Thoma Bravo and Oasis: Potential Upside for Software Portfolio Company Employees?

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Imagine the following scenario: You work for a software company that’s owned by private equity firm Thoma Bravo. In most cases, your company stock is not publicly traded (one notable exception: N-able). As a result, you can’t really “profit” from your shares in the software business until some sort of longer-term financial event occurs (say, an IPO or company sale). Alas, such a financial event may be years away.

Amid that backdrop, Thoma Bravo is pitching a new strategy called Oasis. According to The Wall Street Journal, the Oasis strategy will “provide management and founders with opportunities to monetize some of the value they have created in the companies they manage and often own, at least partially.”

And as a result: “The management teams and employees of those [Thoma Bravo portfolio] companies will view the possibility of early liquidity favorably, particularly when compared with the more limited or delayed liquidity options that could be offered by other potential private owners,” the article quoted from a regulatory filing.

Thoma Bravo and Oasis: Key Question Marks

Still, Thoma Bravo and the boards of portfolio companies need to determine which software companies are eligible for the Oasis strategy,  the article notes. The article did not say when the Oasis funds will make an offer to “certain shareholders” to acquire a “portion” of their interests.

We don’t know if Thoma Bravo’s MSP software portfolio companies — such as Barracuda, ConnectWise and Sophos, among many others — will participate in the Oasis program. Stay tuned.

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    Dave Sobel:

    Important to note the other reason here — that those monetization opportunities are either a lot further out than TB hopes or looking more and more unlikely (if even achievable). To retain top talent and leaders, TB will have to find a way to compensate those individuals, and a perpetual dream that never comes won’t cut it. Compare that to other tech companies where those opportunities are either much closer or already in play. Good for those individuals… a potentially bad sign for the value of TB’s investments.

    David Yates:

    Also gives TB the ability to acquire a larger stake prior to those monetization opportunities. These kinds of deals will need to be scrutinized as TB holds all the cards – what, how much, and from whom they’re willing to buy in addition to when they spin off or take public any of their holdings. The people selling to TB neither know the target offering price nor the timetable.

    Todd Hussey:

    VC/PE firms care about 1 thing and 1 thing only – themselves and their limited partners/investors – and will do anything to meet their expectations – I mean anything.

    Miguel Zubizarreta:

    VC and PE firms are very different. And among PE firms, Thoma Bravo has a very innovative approaches to wealth creation. I am part of a company that was recapitalized by Thoma Bravo. Yes, they are interested in generating wealth. Having said that, they strive to make sure that their goals are aligned with the company and the employees. Among other things, they allow executives at acquired companies to participate in their funds as executive limited partners.
    Their Oasis fund is another unique example. They are being so successful, I expect they will not try to “take advantage “ of their situation because they realize that their success is based on the massive success of the companies they acquire and that is based on the performance of those same executive that may want some liquidity to improve their financial situations.
    We delivered 800% value growth in 8 years for TB, and for ourselves.

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