Private equity giant Thoma Bravo is on the verge of transferring software firm Medallia to its lenders, concluding extensive restructuring talks. This significant move will erase $5.1 billion in equity for Thoma Bravo and its co-investors, who acquired the customer service software company for $6.4 billion in 2021.
Medallia has faced challenges recently due to its $3 billion debt load, owed to major lenders including Blackstone, KKR, Apollo Global, and Antares Capital. Concerns over the impact of artificial intelligence on its services have also pressured valuations for software companies like Medallia, which specializes in analyzing customer and employee feedback.
Thoma Bravo had appointed a new leadership team in early 2025 to implement a turnaround strategy, with discussions also focusing on the company's capital structure. Lenders have recently marked the debt at significantly reduced values, reflecting the company's financial strain.