DEFM14C: OneStream to Go Private in $24/Share Cash Acquisition by Hg

OneStream, Inc. has entered into a definitive agreement to be acquired by an affiliate of Hg for $24.00 per share in cash, representing a 31% premium to its unaffected closing price.

Summary

• OneStream, Inc. has agreed to be acquired by Onward AcquireCo Inc., an affiliate of Hg, for $24.00 per share in cash.
• The acquisition price represents a premium of approximately 31% to OneStream's Class A common stock closing price on January 5, 2026, and a 27% premium to the 30-trading day volume-weighted average price ending January 5, 2026.
• The OneStream Board unanimously determined the merger to be advisable, fair, and in the best interests of the company and its stockholders.
• Stockholders affiliated with KKR Dream Holdings LLC, representing approximately 58% of the voting power, delivered a written consent approving the merger on January 6, 2026, eliminating the need for a stockholder meeting.
• The Tax Receivable Agreement (TRA) was amended to terminate upon merger completion, ensuring no payments under the TRA, which was deemed favorable to stockholders.
• The merger is expected to close in the first half of 2026, subject to regulatory approvals including HSR Act expiration (March 5, 2026) and international antitrust/investment screening clearances.
• J.P. Morgan Securities LLC and Centerview Partners LLC provided fairness opinions, concluding the $24.00 per share consideration was fair from a financial point of view to Class A common stockholders.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a strong positive for OneStream shareholders, offering a substantial premium and immediate liquidity. The unanimous board approval and fairness opinions from two independent advisors reinforce the attractiveness of the offer, despite the company going private.

Positives

• Provides immediate cash value and liquidity to Class A and Class D common stockholders at $24.00 per share.
• The per share price represents a significant premium of approximately 31% to the closing price on January 5, 2026, and 27% to the 30-trading day volume-weighted average price.
• Eliminates uncertainty and risk for stockholders related to the continued execution of OneStream's business plan as an independent public company.
• The Tax Receivable Agreement (TRA) was amended to terminate upon merger completion, eliminating substantial payment obligations that would have otherwise reduced the acquisition price for stockholders.
• The merger is supported by a unanimous recommendation from the OneStream Board.
• Strong financial backing from Hg affiliates with an equity commitment of approximately $5.6 billion, ensuring no financing condition to closing.
• Continued employment and generally no less favorable aggregate benefits for OneStream employees for one year post-merger.

Negatives

• Stockholders will not participate in OneStream's future earnings or growth as a private entity.
• The company is restricted from soliciting alternative acquisition proposals after the initial written consent.
• A termination fee of $207 million is payable by OneStream under certain circumstances, which could deter other potential bidders.
• The merger is subject to regulatory clearances, which could cause delays or impose conditions.
• Potential for litigation challenging the merger, which could incur substantial costs and expenses.
• The cash consideration is a taxable transaction for U.S. Holders.
• The per share price of $24.00 is below the high end of some financial advisor valuation ranges (e.g., J.P. Morgan's selected transaction analysis up to $32.00, Centerview's DCF up to $29.50, and analyst price targets up to $38.00).

Risks

• The possibility that the conditions to the closing of the mergers are not satisfied, including the risk that required regulatory approvals are not obtained on a timely basis, or at all.
• The occurrence of any event, change, or other circumstances that could give rise to the right to terminate the Merger Agreement, and the risk that the Merger Agreement may be terminated in circumstances that require OneStream to pay a termination fee.
• Possible disruption related to the mergers to OneStream's current plans, operations, and business relationships, including through the loss of customers and employees.
• Risks that the pendency of the mergers could affect current operations, relationships with customers, vendors, and other business partners, or the ability to retain or recruit employees.
• The effect of the announcement or pendency of the mergers on operating results and business generally, including risks related to the diversion of management's or employees' attention.
• The response of competitors and other market participants to the mergers.
• The fact that OneStream is restrained from soliciting or engaging in conversations regarding alternative acquisition proposals during the pendency of the mergers.
• The nature, cost, and outcome of any legal proceedings that may be instituted against OneStream and others related to the Merger Agreement and the mergers.
• The amount of the costs, fees, expenses, and charges related to the Merger Agreement or the mergers.
• The risk that the stock price may fluctuate during the pendency of the mergers and may decline significantly if the mergers are not completed.
• The fact that, if the mergers are completed, stockholders will forgo the opportunity to realize the potential long-term value of the successful execution of business strategies as an independent public company.
• Economic, market, business, consumer, or geopolitical conditions, or changes in such conditions, that negatively affect business, operations, and financial performance.
• The risk that the proposed mergers will not be consummated in a timely manner, or at all.
• Fair value of shares determined by Delaware Court of Chancery in appraisal rights could be more than, the same as, or less than the consideration offered.

