Why Private Equity Suddenly Wants Boring HR Software
Trading in Workday stock was halted on August 13. Nothing had broken. Reuters had just reported that Silver Lake was in talks to take the company private, and the stock ripped 18% to close at $206.45, its best single day in a decade.
The reported price is around $43 billion, though after the pop several outlets put the implied value north of $50 billion. Either figure would land the deal among the largest software buyouts ever attempted. Before anyone gets carried away, though, these are talks. Reuters’ sources said the discussions are ongoing with no guarantee anything gets signed.
Still, the fact that the conversation is happening at all says something about where money is going right now.
Nobody else is buying software this year
Software has been private equity’s favorite hunting ground for a decade. Recurring revenue, fat margins, customers who can’t easily leave. Then 2026 happened. PitchBook figures show platform buyouts (the big, buy-the-whole-company deals) fell to just 41% of software deal value through May, a decade low. Full-year volume is tracking toward roughly $39 billion, down from a record $156 billion in 2025.
The freeze comes down to two words that show up in every deal memo now: AI risk. If AI can commoditize application software, why pay a rich multiple for a company that might get disintermediated in five years? Tighten credit markets on top of that and the math on mega-LBOs stops working.
Which makes a $43 billion take-private in this market a fairly loud bet against the consensus.
The case for Workday
Silver Lake’s reported thinking is that the AI fear gets misapplied to companies like this one. Workday is welded into the guts of its customers: payroll, headcount, the financial close. Ripping it out is a multi-year, career-risking project. That same entrenchment is what makes the data sitting underneath it useful for AI rather than vulnerable to it.
The financials support the read. In fiscal 2026 Workday did $9.55 billion in revenue, up 13.1%, with subscription revenue up 14.5%. Non-GAAP operating margin came in at 29.6%. Free cash flow hit $2.78 billion, up almost 27%. The subscription backlog, meaning money already under contract, stands at $28.1 billion across more than 11,500 customers.
And the stock was still down about 15% on the year and more than 40% below its 2024 high before the Reuters story landed. Good business, discounted stock. That gap is where private equity does most of its shopping.
Workday also isn’t the only target. Thoma Bravo closed a $12.3 billion buyout of rival Dayforce back in February. Silver Lake, working with Saudi Arabia’s PIF and Affinity Partners, just closed the $55 billion take-private of Electronic Arts earlier this month.
Do any of these companies come back?
Plenty do, and the round trips are where the returns get made.
Dynatrace is the one PE firms like to talk about. Thoma Bravo bought Compuware for roughly $2.4 billion in 2014, sold the Detroit headquarters, cut $200 million of stranded cost, carved out the dying mainframe business (BMC paid about $2 billion for it in 2020), and rebuilt what was left into a cloud-native observability platform. Dynatrace went public again in July 2019 at a $6.7 billion valuation. Reported returns ran 12.5x and 13.5x across two Thoma Bravo funds.
Dell went private in 2013 at $24.9 billion and found its way back to public markets in 2018 through a $23.9 billion tracking-stock exchange. Silver Lake’s gains on VMware alone reportedly produced a 7.3x return for one of its funds.
Hilton isn’t software, but it remains the gold standard. Blackstone bought it for $26 billion in 2007, held on through the financial crisis, took it public again in 2013, and exited in 2018 with roughly $14 billion in profit, the most lucrative buyout in history.
The other column is worth reading too. SolarWinds went private in 2016, IPO’d in 2018, then got taken private again in 2025 for $4.4 billion, which is nine years of work for not much value created. Informatica ran a similar loop and eventually sold to Salesforce for $8 billion. Medallia, which Thoma Bravo bought for $6.4 billion in 2021, buckled under nearly $3 billion of debt.
So the record includes enormous wins, a fair number of shrugs, and some genuine wipeouts. Leverage magnifies whatever the underlying business does, in both directions.
What to watch
If a deal gets signed, Workday’s roughly 21,000 employees should expect the usual opening moves: cost discipline, flatter org charts, a hard look at pricing. The company already booked $303 million in restructuring charges in fiscal 2026, before any buyer showed up.
For customers, the real question is whether five to seven years under private ownership means focused reinvestment, the Dynatrace path, or a debt-servicing exercise where the support line quietly gets worse.
For everyone else, the signal is this: some of the most sophisticated leveraged buyers in the world are willing to write a $43 billion check for unglamorous back-office software in the middle of an AI panic. They think the panic is mispriced. Their track record on calls like that is good but nowhere near perfect, which is why the next few months of reporting here are worth following closely.
Sources: CNBC, Axios, Benzinga, TheStreet, Workday FY2026 results, PitchBook, Thoma Bravo / Dayforce, EA take-private
