Baird notes that Clearlake Capital made public that it has made an $80 per share offer to acquire Blackbaud, upped from Clearlake’s prior $71 per share offer in March 2023. While “not surprised about Clearlake’s reengagement,” the firm thinks the improved financial profile of Blackbaud may warrant a higher takeout price and it could see this new offer as “setting a potential floor” in the near-term. Given the overall growth and execution challenges the company has had, and given concerns around product and unit growth versus price increases, the firm does not believe that an offer that captures the middle of the historical range is a requirement for a sale, but believes “something around the lower end would probably be sufficient,” adding that it would view a takeout price of “$90+/share” as “more reasonable.” The firm has an Outperform rating and $88 price target on Blackbaud shares.
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