The two sides originally struck an agreement in early February over a $1.5 billion sale, a $28.60 per share offer that was a roughly 20 percent premium to the pre-announcement share price.

The agreement included a 25-day go-shop period expiring at the end of February, and Everbridge managed to solicit an improved proposal from a third-party. Thoma Bravo matched and is now paying $1.8 billion, or $35 per share.

Go-Shop Surprise

While go-shop provisions are more common for financial buyers than strategics, they’ve become relatively rare in recent years. As of February 2024, slightly more than one quarter of private equity take-privates over the last twelve months included such language, according to Paul, Weiss’ terms tracker.

The number of go-shops that lead to an upward purchase price revision is, of course, smaller still. Based solely on market data, Thoma Bravo may be somewhat surprised that they’ve now found themselves shelling out an extra $300 million.

Paul, Weiss notes, however, that part of the reason for the seeming scarcity of go-shop provisions is that many targets question their need. Because targets will generally have a “fiduciary out,” which permits the board to terminate the initial merger agreement should a higher-priced offer materialize, go-shops can be superfluous (especially as rapid news coverage means other suitors are well aware of the initial bid, even without go-shop solicitation).

Either way, Everbridge’s specific outcome doesn’t happen often.

Years in the Making

Formed in aftermath of the September 11, 2001 terrorist attacks, Everbridge provides a suite of solutions designed to help clients assess threat levels in specific geographies (such as where employees live or travel) and send mass-notification emergency alerts.

It’s a somewhat niche offering, but Everbridge’s flagship Mass Notification product is considered a category leader and holds large contracts with Germany, The Netherlands, and the United Kingdom.

Even so, the business has weathered volatility over recent years, including a drop in growth from 36 percent in 2021 to just 3 percent in 2023. With a product that doesn’t directly generate ROI, Everbridge can be one of the first software providers to face budget cuts when economic conditions cool—2023 was a story of down-sells, seat compression, and limited new logo wins.

Against that backdrop, analysts generally felt the original Thoma Bravo offer was a solid outcome for the business. At the time, consensus was that an improved bid was unlikely, particularly with a limited number of potential strategic acquirers.

Adding to the surprise is speculation that Everbridge has likely been in play for a couple of years following a December 2021 CEO departure. Any potential suitors have had ample time to make a move—one Raymond James analyst even labelled it “a rather thorough selling process.”

Looking forward, the deal could be a positive for Everbridge, which is likely to benefit from a period of time away from public market scrutiny. The company has kicked off a series of longer-term changes to its product and go-to-market strategy, which should be easier to execute under Thoma Bravo ownership.