UserTesting has low odds of another bidder emerging - analyst
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UserTesting Inc. (NYSE:USER), which agreed Thursday to be sold to private equity firms Thoma Bravo and Sunstone Partners, has low odds of another bidder emerging, according to Oppenheimer.
UserTesting (USER) is unlikely to see another offer as its business model is in "transition," the offer looks to be a "fair" valuation and the strength of the PE firms' balance sheets will be difficult for a rival bidder to overcome, Oppenheimer analyst Brian Schwartz wrote in a note. Schwartz moved his rating to not rated from outperform. 
Thoma Bravo and Sunstone agreed to purchase UserTesting for $1.3 billion, or $7.50/share in cash, a 94% premium to USER's closing price on Wednesday. The agreement includes a "go-shop" period that expires Dec. 10 that allows USER to consider alternative acquisition proposals.
UserTesting (USER) shares skyrocketed 93% on the news.
The deal is likely to see few regulatory issues as the segment is early in its evolution and the competitive landscape is fragmented, according to Schwartz.
Though the odds of a rival bid are low, Qualtrics (XM) would be the logical company to make an alternative bid, Schwartz wrote. Qualtrics is an integration partner with UserTesting (USER), though it also has a competing product. Qualtrics rose 3.9%.
Large CRM companies such as Adobe (ADBE), Salesforce (CRM), Oracle (ORCL) and Microsoft (MSFT) may also be viewed as possible white knights, according to Schwartz.
UserTesting (USER) earlier Thursday also reported Q3 results.