Thoma Bravo's $5.5 Billion Dayforce Loan: A Bellwether for SaaS Leveraged Buyouts in 2025

In the ever-evolving landscape of private equity (PE) and enterprise software, Thoma Bravo's $5.5 billion leveraged loan to acquire Dayforce Inc. has emerged as a defining moment. Finalized in October 2025, this seven-year financing package-priced at 3 percentage points over the benchmark rate and discounted to 99.75 cents on the dollar-reflects a rare confluence of investor demand and strategic ambition, according to a Chicago Business report. As the largest acquisition-backed loan of the year, it underscores a broader resurgence in SaaS leveraged buyouts (LBOs) and signals shifting dynamics in the PE market.

The Dayforce Loan: A Case Study in Investor Appetite

The Dayforce transaction, valued at $12.3 billion in total, includes a mix of equity and debt to take the human-resources software provider private, Chicago Business reported. Goldman Sachs led the deal, securing favorable terms that outperformed initial expectations. The loan's tight pricing-despite a market where acquisition-backed loans accounted for just 10% of 2025 issuance volume-highlights investor hunger for large-scale, high-conviction bets, according to a Herron Palmer analysis. This demand is driven by a scarcity of such opportunities in a year marked by cautious PE strategies and rising interest in corporate-led SaaS deals, as Chicago Business noted.

The loan's structure also reflects confidence in Dayforce's business model. As an AI-powered Human Capital Management (HCM) platform, Dayforce offers recurring revenue streams and low capital expenditures-traits that align with PE firms' preference for scalable, cash-generative assets, as detailed in a ClassVI Partners report. Analysts note that taking Dayforce private provides the company with operational flexibility to accelerate innovation, particularly in AI-driven workforce analytics, without the constraints of public market expectations, according to a Dayforce press release.

SaaS M&A: Diverging Paths for PE and Corporate Buyers

The Dayforce deal fits into a broader narrative of diverging strategies between PE firms and corporate acquirers in 2025. While corporate buyers like Salesforce have driven a 84% quarter-over-quarter surge in SaaS M&A value-exemplified by its $8 billion acquisition of Informatica-PE activity has taken a more measured approach, Chicago Business reported. Despite a record 77 transactions in Q2 2025, PE deal value fell by 15% year-over-year to $17.2 billion, as firms prioritized quality over quantity, according to Chicago Business.

This caution is understandable. SaaS valuations, while still robust in high-growth categories like ERP and IT management tools, have cooled compared to 2020–2021 peaks, as the ClassVI Partners report observed. However, platforms with strong customer retention, operational efficiency, and AI integration continue to attract premium valuations. For instance, Dayforce's 32% premium to its pre-announcement stock price reflects its competitive positioning in a fragmented HCM market, per the Dayforce press release.

Leveraged Loans and the Resurgence of LBOs

The Dayforce loan also aligns with a broader revival of leveraged buyouts in the enterprise software sector. In 2024, platform LBO activity surged by 28.4% year-over-year, fueled by lower borrowing costs following Federal Reserve rate cuts, according to a Financial Report Card analysis. Leveraged loans, which accounted for 68% of LBO debt financing in H1 2024, have become a preferred vehicle for PE firms seeking to balance risk and return, the Financial Report Card analysis noted.

Thoma Bravo's strategy exemplifies this trend. The firm has pursued a "buy-and-build" approach in 2025, acquiring high-growth SaaS assets like Flexera Software and Jeppesen to create consolidated platforms with cross-selling potential, as the ClassVI Partners report describes. Dayforce, with its cloud-native architecture and AI capabilities, fits squarely into this playbook. By taking the company private, Thoma Bravo aims to streamline product development and expand globally-a strategy that mirrors broader PE interest in mission-critical software solutions, as Herron Palmer analyzed.

Implications for the Future of SaaS LBOs

The Dayforce acquisition suggests that SaaS LBOs will remain a cornerstone of PE activity in 2025–2026. Several factors support this outlook:
1. AI and Cybersecurity Premiums: SaaS platforms integrating AI-driven tools or advanced cybersecurity features are seeing enhanced valuations, as these technologies become table-stakes for differentiation, the ClassVI Partners report found.
2. Recurring Revenue Models: Investors continue to prioritize businesses with predictable cash flows, a hallmark of SaaS platforms. Dayforce's 90% gross margin and 95% customer retention rate exemplify this appeal, per the Dayforce press release.
3. Market Fragmentation: Consolidation opportunities in niche sectors like HCM, ERP, and CRM will drive further M&A activity, particularly as larger players like Workday and SAP face margin pressures, Herron Palmer observed.

Conclusion

Thoma Bravo's Dayforce loan is more than a financing milestone-it is a bellwether for the future of SaaS LBOs. By securing favorable terms in a cautious market, the firm has demonstrated that high-conviction, well-structured deals can still attract investor demand. As AI reshapes enterprise software and PE firms refine their "buy-and-build" strategies, similar transactions are likely to follow. For now, Dayforce's transition to private ownership offers a blueprint for how PE can leverage leveraged loans to capitalize on the next phase of SaaS growth.