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

Human capital management technology leader Dayforce, Inc. has agreed to be acquired by Thoma Bravo for US$12.3 billion, with stockholders receiving US$70.00 per share in cash.

Summary

• Dayforce, Inc. will be acquired by Dawn Bidco, LLC and Dawn Acquisition Merger Sub, Inc., affiliates of Thoma Bravo, in an all-cash transaction.
• The transaction has an enterprise value of US$12.3 billion.
• Dayforce stockholders will receive US$70.00 per share in cash for each outstanding share of common stock.
• This purchase price represents a 32% premium over Dayforce's unaffected closing share price on August 15, 2025.
• A wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA) is making a significant minority investment in the transaction.
• Dayforce will become a privately held company and will continue to operate under its current name and brand.
• The transaction is not subject to a financing condition, as Parent has secured equity and debt financing commitments.

Sentiment

Score: 8

Explanation: The acquisition offers a significant premium to shareholders and is backed by a reputable private equity firm with a strong focus on software, indicating a positive outlook for the company's future growth and market position, especially in AI-driven HCM. The all-cash nature provides certainty for shareholders, despite the loss of public market access.

Positives

• Stockholders will receive a substantial 32% premium over the unaffected closing share price, providing immediate and certain cash value.
• The partnership with Thoma Bravo, a leading software investment firm, is expected to accelerate Dayforce's growth, enhance customer value, and strengthen its leadership in AI-driven Human Capital Management (HCM).
• The transaction is not subject to a financing condition, reducing uncertainty regarding the completion of the acquisition.
• Continuing employees will receive no less favorable base salary, target annual or short-term cash incentive opportunities, and severance benefits for 12 months following the Effective Time.
• Unvested restricted stock units (RSUs) and performance-based restricted stock units (PSUs) will convert into cash payment rights, subject to continued service, with performance conditions for PSUs deemed achieved at 100% of target.

Negatives

• Dayforce's common stock will no longer be listed on the New York Stock Exchange (NYSE) or the Toronto Stock Exchange (TSX), removing public market liquidity and access for investors.
• Unvested Company stock options, and those with an exercise price equal to or greater than the Merger Consideration, will be cancelled without consideration.
• The transaction may cause disruption to management's time from ongoing business operations.
• There is a risk of unexpected costs or expenses resulting from the proposed transaction.
• The announcement and transaction could have adverse effects on Dayforce's ability to retain and hire key personnel and maintain relationships with customers, vendors, partners, employees, and other business relationships.

Risks

• The timing, receipt, and terms of required governmental and regulatory approvals (including under the HSR Act, Competition Act (Canada), Officer of the Comptroller of the Currency (OCC), and CFIUS) could delay or prevent the consummation of the transaction.
• There is a possibility that Dayforce stockholders may not approve the proposed transaction.
• The parties to the merger agreement may not be able to satisfy all closing conditions in a timely manner or at all.
• Disruption of management time from ongoing business operations due to the proposed transaction.
• Announcements relating to the proposed transaction could have adverse effects on the market price of Dayforce's common stock.
• The risk of any unexpected costs or expenses resulting from the proposed transaction.
• The risk of any litigation relating to the proposed transaction, including claims of breach of fiduciary duty.
• The proposed transaction and its announcement could have an adverse effect on Dayforce's ability to retain and hire key personnel and to maintain relationships with customers, vendors, partners, employees, stockholders, and other business relationships.
• Parent is not required to agree to any 'Materially Burdensome Regulatory Condition' that could materially adversely affect the business of the Surviving Company or Parent's affiliates.
• Non-U.S. persons with direct or indirect interests in Parent must solely hold passive economic interests and not have board representation or governance rights until CFIUS Approval is obtained.

Future Outlook

The transaction is expected to close in early 2026, subject to customary closing conditions including stockholder and regulatory approvals. Dayforce aims to accelerate growth, increase customer value, and further secure its position in AI as an HCM leader, leveraging the partnership with Thoma Bravo.

Management Comments

• "Dayforce has always stood for a bold promise: to make work life better. As one of the worlds leading enterprise software investors, Thoma Bravos commitment amplifies this promise as we partner to grow our business, increase quantifiable value for customers, and further secure our position in AI as a generational software company." David Ossip, Chair and CEO of Dayforce.
• "With Thoma Bravo, we are partnering with a truly special organization to accelerate our business with our focus, resources, and product innovation all laser-pointed on leaping forward as the HCM leader for a world of work shaped by AI." David Ossip, Chair and CEO of Dayforce.
• "The Board of Directors believes this transaction will provide immediate and substantial value to Dayforce stockholders and recognizes the valuable organization that the team has built." Gerald Throop, Lead Independent Director of Dayforce.
• "We are thrilled to be investing in Dayforce, a clear category leader that is poised to define the future of HCM in the age of AI." Holden Spaht, Managing Partner at Thoma Bravo.
• "Dayforce's differentiated platform, global scale, and world-class team make it well-positioned to meet the growing and evolving needs of employers and employees around the world. We see significant opportunity to accelerate growth, deepen customer impact, and continue to drive innovation across the global HCM landscape." Holden Spaht, Managing Partner at Thoma Bravo.
• "Dayforce has built an exceptional business by pairing relentless innovation with a deep commitment to its customers. This combination has fueled strong growth and established Dayforce as a partner of choice in HCM. We are excited to build on this strong foundation and momentum alongside them, helping them to move faster, think bigger, and unlock even more market and product potential." Tara Gadgil, Partner at Thoma Bravo.

