Blackbaud rejects $71/shr offer from stakeholder Clearlake

Reuters
Updated ·2-min read

(Reuters) -Blackbaud Inc on Monday rejected a buyout offer from its largest shareholder Clearlake Capital, saying it was undervalued in the approach that pegged the software maker at $3.78 billion.

Clearlake, which has a stake of 18.3% in Blackbaud, had last week made the all-cash offer of $71 per share and said it would also back a superior proposal for the company that provides cloud software to the philanthropic community.

High inflation, weak consumer demand and the fallout from the Ukraine crisis have knocked global stocks in the past year, with the tech sector among the worst hit. That has driven up private equity interest in the sector, even as the lack of bank debt financing has weighed on overall deal-making activity.

Blackbaud's shares had risen more than 20% in premarket trading after Clearlake disclosed the offer, but pared those gains after the company rejected the bid and were last up 13%.

The company had in October adopted a shareholder rights plan known as "Poison Pill" to prevent any entity from acquiring a stake of more than 20%, after a Clearlake statement that it was talking to Blackbaud's management about evaluating alternatives.

Blackbaud, which counts Bosch and JetBlue as customers, said its board determined that the private equity firm's offer was "highly opportunistic and significantly undervalues Blackbaud."

"Clearlake's unambiguous statement that the firm itself does not need to be an acquirer is an overt attempt to put the company in play opportunistically," Blackbaud said in a statement.

Clearlake, which has about $70 billion in assets under management, made an initial investment in Blackbaud in 2020. It has bought software firms such as Cornerstone OnDemand and Quest Software, betting on pandemic-fueled demand for cloud services.

Santa Monica, California-based Clearlake did not respond to a Reuters request for comment on Blackbaud's rejection of the proposal.

(Reporting by Eva Mathews in Bengaluru; Editing by Anil D'Silva and Shounak Dasgupta)

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