Shares of DocuSign (DOCU +1.21%) fell 8.5% on Monday after Reuters reported talks had stalled with two private equity firms as they weighed whether to acquire the online signature services company.
NASDAQ: DOCU
Key Data Points
Acquisition talks for DocuSign have cooled
Shares of DocuSign have rallied in recent weeks amid rumors that the e-signature leader was exploring a potential sale. Private equity firms Bain Capital and Hellman & Friedman emerged as potential suitors in the process. But according to three people "familiar with the matter" this week, Reuters says the firms' interest in striking a deal has waned after weeks of talks "over disagreements on how much they should pay" for the company.
What's next for DocuSign stock?
DocuSign boasts a market capitalization of just under $11 billion as of Monday's close, which would potentially make its acquisition one of the largest leveraged buyouts in recent years. DocuSign previously thrived during the pandemic as at-home work accelerated the transition to e-signature platforms. However, shares have pulled back sharply since late 2021 as growth decelerated. Even after rallying nearly 40% from their 2023 lows, shares of DocuSign are down around 15% over the past year.
All told, DocuSign will likely be just fine even if acquisition talks fall through; the company's top-line growth has stabilized, with current guidance implying 9% year-over-year growth in 2023. The company also appears to be on track to achieve its first-ever full-year net profit.
But with hopes of a juicy acquisition premium fading, it's hardly surprising to see the stock pulling back in response today.
