DEFM14A: Olo Inc. to Go Private in $2.0B Thoma Bravo Acquisition

Olo Inc. stockholders are set to vote on a $10.25 per share all-cash acquisition by private equity firm Thoma Bravo, valuing the company at approximately $2.0 billion.

Summary

• Olo Inc. has entered into a Merger Agreement with Project Hospitality Parent, LLC (an affiliate of Thoma Bravo, L.P.) for an all-cash acquisition.
• Stockholders will receive $10.25 in cash for each Company Share they own.
• This consideration represents a premium of approximately 65% over Olo's closing price of $6.20 as of April 30, 2025, the last trading day prior to media reports regarding a potential transaction.
• The total transaction value is estimated at approximately $2.0 billion, including estimated transaction fees and expenses.
• The Olo Board of Directors unanimously recommends stockholders vote FOR the Merger Proposal, FOR the Compensation Proposal, and FOR the Adjournment Proposal.
• A special meeting of stockholders will be held virtually on September 9, 2025, at 9:00 a.m. Eastern Time to vote on the merger.
• Certain supporting stockholders, including Noah H. Glass, The Raine Group, and Raqtinda Investments LLC, collectively owning approximately 78.5% of the total voting power, have agreed to vote in favor of the Merger Proposal.
• Upon consummation, Olo will become a wholly-owned subsidiary of Project Hospitality Parent, delist its Class A Common Stock from the NYSE, and deregister with the SEC.

Sentiment

Score: 8

Explanation: The all-cash acquisition at a significant premium provides immediate and certain value to shareholders, reflecting a favorable outcome from a robust negotiation process. The unanimous board recommendation and strong shareholder support further bolster confidence.

Positives

• The $10.25 per share cash consideration provides immediate value and liquidity to stockholders.
• The merger consideration represents a significant premium of approximately 65% over Olo's unaffected share price of $6.20 as of April 30, 2025.
• The Olo Board of Directors unanimously determined that the Merger Agreement and the transactions are in the best interests of Olo and its stockholders.
• Supporting stockholders, representing approximately 78.5% of the total voting power, have agreed to vote in favor of the Merger Proposal, increasing closing certainty.
• Thoma Bravo has committed to provide a full equity backstop for the entire purchase price, enhancing financing certainty.
• The terms of the Merger Agreement were the result of arm's-length negotiations, leading to an increased valuation offered by Thoma Bravo.
• The merger is not conditioned upon receipt of financing by Project Hospitality Parent, reducing financing risk.
• Olo's directors and executive officers are entitled to continued indemnification and insurance coverage for six years following the merger.

Negatives

• Olo's public stockholders will not participate in any future growth potential or benefit from any future increase in the value of Olo as a private company.
• Olo may be required to pay a termination fee of $73,725,000 under certain circumstances, potentially increasing to 3.75% of the aggregate implied equity value if a superior proposal is received and Parent increases its offer.
• The receipt of cash for Company Shares will be a taxable transaction for U.S. federal income tax purposes for U.S. Holders.
• Olo's business operations are subject to certain restrictions between the signing of the Merger Agreement and the Effective Time.
• The merger involves significant costs and management effort, which may disrupt business operations.

Risks

• The possibility that all conditions to the Merger will not be timely satisfied or waived, and that the Merger will not be consummated.
• Potential negative effects on Olo's stock price if the Merger is not consummated, possibly declining significantly below the price prior to the public announcement.
• Negative effects of the public announcement of the Merger on Olo's business relationships (employees, customers, suppliers, partners), operating results, and cash flows.
• Risks related to Olo's ability to retain or recruit key employees and maintain relationships with key business partners and customers.
• Diversion of management and employee attention from ongoing business operations due to the merger process.
• Restrictions on the conduct of Olo's business prior to the completion of the Merger, which may delay or prevent Olo from undertaking business opportunities.
• The nature, cost, and outcome of any litigation and other legal proceedings, including those related to the Merger.
• Olo is precluded from actively soliciting alternative acquisition proposals during the pendency of the Merger.
• The receipt of the all-cash Merger Consideration would be taxable to U.S. Holders for U.S. federal income tax purposes.
• Risk that regulatory approval may delay the consummation of the Merger or result in the imposition of conditions that could cause the parties to abandon the Merger.
• Risks related to general industry conditions, competition, public health crises, macroeconomic conditions (inflation, interest rates), geopolitical instability, and shifts in consumer preferences.
• Parent's liabilities for monetary damages for breaches under the Merger Agreement or Equity Commitment Letter are limited to $157,300,000.
• The fair value of shares determined by the Delaware Court of Chancery in appraisal rights proceedings could be more than, the same as, or less than the Merger Consideration.

Future Outlook

Olo is expected to become a private company, delisting from the NYSE and deregistering with the SEC. This transition will remove Olo from public market scrutiny and reporting requirements. The company's future operations will be directed by Project Hospitality Parent (Thoma Bravo), with a focus on long-term strategic goals outside of public market pressures. Projections provided by Olo management indicate continued revenue and profit growth as a standalone entity through 2034, but these will not be realized by public shareholders post-merger.

Management Comments

• The Board unanimously recommends that holders of Company Shares vote FOR the Merger Proposal, FOR the Compensation Proposal and FOR the Adjournment Proposal.
• The Board, after considering the factors more fully described in the enclosed proxy statement, has unanimously (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Merger (together, the Transactions), are in the best interests of Olo and the holders of Company Shares, and declared it advisable to enter into the Merger Agreement, (ii) approved the execution, delivery and performance of the Merger Agreement and the consummation of the Transactions contemplated thereby, including the Merger, and (iii) resolved to recommend that holders of Company Shares adopt the Merger Agreement and direct that such matter be submitted for consideration of the holders of Company Shares at the Special Meeting.

