Filing Flows › Paycom Software (PAYC) › Takeover & LBO
Is Paycom Software (PAYC) a takeover target?
A leveraged buyout at today's price plus 30% ($343.46 a share) would return about 4% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $216.78 a share (−18% against today's $264.20). Historically 1.9% of companies with its figures were bought within a year (0.38× the average).
The buyout, step by step
| Entry | Amount | How |
|---|---|---|
| Offer price a share | $343.46 | today's $264.20 plus 30% |
| × shares | 44.5 million | |
| = Equity value | $15.3B | |
| + Debt refinanced | $750M | |
| − Cash | $194M | |
| = Enterprise value | $15.8B | 17.0× EBITDA of $933M |
| Fees | $317M | 2% of the price |
| New debt | $5.1B | 5.5× EBITDA at 7.65% a year; the limit that binds: 5.5× EBITDA |
| Buyer's own money | $11.0B | 68% of the cost |
5 years under the buyer
| Year | Revenue | EBITDA | Interest | Free cash flow | Debt left |
|---|---|---|---|---|---|
| Year 1 | $2.4B | $1.0B | $393M | $320M | $4.8B |
| Year 2 | $2.5B | $1.1B | $368M | $381M | $4.4B |
| Year 3 | $2.7B | $1.1B | $339M | $440M | $4.0B |
| Year 4 | $2.8B | $1.2B | $305M | $496M | $3.5B |
| Year 5 | $2.9B | $1.2B | $267M | $547M | $2.9B |
The exit and the buyer's return
| Exit | Amount | |
|---|---|---|
| Exit multiple | 13.2× EBITDA | today's trading multiple, before any premium |
| Enterprise value at exit | $16.1B | |
| − Debt left | $2.9B | |
| = Buyer's equity | $13.1B | |
| Money multiple | 1.19× | on $11.0B put in |
| Buyer's yearly return (IRR) | 3.6% |
Price against return
What the buyer makes at other premiums over today's $264.20; the IRR reaches 20% at $216.78 a share.
| Premium | Price a share | Buyer's IRR |
|---|---|---|
| 10% | $290.62 | 8.8% |
| 20% | $317.04 | 6.0% |
| 30% | $343.46 | 3.6% |
| 40% | $369.88 | 1.4% |
| 50% | $396.30 | −0.4% |
The figures used
| Figure | Amount | |
|---|---|---|
| Revenue, last 12 months | $2.2B | |
| EBITDA, last 12 months | $933M | 42.6% of revenue |
| Depreciation and amortization | $201M | |
| Capital spending | $151M | |
| Debt | $750M | |
| Cash | $194M | |
| Share price | $264.20 | on Oct 30, 2026 |
Fixed rules, the same as the interactive view's starting point: the shares are bought at today's price plus 30%, the company's debt is refinanced and fees take 2%. New debt is the least of 5.5× EBITDA, 65% of the price and the amount whose interest EBITDA covers 2 times, at 7.65% a year (SOFR 3.89% plus the high-yield B spread 3.26% plus 0.5%, rates of Oct 15, 2026). Revenue grows 8.0% in the first year — the company's own rate, held between −3% and +8% — fading to 3% by year 5; the EBITDA margin, depreciation and capital spending stay at today's share of revenue; working capital takes 10% of each year's added revenue; tax is 29% of profit after interest. Every dollar of free cash flow repays debt. After 5 years the buyer sells at today's multiple of EBITDA.
What a takeover could cost
Takeovers in its sector paid a median premium of 30% over the share price before the deal (the middle half 12% to 31%), according to the 14 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Paycom Software would cost about $343.46 a share, $15.3B for all its shares.
| Premium | % | Price a share | All shares |
|---|---|---|---|
| Low end (a quarter of deals paid less) | 12% | $295.90 | $13.2B |
| Median | 30% | $343.46 | $15.3B |
| High end (a quarter paid more) | 31% | $346.10 | $15.4B |
The odds, from history
Historically 1.9% of companies with its figures were bought within a year (0.38× the average). Its figures put it in decile 1 of 10 (10 = the most likely to be bought). The odds come from a model of every merger proxy, tender-offer response and going-private statement filed on EDGAR since 2011, set against each company's size, margins, debt, cash flow and growth the year before.
Paycom Software's latest quarter
Paycom Software, Q3 2026: revenue $544M (+10% year over year), operating margin 36.0%, net earnings $133M, operating cash flow $186M. The chart follows the revenue to costs, profit and cash.
Questions
Is Paycom Software being acquired?
No headline, 8-K or 13D about a sale is on file in the last year.
Could private equity buy Paycom Software?
A leveraged buyout at today's price plus 30% ($343.46 a share) would return about 4% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $216.78 a share (−18% against today's $264.20).
What would a takeover of Paycom Software cost?
Takeovers in its sector paid a median premium of 30% over the share price before the deal (the middle half 12% to 31%), according to the 14 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Paycom Software would cost about $343.46 a share, $15.3B for all its shares.
Updated Nov 8, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.