Private equity firm Thoma Bravo is reportedly engaged in advanced discussions to acquire Dayforce Inc. (DAY), a prominent human capital management software provider, with the intention of taking the company private. This potential transaction highlights private equity’s strategic focus on identifying and unlocking value in firms whose public market valuations may not fully reflect their operational strengths amid evolving market dynamics.
- Thoma Bravo is in advanced talks to acquire Dayforce Inc., aiming for privatization.
- Dayforce shares surged up to 22% in pre-market trading following news of the prospective deal.
- The company was valued at approximately $8.4 billion on Friday prior to the announcement.
- Despite significant revenue growth, Dayforce’s stock declined 60% from its 2021 peak.
- Thoma Bravo maintains an aggressive acquisition strategy, with notable deals this year.
- Dayforce provides AI-powered software for critical HR functions across various sectors.
Market Reaction and Valuation Details
Dayforce shares experienced a substantial surge, climbing up to 22% in Monday’s pre-market trading, following reports of the prospective deal. Valued at approximately $8.4 billion as of Friday, an official announcement could potentially emerge within weeks. However, sources familiar with the discussions caution that while the deal is advanced, it remains uncertain and subject to potential competing bids.
Dayforce’s Public Market Performance
Despite robust underlying fundamentals, Dayforce has navigated a challenging trajectory in the public market. Its stock notably fell 60% from its peak in 2021, even as revenue expanded by over 70% between 2021 and 2024, accompanied by improved profitability. This divergence reflects a broader deceleration in enterprise software spending observed in the post-COVID-19 era. Analysts at Jefferies, including Samad Samana, have specifically pointed out Dayforce’s underperformance, even within the broader human resources and payroll software sector.
Thoma Bravo’s Aggressive Acquisition Strategy
Led by co-founder Orlando Bravo, Thoma Bravo continues to pursue an assertive acquisition strategy within the highly competitive private equity landscape. This year, the firm has committed significant capital to major transactions, including the $10.6 billion acquisition of Boeing Co.’s flight navigation unit in April and a $2 billion deal for Olo Inc. in July. It has also been reported by Bloomberg News to be in discussions regarding a potential takeover of Verint Systems Inc.
Overview of Dayforce’s Offerings
Dayforce, formerly known as Ceridian HCM Holding Inc., specializes in offering AI-powered software solutions designed for critical human resources functions. These include comprehensive services such as recruitment, payroll processing, and employee development. The company’s diverse client portfolio spans key sectors including health-care, retail, hospitality, and financial services.
Oliver brings 12 years of experience turning intimidating financial figures into crystal-clear insights. He once identified a market swing by tracking a company’s suspiciously high stapler orders. When he’s off the clock, Oliver perfects his origami… because folding paper helps him spot market folds before they happen.