Future Outlook

OneStream is set to transition from a publicly traded company to a privately held entity under Hg's majority ownership, with General Atlantic and Tidemark as significant minority investors. The company's management had projected continued revenue growth of approximately 20% annually through fiscal year 2030, with operating income margin expansion from 6% to 20% in the same period, and further growth and margin expansion through 2035. However, as a private entity, OneStream will no longer be subject to public market scrutiny based on quarterly performance, potentially allowing for greater flexibility in implementing long-term strategic and organizational changes, including further development of AI-enabled solutions.

Management Comments

• The OneStream Board, by unanimous vote of the directors present at a duly constituted meeting: (1) determined that the Merger Agreement and the transactions contemplated by the Merger Agreement, including the company merger, are advisable, fair to and in the best interests of OneStream and its stockholders; (2) approved and declared advisable the Merger Agreement and the transactions contemplated by the Merger Agreement, including the company merger; (3) approved the execution and delivery of the Merger Agreement by OneStream; (4) directed that the Merger Agreement be submitted for adoption by OneStream's stockholders; and (5) resolved to recommend that OneStream's stockholders adopt the Merger Agreement and approve the company merger in accordance with the DGCL.
• Thank you for your continued support of, and interest in, OneStream. Thomas Shea, Chairman and Chief Executive Officer.
• Mr. Shea informed the OneStream Board that, upon further reflection, and based upon the foregoing considerations, he was now willing to agree to participate in a rollover in an acquisition based on the Final Hg Proposal if required by Hg to complete the transaction, subject to negotiating the terms of the rollover with Hg.

Industry Context

StockSavvy.ai notes that this acquisition reflects a broader trend of private equity firms, particularly those specializing in software and data businesses like Hg, seeking to acquire established cloud-based platforms. The move to private ownership could provide OneStream with the capital and operational flexibility to pursue long-term strategic initiatives, such as AI-enabled solutions and market expansion, away from the quarterly pressures of public markets. This strategy is often employed to accelerate growth and innovation in mature or consolidating software sectors, potentially allowing OneStream to strengthen its position as an 'operating system for modern Finance' without immediate investor scrutiny on short-term performance metrics.

Comparison to Industry Standards

• J.P. Morgan's Selected Public Company Analysis used companies like Datadog, Zscaler, Samsara, Xero, Klaviyo, monday.com, GitLab, and SentinelOne, with FV/2026E revenue multiples ranging from 4.0x to 6.0x, implying an equity value of $13.75 to $19.00 per share for OneStream.
• J.P. Morgan's Selected Transaction Analysis included acquisitions such as Thoma Bravo/Dayforce, Paychex/Paycor HCM, Blackstone/Smartsheet, Vista Equity Partners/EngageSmart, and Silver Lake/Qualtrics International, with EV/NTM revenue multiples ranging from 7.5x to 11.0x, implying an equity value of $23.00 to $32.00 per share for OneStream.
• Centerview's Selected Public Company Analysis included BlackLine, Braze, Intapp, Kinaxis, Klaviyo, monday.com, Vertex, Workday, Workiva, and Xero, with EV/2026E Revenue Trading Multiples having a median of 4.9x and a selected range of 4.5x to 6.0x, implying an equity value of $15.20 to $19.10 per share for OneStream.
• Centerview's Selected Precedent Transactions Analysis included Permira/Clearwater Analytics, Thoma Bravo/Dayforce, Blackstone/Smartsheet, Vista Equity Partners/EngageSmart, and Silver Lake/Qualtrics International, with EV/NTM Revenue Multiples having a median of 8.3x and a selected range of 6.5x to 9.0x, implying an equity value of $20.35 to $26.80 per share for OneStream.
• The $24.00 per share offer price falls within the upper range of the discounted cash flow analyses from both J.P. Morgan ($21.50-$28.50) and Centerview ($20.60-$29.50), and within the selected precedent transaction analysis ranges, but above the public trading multiples analysis ranges.
• The offer price is also within the range of publicly available Wall Street research analyst price targets, which ranged from $21.00 to $38.00 per share.

