Workday (WDAY) shares exploded 25% higher Thursday after Reuters reported that private equity firm Silver Lake is in talks to acquire the company.
Trading in the stock was halted three times due to circuit breakers as volatility surged on the breaking news out of financial markets.
Silver Lake and the human-resources and financial management software company have held discussions about a potential deal in recent months, according to people familiar with the matter.
The talks are ongoing and there is no guarantee a deal will materialize, said sources who spoke on condition of anonymity because the discussions are confidential.
The Pleasanton, California-based company had a market value of around $43 billion before Reuters reported on the talks, reflecting months of pressure on the stock.
Workday shares closed at $206.45 on Thursday, giving the company a market value of around $51.1 billion following the dramatic single-session rally.
Silver Lake could bring in additional investors to help finance what would rank among the largest software buyouts in history.
Prior to Thursday’s news, Workday shares had fallen about 15% this year and were down more than 40% from their 2024 peak, as investors questioned the durability of traditional software in an era of rapidly advancing artificial intelligence.
Thursday’s surge effectively erased all of those year-to-date losses, with shares now sitting approximately 3% higher since the start of the year.
Private equity firms have largely stayed on the sidelines of large software buyouts this year, as concerns over artificial intelligence have made it harder to assess the future growth and value of traditional software companies.
That cautious stance has contributed to a notable dearth of large software take-private deals, making any Workday transaction a significant market signal.
The potential acquisition follows another massive transaction in the sector, when private equity firm Thoma Bravo acquired payroll software specialist Dayforce in a deal valued at approximately $16 billion.
A successful acquisition of Workday would signal a major revival for large-scale technology buyouts after a multi-year period of subdued deal volumes across the industry.
Workday’s subscription revenue, the company’s main source of income, is expected to grow 15% annually in the coming years, a figure likely central to any valuation discussions.
Neither Silver Lake nor Workday responded to requests for comment on the reported discussions.
