Private Equity house Thoma Bravo will buy supply chain software company Coupa for $8 billion including debt, or $81 a share – moving in after the Nasdaq-listed company tumbled from its 2021 highs of over $360 per share.
Not all shareholders will be happy. Morgan Stanley analysts led by Keith Weiss last week suggested that there's a "reasonable framework" for Coupa to see ~$100 per share in a possible takeover.
“This transaction is the result of a deliberate and thoughtful process," said Roger Siboni, Coupa's lead independent director, adding: "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.”
Coupa provides business spend and supply chain analysis, with automated insights into large requisitions and contracts nearing expiration. Its software sits in what Gartner characterises as the Procure-to-Pay Suite segment (“integrated solutions with automated workflows to request, procure, receive and pay for goods and services across an enterprise”), in which it ranks as a leader, alongside GEP, Ivaluer, JAEGGER and SAP.
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Coupa’s 2,500+ customers include AON, Nestle, Sanofi, and Unilever. Its software platform tracks $4 trillion in supply chain spending but Coupa itself saw a $77.4 million operating loss in Q3 on revenues of $217.3 million.
Gartner’s 2022 Magic Quadrant for the segment notes that Coupa “short-term investment roadmap includes big data and AI capabilities, ESG, collaboration, ecosystem and platform, consumerized experiences, process mining and automation as a service, payments and treasury suite synergies, travel and expenses.”
Coupa CEO Rob Bernshteyn said: “For more than a decade, we've been building an incredible Business Spend Management Community and have proudly cemented our position as the market-leading platform in our category. We're looking forward to partnering with Thoma Bravo and accelerating our vision to digitally transform the Office of the CFO… 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.”
Thoma Bravo announced last week that it raised more than $32.4 billion for three new buyout funds. Thoma Bravo Fund XV will target large equity investments; Thoma Bravo Discover Fund IV will target middle-market equity investments; and Thoma Bravo Explore Fund II will target lower middle-market equity investments.
In the past two years alone it has snapped up Ping Identity, Sophos, Proofpoint and Sailpoint Technologies.