Thoma Bravo's Coupa acquisition is a foretelling sign for buyouts in 2023
News, insights and updates from the team at Bloom Equity Partners
Happy Friday folks.
Thanks for stopping by for another edition of The Weekly Bloom - a must-read for investors, operators, and founders navigating the world of software private equity.
This week we’re sharing our thoughts on the latest Thoma Bravo acquisition and what it means for the broader ecosystem of PE-funded investments across the software landscape heading into 2023.
The role of PE in venture-backed SaaS
Earlier this week, Thoma Bravo announced that they have entered into a definitive agreement to buy Coupa, a leader in Business Spend Management, for an all-cash transaction valued at $8 Bn.
Tomasz Tunguz highlighted some interesting dynamics surrounding the deal including the premium and NTM revenue multiples. (His post: here)
The acquisition is notable for three reasons. First, the premium to the public price is 31%. Second, the multiple is 8.4x NTM revenues. Both of these data points imply public multiples have room to grow. Third, it’s the most substantive acquisition to announce this year after Figma’s announced its sale to Adobe. The M&A market may be thawing a bit.
He also highlighted the trend of private equity players acquiring venture-backed startups
Startups should expect more private equity M&A both in the public & private markets. Over time, the M&A market activity should begin to inform public valuations. If private buyers are willing to pay premiums above the public market, then overall market multiples should rise
At Bloom, we believe that PE will increasingly become a sound exit ramp for troves of great venture-backed businesses that will continue thriving under PE-style mandate and growth goals/timelines.
Some other notable reactions to the news:
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What We’re Reading and Listening To…
📚 private equity pursues application software deals
Favorites from the Ecosystem
Investors👇…..
Founders👇…..
Operators👇….
News from the Industry: deals, deals, and more deals 💰
Nitro Software recommends higher $358 mln bid from KKR-backed Alludo
Thoma Bravo smashes tech fundraising record with $32.4bn haul
A $40 billion Merger Monday shows M&A appetite increasing after brutal 2022
End Note 🔚
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About Bloom Equity Partners
Bloom Equity Partners unlocks growth in lower-middle market enterprise software & tech-enabled services companies through control investments and further developing already-great businesses into market leaders.
Led by a team of tech-focused investors and industry operators, Bloom injects the capital, operational resources and playbooks in recession resistant businesses to rapidly unlock transformational growth and deliver superior risk-adjusted returns to our investment partners and management teams.
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