Goldman Sachs' Strategic $6 Billion Financing Move for Thoma Bravo's Dayforce Acquisition

In late 2025, Goldman Sachs' $6 billion debt financing package for Thoma Bravo's $12.3 billion acquisition of Dayforce Inc. has emerged as a landmark transaction, underscoring the growing influence of private equity in the SaaS sector and reshaping capital allocation dynamics for institutional investors. This deal, which includes a $5.5 billion term loan and a $500 million revolving credit facility, reflects a strategic alignment between private equity firms, institutional capital, and favorable financing conditions, while also highlighting the sector's evolving risk-reward profile.

Strategic Rationale and Deal Structure

Thoma Bravo's acquisition of Dayforce—a leading provider of cloud-based human capital management (HCM) software—is structured to capitalize on the SaaS sector's high-margin, recurring revenue model. The $70-per-share offer represents a 32% premium over Dayforce's pre-announcement stock price, signaling confidence in the company's long-term value creation potential. Goldman Sachs and J.P. Morgan Securities, serving as financial advisors, have designed a financing package that minimizes risk through a robust debt-to-equity ratio, with Abu Dhabi Investment Authority (ADIA) committing significant minority equity capitalDayforce Enters into US$12.3 Billion Definitive Agreement with …^[2].

The transaction's $351 million termination fee and $702 million reverse termination fee further underscore the parties' commitment to closing the deal by early 2026, pending regulatory and shareholder approvals. These provisions are critical in a market where regulatory scrutiny of private equity activity remains elevated, particularly in technology-driven sectorsThoma Bravo to Acquire Dayforce in $12.3 Billion Take-Private Deal Backed by Goldman Sachs^[3].

Broader Trends in SaaS LBOs

The Dayforce deal is emblematic of a broader resurgence in leveraged buyout (LBO) activity within the SaaS sector. According to a report by Ion Analytics, leveraged loan volumes rebounded sharply in 2024, with USD 22.65 billion in Q1 2024—the highest in six quarters—and leveraged loans accounting for 68% of total LBO debt financing in H1 2024, up from 46% in H1 2023LBOs on the rebound: How leveraged loans are stealing the …^[4]. This shift reflects a preference for syndicated bank financing over direct lending, particularly for large-scale transactions like Dayforce.

The narrowing bid-ask spread and improved macroeconomic conditions have further fueled this trend. As noted in a 2025 McKinsey report, SaaS deal values surged 32.4% year-over-year in 2024, driven by institutional investors' appetite for high-margin, cash-generative assetsGlobal Private Markets Report 2025 | McKinsey^[5]. Meanwhile, the cost of debt for LBOs has plummeted, with spreads averaging just 305 bps over SOFR in Q3 2025—the lowest since 2007—enabling sponsors to execute highly leveraged transactions with greater financial flexibilityNew crop of loans backing LBOs pushes pricing …^[6].

Implications for Institutional Investors

For institutional investors, the Dayforce acquisition highlights the dual-edged nature of SaaS-backed LBOs. On one hand, the sector's predictable cash flows and scalable business models make it an attractive target for private equity firms seeking to deploy dry powder. On the other, the high leverage ratios inherent in such deals amplify downside risks, particularly in a macroeconomic environment where interest rate volatility remains a concernWhat’s in store for leveraged loans and CLOs in 2025^[7].

A 2025 McKinsey survey of limited partners (LPs) revealed that 30% plan to increase private equity allocations in the next 12 months, citing the asset class's long-term outperformance against public marketsGlobal Private Markets Report 2025 | McKinsey^[5]. However, this optimism is tempered by the need for rigorous due diligence. For instance, the inclusion of margin ratchets in recent LBOs—such as those for Air Transport Services and GFL Environmental—demonstrates sponsors' efforts to align debt costs with deleveraging milestones, thereby mitigating refinancing risksNew crop of loans backing LBOs pushes pricing …^[6].

Risk-Reward Analysis

The risk-reward profile of SaaS LBOs in 2025 hinges on two key factors: operational execution and macroeconomic stability. While Dayforce's recurring revenue model provides a buffer against short-term volatility, over-leveraging remains a critical risk. According to a report by Nurp, 40% of LBO failures between 2010–2020 were attributed to inadequate operational execution post-acquisitionRisks of Leveraged Buyouts: What Investors Should …^[8]. Thoma Bravo's track record in enterprise software, however, suggests a strong capacity to integrate Dayforce's platform and drive efficiency gains.

For institutional investors, the Dayforce deal also underscores the importance of diversification. While large SaaS LBOs like this one offer high returns, they should be balanced with smaller, middle-market transactions where direct lenders still play a role. As Pitchbook notes, direct lenders executed 113 LBO deals in H1 2024, outpacing syndicated banks in niche marketsNew crop of loans backing LBOs pushes pricing …^[6]. This bifurcation of capital sources allows LPs to tailor their risk exposure based on liquidity needs and return expectations.

Conclusion

Goldman Sachs' $6 billion financing for Thoma Bravo's Dayforce acquisition is more than a single transaction—it is a microcosm of private equity's expanding footprint in the SaaS sector. As leveraged loan volumes rebound and institutional investors reallocate capital toward high-margin technology assets, the risk-reward calculus for SaaS-backed LBOs has shifted in favor of sponsors and LPs alike. However, the path to value creation remains contingent on disciplined execution, macroeconomic resilience, and a nuanced understanding of sector-specific dynamics. For investors, the Dayforce deal serves as both a cautionary tale and a blueprint for navigating the evolving landscape of private equity in 2025.