Key Takeaways
- • Thoma Bravo is set to hand ownership of software provider Medallia to its private credit lenders in a debt-for-equity swap, one of the largest private credit restructurings to date, according to Barron's.
- • Medallia was acquired by Thoma Bravo in 2021 for $6.4 billion at roughly 9x revenue, financed with about $1.8 billion of debt backed by private credit lenders including Blackstone, Apollo and KKR.
- • Blackstone has marked down its Medallia loan exposure; the firm attributed the weaker performance to execution issues at the Thoma Bravo-backed business rather than artificial intelligence disruption.
- • Blackstone and Thoma Bravo are the two firms with the most exposure to Medallia, making the case a notable test of software lending risk within private credit.
- • Publisher coverage cites Blackstone's reported $380M private credit markdown tied to Medallia as a reminder that concentrated credit positions can produce outsized losses.
Summary
Software provider Medallia has emerged as one of the higher-profile problems in private credit markets, with Blackstone and Thoma Bravo carrying the most exposure, according to Barron's. Thoma Bravo has agreed to hand Medallia to a lender group led by Blackstone, in a debt-for-equity swap that the Financial Times has described as one of the largest private credit restructurings to date. Coverage from multiple outlets indicates that Apollo and KKR are also among the lenders taking control of the business.
Thoma Bravo acquired Medallia in 2021 for $6.4 billion, or roughly 9x revenue, funded in part by about $1.8 billion of debt provided by private credit firms including Blackstone, Apollo and KKR. Publisher summaries note that the restructuring follows a period of pressure on software loans, with Thoma Bravo having relied on private credit lenders to finance the purchase. The swap leaves the lenders as owners of the business rather than creditors.
Blackstone has marked down its Medallia loan within a private credit fund. According to reporting cited by the publisher, the firm said the weaker performance reflected execution issues at the Thoma Bravo-backed business rather than disruption linked to artificial intelligence. Publisher coverage has also referenced a roughly $380 million markdown on Blackstone's private credit holdings, underscoring the scale of the write-down.
For allocators, the case highlights the risks of concentrated exposure in private software lending, where leverage and sponsor-backed structures can magnify losses when operating performance deteriorates. The outcome is being watched as a bellwether for how private credit lenders handle sponsor-driven defaults in the software sector.
Thoma Bravo acquired Medallia in 2021 for $6.4 billion, or roughly 9x revenue, funded in part by about $1.8 billion of debt provided by private credit firms including Blackstone, Apollo and KKR. Publisher summaries note that the restructuring follows a period of pressure on software loans, with Thoma Bravo having relied on private credit lenders to finance the purchase. The swap leaves the lenders as owners of the business rather than creditors.
Blackstone has marked down its Medallia loan within a private credit fund. According to reporting cited by the publisher, the firm said the weaker performance reflected execution issues at the Thoma Bravo-backed business rather than disruption linked to artificial intelligence. Publisher coverage has also referenced a roughly $380 million markdown on Blackstone's private credit holdings, underscoring the scale of the write-down.
For allocators, the case highlights the risks of concentrated exposure in private software lending, where leverage and sponsor-backed structures can magnify losses when operating performance deteriorates. The outcome is being watched as a bellwether for how private credit lenders handle sponsor-driven defaults in the software sector.
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