Bottomline Acquisition: Key Details, Impact, and What Comes Next

Thoma Bravo's acquisition of Bottomline Technologies, valued at $2.6 billion, marks a significant move in the financial technology sector. This strategic acquisition is set to enhance Bottomline's capabilities and market reach, leveraging Thoma Bravo's resources and expertise. The deal underscores the growing importance of innovative solutions in the B2B payments market, positioning both companies for future growth and success.

What Is Bottomline?

Founded in 1989, Bottomline Technologies specializes in modernizing global business payments. Its core products include Payments Automation, Business Payments Network, Payments Connectivity & Compliance, and Cash Management. Bottomline stands out with its extensive network of over 550,000 businesses, global reach in 92 countries, and comprehensive solutions ranging from AP Automation to Risk Solutions. With over 35 years of experience, it processes $16 trillion annually and is trusted by 74 Fortune 100 U.S. companies.

Who Acquired Bottomline?

Thoma Bravo is a leading private equity investment firm specializing in the software and technology sectors. With over 40 years of experience, the firm focuses on private equity investments and strategic support to enhance the growth and operational efficiency of its portfolio companies. Thoma Bravo manages assets worth over $166 billion and has completed more than 500 transactions, making it a significant player in the market. The firm is also committed to environmental, social, and governance (ESG) initiatives.

When Was Bottomline Acquired?

Thoma Bravo completed its acquisition of Bottomline Technologies on May 13, 2022. This acquisition, initially announced on December 17, 2021, and approved by Bottomline stockholders on March 8, 2022, comes at a time when the fintech industry is rapidly evolving. The deal aligns with the growing trend of private equity firms investing in technology companies to leverage their operational capabilities and drive innovation in the B2B payments sector.

Why Was Bottomline Acquired?

• Market Expansion: The acquisition allows Bottomline Technologies to leverage Thoma Bravo's operating capabilities and capital resources to enhance its product offerings, which digitize the way businesses pay and get paid. This strategic move is expected to expand Bottomline's market presence and capabilities, particularly in the large and growing B2B payments market.
• Technology Integration: Bottomline Technologies will benefit from Thoma Bravo's technology industry expertise, which will be leveraged to further expand Bottomline's product offerings. The partnership aims to capitalize on Thoma Bravo’s operating capabilities and capital resources to enhance Bottomline's technology solutions, particularly in digitizing business payments and processes.
• Competitive Advantage: The acquisition positions Bottomline to capitalize on the benefits of the partnership with Thoma Bravo, which includes leveraging Thoma Bravo’s deep sector expertise and proven strategic and operational capabilities. This is expected to drive growth initiatives, implement operating best practices, and make accretive acquisitions to accelerate revenue and earnings. The strategic appointment of Craig Saks as CEO, with his extensive experience in the fintech and payments industry, is also seen as a move to strengthen Bottomline's leadership and competitive position in the market.

Acquisition Terms

• Acquisition Price: The acquisition was valued at approximately $2.6 billion.
• Payment Method: The transaction was an all-cash deal.
• Key Conditions or Agreements:
  • Bottomline shareholders received $57.00 per share in cash.
  • This price represented a premium of approximately 42% to Bottomline’s unaffected closing stock price on October 19, 2021, and a premium of approximately 41% to Bottomline’s 30-day volume-weighted average price as of October 19, 2021.
  • The transaction was announced on December 17, 2021, and approved by Bottomline stockholders on March 8, 2022.
  • Bottomline common stock ceased trading and was delisted from the Nasdaq stock market.
  • Craig Saks was appointed as the new Chief Executive Officer, succeeding Rob Eberle, who remained in a strategic advisory role through the end of the fiscal year.
  • Thoma Bravo entered into voting agreements with Bottomline's directors and Clearfield Capital Management, representing approximately 4% of Bottomline's outstanding shares.
  • The transaction required regulatory approvals, including from the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the Financial Conduct Authority in the United Kingdom.

Impact on Bottomline

The acquisition of Bottomline Technologies by Thoma Bravo has led to significant changes in the company's operations and management. Craig Saks has taken over as the new CEO, succeeding Rob Eberle, who remains in an advisory role to ensure a smooth transition. This leadership change is part of a broader strategy to integrate Bottomline's business more coherently, streamline operations, and address legacy tech debt. The company has also ceased trading on the Nasdaq stock market, becoming a privately held entity, which allows for greater flexibility in its strategic initiatives.

On the product front, Bottomline is leveraging Thoma Bravo's resources to enhance its offerings, particularly in digitizing B2B payments. The acquisition has enabled the company to introduce new market offerings, one of which has already generated significant revenue. Employee reactions have been positive, with a culture of flexibility and open-mindedness facilitating rapid innovation. Customers can expect continued commitment to improving business payment processes, with a focus on reducing reliance on paper checks and enhancing cash flow management. For founders considering business transitions, tools like Sunset can assist in managing such processes compliantly and efficiently.