UserTesting Inc. rose as much as 99% on Thursday after the digital consumer insight company agreed to sell to private equity firms Thoma Bravo and Sunstone Partners in a deal valued at about $1.3 billion.
(Bloomberg) — UserTesting Inc.
rose as much as 99% on Thursday after the digital consumer insight company agreed to sell to private equity firms Thoma Bravo and Sunstone Partners in a deal valued at about $1.3 billion.
The buyout firms agreed to pay $7.50 per share in cash for the San Francisco-based company, according to a statement Thursday, confirming a Bloomberg News report.
That’s about a 94% premium to UserTesting’s closing price of $3.86 on Wednesday in New York, according to data compiled by Bloomberg.
The stock — which had fallen 54% this year through Wednesday — was up 93% to $7.44 at 9:34 a.m.
in New York on Thursday, giving the company a market value of about $1.1 billion. As part of the deal, UserTesting will be merged with customer-experience software firm UserZoom.
“We believe the combination of UserTesting and UserZoom will unlock tremendous value for our customers by further integrating and expanding the suite of research methods, testing types, and measurement options available—all while making the voice of the customer and human insight more accessible across an organization and easily integrated into their processes and workflows,” UserTesting Chief Executive Officer Andy MacMillan said in a statement.
MacMillan, who will lead the combined company, said in an interview the deal came about after Thoma Bravo approached the company about merging with UserZoom, a competitor that offers complementary services.
The private equity firm has long had that goal and tried to merge the companies around 2018 and 2019, according to A.J.
Rohde, a Thoma Bravo senior partner.
It’s using all equity to fund the deal, he said in an interview, like another deal it struck this month for ForgeRock Inc.
“Financing markets are expensive in general,” Rohde said “It’s challenging.”
UserTesting’s human-insight platform uses video to assess user engagement with products, apps, services and other experiences, according to its website.
It has more than 850 employees and counts customers including GoDaddy Inc., HelloFresh SE, HP Inc. and Subway Restaurants, the site shows.
Thoma Bravo made a strategic growth investment in UserZoom in April, while Sunstone retained a stake, according to a statement at the time.
Listen: UserTesting CEO Andy MacMillan Bloomberg Intelligence’s Tech Disruptors podcast
UserTesting raised $140 million in an IPO on the New York Stock Exchange in November, after reducing the size of its offering.
The deal, which includes a go-shop period expiring on Dec.
10, is expected to close in the first half of 2023. Morgan Stanley and Fenwick & West advised UserTesting while Kirkland & Ellis is advising Thoma Bravo and Goodwin Procter is advising Sunstone.
(Adds quote from Thoma Bravo in sixth paragraph)
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