Private equity firm Thoma Bravo LP has signed an agreement to buy property management software provider RealPage Inc.
RP -0.92%
for $ 9.6 billion, in one of the largest recent leveraged rewards.
Thoma Bravo pays $ 88.75 per share for the company, a 31% premium to RealPage’s closing price on Friday of $ 67.83, according to company officials.
RealPage, based in Richardson, Texas, provides a technology platform used by rental property owners and managers. Tenants can pay the rent or submit a maintenance request using RealPage software. The company also maintains a database of real-time lease transactions, allowing it to predict where markets are headed.
Its shares are up 26% this year.
“We were able to do pretty well during the pandemic because our industry was in a hurry to become virtual, and we were one of the platforms that did that,” RealPage CEO said in an interview , Steve Winn.
Winn previously led Computer Language Research Inc., a tax software maker, which he sold to the current Thomson Reuters Corp.
in 1998. He bought back a unit from the company that focused on real estate software and incorporated it into what is now RealPage. The company has grown both organically and through a wave of acquisitions, completing 12 bids in the past three years.
Software has been one of the toughest sectors during the Covid-19 pandemic, as companies show that they will continue to pay for it even if they reduce other costs. This has allowed Thoma Bravo, a technology specialist, to be one of the most active private equity contract manufacturers of the year. RealPage would be his biggest acquisition to date.
The price tag makes it a relatively rare leveraged purchase that reaches billions of dollars in double digits. While these transactions were common before the 2008-09 financial crisis, they have become rarer, with buying companies more cautious even as they sit on a mountain of unspent money.
Thoma Bravo, based in San Francisco and Chicago and led by managing partner Orlando Bravo, manages more than $ 70 billion in assets. That includes $ 22.8 billion he just raised in October for three separate vehicles.
The privately held company sold Ellie Mae Inc. in September to the owner of the New York Stock Exchange, Intercontinental Exchange Inc.
Thoma Bravo, who bought the mortgage software firm for $ 3.75 million last year, earned four times her money.
Write to Miriam Gottfried to [email protected] and Cara Lombardo to [email protected]
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It appeared on December 21, 2020, in the print edition, as “RealPage sells for $ 9.6 billion.”