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Thoma Bravo Advantage SPAC Seeks Software Acquisition, Investment

Thoma Bravo Advantage, a blank check company formed by private equity firm Thoma Bravo, has filed a form with the SEC indicating that it plans to raise up to $900 million for an initial public offering (IPO) and an associated software company investment/acquisition.

Thoma Bravo Advantage (proposed NYSE symbol: $TBA) is a SPAC (special purpose acquisition company). A SPAC is designed to raise funds in an initial public offering (IPO) with the aim of acquiring a private company. That private company then becomes public as result of the merger, Reuters notes.

Updated January 15, 2021: Thoma Bravo Advantage shares will be listed on the New York Stock Exchange beginning January 15, 2021 under the symbol TBA, according to an update from the SPAC.

Related: Will SPACs Acquire MSP Software Companies?

Thoma Bravo Advantage: SPAC Software Strategy Hints

So what is Thoma Bravo Advantage potentially up to in the SPAC market? In early December 2020, The New York Post put it this way:

“Chicago-based Thoma Bravo’s usual approach to investing is to acquire controlling stakes in companies through leveraged buyouts instead of taking minority positions. By raising a blank-check company, it can buy a minority stake in a promising tech firm and help it go public, the source said.”

Fast forward to present day. The SEC filing indicates that Thoma Bravo Advantage is looking to acquire a privately held software company that has a strong management team, reasonable valuation, predictable recurring revenues and products that compete in a highly fragmented market segment.

Still, Thoma Bravo Advantage’s specific software target remains a point of discussion. The filing indicated:

“We have not selected any specific business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target with respect to an initial business combination with us.”

Thoma Bravo: Background and Potential Next Moves

Thoma Bravo already owns such MSP-focused technology and software businesses as Barracuda, ConnectWise, SolarWinds and Sophos, among many others.

Meanwhile, recent chatter in the private equity market indicates that software-focused PE firms are investigating the cloud distribution, Unified Communications as a Service (UCaaS) and MSP software markets, according to ChannelE2E’s grapevine connections. Also of note: Kaseya has been exploring a potential IPO, and SolarWinds has been preparing a potential spin-out of its SolarWinds MSP business.

Here’s some more info about the pros and cons of SPAC investments, according to Protiviti, a global consulting firm that helps companies solve problems in finance, technology, operations, governance, risk and internal audit.

Originally posted December 5, 2020. Updated December 29, 2020 with new financial details.

 

 

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