Silver Lake’s reported interest in acquiring Workday has set a valuation floor for software mergers and acquisitions, with a potential bid of roughly $224 per share implying a 15x enterprise value to free cash flow multiple for the company’s fiscal year 2028.
Workday’s stock jumped about 25% following Reuters’ August 13, 2026 report that the private equity firm was in preliminary talks to take the enterprise software provider private. The move triggered a broader rally in European software names the following day, with Nemetschek advancing 9.4% and Sage gaining 3.5%.
Workday reported its second-quarter fiscal 2027 results on August 27, posting adjusted earnings per share of $2.75, exceeding the $2.61 consensus estimate. Subscription revenue reached $2.47 billion, slightly above the $2.46 billion expected. During the earnings call, management declined to comment on the acquisition speculation, focusing instead on operational updates and product integrations, including the recent Paradox acquisition and plans to acquire Pipedream for low-code integration capabilities.
Analysts at Truist highlighted a list of potential software M&A targets, categorizing candidates into two tiers. The “A List,” comprising firms facing activist pressure or recent press speculation, included Commvault, Elastic, Five9, GitLab, HubSpot, UiPath, Varonis, and Zeta Global. The “B List” featured established franchises with no current speculation, such as Dynatrace, Intapp, JFrog, Klaviyo, Paylocity, Qualys, and Tenable.
ServiceNow and Atlassian were noted as unlikely to pursue large acquisitions in the near term, having recently completed significant deals in 2025. Workday’s market capitalization stood at approximately $43 billion as of the latest trading session.
