Thoma Bravo is in advanced discussions to acquire Dayforce Inc., a Minneapolis-based provider of human resources management software, according to people familiar with the matter. The private equity firm is exploring a deal that would take Dayforce private, with an announcement possible in the coming weeks, though talks could still face delays or collapse, and rival bidders may emerge.
Dayforce shares surged on the news, jumping as much as 28% on Monday for their sharpest intraday rally in more than seven years. The stock was trading up 25% at 9:38 a.m. in New York, giving the company a market capitalization of roughly $10.6 billion. The company’s shares also trade on the Toronto Stock Exchange.
Despite revenue growth of more than 70% between 2021 and 2024 and improving profitability, Dayforce stock had fallen about 60% from its 2021 peak through last Friday. The pullback reflects broader challenges in enterprise software, which boomed during the Covid-19 lockdowns but cooled as companies reined in spending once offices reopened and economic uncertainty grew. Analysts at Jefferies noted that a sale would not be surprising given the lack of investor recognition in public markets, with Dayforce underperforming peers in the HR and payroll software sector.
Thoma Bravo, led by co-founder Orlando Bravo, has remained one of the most active private equity buyers in a difficult market for dealmaking. In April, the firm agreed to purchase Boeing’s flight navigation business and other digital assets for $10.6 billion, followed by a $2 billion acquisition of restaurant software maker Olo Inc. in July. It has also been in talks regarding a potential takeover of Verint Systems Inc., Bloomberg reported last month.
Dayforce, which rebranded last year from Ceridian HCM Holding Inc., offers AI-driven solutions for recruitment, payroll, and career development. Its client base spans health care, retail, hospitality, and financial services. The company, which went public in 2018, currently carries about $1.2 billion in debt, giving it an enterprise value above $11 billion, according to Bloomberg data.
Interest in the human capital management software space has been building, with recent deals including Paychex’s acquisition of Paycor HCM and ADP’s purchase of WorkForce Software. Thoma Bravo’s move for Dayforce would mark another major step in consolidating the sector.
Source: Bloomberg
