Zuora has announced that it has entered into an agreement to be acquired and taken private by the investment firm Silver Lake, in collaboration with an affiliate of GIC. This acquisition is valued at approximately $1.7 billion, representing a significant shift for the subscription management software company.
Shareholders are set to receive $10 per share in cash, corresponding to an impressive 18% premium over the company's closing stock price on April 16, which was the last trading day before rumors regarding a potential sale began to circulate. Following this news, Zuora's shares experienced a notable surge, rising by 6.4% in midday trading, reflecting the market's positive reception of the acquisition agreement. The deal's execution is contingent upon obtaining necessary approvals from regulatory authorities as well as from Zuora's stockholders.
It is projected that the acquisition will be finalized in the first quarter of 2025, at which point the company will cease to be publicly traded. "Our agreement with Silver Lake and GIC represents the culmination of a comprehensive process to determine the best path to maximizing value for Zuora stockholders," remarked Jason Pressman, the lead independent director of Zuora's board.
Pressman expressed satisfaction at having reached an agreement anticipated to deliver significant, immediate, and certain value to its stockholders. Tien Tzuo, the Founder and Chief Executive of Zuora, has committed to rolling over a majority of his existing ownership stake in the company, ensuring that he will continue to spearhead the firm.
The company's headquarters will remain in Redwood City, California, ensuring continuity in its operations and strategic direction. In August, Zuora had reported adjusted earnings for the fiscal second quarter of $0.19 per share, an increase from $0.07 per share in the same period the prior year. Revenue figures also indicated a growth of 7%, reaching $115.4 million.
During this period, Zuora projected adjusted earnings per share for fiscal 2025 to be in the range of $0.56 to $0.58, while also anticipating total revenue between $455.5 million and $461.5 million. Choo Yong Cheen, GIC's chief investment officer of private equity, along with Eric Wilmes, head of private equity for the Americas, expressed enthusiasm about collaborating with Zuora's notable management team, as well as with Silver Lake, to foster the company's next growth phase. Furthermore, this investment signals robust confidence in Zuora's position as a leading provider of monetization solutions tailored for modern recurring revenue businesses.
According to Silver Lake's managing partner Joe Osnoss and managing director Mike Widmann, this acquisition underscores their belief in Zuora's capability to thrive in the competitive landscape of subscription-based services. As of the latest trading session, Zuora's stock price stood at $10.01, reflecting a change of +0.59 and a percent change of +6.26..