Filing Flows › Pegasystems (PEGA) › Takeover & LBO
Is Pegasystems (PEGA) a takeover target?
A leveraged buyout at today's price plus 30% ($44.11 a share) would return a loss of about 3% a year to a private-equity buyer over 5 years; no price, however low, gets a buyer to 20%. Historically 4.0% of companies with its figures were bought within a year (0.8× the average).
The buyout, step by step
| Entry | Amount | How |
|---|---|---|
| Offer price a share | $44.11 | today's $33.93 plus 30% |
| × shares | 168.6 million | |
| = Equity value | $7.4B | |
| + Debt refinanced | $0 | |
| − Cash | $310M | |
| = Enterprise value | $7.1B | 38.2× EBITDA of $187M |
| Fees | $143M | 2% of the price |
| New debt | $1.0B | 5.5× EBITDA at 7.65% a year; the limit that binds: 5.5× EBITDA |
| Buyer's own money | $6.2B | 86% of the cost |
5 years under the buyer
| Year | Revenue | EBITDA | Interest | Free cash flow | Debt left |
|---|---|---|---|---|---|
| Year 1 | $1.8B | $188M | $78.5M | $76.0M | $950M |
| Year 2 | $1.8B | $191M | $72.7M | $82.3M | $868M |
| Year 3 | $1.8B | $195M | $66.4M | $89.8M | $778M |
| Year 4 | $1.9B | $200M | $59.5M | $98.6M | $680M |
| Year 5 | $1.9B | $206M | $52.0M | $109M | $571M |
The exit and the buyer's return
| Exit | Amount | |
|---|---|---|
| Exit multiple | 29.0× EBITDA | today's trading multiple, before any premium |
| Enterprise value at exit | $6.0B | |
| − Debt left | $571M | |
| = Buyer's equity | $5.4B | |
| Money multiple | 0.86× | on $6.2B put in |
| Buyer's yearly return (IRR) | −2.9% |
Price against return
What the buyer makes at other premiums over today's $33.93.
| Premium | Price a share | Buyer's IRR |
|---|---|---|
| 10% | $37.32 | 1.2% |
| 20% | $40.72 | −1.0% |
| 30% | $44.11 | −2.9% |
| 40% | $47.50 | −4.6% |
| 50% | $50.89 | −6.2% |
The figures used
| Figure | Amount | |
|---|---|---|
| Revenue, last 12 months | $1.7B | |
| EBITDA, last 12 months | $187M | 10.7% of revenue |
| Depreciation and amortization | $13.6M | |
| Capital spending | $20.5M | |
| Debt | $0 | |
| Cash | $310M | |
| Share price | $33.93 | 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 0.9% 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 12% 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, Pegasystems would cost about $44.11 a share, $7.4B for all its shares.
| Premium | % | Price a share | All shares |
|---|---|---|---|
| Low end (a quarter of deals paid less) | 12% | $38.00 | $6.4B |
| Median | 30% | $44.11 | $7.4B |
| High end (a quarter paid more) | 31% | $44.45 | $7.5B |
The odds, from history
Historically 4.0% of companies with its figures were bought within a year (0.8× the average). Its figures put it in decile 4 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.
Pegasystems' latest quarter
Pegasystems, Q3 2026: revenue $393M (+3% year over year), operating margin 3.8%, net earnings $14.1M, operating cash flow $6.1M. The chart follows the revenue to costs, profit and cash.
Questions
Is Pegasystems being acquired?
No headline, 8-K or 13D about a sale is on file in the last year.
Could private equity buy Pegasystems?
A leveraged buyout at today's price plus 30% ($44.11 a share) would return a loss of about 3% a year to a private-equity buyer over 5 years; no price, however low, gets a buyer to 20%.
What would a takeover of Pegasystems 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, Pegasystems would cost about $44.11 a share, $7.4B for all its shares.
Updated Nov 8, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.