By Zaheer Kachwala
(Reuters) -HR software firm Dayforce said on Wednesday it was in advanced discussions to be acquired by Thoma Bravo for $70 per share, as private equity firms look to software as growth drivers in an uncertain economy.
Dayforce's shares rose around 3% in early trading.
The offer represents a premium of 32.4% based on the stock's closing price on August 15, before the talks were first reported, and a deal value of $11.18 billion, according to Reuters calculations.
If finalized, the
deal will mark another private equity buyout of a software firm, with Thoma Bravo betting on the build-out of artificial-intelligence software and the resilience of recurring revenue in an economy pressured by trade tariffs and erratic spending.
"Dayforce gets relief from being an undervalued public company and gains the flexibility to invest and grow outside of Wall Street's quarterly pressure. Thoma Bravo secures a strong SaaS asset with steady cash flow, AI potential and room for operational improvements," said eMarketer analyst Jeremy Goldman.
The human capital management market has undergone significant consolidation, with big players buying up smaller firms to bolster their products and grab market share amid signs of a deteriorating labor market.
Paychex announced its acquisition of rival Paycor for $4.1 billion at the start of the year, while Automatic Data Processing acquired WorkForce Software last year for around $1.2 billion.
People might have expected more deal activity after the Paychex-Paycor acquisition, but the tariff announcement from U.S. President Donald Trump in April could have caused participants to take a wait-and-see approach, said Scott Kessler, Global Sector Lead, TMT, at Third Bridge.
Dayforce said there could be no assurances of whether an agreement for a transaction would be reached.
The company, which provides human capital management and payroll services through its software platform, has seen its stock lose more than 9% of its value so far this year, underperforming peers.
(Reporting by Zaheer Kachwala in Bengaluru; Editing by Pooja Desai)
