Coupa Software Inc. (NASDAQ: COUP), a business spend management software provider that also operates a VMS, struck a deal to be acquired by Thoma Bravo, a software investment firm, for $81 per share.
This is an all-cash transaction with an enterprise value of $8.0 billion. Following the deal, San Mateo, California-based Coupa will become a privately held company. It will continue to operate under the Coupa brand.
“We’re looking forward to partnering with Thoma Bravo and accelerating our vision to digitally transform the office of the CFO,” Coupa Chairman and CEO Rob Bernshteyn said.
Coupa acquired a vendor management system in August 2018 from DCR Workforce Inc.
“This is a significant deal that serves to underline how the business spend management market is ripe for investment as well as disruption,” said Matt Norton, workforce solutions research director at Staffing Industry Analysts. “From a more narrow VMS perspective, this represents another noteworthy transaction with significant M&A market activity in the past two years. There has been an uptick in VMS-related investments and acquisitions following a suppressed market over the 18 months prior.”
Prior to its acquisition by Coupa, the VMS had been operating under the Smart Track brand.
DCR filed a lawsuit against Coupa in June 2021 in US District Court alleging breach of contract and other claims, according to a filing by Coupa with the US Securities and Exchange Commission. DCR sought various damages including 206,065 shares of Coupa stock. Under the purchase agreement, Coupa had agreed to pay earn-out consideration if the VMS business achieved certain revenue-related milestones through measurement periods that continue on through Dec. 31 of this year. The VMS business met the target for the first measurement period, and Coupa issued stock; however, it did not meet the target for the second measurement period. DCR filed the complaint after it was notified.
Thoma Bravo’s acquisition of Coupa received unanimous approval from the Coupa board, and it’s expected to close in the first half of 2023. It’s subject to customary closing conditions, including approval by Coupa shareholders. However, the transaction is not subject to a financing condition. Coupa also noted the transaction includes a significant minority investment from the Abu Dhabi Investment Authority.
In addition, today Coupa reported earnings for its third quarter of fiscal 2023. Revenue was up 17.0% year over year to $217.3 million with the growth entirely in the company’s subscription business. Revenue fell 10.2% in its professional and other business.
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Share price and market cap
Shares in Coupa were up 26.78% to $78.72 as of 12:22 p.m. Eastern time; they were 95.35% above their 52-week low, according to FT.com. The company had a market cap of $4.71 billion.