Shares of the human resources management software company Workday Inc. jumped almost 18% today after a report emerged that it’s holding acquisition talks with the private equity firm Silver Lake.

Reuters said Silver Lake is prepared to pay up to $43 billion to acquire Workday, an amount that would make it one of the largest-ever buyouts in the software industry. The talks have reportedly been ongoing for a couple of months, but there is no guarantee that a deal will be done, according to Reuters’ source, who spoke anonymously due to the confidential nature of the discussions.

Workday, based in Pleasanton, California, had a market capitalization of around $43 billion before news of the talks became public, sending the stock higher. Workday’s shares closed at $206.45 on Thursday, boosting its value to around $51.1 billion on a day where trading was suspended multiple times.

Silver Lake could bring additional investors on board to help finance the takeover, Reuters added, noting that it previously teamed up with Affinity Partners and Saudi Arabia’s Public Investment Fund to acquire the video game company Electronic Arts Inc. in a $55 billion deal last year.

Prior to today’s report, Workday’s stock had been struggling, losing around 15% of its value in the year to date amid investor concerns that traditional software firms could see their businesses disrupted by the emergence of artificial intelligence agents. These fears have persisted for a while, and Workday’s stock was down more than 40% from its peak in 2024.

So far this year, private equity firms have shied away from software buyouts. According to Reuters, the uncertainty over the AI threat has made it much more difficult for prospective buyers to assess the value and growth prospects of traditional software firms.

So far, the biggest take-private deal involving a software firm was Hg Capital’s $46.4 billion acquisition of the financial services firm OneStream Software LLC. If the buyout of Workday proceeds, it would be many times larger than that deal and therefore be seen as a major indicator of private equity’s appetite for traditional software firms at a time when AI threatens to disrupt the industry.

Prior to OneStream’s acquisition, the most significant software firm to go private was the customer relationship management platform provider Dayforce US Inc., which was bought out by Thoma Bravo LLC for $12.3 billion in August last year.

Silver Lake has a long history of buying up big technology firms and taking them private, having previously been involved in deals with Dell Technologies Inc., VMware Inc. and Qualtrics LLC.

Workday was founded in 2005 by Chief Executive Aneel Bhusri and David Duffield before going public in 2012. The company sells cloud-based software for human resources management, finance, payroll, spending and planning, serving more than 11,500 customers globally, including Netflix Inc., John Hopkins University and Thomson Reuters. Bhusri, who stepped down as the company’s CEO in 2021, suddenly returned to the hot seat in February, replacing Carl Eschenbach, who quit at a time when the company was coming under increasing pressure from the rise of AI models.

In its most recent financial report in May, Workday posted a surprise earnings and revenue beat due to rising demand for its own agentic AI offerings.

Photo: Workday