Meta freezes AI hiring, WSJ reports
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23 minutes ago
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Dayforce to go private in $12.3 billion Thoma Bravo acquisition
Private equity firm Thoma Bravo has agreed to buy human resources software provider Dayforce for $12.3 billion, including debt, in a take-private deal that executives hope will help expand on the company's AI capabilities. Dayforce, which operates on a single data platform, uses artificial intelligence to help companies forecast matters such as labor demand or predict employee burnout, David Ossip, the company's CEO, told Reuters in an interview on Thursday, as he elaborated on the deal's benefits. "Going private gives us more space, flexibility and resources to go much deeper on what matters the most, which is accelerating our focus on being that AI leader in HCM," Ossip said, referring to the practice known as human capital management. Under terms of the deal, Dayforce shareholders will receive $70 per share in cash, representing an equity value of $11.18 billion, according to Reuters' calculations. The offer, announced Thursday, represents a premium of 32.4 per cent based on the stock's closing price on August 15, when news of the deal talks was first reported. While the deal marks Thoma Bravo's largest take-private deal today, the talks between Dayforce and Thoma Bravo date back years. Thoma Bravo has known Ossip, also Dayforce's founder, since before 2012, when his software company Dayforce was acquired by a larger HR and payroll provider, Ceridian. Thoma Bravo had followed Dayforce's journey into the public markets, periodically keeping its tabs on the business, Tara Gadgil, partner at Thoma Bravo, told Reuters. Thoma Bravo formally approached Dayforce about going private about a year ago, when its shares were trading in the mid-$50s – down more than 50 per cent from its peak in 2021, Gadgil said. "We fundamentally believe that for the product differentiation, quality of revenue and recurring revenue growth that Dayforce exhibits, the public markets weren't appreciating the company," Gadgil told Reuters. DEBT LOAD RELIEF SEEN The software sector has emerged as an investment target due to resilient subscription services and recurring revenue in an economy weighed down by a deteriorating labor market, trade tariffs and erratic spending. A wave of deals in the human capital management industry in recent years signals a shift toward AI-driven, single-platform solutions, with acquisitions aimed at consolidating and enhancing the tools offered to clients. Paychex announced its acquisition of rival Paycor for $4.1 billion at the start of the year, and Automatic Data Processing acquired WorkForce Software last year for about $1.2 billion. Analysts have said a buyout would provide Dayforce some relief from its debt load, while Thoma Bravo's deep pockets would help the company accelerate AI development and expand internationally. Dayforce's stock closed up about 2.4 per cent on Thursday. Goldman Sachs committed a $6 billion debt financing package to support the acquisition, Bloomberg News reported on Thursday, citing a person with knowledge of the matter. Goldman declined to comment. The debt includes a $5.5 billion term loan and a $500 million revolving credit facility, the report said, adding that Goldman could sell the financing to a variety of lenders. The transaction, which includes a minority investment from a subsidiary of the Abu Dhabi Investment Authority, is expected to close early next year, Dayforce said. Thoma Bravo, which had about $184 billion in assets under management as of March 31, is among the largest software-focused investors globally. The private equity firm has acquired or invested in more than 530 software and technology companies.
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33 minutes ago
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Meta signs $10 billion-plus cloud deal with Google, The Information reports
Google has struck a major cloud computing deal worth more than $10 billion with Meta Platforms, The Information reported on Thursday, citing two people familiar with the matter. Under the agreement, Meta will use Google Cloud's servers, storage, networking and other services, the report said.
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Intuit forecasts quarterly revenue growth below estimates as Mailchimp lags
Intuit forecast first-quarter revenue growth below analysts' estimates on Thursday, hit by sluggish performance at its marketing platform Mailchimp, sending the shares down nearly 6 per cent in extended trading. The company provides products such as tax-preparation software TurboTax, personal finance portal Credit Karma and accounting software QuickBooks. Mailchimp, acquired in 2021 and housed within Intuit's Global Business Solutions unit, saw its fourth-quarter revenue decline slightly, the company said. CFO Sandeep Aujla told Reuters that Mailchimp is a near-term drag on growth, but the company has initiatives underway and expects it to be performing well by the year-end. "The small businesses are the bread and butter of Mailchimp," Aujla said, adding they found it "a bit harder to use", which hurts retention and expansion. Intuit has largely completed the shift from QuickBooks Desktop licenses to subscriptions and closed the pricing gap with QuickBooks Online, resulting in slower Desktop growth. Excluding Mailchimp, the revenue growth slowdown is due to lower contribution from price increases expected in fiscal 2026, particularly in Desktop, the company said. With the launch of AI agents — systems capable of taking actions on behalf of users — for its QuickBooks portfolio, Intuit also raised the prices of its QuickBooks Online and Payroll subscription services last month. "Every time we do a price change, we realize that we were too conservative, but customer attrition ends up being below our expectations," Aujla said. Intuit expects fiscal 2026 revenue to be between $21 billion and $21.19 billion, largely in line with analysts' average estimate of $21.12 billion, according to data compiled by LSEG. Its annual adjusted profit per share forecast of $22.98 to $23.18 was also broadly in line with estimates of $23. The company's projection for first-quarter revenue growth of 14 per cent to 15 per cent came in below estimates of 16.1 per cent growth. Intuit forecast adjusted earnings per share of $3.05 to $3.12 for the quarter, compared with estimates of $3.07. The fourth-quarter revenue grew 20 per cent to $3.83 billion, beating estimates of $3.75 billion. The adjusted EPS of $2.75 also exceeded estimates of $2.66.