Management Changes

Corporate Governance

Legal Proceedings

• On February 20, 2026, a purported stockholder filed a complaint (Rana v. OneStream, Inc., et al., No. 1:26-cv-01931-CPK) in the U.S. District Court for the Northern District of Illinois against OneStream and its Board members.
• The lawsuit alleges claims under Section 14(a) of the Exchange Act and SEC Rule 14c-6 for allegedly false and misleading statements and omissions in OneStream's preliminary information statement.
• Claims against individual defendants are asserted under Section 20(a) of the Exchange Act for alleged control person liability.
• The Rana action seeks to enjoin the mergers until curative disclosures are issued, rescind the Merger Agreement, and recover damages and attorneys' fees.
• OneStream disputes these allegations and intends to vigorously defend against the lawsuit.
• Additional similar lawsuits may be filed, and OneStream is not obligated to disclose them as they are filed.

Related Party Transactions

• Stockholders affiliated with KKR Dream Holdings LLC, representing approximately 58% of the voting power, delivered a written consent adopting the Merger Agreement. KKR is also a party to the TRA Amendment.
• Certain directors and executive officers, and their respective affiliates (including KKR), hold LLC units and are current or former members of OneStream LLC, entitling them to the per unit price.
• Thomas Shea, CEO, agreed to roll over approximately 50% of his existing equity holdings in OneStream into an entity that controls Parent, subject to continued employment and performance metrics.
• The TRA Amendment, which eliminates TRA payment obligations upon merger completion, was entered into by OneStream, OneStream LLC, and the consenting stockholders (including KKR affiliates).

Stakeholder Impact

• Shareholders (Class A & D): Receive $24.00 cash per share, providing immediate liquidity and a significant premium, but forgo future growth potential as a public company.
• Shareholders (Class B & C): Receive $0.0001 cash per share, as per charter requirements.
• LLC Unit Holders: Receive $24.00 cash per unit, providing immediate liquidity.
• Employees: Employment will continue, and benefits will be maintained at no less favorable aggregate terms for one year post-merger. Equity awards are converted to cash or contingent cash awards with continued vesting.
• Management: Executive officers receive cash for vested equity and contingent cash awards for unvested equity. Certain executives are eligible for severance benefits upon qualifying termination. CEO Thomas Shea is rolling over a significant portion of his equity, aligning his interests with the new private ownership.
• Customers: The transition to private ownership under Hg, a software investor, could imply continued investment in the platform and services.
• Suppliers/Creditors: Existing contractual relationships are expected to continue, with Parent assuming liabilities.

Next Steps

• Expiration or termination of the HSR Act waiting period (expected March 5, 2026).
• Obtain requisite consents, approvals, clearances, and filings under certain non-U.S. antitrust and investment screening laws (e.g., Australia, UK).
• Closing of the mergers, expected in the first half of 2026, but no earlier than April 6, 2026, without Parent's consent.
• Delisting of Class A common stock from Nasdaq and deregistration under the Exchange Act after merger completion.
• Payment of merger consideration to stockholders and LLC unit holders.
• OneStream to vigorously defend against the Rana v. OneStream, Inc., et al. lawsuit.
• Parent may initiate discussions regarding employment or other retention terms with OneStream's executive officers, including additional rollover arrangements.

Key Dates

Keywords

OneStream, Hg, Acquisition, Merger, Software, Cloud Platform, Financial Planning, Corporate Performance Management, Private Equity, Takeover, SEC Filing, DEFM14C, KKR, Delisting, Deregistration, Cash Offer, Stockholder Consent, Appraisal Rights, Financial Technology