Toronto entrepreneur David Ossip transformed one of America’s oldest technology companies, Ceridian Corp., from an underperforming, debt-laden equity-owned enterprise based in Minneapolis into a leading enterprise software vendor that was largely managed from Canada.

That human resources software company, now known as Dayforce Inc. DAY-T, appears to be headed back into the private realm after confirming Wednesday it was in advanced discussions to be acquired by private equity giant Thoma Bravo for US$70 per share, valuing the company at more than US$11-billion.

The offer represents a premium of 32.4 per cent based on the stock’s closing price on Aug. 15, before the talks were first reported, and is the latest consolidation move in the human resources software market, after the acquisition by Paychex of rival Paycor for US$4.1-billion earlier this year, and Automatic Data Processing’s 2024 acquisition of WorkForce Software for about US$1.2-billion.

Dayforce stock, which had already soared earlier this week on reports of an impending deal, was trading Wednesday morning at $67.06 on the New York Stock Exchange, up 2.4 per cent.

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If the Thoma-Dayforce deal happens, it would mark the latest in a sweep of takeovers by private equity firms of software firms that saw their valuations crash in late 2021 as the specter, later realized, of rising interest rates hit the technology sector.

This privatization wave is different from the buyout craze of the 2000s that consumed Ceridian and nearly culminated in a takeover of Canadian telecom giant BCE Inc. That wave was fuelled by cheap money and loose lending terms alongside the subprime mortgage bubble, which led to the credit crisis and deep recession in 2008-09.

This time, private equity firms, including Thoma Bravo, have been largely focused on sturdy, growing subscription software firms that have fallen out of favour with public market investors. The new era has seen more than half of the 20 Canadian technology companies that went public on the Toronto Stock Exchange during the pandemic-fuelled initial public offering boom in 2020 and 2021 go private through buyouts or delisting.

That includes Magnet Forensics, one of the standout performers of that class of TSX IPOs, which Thoma took private for $1.8-billion in 2023. Other prominent publicly traded Canadian software companies have recently looked into privatizing, including Lightspeed Commerce Inc. – which abandoned a sale process early this year – as well as Altus Group Ltd. and Dye & Durham Ltd.

Mr. Ossip, a veteran, South African-born Canadian software entrepreneur, was already one of Canada’s most high-profile software entrepreneurs when he launched Dayforce in the late 2000s: His previous startup, time-and-attendance management software provider Workbrain Corp., was bought by Infor Global Solutions for $227-million in 2007. Many employees went on to build their own startups.

When Ceridian bought Dayforce in 2012, it looked like a familiar story: Promising Canadian startup sells out too soon to a big U.S. buyer. But it was an intentional move that “wasn’t a random series of events,” Mr. Ossip told The Globe and Mail in 2017. “It was designed.”

At the time, the buyer, a payroll processing stalwart, was a faded technology has-been that started life as an IBM unit in 1932 and was purchased by U.S. private-equity giant Thomas H. Lee Partners in 2007. Part of the deal was that Mr. Ossip would become CEO of Ceridian and lead its transformation into a 21st century subscription software powerhouse. He is also chairman of the company.

Mr. Ossip, now 58, subsequently built Ceridian’s effective headquarters and executive team in Toronto, where much of the development work happens, while maintaining its U.S. domicile and Minneapolis headquarters. Mr. Ossip shifted Ceridian’s focus to expanding Dayforce, which offers payroll and other human-resources services, including benefits and workforce and talent management administration, on a single platform.

Dayforce had nearly 7,000 customers on its subscription software platform as of June 30, up 4.9 per cent year-over-year. One of its biggest is the government of Canada, which is deploying Dayforce to replace its failed Phoenix payroll system. If the original Dayforce startup had remained a stand-alone Canadian company, it would be one of this country’s largest homegrown software vendors. Dayforce eventually consumed the old Ceridian, which formally changed its name early last year.

After going public on the Toronto and New York stock exchanges in 2018 at US$22-a share (as Ceridian HCM Holdings Inc.), the stock soared through 2021, topping US$130 that November as the pandemic pushed consumers and companies alike to increasingly adopt online software.

But like other software companies, Dayforce’s stock fell after soaring inflation raised concerns that central banks would counteract with interest rate hikes. Those started in spring 2022. By that June, the company’s stock had lost nearly two-thirds of its peak value, and was only trading in the low $50s range before news broke about a possible buyout last weekend.

Rising rates also weighed on the enterprise software sales market. Dayforce’s recurring revenue growth from its subscription software platform slowed from the 30 per cent-plus range two years ago, gaining 13.6 per cent in the second quarter to reach US$315.5-million. That outpaced total revenue growth, weighted down by Ceridian’s legacy payroll management business, of 9.8 per cent.

The results, reported last week, included a US$21.3-million net profit for the quarter, beating Wall Street expectations. The company raised its annual revenue forecast last week, as more enterprises increase use of AI and cloud-based platforms to run day-to-day operations.

Mr. Ossip briefly shared the CEO title with Leagh Turner from early 2022 through November, 2023.

Ms. Turner, who had joined as president and chief operating officer in 2018 after serving as global chief operating officer with SAP AG, left Dayforce to lead Coupa Software, a Silicon Valley spend management software vendor.

With a file from Reuters.