Thoma Bravo's Acquisition of Dayforce: A Strategic Windfall for Shareholders

The acquisition of Dayforce by Thoma Bravo for $12.3 billion, including debt, marks a pivotal moment in the human capital management (HCM) sector. With a per-share offer of $70.00-representing a 32% premium over Dayforce's unaffected share price on August 15, 2025-the deal has been overwhelmingly approved by Dayforce stockholders (88.4% in favor) and cleared regulatory hurdles in the U.S. and Canada, according to a Financier Worldwide report. This transaction, poised to close in early 2026, underscores Thoma Bravo's strategic focus on high-growth software firms and positions Dayforce as a key player in the AI-driven HCM landscape, as noted in a MLX article.

Financial Merits: A Premium Backed by Strong Fundamentals

Dayforce's financial performance in Q3 2025 provides a compelling rationale for the acquisition. The company reported total revenue of $482 million, a 10% year-over-year increase, with recurring revenue (excluding float) rising 14% to $333 million, as reported in a TradingView article. Adjusted EBITDA for the quarter reached $147.3 million, reflecting a 30.6% margin and a 16.8% year-over-year growth, as noted in a Yahoo Finance article. These figures align with management's guidance of achieving full-year adjusted EBITDA margins of 32%, suggesting operational discipline and scalability, according to a Morningstar article.

The $70-per-share offer, while not explicitly tied to traditional valuation metrics like P/E or P/EBITDA, reflects investor confidence in Dayforce's market leadership. Analysts project 11.8% revenue growth for the next 12 months, albeit slightly below the company's five-year compound annual growth rate of 17.6%, as reported in a TradingView article. This deceleration, however, is offset by Dayforce's robust EBITDA margins and its position as a category leader in cloud-based HCM solutions, as noted in a Financier Worldwide report.

Strategic Rationale: Leveraging Expertise and AI Innovation

Thoma Bravo's track record in software acquisitions-spanning a $184 billion asset portfolio as of March 2025-positions the firm to unlock Dayforce's potential, according to a Financier Worldwide report. The private equity giant has historically prioritized firms with scalable technology and recurring revenue models, both of which Dayforce exemplifies. The acquisition aligns with Thoma Bravo's broader strategy to invest in AI-driven solutions, a critical growth area in HCM, as noted in a Financier Worldwide report.

The deal also includes a significant minority investment from the Abu Dhabi Investment Authority (ADIA), signaling institutional confidence in Dayforce's long-term value, as reported in a Financier Worldwide report. By integrating Dayforce into its portfolio, Thoma Bravo aims to accelerate innovation in workforce management and talent development, areas where AI adoption is rapidly reshaping industry standards, as noted in a TradingView article.

Industry Context: HCM Sector Valuation and Growth

The HCM sector is experiencing heightened demand, driven by AI and cloud-based solutions that optimize workforce management, as noted in a Financier Worldwide report. While specific P/EBITDA multiples for Dayforce are not disclosed in the transaction, the 32% premium suggests a valuation aligned with industry benchmarks for high-growth software firms. Analysts note that the sector's average P/EBITDA multiple has expanded in recent years, reflecting its resilience amid macroeconomic volatility, as noted in a Financier Worldwide report.

Risk Considerations and Mitigation

Despite the deal's strengths, Dayforce's Q3 2025 results included a non-cash pension-related loss of $196.8 million, which temporarily depressed net income, according to a TradingView article. However, the all-cash structure of the acquisition-financed by a $6 billion secured debt package from Goldman Sachs-eliminates financing risk and ensures immediate liquidity for shareholders, as reported in a Financier Worldwide report. Regulatory approvals and shareholder ratification further reduce execution risk, with the transaction expected to close by early 2026, as noted in a QuiverQuant article.

Conclusion: A Win for Shareholders and the HCM Sector

Thoma Bravo's acquisition of Dayforce represents a strategic windfall for shareholders, combining a substantial premium with a clear path to operational and technological enhancement. By leveraging Thoma Bravo's expertise and the HCM sector's growth trajectory, the deal not only rewards Dayforce's stakeholders but also reinforces the sector's role in shaping the future of work. While short-term challenges like pension liabilities exist, the transaction's structure and strategic rationale position it as a transformative opportunity.