Morning Commentary: Coupa Software to be acquired, sending convertible notes surging

By Abigail W. Adams

Portland, Me., Dec. 12 – The convertibles primary market was quiet early Monday following one of the highest volume weeks of the year.

While there may be scattered activity in the days ahead, sources do not expect to see the deluge of issuance that was seen the previous week, especially with market volatility expected surrounding the latest Consumer Price Index print and the Federal Open Market Committee meeting in coming days.

While activity in the secondary space was muted early in the session, Merger Monday launched one name into the spotlight.

Coupa Software Inc.’s convertible notes surged in high-volume activity after Thoma Bravo’s long-rumored takeover of the company was formerly announced.

Coupa’s 0.375% convertible notes due 2026 jumped 9 points outright to 96.625.

There was $8 million in reported volume.

Coupa’s 0.125% convertible notes due 2025 jumped 6 points outright to 97.

There was $4 million in reported volume.

Both tranches were up on swap, a source said.

Coupa’s stock was changing hands at $78.68, an increase of 26.73%, shortly before 11 a.m. ET.

Thoma Bravo’s long-rumored acquisition of the business spend management software company was part of a whirlwind of end-of-year M&A activity announced on Monday.

Thoma Bravo will pay $81 per share in cash for Coupa in a deal with an enterprise value of $8 billion.

The convertible notes will be taken out in the acquisition.

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