Clearlake Capital increased its offer to acquire cloud computing company Blackbaud by almost $500 million, bringing its offer to $4.3 billion, according to an April 14th filing by Blackbaud with the U.S. Securities and Exchange Commission.
After its previous offer was rejected, the Santa Monica-based firm has bumped its all-cash proposal from $71 to $80 per share in cash.
In a letter that was attached to the filing, Clearlake indicated that South Carolina-based Blackbaud requires substantial investment, and its challenges can only be overcome by taking the company private.
"We continue to believe in the company's potential since our initial investment in March 2020, over four years ago now. However, despite the management team's determined best efforts, we must acknowledge that the company continues to face substantial operational challenges that require transformational change and investment over many years," Clearlake wrote. "We believe these challenges can practically only be addressed as a private company with the support of a strategic party or sponsor, such as Clearlake, that can provide the necessary financial and institutional support.”
Blackbaud’s competitors include Macquarie-backed Plutora, Vista-backed ACTIVE Network, and Apax-backed Bonterra.
Clearlake’s first offer, a $3.78 billion bid in March 2023, was called "highly opportunistic" by Blackbaud, with management saying it significantly undervalued the company.
This time, however, Blackbaud has characterized the current offer as representing "a fair value" for its shares.
The deal would be among the largest recent transactions in the cloud space—a meaningful jump from IBM’s purchase last year of StreamSets and webMethods for $2.3 billion, the industry’s largest in 2023.