Medallia handed to lenders

Thoma Bravo is close to giving Medallia to its lenders after months of debt talks failed. (finance.yahoo.com) The proposed deal would erase about $5.1 billion of equity held by Thoma Bravo and its co-investors and tackle roughly $3 billion of Medallia debt, according to Reuters reporting published April 22. (finance.yahoo.com) Medallia was bought by Thoma Bravo in October 2021 in a $6.4 billion take-private deal, after the firms announced the transaction in July 2021 at $34 a share. (medallia.com, (thomabravo.com)) The company sells software that helps large businesses track customer and employee feedback, and Medallia says its platform is used by 7 of the Fortune 10. (medallia.com) The restructuring is expected to hand ownership to lenders through a debt-for-equity swap, a deal in which creditors cancel part of what they are owed in exchange for shares in the company. (finance.yahoo.com, (octus.com)) Reuters reported that the negotiations had stretched on for months, and Octus reported April 22 that Medallia was working with Kirkland & Ellis while the lender group was represented by Latham & Watkins. (finance.yahoo.com, (octus.com)) A lender group led by Blackstone has been driving the talks, and Bloomberg reported earlier this month that the creditors had resisted extending another lifeline unless Thoma Bravo put in more money or surrendered control. (transacted.io, (bloomberg.com)) The fight has become a test of the software buyout model from 2021, when private equity firms paid high prices and financed deals with cheap debt before interest rates rose and refinancing got harder. (thomabravo.com), (bloomberg.com)) If the handover is completed, Medallia would move from a marquee private-equity acquisition to a lender-owned software company in less than five years. (medallia.com, (finance.yahoo.com))