QAD Acquisition: Key Details, Impact, and What Comes Next

Thoma Bravo's acquisition of QAD Inc. for $2 billion marks a significant development in the manufacturing and supply chain solutions industry. This strategic move is expected to enhance QAD's capabilities and drive innovation, positioning the company for future growth. The acquisition underscores Thoma Bravo's commitment to investing in growth-oriented software companies.

What Is QAD?

Founded in 1979, QAD specializes in cloud-based manufacturing and supply chain solutions. Its core offerings include Enterprise Resource Planning (ERP), supply chain planning, quality management, and global trade compliance. QAD differentiates itself with its Adaptive Enterprise vision, providing tailored solutions for industries like automotive, food and beverage, and life sciences. The company's focus on cloud technology ensures flexibility and scalability, while its comprehensive support services enhance customer success and operational efficiency.

Who Acquired QAD?

Thoma Bravo is a leading private equity firm specializing in investments in software and technology companies. With over 40 years of experience, the firm provides capital and strategic support to help tech companies grow. Key services include private equity investments, strategic guidance, and involvement in ESG initiatives. Thoma Bravo manages assets worth over $179 billion and has a substantial portfolio of over 75 current companies. The firm is recognized for its significant influence and global presence in the technology sector.

When Was QAD Acquired?

Thoma Bravo completed its acquisition of QAD on November 5, 2021. This acquisition, initially announced on June 28, 2021, and approved by QAD’s stockholders on November 2, 2021, occurred during a period of significant innovation in the manufacturing and supply chain sectors. The timing reflects Thoma Bravo's strategic move to bolster its portfolio with a company that excels in cloud-based solutions, aligning with industry trends towards digital transformation and adaptive enterprise solutions.

Why Was QAD Acquired?

• Market Expansion: Thoma Bravo's acquisition of QAD is expected to provide QAD with enhanced flexibility, focus, and resources to invest in and capitalize on expanding growth opportunities. This will help QAD to continue its global expansion and strengthen its position in the market. Additionally, the deal will help QAD expand its footprint across different sectors within the manufacturing industry.
• Technology Integration: QAD is a provider of next-generation manufacturing and supply chain solutions in the cloud. The acquisition by Thoma Bravo will support QAD in furthering its journey to Software as a Service (SaaS) and driving sustainable long-term growth through technology integration. Thoma Bravo’s investment aims to advance QAD’s vision and drive sustainable value, which likely includes further technological advancements.
• Competitive Advantage: QAD’s ability to innovate and adapt to changing business models at unprecedented speeds is highlighted as a competitive advantage. The partnership with Thoma Bravo is expected to enhance QAD's value proposition and cement its positioning as the intelligent, agile, and innovative partner of choice for Adaptive Manufacturing Enterprises. By acquiring QAD Inc., Thoma Bravo gains a competitive advantage in the market for cloud-based manufacturing and supply chain solutions, positioning themselves as a leader in this niche.

Acquisition Terms

• Acquisition Price: Approximately $2 billion.
• Payment Method: All-cash transaction, with QAD stockholders receiving $87.50 per share of Class A or Class B Common Stock.
• Key Conditions or Agreements:
  • The transaction was subject to the terms of the definitive merger agreement.
  • Approval by QAD’s stockholders at the Special Meeting of Stockholders held on November 2, 2021.
  • QAD’s common stock ceased trading and was delisted from the Nasdaq stock market.
  • Ms. Lopker intended to retain a significant ownership interest in the company and continue serving on the QAD Board.
  • The final voting results were filed in a Form 8-K with the U.S. Securities and Exchange Commission.

Impact on QAD

The acquisition of QAD by Thoma Bravo has led to several operational and management changes. QAD has transitioned to a private company, with its common stock delisted from the Nasdaq stock market. Anton Chilton continues to lead as CEO, and the company maintains its headquarters in Santa Barbara, California. Thoma Bravo's expertise and resources are expected to bring strategic shifts in operational practices, enhancing QAD's ability to innovate and expand its market reach. Pamela Lopker retains a significant ownership interest and continues to serve on the QAD Board, ensuring continuity in leadership.

In terms of product offerings and services, the acquisition aims to bolster QAD's capabilities in cloud-based manufacturing and supply chain solutions. Thoma Bravo's investment is set to drive QAD's journey towards Software as a Service (SaaS) and sustainable long-term growth. The integration of Redzone's enterprise software solutions into QAD's portfolio is a notable enhancement, expanding QAD's reach across different manufacturing sectors. While specific employee and customer reactions are not detailed, the strategic focus on innovation and customer value propositions suggests a positive outlook for both groups.

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