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Coupa is acquired by Thoma Bravo for $8B amid activist demands to wait for a greater price

We paid attention when it was reported last week that activist investors were urging Coupa Software to not sell for less than $95 a share. Investors rarely write to a company requesting a delay in a sale, as is the custom. Usually, the reverse is true.

However, the business declared today that Thoma Bravo will buy it for $8 billion. That is $81 per share, which is still a 77% premium for stockholders but significantly less than what HMI Capital requested in a letter that was made public earlier this month.


The letter had seen public allegations that another private equity firm, Vista Equity Partners, was interested in purchasing it, but in the event, Thoma Bravo and an affiliate of the Abu Dhabi Investment Authority (ADIA) entirely participated in the transaction as a minority investor were the buyers. Thoma Bravo has a lengthy history of buying and privatizing established corporate software businesses.

Like many SaaS startups, Coupa, which develops spend management software for large enterprises, has had a difficult year on the stock market due to the anger of investors who prioritize profit over development. The stock price of the company has decreased 64% year to date and decreased over 2.5% in pre-trading, which may indicate that investors are unsatisfied with the acquisition.

As one might anticipate, company CEO Rob Bernshteyn put a smile on the arrangement by noting that consumers can anticipate receiving the same level of care regardless of who is writing the checks.

According to Coupa’s lead independent director, Roger Siboni, the business considered the present state of the economy before deciding the deal was worthwhile. The Board found that the attractive and certain cash consideration in the deal provides greater risk-adjusted value in comparison to the Company’s standalone prospects after comparing the transaction to the company’s standalone prospects in the present macroeconomic environment. The Board unanimously agrees that this transaction is the appropriate course of action and in our shareholders’ best interests, he said in a statement.

The board of directors unanimously approved the terms, but it will be intriguing to see whether the shareholders share that sentiment when they convene early in the following year. If the letter the company published is any indication of its sentiments about the company being undervalued at this price, it would appear that HMI Capital, which holds 4.8% of the Coupa stock, will spearhead the opposition to the sale.

In the first half of 2023, if investors and authorities approve the transaction, it is anticipated to close. Given HMI’s letter, it is surprising that there is no “go-shop” clause in this agreement, which would allow Coupa to keep looking for a better offer.

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