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

Thoma Bravo's acquisition of Coupa Software, valued at $8 billion, marks a significant development in the Business Spend Management (BSM) sector. This all-cash transaction, which includes a minority investment from the Abu Dhabi Investment Authority, is expected to bolster Coupa's market position and drive further innovation in the industry.

What Is Coupa?

Founded in 2006, Coupa offers an AI-driven Total Spend Management platform that includes core services such as supply chain design and planning, supply chain collaboration, source-to-contract, procure-to-pay, AP automation, and treasury and cash management. Coupa's unique selling points include its AI capabilities, extensive data insights from over 15 years and $7 trillion in spend data, and a comprehensive suite of solutions tailored for various business roles and industries.

Who Acquired Coupa?

Thoma Bravo is a leading private equity firm specializing in investments in software and technology companies. With over 40 years of experience, the firm provides capital and strategic support to help tech companies grow. Key services include private equity investments, strategic guidance, and involvement in Environmental, Social, and Governance (ESG) initiatives. Managing over $166 billion in assets, Thoma Bravo is one of the most influential firms in the tech sector, with a significant market presence and numerous industry recognitions.

When Was Coupa Acquired?

Thoma Bravo completed its acquisition of Coupa Software on February 28, 2023. This strategic move followed the initial announcement on December 12, 2022, and stockholder approval on February 23, 2023. The timing of the acquisition aligns with a broader trend of private equity firms targeting tech companies amid a market downturn, characterized by high inflation and weak consumer demand, making such firms attractive investment opportunities.

Why Was Coupa Acquired?

• Market Expansion: The acquisition of Coupa by Thoma Bravo is a strategic move to capitalize on the expanding global market for Business Spend Management (BSM). Coupa's established position in this sector allows Thoma Bravo to enter new markets and drive growth both organically and through mergers and acquisitions.
• Technology Integration: Thoma Bravo benefits significantly from Coupa's advanced BSM platform, which is designed to digitally transform the Office of the CFO. By integrating Coupa's technology, Thoma Bravo can enhance its portfolio's capabilities, driving continued investment in product innovation and better serving its customer base.
• Competitive Advantage: The acquisition strengthens Thoma Bravo's competitive position by leveraging Coupa's market-leading platform and extensive customer community. This move allows Thoma Bravo to capitalize on undervalued assets in a tech sector downturn, further solidifying its market presence and enabling continued innovation and growth initiatives.

Acquisition Terms

• Acquisition Price: The acquisition was valued at approximately $8 billion.
• Payment Method: The transaction was an all-cash deal.
• Key Conditions or Agreements:
  • Coupa shareholders will receive $81 per share in cash.
  • The transaction includes a significant minority investment from a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA).
  • The transaction was approved by Coupa stockholders at a Special Meeting held on February 23, 2023.
  • Coupa's common stock will be delisted from Nasdaq.
  • The transaction has not been implemented in South Africa pending approval from South African competition authorities.

Impact on Coupa

The acquisition of Coupa by Thoma Bravo has led to significant changes in the company's operations and management. Coupa's common stock has been delisted from Nasdaq, and the company is now privately held. Thoma Bravo brings strategic and operational expertise, aiming to leverage its software knowledge to accelerate growth and drive continued investment in product innovation. Despite these changes, Coupa will continue to operate under its established name and brand, maintaining its commitment to delivering leading-edge innovation on its Business Spend Management (BSM) platform.

Regarding product offerings and services, the partnership is set to enhance Coupa's capabilities, with Thoma Bravo planning to invest in the company's product strategy and drive growth through mergers and acquisitions. Employee reactions have not been explicitly detailed, but the CEO's statements suggest a continued focus on customer-centric values. Customer reactions have also not been directly reported, but the acquisition underscores Coupa's market-leading position and commitment to maximizing value for its customer community. For founders considering business transitions, tools like Sunset can assist in managing such processes compliantly and efficiently.