SAN MATEO, Calif. - Model N, Inc. (NYSE: NYSE:MODN), a company specializing in revenue optimization and compliance solutions, announced Monday that it has agreed to be acquired by private equity firm Vista Equity Partners in a deal valued at approximately $1.25 billion. Under the agreement, Vista will purchase all outstanding shares of Model N for $30.00 per share in cash.
The acquisition price reflects a 23% premium over Model N's average share price for the 30 trading days preceding January 10, 2024, and a 16% premium over the average share price leading up to April 5, 2024. This strategic move is set to provide immediate and certain cash value to Model N stockholders, as highlighted by Baljit Dail, Chairman of the Model N Board.
Model N President and CEO Jason Blessing expressed that the partnership with Vista will bolster the company's ability to navigate a dynamic market and focus on long-term annual recurring revenue growth. Vista, known for its investments in enterprise software, data, and technology-enabled businesses, recognizes Model N's role as a pioneer in revenue management for the life science and tech industries, as stated by Michael Fosnaugh, Co-Head of Vista's Flagship Fund.
The transaction, which is expected to close in mid-2024, is subject to customary closing conditions, including Model N stockholder approval and clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Post-acquisition, Model N will operate as a privately held entity and its shares will be delisted from public markets.
Jefferies LLC is acting as the exclusive financial advisor to Model N, while Fenwick & West LLP is providing legal counsel. Vista's legal counsel is Kirkland & Ellis LLP.
This announcement is based on a press release statement.
InvestingPro Insights
As Model N, Inc. (NYSE: MODN) prepares to transition into a private company under the acquisition by Vista Equity Partners, the market has responded to this news with various indicators of the company's financial health and potential. According to InvestingPro data, Model N currently holds a market capitalization of approximately $1.06 billion. Despite the company's negative P/E ratio of -32.88, reflecting challenges in profitability over the last twelve months, analysts foresee a brighter future with net income expected to grow this year.
InvestingPro Tips suggest that while Model N operates with a moderate level of debt, its liquid assets surpass short-term obligations, indicating a stable financial position for meeting immediate liabilities. However, it's essential to note that 11 analysts have revised their earnings forecasts downwards for the upcoming period, which could signify potential headwinds or a conservative outlook on the company's performance.
For investors considering the implications of the acquisition, it is noteworthy that Model N's revenue has grown by 11.92% over the last twelve months as of Q1 2024. This growth trajectory may align with Vista's strategy to enhance the company's focus on long-term annual recurring revenue growth. Furthermore, the company's EBITDA has impressively increased by 185.57% during the same period, signaling operational efficiency improvements that could be leveraged post-acquisition.
For those looking for more in-depth analysis and additional insights, InvestingPro offers a comprehensive array of metrics and tips. There are more InvestingPro Tips available, which can be accessed through the platform, providing subscribers with a more granular look at Model N's financials and market performance. To take advantage of this resource, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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