Industry Context

The acquisition of Olo by Thoma Bravo, a leading private equity firm focused on software and technology-enabled services, aligns with a broader trend of private equity firms acquiring public technology companies, particularly those in specialized SaaS sectors. This move allows Olo to pursue long-term strategies and investments away from the quarterly pressures of the public market, potentially enabling deeper integration and expansion of its restaurant SaaS platform without immediate public shareholder expectations. The transaction also highlights the continued interest in the restaurant technology sector, which has seen significant growth and consolidation.

Comparison to Industry Standards

• The 65% premium over Olo's unaffected share price of $6.20 (April 30, 2025) is a substantial premium compared to typical public company acquisitions, which often range from 20-40%.
• Goldman Sachs' financial analysis included comparisons to publicly traded companies like Toast, Inc., PAR Technology Corp., Shift4 Payments, Inc., Block, Inc., Bill Holdings, Inc., Lightspeed Commerce Inc., Fiserv, Inc., PayPal Holdings, Inc., and Global Payments Inc., as well as selected precedent transactions in the software industry.
• The illustrative EV/NTM uFCF multiples for Olo (undisturbed) were 15.8x, while the median for selected publicly traded companies was 14.1x. The EV/NTM GP multiples for Olo (undisturbed) were 3.6x, while the median for selected publicly traded companies was 5.7x. The merger consideration implies a higher valuation than the undisturbed multiples.
• Selected precedent transactions in the software industry (e.g., Kaseya Holdings Inc. / Datto Holding Corp., Thoma Bravo / Coupa Software Incorporated, Vista Equity Partners / Duck Creek Technologies, Inc.) showed EV/NTM FCF multiples ranging from 16.1x to 31.1x. Olo's valuation in this deal falls within or above the higher end of some comparable metrics, especially considering the premium.
• The premia paid analysis for all-cash acquisition transactions in the technology industry since July 1, 2020, showed a median premium of 31% over the last undisturbed closing stock price. Olo's 65% premium significantly exceeds this median, indicating a favorable outcome for shareholders.

Management Changes

Corporate Governance

Legal Proceedings

• The filing identifies 'Transaction Litigation' as a potential risk, referring to any claims, demands, or proceedings asserted against Olo, the Board, Parent, or Merger Sub related to the Merger Agreement.
• Olo will notify Parent of any Transaction Litigation and allow Parent a reasonable opportunity to participate in the defense and settlement, but Olo will not settle without Parent's prior written consent.
• The filing also mentions 'any demand or Proceeding for appraisal of the fair value of any Company Shares pursuant to the DGCL in connection with the Merger Agreement' as a potential legal matter.

Related Party Transactions

• Noah H. Glass (CEO & Director), The Raine Group, and Raqtinda Investments LLC (significant stockholders) entered into support agreements to vote their respective Company Shares in favor of the Merger Proposal. These entities collectively beneficially owned approximately 78.5% of the total voting power as of July 3, 2025.
• The Board discussed potential conflicts of interest posed by the possibility of significant shareholders participating in a rollover of equity, leading to the establishment of 'significant stockholder guidelines' for Raqtinda and Mr. Frankel (Manager of Raqtinda) to prevent discussions regarding rollovers without Transaction Committee approval.
• Goldman Sachs & Co. LLC, Olo's financial advisor, has existing lending relationships and has provided financial advisory and/or underwriting services to Thoma Bravo and/or its affiliates and portfolio companies, for which Goldman Sachs Investment Banking recognized approximately $200 million in compensation over the two-year period ended July 3, 2025. Goldman Sachs also has co-investments with Thoma Bravo and The Raine Group.

Stakeholder Impact

• Shareholders will receive $10.25 per share in cash, providing immediate liquidity and a significant premium, but will cease to have any ownership interest in Olo as a public company.
• Employees who continue employment will receive base salary/hourly rate and target annual cash incentive compensation opportunities no less favorable in aggregate for 12 months post-closing, along with substantially similar employee benefits (excluding certain types).
• Certain executive officers are expected to receive transaction bonuses and severance payments/benefits upon a 'CIC Termination' (termination without cause or for good reason within a specified period around the change in control).
• Directors and executive officers will benefit from continued indemnification and insurance coverage for six years post-merger.
• Customers, suppliers, and partners may experience potential negative effects on relationships due to the public announcement of the merger, as noted in the risk factors.

Next Steps

• A Special Meeting of stockholders will be held virtually on September 9, 2025, at 9:00 a.m. Eastern Time to vote on the Merger Proposal, Compensation Proposal, and Adjournment Proposal.
• Consummation of the Merger is anticipated in the second half of 2025, assuming satisfaction or waiver of all conditions.
• Upon consummation, Olo's Class A Common Stock will be delisted from the NYSE and deregistered under the Exchange Act.
• Olo will cease filing periodic reports with the SEC after delisting and deregistration.

Key Dates

Recommendation

The all-cash offer of $10.25 per share represents a substantial 65% premium over the unaffected share price, offering immediate and certain value to shareholders. The unanimous board recommendation, coupled with strong support from major stockholders (78.5% voting power committed), significantly de-risks the transaction. The financing is fully committed and not a condition to closing, further enhancing deal certainty. While public shareholders will forgo future upside as a private company, the current offer provides a compelling and secure return, making it a strong buy for investors seeking a quick, high-premium exit.

Keywords

Olo Inc., Thoma Bravo, Merger, Acquisition, SaaS, Restaurant Technology, Private Equity, SEC Filing, Proxy Statement, Stockholder Vote, Cash Acquisition, Corporate Governance, Financial Analysis, Delisting, Deregistration