Private equity firm Thoma Bravo has agreed to buy the real estate software company RealPage in a deal that values it at $10.2bn, one of the biggest leveraged buyouts this year.
The Chicago-based group will pay $88.75 a share for RealPage’s stock, a 30.8 per cent premium to its closing price of $67.83 on Friday, the software provider said in a statement on Monday.
The deal marks the second-largest leveraged buyout this year, behind the €17.2bn acquisition of Thyssenkrupp’s lifts business in February by Advent and Cinven, according to data from Refinitiv.
Texas-based RealPage provides online services for property owners, including marketing apartments and operating online billing. It also uses an algorithm to screen potential tenants using data on rent-payment history, criminal records and credit scores.
The tool assesses “more than just a credit score and the ability to pay — it’s about the willingness to pay,” according to RealPage’s website.
The Nasdaq-listed company made revenues of $988m in the year to December 2019, according to its most recent annual report. Its shares tumbled at the beginning of the coronavirus pandemic in March, falling by a third to $42.69 in less than a fortnight, but they have since risen higher than their pre-crisis level.
“We believe this transaction will provide immediate and substantial value to RealPage stockholders, reflecting the tremendous work that our employees have done to build this company,” RealPage’s chairman and chief executive Steve Winn said in a statement.
RealPage expects Mr Winn and the existing leadership team to stay in place after the acquisition, it said.
Thoma Bravo, which specialises in software deals, bought the Oxfordshire-based cyber security company Sophos in a $3.9bn deal announced last year.
It owns a stake in SolarWinds, the Texas-based IT software group that was targeted this month in one of the biggest and most startling cyber hacks in recent history. It and rival Silver Lake sold some of their shares in the company to the Canada Pension Plan Investment Board just days before the hack became public, the Financial Times reported last week.
The RealPage deal is subject to a 45-day “go-shop” process in which the software company can solicit higher bids and can terminate its agreement with Thoma Bravo to accept a better offer.
If the deal goes ahead, the parties expect it to close in the second quarter of 2021, the statement said.
RealPage “has tremendous potential going forward,” said Orlando Bravo, a managing partner of Thoma Bravo. The group will seek to “grow the company’s market offerings and enhance its current capabilities to capitalise on the increasingly complex and expanding real estate market,” he said.