Cloud subscription services company Zuora Inc. has announced that it plans to be acquired by private-equity firm Silver Lake and an affiliate of Singapore’s sovereign wealth fund GIC Pte. Ltd. in a transaction valued at $1.7 billion.
Under the terms of the agreement, Silver Lake and GIC will acquire all outstanding shares of Zuora stock at $10 per share in cash. That’s a premium to Zuora shares, which were trading at $9.42 prior to the announcement but as low as $8.36 over the last month. Officially, the acquisition price is offering an 18% premium on Zuora’s last stock price.
The agreement has been approved by Zuora’s board and awaits approval by shareholders.
Founded in 2007, Zuora offers cloud-based software that is designed to help businesses manage and automate their subscription billing processes. The company specializes in helping companies transition from traditional product-based models to subscription-based services to enable recurring revenue streams.
Zuora’s platform offers support for billing, payment collection, revenue recognition and analytics. Additionally, the company offers a unified view of customer lifecycles to help businesses efficiently manage their subscription growth and customer retention strategies.
The company serves industries ranging from software and media to healthcare and education, with flexible pricing models tailored to different needs.
“Since our founding, Zuora has evangelized the shift to the Subscription Economy and evolution to complex revenue models, providing technology necessary to monetize products and services,” Tien Tzuo, founder, chairman and chief executive of Zuora, said in a statement. “As a private company, with the support and expertise of Silver Lake and GIC, our monetization suite will continue to lead in the marketplace.”
Post-takeover, Tzuo will continue to lead the company.
As of its last reported quarter, its fiscal 2025 second quarter, Zuora reported adjusted earnings per share of 19 cents, up from seven cents in the same quarter of fiscal 2024, on revenue of $115.4 million, up 7% year-over-year. Subscription revenue in the quarter rose 9% year-over-year, to $104.1 million, driven by customer growth and increased spending. Zuora ended the quarter with annual recurring revenue of $412.3 million, up from $384.2 million the year prior.
For its fiscal full year, Zuora expects adjusted earnings per share of 56 to 58 cents on revenue of $455.5 million to $461.5 million.
The acquisition is expected to close in the first quarter of calendar year 2025, subject to customary closing conditions and approvals.