Posted by Andrew Bartolini & John Yuva
It may be December, but that doesn’t mean merger and acquisition activity has ceased. This week, news broke that Coupa Software, a leader in business spend management, entered into an agreement to be acquired by Thoma Bravo, a leading software investment firm. Valued at $8.0 billion, Coupa will become a privately held company once the all-cash transaction is completed.
Described as a robust process, Coupa states that the company engaged with 14 prospective acquirers. The deal with Thomas Bravo was approved unanimously by the Coupa Board of Directors and should close within the first half of 2023. Coupa shareholders must still approve the acquisition. And receipt of required regulatory approvals is also a condition for finalization.
“Coupa has been on a decade-plus winning streak. Its solutions are top rated, its road map remains highly-innovative, and its prospects remain very bright. It is no wonder multiple investors and companies were interested in this company,” noted Andrew Bartolini, Ardent Partners’ founder and chief research officer. “Thoma Bravo is acquiring a top company in the space,” he added.
According to Rob Bernshteyn, chairman and chief executive officer at Coupa, the company takes pride in its ability over the last decade to build an incredible business spend management community, cementing its position as a market-leading platform in the space.
“We’re looking forward to partnering with Thoma Bravo and accelerating our vision to digitally transform the Office of the CFO,” Bernshteyn said. “While our ownership may change, our values do not. Every one of us at Coupa will continue to put our customers at the center of everything we do and help them maximize the value of every dollar they spend.”
Expanding on Bernshteyn’s comments with insight on the transaction process, Roger Siboni, Coupa’s lead independent director, said the transaction was a result of a deliberate and thoughtful process that included engagement with three strategic and 11 financial parties.
“The Board evaluated the transaction against the company’s standalone prospects in the current macroeconomic climate and determined that the compelling and certain cash consideration in the transaction provides superior risk-adjusted value relative to the company’s standalone prospects,” explained Siboni. “The Board is unanimous in its belief this transaction is the optimal path forward and in the best interest of our shareholders.”
Coupa states that upon completion of the transaction, the company’s common stock will no longer be listed on any public market. And the company will continue to operate under the Coupa name and brand.
Remarking on the deal, Holden Spaht, a managing partner at Thomas Bravo, said Coupa established the large and growing business spend management category.
“We’ve followed the company’s success for many years and have been impressed by its consistent track record of delivering high levels of value for its global customer base,” Spaht said. “We look forward to partnering with Rob and the rest of the management team to keep investing in the company’s product strategy while driving growth both organically and through M&A.”
Ardent’s Instant Analysis
The overall tech slowdown in the broader public market has hit the procurement, fintech and supply management tech sectors with equal force. Business spend management leader, Coupa, has become a dominant force in the sourcing and technology spaces and has been building a great presence with strong solutions in the AP automation and VMS (contingent workforce) spaces as well. This deal is less a reflection of Coupa specifically, but rather, the market opportunity to buy large technology companies that are sizably undervalued.
Earlier this year, Thoma Bravo took another undervalued technology gem – Bottomline Technologies – private for $2.6 billion. It will be interesting to see if the new owner can execute on the compelling synergies that exist between these two companies.
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