Dayforce, Inc.'s $12.3B Thoma Bravo Acquisition: Valuation Scrutiny and Investor Due Diligence in Focus

In October 2025, Dayforce, Inc. (DAY) announced a proposed $12.3 billion all-cash acquisition by Thoma Bravo, offering shareholders $70 per share-a 2.8% premium over its late September trading price of $68.99, according to a BusinessWire alert. While the deal has been framed as a strategic move to accelerate Dayforce's AI-driven human capital management (HCM) platform, the transaction has sparked intense scrutiny from shareholder rights firms and financial analysts. This article examines the valuation metrics, legal challenges, and due diligence considerations for investors navigating this high-stakes M&A deal.

Valuation Metrics: A Premium Amid Declining Multiples

Dayforce's trailing twelve months (TTM) P/E ratio stands at 237.24, calculated using earnings per share (EPS) of $0.29 and a stock price of $68.80, according to the FullRatio P/E analysis. This represents a sharp decline from its five-year average of 601.03 and a seven-year average of 528.57, as shown in the FullRatio analysis. Despite this drop, the P/E ratio remains significantly higher than the Technology sector average of 33.53, suggesting Dayforce's stock is priced at a premium relative to earnings (the FullRatio analysis also shows the sector comparison).

The Enterprise Value to EBITDA (EV/EBITDA) ratio of 28.76 further underscores the valuation gap, per TradingView statistics. While this metric is often used to assess operational efficiency, it highlights Dayforce's premium pricing compared to peers. The $70-per-share offer, which implies a 2.8% premium over recent trading levels, appears to align with Dayforce's current P/E ratio but falls far below its historical averages. This discrepancy raises questions about whether the offer captures the company's long-term growth potential in AI-driven HCM.

Legal Scrutiny: Fiduciary Duties and Shareholder Confidence

The proposed acquisition has drawn investigations from multiple shareholder rights firms, including Kahn Swick & Foti, LLC and Halper Sadeh LLC, as reported in the BusinessWire alert. These firms are probing whether Dayforce's board fulfilled its fiduciary duties to shareholders and whether the $70-per-share offer adequately reflects the company's intrinsic value. Such legal reviews are common in large M&A deals, particularly when insider transactions occur. For instance, Dayforce's insider sales of 3,232 restricted shares through Morgan Stanley Smith Barney LLC-valued at $222,296.96-have added fuel to the debate about potential conflicts of interest, detailed in a Form 144 filing.

Despite these concerns, Dayforce's stock has remained stable, trading near $68.99 as of late September 2025, per the BusinessWire alert. This suggests investor confidence in the deal's completion, though it also highlights the risk of undervaluation. The board's approval of the transaction, pending stockholder and regulatory approvals, indicates a strategic alignment with Thoma Bravo's portfolio of technology-driven enterprises, as noted in TradingView statistics.

Investor Due Diligence: Balancing Risks and Rewards

For investors, the key considerations revolve around valuation adequacy and legal risks. The $70-per-share offer, while a 2.8% premium, must be evaluated against Dayforce's declining P/E ratio and robust EV/EBITDA. A 44% drop from historical P/E averages implies that the market has tempered expectations for Dayforce's growth, potentially leaving room for undervaluation (the FullRatio analysis documents the historical decline). However, the company's AI leadership in HCM and global scale-cited by Thoma Bravo as key advantages-could justify a higher valuation in the long term, a point reflected in TradingView statistics.

Legal challenges, though typical, introduce uncertainty. If investigations uncover procedural flaws or conflicts of interest, the deal could face delays or renegotiation. Investors should monitor regulatory approvals and insider activity, as these factors could influence the transaction's timeline and final terms.

Conclusion

Dayforce's proposed sale to Thoma Bravo represents a pivotal moment for the HCM sector, blending strategic growth ambitions with valuation and legal complexities. While the $70-per-share offer appears reasonable in the short term, investors must weigh the company's declining valuation multiples against its long-term AI-driven potential. As the deal moves toward a projected 2026 closing, due diligence will hinge on transparency in board decision-making and alignment with shareholder interests.