Private equity could be gearing up to shop for vulnerable technology companies • businessroundups.org

businessroundups.org recorded a week before an investor in Coupa raised the alarm that the software company could be sold to private equity for a price lower than what the asset manager deemed fair. The plea went unanswered, with Coupa selling for a discount to what the investor had demanded as a minimum, we reported this morning.

That the deal came about so quickly after the warning is not surprising. The investor in question would not have attempted to make inappropriate public noise unless something was imminent. That the deal was made for the price it did, however, is remarkable. How is that possible? Because private equity has more money than god and technology is cheaper than it has been in ages.

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The combination, in light of the Coupa sale, makes us wonder if technology is about to discover itself in the midst of a sell-off — a situation where the balance of power is off. This could apply to public technology companies and those who have yet to pull the trigger on an IPO for one reason or another. Neither cohort is in good valuation shape, making them equally vulnerable.