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Investing.com -- Workday (WDAY) shares surged nearly 18% on Wednesday, August 13, their best single-day gain since 2016, after Reuters reported that private equity firm Silver Lake is in talks to acquire the enterprise software company in a deal that would rank among the largest software buyouts in history.
The surge rippled immediately across the software sector, reigniting a debate that has dogged the industry for months: whether the deal reflects a genuine valuation floor for beaten-down SaaS names, or signals that even blue-chip software companies are struggling to navigate the AI transition.
Silver Lake’s approach, according to Reuters, remains at the talks stage with no guarantee a deal will materialize. The firm may bring in additional investors to help finance a transaction that would require enormous capital. Silver Lake’s credibility as a mega-deal buyer is established — it was among the acquirers in the $55 billion Electronic Arts transaction alongside Saudi Arabia’s PIF and Affinity Partners.
For publicly traded software peers, the reported approach immediately reframes the valuation conversation. KeyBanc analyst Jason Celino argued investors will now contemplate takeout scenarios starting at 15x FY28/CY27 EV/FCF, which implies an acquisition price of roughly $224 per share. He benchmarked that floor against Atlassian at 21x, ServiceNow at 19x, SAP at 18x, Salesforce at 13.5x, Intuit at 12.5x, HubSpot at 11x, and Adobe at 10x.
Celino’s framing captures the dual read the market is wrestling with. On one hand, a private equity bid at a meaningful premium to depressed multiples validates that enterprise software assets have a price floor. On the other, the fact that Workday’s co-founder Aneel Bhusri returned as CEO earlier in 2026 for a second stint, widely seen as a transitional move to stabilize the company through an AI-disrupted product cycle, and may now be steering toward a take-private suggests the scrutiny of public markets has become a strategic constraint rather than a tool.
Celino wrote that going private could allow Workday to make product, pricing, and strategic pivots away from that scrutiny, a view that implies the company’s current challenges are real and structural, not cosmetic.
KeyBanc’s Celino flagged several other software names that could attract similar attention in the wake of the Workday report. Within his own coverage, he identified GitLab (GTLB), UiPath (PATH), PTC, and Procore (PCOR) as likely M&A candidates. In large-cap software covered by KeyBanc colleague Jackson Ader, he pointed to Adobe (ADBE) and HubSpot (HUBS).
Truist analyst Terry Tillman offered a sweeping sector read, arguing the report could serve as a major wake-up call for a software M&A market that has been, in his words, "quite sleepy" in 2026. Tillman wrote that while one deal does not make a trend, a transaction of this magnitude could reopen the conversation around both sponsor and strategic acquirer appetite for software, particularly after significant valuation compression across the sector.
To that end, Truist refreshed its "M&A-B Lists" of compelling potential takeout candidates across its software coverage universe. In Application Software, Truist noted 16 coverage names have been acquired since 2019, and sees the greatest M&A appeal among assets with high recurring revenue, durable retention, strong cash flow, deeply embedded workflows, and credible agentic roadmaps. In Infrastructure Software, Truist highlighted that five infrastructure software names on its A&B lists rose an average of 7.4% in Wednesday’s session, and expects strategic and financial buyers to return to this layer of the stack first given its importance in supporting AI applications; the firm expects ServiceNow (NOW) and Atlassian (TEAM) to remain sidelined near term as they digest large deals from the second half of 2025.
In Cybersecurity, Tillman noted that vendor consolidation has been a core theme through 2026, driven by large-scale platform acquisitions as well as AI-focused tuck-in deals, and expects AI-native and identity-focused assets to remain among the most sought-after targets as buyers seek to augment internal development through targeted M&A.
