DEFA14A: Dayforce to Go Private in $12.3B Thoma Bravo Acquisition

Dayforce, Inc. announced a definitive agreement to be acquired by Thoma Bravo in an all-cash transaction valuing the company at approximately US$12.3 billion, marking a new chapter for the HCM leader.

Summary

• Dayforce, Inc. has entered into a definitive agreement to become a private company through an acquisition by Thoma Bravo.
• The transaction is an all-cash deal, valuing Dayforce at approximately US$12.3 billion.
• The strategic move aims to provide Dayforce with enhanced flexibility and resources to accelerate its leadership in AI-driven Human Capital Management (HCM).
• Management believes becoming private will allow the company to move with unprecedented speed and focus in the evolving workforce and compliance landscape.
• The acquisition is expected to close by early 2026, subject to regulatory approvals and stockholder consent.

Sentiment

Score: 9

Explanation: The announcement of an all-cash acquisition at a significant valuation by a reputable private equity firm is overwhelmingly positive for shareholders and signals strong confidence in the company's future under private ownership, despite the inherent risks of any merger.

Positives

• The acquisition by Thoma Bravo, a leading enterprise software investor, validates Dayforce's strong business and market position.
• The all-cash transaction offers a significant valuation of US$12.3 billion to shareholders.
• Partnership with Thoma Bravo is expected to accelerate Dayforce's growth, innovation pace, and focus on being the AI leader in HCM.
• Going private will provide Dayforce with greater operational flexibility and resources, free from public market pressures.
• Thoma Bravo's investment reflects confidence in Dayforce's product leadership, nearly 7,000 live customers, industry-leading retention rate, and consistent sales momentum.

Negatives

• No explicit negatives are presented in the filing, as it announces a strategic acquisition viewed positively by management.

Risks

• The timing, receipt, and terms of required governmental and regulatory approvals could delay or prevent the transaction.
• The merger agreement could be terminated due to various unforeseen events, changes, or circumstances.
• Dayforce stockholders may not approve the proposed transaction.
• The parties to the merger agreement may not be able to satisfy the conditions to the proposed transaction in a timely manner or at all.
• The proposed transaction could disrupt management's time from ongoing business operations.
• Announcements related to the proposed transaction could adversely affect the market price of Dayforce's common stock.
• Unexpected costs or expenses may arise from the proposed transaction.
• There is a risk of litigation relating to the proposed transaction.
• The transaction and its announcement could adversely affect Dayforce's ability to retain and hire key personnel, maintain relationships with customers, vendors, partners, employees, and other business relationships, potentially impacting operating results and business generally.

Future Outlook

Dayforce expects to accelerate its focus on becoming the AI leader in Human Capital Management (HCM) and deliver enhanced value for customers and communities as a private company. The transaction is anticipated to close by early 2026, after which the company will operate with increased flexibility and resources to drive innovation and growth.

Management Comments

• "I'm proud to officially announce something incredibly significant: Dayforce has entered into a definitive agreement to become a private company through a transaction with Thoma Bravo, one of the world's leading enterprise software investors, in an all-cash transaction that values us at approximately US$12.3 billion." David Ossip, Chair, CEO, and Founder.
• "Our partnership with a world-class firm like Thoma Bravo coupled with the scale of their commitment reflects the strength and success of the business that we've collectively built as Daymakers, anchored in our promise to make work life better." David Ossip.
• "Becoming a private company will give us the added space, flexibility, and resources to go even deeper on what matters most: accelerating our focus on being the AI leader in HCM and delivering even more value for our customers and communities." David Ossip.
• "There's no better partner to help fuel our next chapter than Thoma Bravo. They're one of the world's most respected investment firms, known for backing high-growth, market-leading companies with strong products and deep, long-term customer relationships." David Ossip.
• "We expect to close this transaction by early 2026. Until then, we will continue to operate as a public company. We must keep our focus on continuing to build a great company, accelerating sales, achieving our targets, and delivering great products that create value for our customers." David Ossip.

Industry Context

The acquisition of Dayforce by Thoma Bravo highlights the increasing strategic importance of Human Capital Management (HCM) solutions, particularly those leveraging Artificial Intelligence (AI), in a dynamic global macroeconomic and compliance landscape. This move positions Dayforce to compete more aggressively for leadership in the AI-shaped world of work, a trend seen across the enterprise software sector where private equity firms are investing heavily to accelerate innovation and market capture away from public market pressures.

Comparison to Industry Standards

• Thoma Bravo is recognized as a 'gold standard' investment firm, known for backing high-growth, market-leading companies with strong products and long-term customer relationships, aligning Dayforce with a portfolio of successful industry leaders.
• Thoma Bravo's portfolio represents approximately $275 billion in enterprise value, indicating significant experience and a strong track record in the enterprise software sector.
• The US$12.3 billion acquisition price for Dayforce reflects a substantial valuation for a company in the HCM software space, consistent with high valuations for market leaders in specialized enterprise software sectors.
• Dayforce's reported nearly 7,000 live customers and industry-leading retention rate suggest strong competitive positioning within the HCM market, comparable to top-tier players in terms of customer loyalty and product stickiness.

Legal Proceedings

• Risk of litigation relating to the proposed transaction.

Stakeholder Impact

• Shareholders will receive cash for their shares, realizing a specific valuation.
• Employees (Daymakers) are assured that the company's promise and values remain, with new opportunities for growth and innovation, though there is a risk of adverse effects on retention and hiring.
• Customers are expected to benefit from enhanced value and accelerated innovation, particularly in AI-driven HCM solutions.
• Vendors and partners may experience changes in relationships, with a risk of adverse effects on maintaining these relationships.

Next Steps

• Continue to operate as a public company until the transaction closes.
• Maintain focus on building the company, accelerating sales, achieving targets, and delivering great products.
• Host Global All-Team Meetings on August 21, 2025, and August 25, 2025, to inform employees.
• Provide ongoing information and FAQs via dedicated Hub and YourSource pages.
• File a preliminary Proxy Statement with the SEC and Canadian securities regulators.
• Mail a definitive Proxy Statement to stockholders and holders of exchangeable shares.
• Seek governmental and regulatory approvals for the proposed transaction.
• Seek approval from Dayforce stockholders for the proposed transaction.

Key Dates

Recommendation

For existing shareholders, the all-cash acquisition at a stated value means the stock price will likely trade close to the offer price until closing. Holding shares allows them to receive the agreed-upon cash consideration. For new investors, there is limited upside potential beyond the offer price, making it less attractive for new positions unless there's a significant discount to the offer price, which is not indicated. The recommendation is to hold for existing shareholders to realize the acquisition value.

Keywords

Dayforce, Thoma Bravo, Acquisition, Private Equity, Human Capital Management, HCM, AI, Software, Merger, Technology