CHICAGO - Thoughtworks (NASDAQ: TWKS), a global technology consultancy, has completed its transition to a private company through a $1.75 billion acquisition by affiliates of investment funds advised by Apax (HN:IBC) Partners LLP. The buyout resulted in Thoughtworks shareholders receiving $4.40 per share in cash, which is a 48% premium over the stock's volume-weighted average price as of August 2, 2024.
With the conclusion of this deal, Thoughtworks' shares have been removed from NASDAQ, marking the start of a new phase where the company intends to focus on long-term strategies and digital solutions for its global clientele. The CEO of Thoughtworks, Mike Sutcliff, expressed satisfaction with the partnership with Apax, emphasizing the opportunity to concentrate on the company's core values and innovation without the pressures of public market performance.
Salim Nathoo, a Partner at Apax and Non-Executive Director of Thoughtworks, also conveyed enthusiasm for supporting the company's growth, particularly in AI-enabled software and data engineering services, which are vital for enterprise-level digital transformations.
Goldman Sachs (NYSE:GS) & Co. LLC served as the exclusive financial advisor to Apax, while legal counsel was provided by Kirkland & Ellis LLP and Richards, Layton & Finger, P.A. Thoughtworks received legal advice from Paul Hastings LLP, and Lazard (NYSE:LAZ) was the financial advisor to the Special Committee, with Kramer Levin Naftalis & Frankel LLP and Potter Anderson & Corroon LLP as legal counsel.
Thoughtworks, with over 10,000 employees in 19 countries, has been a significant player in the technology consultancy sector for 30 years. Apax Partners, a leading private equity advisory firm with a 50-year history, manages funds that have raised almost $80 billion, focusing on the tech, services, and internet/consumer sectors.
The acquisition is seen as a strategic move to bolster Thoughtworks' capabilities and market position in the technology consulting industry. This information is based on a press release statement.
InvestingPro Insights
As Thoughtworks (NASDAQ: TWKS) transitions to private ownership, it's worth noting some key financial metrics and insights from InvestingPro that shed light on the company's recent performance and valuation.
According to InvestingPro data, Thoughtworks had a market capitalization of $1.45 billion prior to the acquisition, which aligns closely with the $1.75 billion buyout price. The company's revenue for the last twelve months as of Q3 2023 stood at $1.01 billion, with a concerning revenue decline of 14.44% over the same period.
An InvestingPro Tip indicates that Thoughtworks was not profitable over the last twelve months, which is reflected in its negative P/E ratio of -20.34. This financial performance may have influenced the decision to go private, as the company can now focus on long-term strategies without the scrutiny of quarterly earnings reports.
Despite these challenges, another InvestingPro Tip suggests that analysts predict the company will be profitable this year. This optimistic outlook might have been a factor in Apax Partners' decision to acquire Thoughtworks at a premium.
It's also noteworthy that Thoughtworks experienced a large price uptick over the last six months, with InvestingPro data showing a 50.51% price total return over that period. This increase in stock value likely contributed to the timing and valuation of the acquisition.
For investors interested in deeper analysis, InvestingPro offers additional tips and metrics beyond those mentioned here. In fact, there are 5 more InvestingPro Tips available for Thoughtworks, which could provide further insights into the company's financial health and prospects.
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