News

It seems Blackbaud (NASDAQ: BLKB) might be in play.

A media report stated that the cloud-based software provider might be the target of a renewed buyout effort by a former suitor. On that potentially share-price-lifting news, investors piled into the stock on Thursday to the point where it closed more than 5% higher. That was more than good enough to beat the 0.7% increase of the S&P 500 index on the day.

A new go-private possibility

That morning, Bloomberg reported that California-based Clearlake Capital Group was mulling a buyout of Blackbaud. Clearlake's name could be familiar to at least some of the cloud software company's investors, as the firm attempted a purchase last year but was refused. Additionally, Clearlake holds an equity stake of just under 19% in Blackbaud.

Citing unnamed "people with knowledge of the matter" as its sources, thefinancial newsagency said that Clearlake is consulting with potential advisors about making a formal offer to Blackbaud's board of directors. The firm has also contacted would-be lenders about assisting with the finances that would be involved in a buyout.

Neither Blackbaud nor Clearlake has yet officially commented on the Bloomberg story.

Likely a pricey buy

So far, Blackbaud hasn't been an easy acquisition target. It decisively rebuffed Clearlake's 2023 offer of $71 per share last March, which at the time would have represented a roughly 23% premium to Blackbaud's share price. Additionally, the company operates in the popular cloud segment and has lately been profitable and well in the black with free cash flow (FCF). As such, it's likely to command a richer premium than previously offered.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Blackbaud. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.