Our Thoughts on Olo’s Acquisition by Thoma Bravo

Olo Inc. (NYSE: OLO), a leading open SaaS platform powering digital ordering and guest engagement for restaurants, announced it has entered into a definitive agreement to be acquired by Thoma Bravo, a premier software investment firm, in an all-cash transaction valued at approximately $2.0 billion in equity.

Under the terms of the agreement, Olo shareholders will receive $10.25 per share in cash. This per-share purchase price represents a substantial 65% premium over Olo's unaffected share price of $6.20 as of April 30, 2025, the last trading day prior to media reports regarding a potential transaction.

Upon completion, Olo will become a privately held company, ending its four-year tenure on the public markets. The company will continue to operate under its well-known Olo name and brand.

Founded in 2005, Olo has been a trailblazer in the restaurant technology sector, developing a comprehensive platform that enables over 750 restaurant brands across 88,000 locations globally to manage digital ordering, payments, and guest engagement. Its robust network of more than 400 integration partners has made it a crucial backbone for many leading restaurant chains, including household names like Denny's and PF Chang's.

The acquisition comes at a time when Olo has shown strong financial performance, including turning profitable in Q1 2025 with a reported $1.8 million net income. By turning this corner, Olo joined a growing list of young companies that have used the past 2 years to focus on costs, financial discipline and operational excellence, meanwhile balancing growth and profitability at the same time. We blogged on this trend with some other companies such as Spendesk, the European leader in expense management software. This also aligns well with Thoma Bravo's investment philosophy of acquiring strong, fundamentally sound software companies and accelerating their growth in a private setting, free from the pressures of quarterly public market reporting.

This deal underscores a renewed appetite among private equity firms for vertical SaaS platforms with sticky revenue models and significant market penetration. Olo's strong net revenue retention rate and established customer base present a compelling opportunity for Thoma Bravo to further invest in product innovation, potentially expanding into new areas like AI-driven analytics and deeper payment solutions through Olo Pay.

A Market Premium:

One interesting piece of analysis is the multiple that Thoma Bravo paid for Olo. If we take the trailing FY 2024 revenue as a benchmark, then the deal culminated at a 7x multiple to revenue. If we use a forward revenue guidance for FY 2025 of $339M, the deal culminated at 5.90x. This is total revenues. The multiple figures will shift if we parse revenue.

This multiple offers a strong endorsement to Olo’s business and their trajectory. In terms of comps, we looked at Toast which is a larger player in the space with a more retail and SMB focus. Toast has a market capitalization of $25 Billion and is currently trading at approximately 4.4x - 4.8x its trailing twelve-month (LTM) revenue of $5.22 billion

We attribute this premium likely to Thoma Bravo’s confidence to the following factors:

1.    Overall optimism in the market and expanding multiples as we head towards what could be an interest rate easing cycle by the Fed

2.    Market sentiment that has been driven by the deregulation and business friendly policies from the new administration in Washington DC

3.    A vote of confidence in Olo and its impressive turnaround to becoming a strong, legitimate profit-making company

4.    Strong belief that Olo will push further and faster to expand its business in a private market setting as it is free from the regulatory and compliance burdens of being a public company

While this deal does not exactly fall into the traditional CFO Office software space, we do believe that the CFO Office in consumer facing retail businesses such as restaurant or leisure have a very important say in deciding on the ordering, engagement and payments software partners, they choose. Having the right payment platform in particular that vertically integrates with the business, offers the best feature set, has superior up-time capability and can offer the benefits of lower costs are vital decision-making parameters that CFOs in these companies look for.

Overall, though, this is exciting on a macro front as this deal only adds more fuel to the already hot M&A space. We expect private equity firms to push even further and make many more deals in the coming 12 – 24 months.