Private equity firm Thoma Bravo is close to an agreement that would transfer control of software company Medallia to its lenders, effectively ending a restructuring process that has been ongoing for several months, according to a report by Reuters.
The report cites unnamed people familiar with the situation as highlighting that the transaction would result in a full loss of equity for Thoma Bravo and its co-investors, who acquired the customer experience software company in 2021 for around $6.4bn. The deal would effectively erase approximately $5.1bn of equity value, the sources said.
Medallia carries roughly $3bn in debt, held across a group of lenders that includes Blackstone, KKR, Apollo Global and Antares Capital. Those creditors are expected to assume ownership as part of the restructuring outcome.
The company, which provides software used to collect and analyse customer and employee feedback, has faced increasing pressure in recent months amid broader concerns about the durability of software valuations in the face of artificial intelligence-driven disruption and tighter financing conditions.
Credit investors have already marked down portions of Medallia’s debt, reflecting market concerns about recovery value. Some funds have valued exposures in the 70–80 cents on the dollar range, according to recent disclosures.
The restructuring follows operational challenges at the company, which saw a leadership change in early 2025 as part of a turnaround effort. Credit investors have indicated that further discussions around the capital structure had been expected.
Thoma Bravo, Blackstone, KKR, Apollo and Medallia all reportedly declined to comment.
