Private equity firm Silver Lake is in discussions to acquire Workday, a major cloud-based human resources and financial management software company, in what could become one of the largest software buyouts in history, according to people familiar with the matter.
The talks have been ongoing for several months, but no agreement has been finalized and there is no guarantee that a transaction will ultimately be completed. The discussions are confidential, the people said.
News of the potential acquisition sent Workday shares sharply higher on Thursday. The stock jumped nearly 18% after the report emerged, lifting the company’s market value substantially.
Before the report, Workday had a market capitalization of roughly $43 billion. Its shares closed at $206.45 on Thursday, giving the company a market value of approximately $51.1 billion.
Silver Lake Explores Major Workday Acquisition
Silver Lake, one of the prominent technology-focused private equity firms, has been discussing a potential deal with Workday in recent months, according to people familiar with the matter.
One person said Silver Lake could bring additional investors into the transaction to help finance the acquisition. The approach could allow the private equity firm to assemble a larger investment group for a deal of Workday’s scale.
Silver Lake has previously partnered with major investors on large technology transactions. Last year, it teamed up with Saudi Arabia’s Public Investment Fund and Affinity Partners for a roughly $55 billion take-private transaction involving videogame maker Electronic Arts.
Neither Silver Lake nor Workday immediately responded to requests for comment regarding the reported discussions.
If completed, a Workday acquisition would represent a major transaction for the private equity industry and one of the largest take-private deals involving a software company.
Workday Shares Jump as Acquisition Talks Emerge
Workday’s stock had faced pressure before news of the potential deal surfaced.
The company’s shares had fallen about 15% during the year before Thursday’s rally, as investors increasingly questioned the long-term growth prospects of traditional enterprise software businesses amid rapid advances in artificial intelligence.
Workday’s shares had also declined more than 40% from their 2024 peak.
The sharp increase following the acquisition report highlights how investors are responding to the possibility of a major private equity transaction. However, the jump in Workday’s valuation does not mean that a deal has been agreed.
The discussions remain ongoing, and the parties could still decide not to proceed.
AI Pressure Reshapes Software Industry
The potential Workday transaction comes at a difficult time for traditional software companies.
Private equity firms have largely remained cautious about large software buyouts this year as artificial intelligence continues to change the technology industry. Investors are trying to determine how quickly AI could affect demand for conventional software products and how that could influence future revenue growth.
Those concerns have contributed to a limited number of major software take-private transactions.
One of the notable deals announced earlier this year was Hg Capital’s agreement in January to take financial software company OneStream private for approximately $6.4 billion.
A potential acquisition of Workday would be considerably larger and could become an important test of private equity investors’ willingness to commit substantial amounts of capital to established software companies while AI transforms the sector.
The reported talks also come after Thoma Bravo agreed to acquire payroll software provider Dayforce in a transaction valued at approximately $12.3 billion.
Silver Lake Has Deep Technology Investment Experience
A Workday transaction would fit Silver Lake’s long-standing focus on technology and software businesses.
The private equity firm has invested in several major technology companies over the years, including Dell Technologies, VMware and Qualtrics.
That experience could be particularly relevant as Workday seeks to navigate an industry undergoing rapid technological change.
For private equity investors, a potential Workday acquisition would offer exposure to an established enterprise software company with a large global customer base, while also presenting the challenge of adapting the business to the growing influence of artificial intelligence.
Workday’s Business and AI Strategy
Workday was founded in 2005 by former PeopleSoft executives Aneel Bhusri and David Duffield. The company went public in 2012.
It provides cloud-based software covering areas including human resources, payroll, finance, spending and business planning.
The company serves more than 11,500 customers around the world. Its customer base includes Netflix, U.S. Bank, Johns Hopkins University and Thomson Reuters.
Workday is also attempting to navigate increasing pressure from artificial intelligence across the enterprise software market.
Aneel Bhusri returned as Workday’s chief executive in February, replacing Carl Eschenbach, as the company works through the changing competitive environment.
The shift comes as enterprise software companies face growing expectations to integrate AI capabilities into their products while demonstrating that their existing platforms can continue generating strong growth.
Revenue Growth Slows From Previous Year
Workday reported revenue of $9.6 billion for fiscal 2025, representing a 13% increase from the previous year.
The company also generated $2.9 billion in operating cash flow during the year, an increase of 19%.
However, Workday’s revenue growth slowed from 16% in the previous year, contributing to investor concerns about the future pace of expansion.
The slowdown has taken place as the broader software industry faces questions about how AI will affect traditional business applications and the companies that provide them.
A private equity buyer would therefore be taking on both the opportunities associated with Workday’s established customer base and the challenges created by a rapidly changing software market.
Deal Could Become Major Software Buyout
A successful acquisition of Workday would rank among the largest software buyouts ever and could become a landmark transaction for the private equity sector.
The potential deal would also demonstrate whether investors are prepared to deploy tens of billions of dollars into established software businesses despite uncertainty surrounding artificial intelligence.
For now, however, the discussions remain preliminary. The people familiar with the matter emphasized that negotiations are continuing and that there is no certainty an agreement will be reached.
Workday’s dramatic stock move following the report has nevertheless placed the company at the center of the technology and private equity markets, as investors watch closely to see whether Silver Lake ultimately turns its discussions into a formal acquisition agreement.
