QAD Acquired by Thoma Bravo, Stock Up 19%

Manufacturing and supply chain software company QAD Inc. (QADA) has been acquired by private equity firm Thoma Bravo for $2 billion. QAD stock jumped 19.41% to $87.05 on Monday. QAD shareholders will receive $87.50 per share in the all-cash buyout.

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Thoma Bravo primarily invests in software companies. QAD believes that going private as part of Thoma Bravo will boost its flexibility and resources to invest in expanding its growth opportunities.

QAD CEO Anton Chilton will continue to lead the company. QAD Founder and President Pamela Lopker plans to remain a significant shareholder in the company and continue to serve on the board following the closing of the transaction.

“Today’s announcement, which is the culmination of a comprehensive process, represents a compelling opportunity to build on QAD’s impressive legacy and strong momentum while maximizing value for shareholders,” said Chilton.

“Since QAD’s founding in 1979, our customers, our technology and the manufacturing industry have evolved significantly – and, at every step, QAD has adapted swiftly to maintain and build our leadership position…Through this partnership, we will be even better positioned to build on our strong foundation and enhance our value proposition,” said Pamela Lopker.

A special committee made up of independent directors on the QAD board negotiated the deal with Thoma Bravo. The board recommends that shareholders approve the transaction. Lopker controls 67% of the voting power in QAD and supports the deal. The deal is expected to close in the fourth quarter.

Thoma Bravo likes QAD’s exceptional foundation and history and is excited about its future. It plans to bring its deep expertise to support the company toward sustainable long-term growth. (See QAD stock chart on TipRanks).

Stifel analyst Brad Reback downgraded QAD stock rating to Hold from Buy following the announcement. Reback sees QAD’s deal with Thoma Bravo as another example of more private equity money flowing into the software sector and expects more similar deals in the coming quarters and years.

Consensus among analysts is a Hold based on 3 Holds.

QAD scores a 7 out of 10 on TipRanks’ Smart Score rating system, suggesting that the stock is likely to perform in line with market averages.