On Sunday, Anaplan Inc. announced it struck a $10.70 billion deal to go private with Thoma Bravo LP, a leading software investment firm.
The agreement is another sign of rising private equity interest in the cloud-based software space.
Under the terms of the acquisition, Thoma Bravo will pay $66.00 per share in cash. The figure delivers a more than 30.00% premium over Anaplan’s last closing price on Friday.
This valuation is from the 161.50 million fully diluted software maker’s shares.
Accordingly, both companies expect the deal to close in the first half of 2022.
In line with this, the software business will be delisted from the New York Stock Exchange following its completion.
The California-based technology firm sells subscriptions for cloud-based business-planning software and provides data for decision-making purposes.
The business started last 2006 in the United Kingdom and currently has more than 1,900 customers worldwide. Eventually, it went public in 2018.
Notably, it provides analytics services to online real-estate marketplace Zillow and telecommunication firm Vodafone.
Then, its revenue rose by about a third in the year to January 31, while losses widened.
Thoma Bravo is one of the private equity industry’s most active investors. It has signaled to use its financial and operational resources to accelerate Anaplan’s strategy.
The agreement intends to attract and retain customers, employees, and partners. They also target to lead and expand the Connected Planning segment.
The decision also came after the recent steep plunge in technology stocks. The fears of rising interest rates and Russia’s invasion of Ukraine mainly drove the damp market sentiment.
After the announcement, Anaplan’s stock surged 26.92% or 13.62 points to $64.21 per share in the pre-market.
Anaplan’s deal paves way for LBOs
Moreover, Anaplan’s highly leveraged buyout is the latest in the software sector.
The industry primarily benefited during the COVID-19 pandemic, attracting interest from private equity players.
Last month, Elliott Management and Vista Equity Partners acquired software company Citrix Systems for $16.50 billion.
Likewise, cybersecurity company McAfee went private in a $14.00 billion deal with Advent International and Permira this month.
Notably, the Anaplan acquisition indicates that massive leveraged buyouts will continue at a brisk pace in 2022.
In recent years, private lenders have taken market share from banks to finance big buyouts. As a result, they could offer higher leverage ratios on deals and greater discretion.
However, interest rates could increase in the near term. The latest Thoma Bravo deal would be the largest LBO to bypass bank financing.
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