Thoma Bravo to take Dayforce stock private at $70 per share

Investing.com - Dayforce (NYSE:DAY) announced Thursday it has entered a definitive agreement with software investment firm Thoma Bravo to go private at $70 per share, representing a 32% premium to its unaffected close on August 15. The news has driven Dayforce’s stock up significantly, with InvestingPro data showing an impressive 30.5% return over the past week.

The transaction values Dayforce at an enterprise value of $12.3 billion, implying approximately 4.4 times 2027 estimated sales. The deal is expected to close in early 2026, subject to Dayforce shareholder and regulatory approval. According to InvestingPro data, the company maintains healthy financials with a 51% gross profit margin and operates with a moderate debt-to-equity ratio of 0.45.

UBS reiterated a Buy rating on Dayforce with a $72.00 price target following the announcement. The firm expects this deal to drive positive reactions across the broader HCM sector, including Alight and Paycom (NYSE:PAYC), amid increased M&A activity following Paychex (NASDAQ:PAYX)’s approximately $4 billion acquisition of Paycor (NASDAQ:PYCR).

According to Thoma Bravo, Dayforce is a category leader "poised to define the future of HCM in the age of AI." The private equity firm’s approach appears consistent with its historical SaaS strategy of leveraging scale, recurring revenue, and high margins to drive operational efficiencies and pursue tuck-in acquisitions.

Dayforce currently demonstrates strong positioning with recurring ex-float revenue growing approximately 15-17% year-over-year on a constant currency basis, along with overall adjusted EBITDA margins of approximately 32% expected for 2025. InvestingPro subscribers have access to 15+ additional insights about Dayforce’s financial health, which currently rates as GOOD based on comprehensive analysis of growth, profitability, and momentum metrics.

In other recent news, Dayforce has agreed to be acquired by Thoma Bravo in an all-cash transaction valued at $12.3 billion. This deal will take the company private, with Dayforce stockholders set to receive $70 per share in cash, marking a 32% premium to the unaffected share price. Following this announcement, BMO Capital downgraded Dayforce from Outperform to Market Perform, although it raised the price target to $70.00 from $67.00. Similarly, TD Cowen downgraded Dayforce from Buy to Hold while adjusting its price target to $70.00, reflecting Thoma Bravo’s acquisition offer.

Meanwhile, UBS has reiterated its Buy rating and maintained a $72.00 price target on Dayforce amid the acquisition talks. The discussions between Dayforce and Thoma Bravo were confirmed after a Bloomberg report suggested an imminent announcement. This series of events has spurred significant interest in the company’s future, with analysts adjusting their ratings in response to the acquisition news.

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