Apax, Canada Pension weigh buyout of US$2 billion IT firm Thoughtworks

A CONSORTIUM backed by buyout firm Apax Partners is considering a potential bid to take US-listed technology consultancy Thoughtworks Holding private, people familiar with the matter said.

Apax has teamed up with Canada Pension Plan Investment Board, according to the people, who asked not to be identified because the information is private. They are working with advisers to explore a possible joint offer for the shares they don’t already own in Chicago-based Thoughtworks, the people said.

Shares of Thoughtworks jumped as much as 25 per cent in Tuesday (May 2) morning trading, the biggest intraday gain since September 2021. They were up 18 per cent at the close in New York, giving the company a market value of US$2.3 billion.

Thoughtworks stock had fallen more than 80 per cent through Monday from its peak in the days following the company’s initial public offering (IPO). Thoughtworks in February provided a profit outlook for the year that disappointed investors.

Apax bought Thoughtworks in 2017 for an undisclosed amount. It listed the company through a Nasdaq IPO in September 2021 and remains its controlling shareholder.

Deliberations are ongoing, and there’s no certainty they will lead to a formal offer, the people said. Representatives for Apax and CPPIB declined to comment. A spokesperson for Thoughtworks said the company is focused on executing its business plan and declined to comment further.

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Other major shareholders of Thoughtworks include German engineering firm Siemens and Singaporean sovereign fund GIC, which both invested before the IPO, according to data compiled by Bloomberg.

Thoughtworks operates in 18 countries and counts more than 12,500 employees, according to its website. Its clients include Bayer, Mercedes-Benz Group and Paypal Holdings. BLOOMBERG