thoma bravo

The UserTesting sale to private equity is bad news for unicorns • ZebethMedia

By zebethcontrolPosted on October 27, 2022Posted in EC venture capital, Startups, Sunstone Partners, thoma bravo, user testing, VentureNo Comments

News broke this morning that UserTesting, a former startup that went public last year, is selling to private equity (Thoma Bravo, Sunstone Partners) for $1.3 billion, or $7.50 per share in cash. The deal, expected to close in the first half of 2023, does include a “go-shop” period, in case a better deal crops up. Holders of UserTesting shares have some cause for joy. The customer insight platform is selling for what it describes as a “premium of approximately 94% over [its] closing stock price” yesterday. As a result, shares of UserTesting soared today as investors digested the news. UserTesting dropped earnings this morning in conjunction with the deal news, giving us a window into its health. We can cross those numbers with the final price that UserTesting will command in the sale to improve our understanding of the value of smaller technology companies — at least when compared to the giants of their industry. The lessons thereof are pretty simple and not great for yet-private unicorns. Looking at the deal, it’s clear that single-digit SaaS multiples are not merely real but durable. UserTesting is exiting at a nearly 100% premium for a fraction of the price at which it went public last year. Unless the company is a financial mess, that’s terrifying for unicorns that raised money last year.

Thoma Bravo, Sunstone Partners to acquire UserTesting for $1.3B and combine it with UserZoom • ZebethMedia

By zebethcontrolPosted on October 27, 2022Posted in customer experience, Enterprise, mergers and acquisitons, thoma bravo, usertestingNo Comments

Thoma Bravo and Sunstone Partners announced today that they’re acquiring customer insight platform UserTesting for $1.3 billion in an all-cash deal. The acquirers say they plan to combine it with UserZoom, a customer research company Thoma Bravo bought an $800 million majority stake in last April. The firms paid what appears to be a generous $7.50 a share for the company, which opened trading this morning at $3.86 per share. Brent Leary, founder and principal analyst at CRM Essentials, was surprised by the price, but says that combining the two companies creates a broad platform of customer experience services. “With more interactions taking place digitally, UserTesting has built out a nice platform for getting quick feedback that allows marketers to react quickly to the insights they’ve uncovered. And you have to think the combination of UserTesting and UserZoom has the opportunity to provide insights to a broader set of user experiences covering customers, employees, devices and more,” he said. While it may seem that Thoma Bravo wants to buy every company with ‘User’ in its name, as Leary pointed out, combining these two companies could provide an interesting mix of tools to help understand those users better with the ultimate goal of delivering better customer experiences. Thoma Bravo partner A.J. Rohde sees the customer experience angle as being key to this acquisition, especially the combined firms. “Our acquisition of UserTesting is a testament to our belief that customer experience is mission critical to organizations, and the combined company will be well-positioned to further market expansion, accelerate innovation and provide even greater insights to its customers,” he said in a statement. That outcome remains to be seen, but the fact is that UserTesting has had a rough ride as a public company, going public below its expected range just about a year ago when it IPOed at $14 a share — not a good sign as it entered the public realm. The stock price bottomed out at $3.43 a share on September 22nd. It had to be a pretty good day for shareholders when this price crossed the wire, all things considered. Not surprisingly, the UserTesting board unanimously agreed to the terms of the acquisition and the deal is expected to close in the first half of next year. There is a go-shop provision that allows the company to shop around and see if it can find a better price before December 10th. While that seems unlikely at this point given the premium on the share price, it is part of the terms of the deal. UserTesting was founded in 2007 and raised over $150 million before going public last year.