Truist analyst Joe Meares highlighted that Anaplan was recently purchased for 11.0x EV/sales on CY23E revenue and Avalara (AVLR) was recently taken out for 8.0x EV/sales on CY23E. The multiples in these transaction imply a potential takeout range of $98 to $135, or $117 on average, for Workiva (WK).
The note comes after Workiva (WK) soared more than 18% on Wednesday after a Bloomberg report indicated that private equity firms Thoma Bravo and TPG were eyeing an acquisition of the Iowa-based software-as-a-service company.
Workiva (WK) produces software in the regulatory, financial and environmental, social and governance areas. Workiva has a market cap of $4 billion.
“… We believe the company does have a unique set of assets and niche market leadership serving end-markets that will likely remain demand resilient,” Meares, who has a buy rating and $90 price target on Workiva (WV) wrote in a note on Thursday. “Notably, Workiva is <10% penetrated in all product markets outside of SEC, these products represent ~55% of total company revenue.”
Vista Equity agreed to pay $93.50/share in all cash-transaction for Avalara (AVLR) last month, which represented a 27% premium to Avalara’s closing price on July 6, the last trading prior to media reports about a potential transaction.
Even as some shareholders have come out against the Avalara (AVLR) sale, which is scheduled for a holder vote on Oct. 14, influential proxy from ISS on Friday recommended holders vote in favor of the deal.