Blue Owl Leads $750M Software Buyout Debt
Blue Owl Capital has led a $750 million debt financing package for Vista Equity Partners' buyout of software firm Nexthink. The deal signals robust demand in the private credit market for financing large software acquisitions, even amid concerns about AI disruption. It's a key example of non-bank lenders stepping in to fund major LBOs.
Vista Equity Partners' acquisition of Nexthink is valued at approximately $3 billion. This deal makes Nexthink, a Swiss-American company specializing in Digital Employee Experience (DEX) management, one of the most valuable software firms to originate from Switzerland. The transaction is structured as a majority investment, with Vista acquiring the stake from previous investors including Permira, Highland, Index, and Auriga. Nexthink's founder and CEO, Pedro Bados, will continue to lead the company alongside the existing management team. The company, founded in 2004 as a spin-off from the École Polytechnique Fédérale de Lausanne (EPFL), provides a cloud-based platform that uses AI to monitor and improve the digital experiences of employees across devices and networks. Nexthink serves over 1,500 enterprise customers, reaching 25 million employees globally. Financially, Nexthink has shown significant growth, with revenue increasing from over $100 million in 2020 to $294 million in 2024. The company operates on a subscription-based SaaS model, which generates predictable recurring revenue. Its valuation has risen substantially from the $1.1 billion it was valued at when Permira invested in 2021. The $750 million debt financing for this buyout was priced at 5.5 percentage points over the U.S. benchmark rate. This deal highlights a broader trend of private credit firms financing large leveraged buyouts, stepping into a role traditionally held by major banks. The global private credit market has more than quadrupled in the last decade, exceeding $2 trillion in 2024. For Blue Owl, this deal reinforces its focus on software lending despite recent market concerns about the impact of generative AI on the sector. The firm has faced investor pressure and a decline in its stock price partly due to its significant exposure to private equity-backed software companies. However, Blue Owl maintains that its software loans are well-cushioned with an average loan-to-value of just 37%. Vista Equity Partners, with over $100 billion in assets under management, is a major investor in enterprise software. This acquisition adds to a busy year of transactions for the firm. The deal is expected to close in the first quarter of 2026, pending customary closing conditions.
