Private equity firm buying Bloomington-based Dayforce, which grew out of Control Data, for $12.3B

Bloomington-based Dayforce, with its roots in the pioneering Minnesota computer company Control Data, has agreed to be acquired in a $12.3 billion deal.

The deal with Thoma Bravo, a Chicago private equity firm, is the largest acquisition in Minnesota since 2021 when Eden Prairie-based UnitedHealth Group acquired Change Healthcare for more than $13 billion.

Dayforce is a cloud-based provider of human capital management (HCM) software providing subscription-based solutions to help large complex organizations manage human resource functions, taxes and payroll. It also offers other functions including a way to pay hourly employees more frequently.

Officials said they need the investment to adopt more artificial intelligence tools.

In an email to employees announcing the deal with Thoma Bravo, CEO David Ossip said AI is creating the biggest technology shift the HCM industry has seen.

The deal will give Dayforce “added space, flexibility and resources” to delve deeper into AI, his email said.

“With Thoma Bravo, we are partnering with a truly special organization to accelerate our business,“ Ossip said in a news release.

Shareholders of Dayforce will get $70 per share, a 32% premium to the last price of Dayforce before rumors of the deal were made public. On Monday, shares of Dayforce rose 25% and on Thursday shares rose another 2.4% to close at $69 a share.

Dayforce, then known as Ceridian HCM Holdings, went public in a 2018 initial public offering that was the largest in Minnesota at that time. Ceridian’s roots went back to pioneering Minnesota computer company Control Data.

Holden Spaht, a managing partner at Thoma Bravo, said he believes Dayforce can help define the future of AI in its sector.

“We are thrilled to be investing in Dayforce, a clear category leader,” Spaht said a news release.

The deal includes a significant minority investment from the Abu Dhabi Investment Authority, according to a filing with the Securities and Exchange Commission.

Dayforce competes against larger companies like Oracle, SAP, ADP and Workday that are also investing in AI technology, requiring Dayforce to keep pace.

“If it is unable to innovate or performs subpar service, it is susceptible to losing customers,” wrote Morningstar analyst Alex Medow.

Dayforce’s board has approved the deal, which is expected to close in 2026 after it gets regulatory and shareholder approval. There is a $351 million termination fee if the deal collapses under certain conditions.