DOCU Stock Falls as Private Equity Firms Stall Out on DocuSign


  • Bain Capital and Hellman & Friedman disagree with DocuSign (DOCU) over how much the company should be bought for.
  • Last week, it was announced that JPMorgan Chase (JPM) and Bank of America (BAC) were open to providing up to $8 billion in financing for a potential buyout.
  • DOCU stock is down by about 5% today.
DOCU stock - DOCU Stock Falls as Private Equity Firms Stall Out on DocuSign

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Who wants to buy DocuSign (NASDAQ:DOCU)? Earlier this year, it was revealed that private equity firms Bain Capital and Hellman & Friedman were competing to buy out the electronic signature company. According to sources close to the matter, the two firms were named as final bidders in the auction for the company. The sources also stated that the firms could cooperate in acquiring DocuSign.

However, DOCU stock is falling lower today after Reuters reported that Bain and Hellman are in a disagreement with DocuSign over how much it should be acquired for following several weeks of negotiations.

“It remains, possible, however, that the deal talks will resume in the future, the sources added, requesting anonymity because the matter is confidential,” said Reuters.

DOCU Stock: Private Equity Firm Buyout Talks Slow Down Following Price Disagreement

The rate of leveraged buyouts has fallen during the past two years due to the rise in interest rates. Still, it was reported last week that JPMorgan Chase (NYSE:JPM) and Bank of America (NYSE:BAC) had engaged in talks to provide up to $8 billion of financing for a DocuSign buyout, valuing the company at around $13 billion. DOCU currently has a market capitalization of about $11 billion. Sources familiar with the matter also named Jefferies Financial Group and Deutsche Bank (NYSE:DB) as possible lenders in the event of a buyout.

“Some of the largest lenders in the $1.7 trillion private credit market are hesitant to participate, according to the people,” said Bloomberg. “If provided by direct lenders, the financing would rank as one of the largest private loans on record, according to data compiled by Bloomberg.”

Meanwhile, DocuSign President and CEO Allan Thygesen has been reducing his stake in DOCU during the past few months, albeit with a prearranged 10b5-1 trading plan. He sold off 7,680 shares on Feb. 1 at an average per share price of $61.27. In total, the transaction amounted to $470,554. Following the sale, Thygesen still owns 111,767 shares.

He also sold 7,420 shares on Jan. 2 and 92,750 shares worth $5.68 million on Dec. 19.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.

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