The stock of US company Everbridge has recently seen a strong rise. The financial investor plans to take over the software company for $1.5 billion. This caused the Everbridge stock to soar after the announcement of the acquisition.

Thoma Bravo: Financial investor with a focus on tech… Thoma Bravo, one of the leading software investment companies, has made another move. The private equity group is one of the major players in buying and selling technology companies. Just at the end of 2022, it launched several new funds, including the „Thoma Bravo Fund XV“ with $24.3 billion for new acquisitions and investments, mainly with a focus on software companies.

Thoma Bravo’s preferred market segments for investments include digitalization in healthcare – such as software for hospitals – and software solutions for financial and budget planning. According to their own statements, the company is one of the leading tech investors in the USA when it comes to cybersecurity. Thoma Bravo plans to invest more in Europe.

…offers $1.5 billion bid for Everbridge Now, the private equity investor is offering around $1.5 billion for the Everbridge company in a cash transaction. This effectively represents a 32% premium on the volume-weighted average stock price (VWAP) of the last three months.

Software for managing critical events Everbridge is a software company that specializes in managing critical events. The company was founded in 2002 under the name 3N Global and supports governments and companies from a wide range of industries in responding to emergency situations. This includes risk information to help assess the threat situation in the vicinity of the employees‘ residence or travel destination, as well as mass notification tools to effectively deliver important messages during severe weather or terrorist attacks.

According to their own information, Everbridge has over 6,500 customers, including multinational companies from various industries such as financial services, manufacturing, retail, transportation, energy and gas, and education. In addition, they also serve national, state, and local government agencies and US federal agencies.

Everbridge stock significantly below all-time high Everbridge went public on the Nasdaq in 2016 and its stock reached an all-time high in September 2021 – the company reached a market value of $6.4 billion before a significant consolidation began. The company has never recovered and its valuation has been below the $1 billion mark in the last six months.

Quarterly breakeven achieved However, Everbridge has been on a growth path in recent years: from 2017 to 2022, revenues increased from $104 million to $432 million. For 2023, management expects revenues of $447 to $448.5 million and earnings of $1.48 to $1.52 per share. This means that Thoma Bravo is paying 19 times the forecasted earnings for 2023.

Thoma Bravo aims to boost growth The buyer, Thoma Bravo, is likely targeting the subscription revenue, which accounted for around 90% of their revenue. „We look forward to partnering with Everbridge to expand opportunities in the growing market for risk, compliance, and security solutions,“ said Thoma Bravo partner Hudson Smith in a press release.

The transaction is still subject to certain regulatory and shareholder approvals. The completion is planned for the second quarter of the current year.

Stock price approaches takeover price The agreement includes a 25-day „go-shop“ period, which ends on February 29, 2024 and allows the Everbridge board and its advisors to actively initiate alternative takeover proposals from certain third parties. Meanwhile, the stock is trading at $28.17, just below the purchase offer price of $28.60.