Industry Context

The acquisition highlights the ongoing consolidation and private equity interest in the Human Capital Management (HCM) technology sector, particularly for companies with global scale and a focus on AI innovation. Thoma Bravo's expertise in software investments suggests a strategic move to capitalize on Dayforce's market position and accelerate its development in AI-driven HCM solutions, reflecting a broader industry trend towards advanced, integrated platforms. This move positions Dayforce to potentially enhance its competitive standing against other major HCM providers by leveraging private capital for accelerated innovation and market expansion.

Comparison to Industry Standards

• The 32% premium offered to Dayforce stockholders is a strong indicator of the perceived value and strategic importance of Dayforce within the HCM sector, often exceeding typical premiums in public-to-private transactions for established technology companies.
• Thoma Bravo's stated intent to accelerate Dayforce's growth and AI leadership aligns with the competitive landscape in HCM, where major players like Workday, SAP SuccessFactors, and Oracle HCM Cloud are also heavily investing in AI and integrated platforms to gain market share.
• Dayforce's 'single AI-powered people platform for HR, Pay, Time, Talent, and Analytics' positions it competitively against other comprehensive HCM suites, suggesting a robust and differentiated offering that attracted a premium valuation from a specialized software investor like Thoma Bravo.

Management Changes

Corporate Governance

Legal Proceedings

• The filing explicitly mentions the risk of 'any litigation relating to the proposed transaction' and 'litigation arising from allegations of breach of fiduciary duty or violation of Law relating to this Agreement or the Transactions'.
• Dayforce and Parent have agreed to cooperate in the defense or settlement of any 'Transaction Litigation'.

Related Party Transactions

• The acquirer, Dawn Bidco, LLC, and Dawn Acquisition Merger Sub, Inc., are affiliates of Thoma Bravo Fund XVI, L.P., Thoma Bravo Fund XVI-A, L.P., Thoma Bravo Fund XVI-B, SCSP, Thoma Bravo Executive Fund XVI, L.P., Thoma Bravo Employee Fund II, L.P., Thoma Bravo Fund XV, L.P., Thoma Bravo Fund XV-A, L.P., Thoma Bravo Executive Fund XV, L.P., Thoma Bravo Employee Fund, L.P., Thoma Bravo Fund XIV, L.P., Thoma Bravo Fund XIV-A, L.P., Thoma Bravo Executive Fund XIV, L.P. and Thoma Bravo Executive Fund XIV-a, L.P. (collectively, Thoma Bravo).
• The transaction includes a significant minority investment from a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA).
• Thoma Bravo Fund XV, L.P. and Thoma Bravo Fund XVI, L.P. (the Equity Investors) are entering into a Guarantee with respect to certain obligations of Parent and Merger Sub under the Merger Agreement.

Stakeholder Impact

• **Shareholders**: Will receive US$70.00 cash per share, representing a 32% premium, providing immediate and substantial value. They will lose future public market upside and liquidity as the company goes private.
• **Employees**: Continuing employees are guaranteed no less favorable base salary, target annual/short-term cash incentives, and aggregate benefits (excluding certain types) for 12 months post-closing. Unvested equity awards convert to cash payment rights, subject to continued service. There is a risk of disruption and potential challenges in retaining key personnel.
• **Customers, Vendors, and Partners**: Management aims to deepen customer impact and drive innovation. However, there is a risk of adverse effects on existing relationships due to the change in ownership.
• **Management**: The current officers of Dayforce are expected to become the officers of the Surviving Corporation, indicating continuity in leadership.
• **Regulators**: The transaction requires various regulatory approvals (e.g., HSR, Competition Act, OCC, CFIUS), which will involve scrutiny and compliance efforts.

Next Steps

• Dayforce will prepare and file a preliminary proxy statement with the SEC and Canadian securities regulators.
• Dayforce will mail a definitive proxy statement to its stockholders and holders of exchangeable shares.
• Dayforce will convene a Company Stockholders Meeting to obtain the Company Stockholder Approval.
• The parties will seek required governmental and regulatory approvals, including under the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act), the Competition Act (Canada), the Officer of the Comptroller of the Currency (OCC), and CFIUS.
• Dayforce will take actions to terminate its Global Employee Stock Purchase Plan (GESPP) and convert outstanding purchase rights.
• Dayforce will cooperate with Parent regarding notices and actions for Company Convertible Notes and Capped Call Transactions.
• Dayforce Common Stock will be de-listed from the NYSE and TSX, and de-registered under the Exchange Act.
• The merger is expected to close in early 2026.

Key Dates

Recommendation

The all-cash acquisition offers a substantial 32% premium over the unaffected share price, providing immediate and certain value to stockholders. The Board of Directors has unanimously approved the transaction and recommends it, signaling strong internal conviction. While the company will go private, for current public shareholders, this represents a clear and attractive exit at a premium, making it a strong buy for those seeking to capitalize on the acquisition price.

Keywords

Dayforce, Thoma Bravo, Acquisition, Merger, Human Capital Management, HCM, Software, Private Equity, AI, NYSE, TSX, Stockholder Value, Regulatory Approval, Corporate Governance, ADIA, Going Private