Thoma Bravo Leads Private Equity Firms on Enterprise Software Spending Spree

Enterprise software companies are attractive investments for private equity firms hunting for the next hot thing in tech, and when they find an appealing deal, they’re inclined to bet big. For instance, in December 2022, private equity firm Thoma Bravo beat out rival Vista Equity Partners to purchase Coupa Software in a $6.15 billion cash purchase.

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Founded in 2006, Coupa Software is a leading business spend management platform that boasted a 2021 market cap of more than $20 billion. With the potential for significant growth beyond that, it’s no wonder Thoma Bravo fought for the purchase.

2022 was a busy year for enterprise software and software-as-a-service (SaaS) mergers and acquisitions (M&As), with at least an estimated $127 billion spent in disclosed-price purchases, slightly under 2021’s high of over $165 billion. Companies that have experienced dramatic growth similar to Coupa Software’s are particularly attractive to private equity firms.

Last year, Thoma Bravo also picked up identity management software company ForgeRock for a relatively-paltry $2.3 billion, while customer service software company Zendesk sold to a consortium of investors led by Hellman & Friedman and Permira for $10.2 billion.