Blackstone Consortium Acquires Management Rights of Software Group Medallia from Thoma Bravo

Handed over Medallia, a software company acquired five years ago.

(Seoul = Yonhap News) Reporter Seol Won-tae = The Financial Times (FT) reported on the 17th (local time) that a consortium led by Blackstone, a large private equity fund operator, has agreed to take over management rights of software group Medallia from Thoma Bravo, another private equity fund operator.

The FT added that this transaction will be recorded as one of the largest total losses in private equity fund history.

According to the terms of the deal, Thoma Bravo will lose the entire $5 billion (approximately 7.6 trillion won) it invested in acquiring Medallia in 2021.

A consortium led by Blackstone and including Apollo, KKR, etc. will take over management of Medallia and invest $150 million to reduce Medallia's debt burden.

Thomas Bravo handed over management rights to Medallia to Medallia's creditors, including Blackstone, Apollo, and KKR, without compensation. Medallia's management difficulties were also a cause for concern for Blackstone and Apollo.

According to Daniel Rasmussen of Birdad Advisors, a private equity analysis firm, Thoma Bravo's loss is the second largest in private equity history, following the bankruptcy of Texas utility company TXU.

This transaction came amid growing concerns about the performance of private equity funds' acquisitions of software companies, which were carried out in the early 2020s when corporate values ​​were soaring.

Orlando Bravo, co-founder of Thoma Bravo, which manages more than $180 billion in assets, admitted to investing an excessive amount of money in Medallia, which sells a chatbot for automating customer service inquiries.