On Monday, Blackbaud Inc. rejected a takeover bid from its largest shareholder, Clearlake Capital, claiming the software firm was undervalued in the proposal, which valued it at $3.78 billion.
In fact last week, Clearlake, which owns 18.3% of Blackbaud, made an all-cash offer of $71 per share and stated that it would also support a better offer for the provider of cloud software to the philanthropic sector.
Nevertheless, the tech industry has been among the ones which felt the hardest the effects of high inflation, weak consumer demand, and the aftermath from the Ukraine conflict on global stocks over the past year. In spite of the overall deal-making activity hindered by a shortage of bank debt funding, this has increased private equity interest in the sector.
After Clearlake disclosed the offer, Blackbaud’s shares increased by more than 20% in premarket trading. However, those gains diminished when the business rejected the offer, and at last check, they were up 13%.
In addition, to prohibit any entity from obtaining a stake of more than 20%, the business implemented the “Poison Pill” shareholder rights plan in October in response to a Clearlake declaration that it was in talks with Blackbaud’s management about exploring other options.
Moreover, Bosch and JetBlue are among the companies that Blackbaud serves as a client. According to the company’s board, the private equity firm’s offer “significantly undervalues Blackbaud” and is “highly opportunistic.”
Furthermore, Blackbaud said in a statement that Clearlake’s explicit assertion that the company does not have to be an acquisition is an overt attempt to put the company in play strategically.
In 2020, Clearlake, which oversees assets worth roughly $70 billion, made its first investment in Blackbaud. In an effort to capitalize on the pandemic-driven demand for cloud services, it has acquired software companies including Cornerstone OnDemand and Quest Software.
Reuters contacted Clearlake in Santa Monica, California, but they declined to comment on Blackbaud’s decision to reject the proposal.
