New York, June 21, 2026, 12:05 EDT
- Medallia is set to move from Thoma Bravo to a group of lenders headed by Blackstone, Apollo and FS KKR Capital. The deal includes $150 million in new capital.
- The agreement erases Thoma Bravo’s equity stake of about $5 billion, making it among the biggest private equity write-offs from the software run.
- The restructuring adds new pressure on private credit funds that backed leveraged software plays, as AI changes the customer-experience software market.
Medallia’s lenders are set to take over the customer and employee experience software company from Thoma Bravo in a recap that erases the buyout firm’s estimated $5 billion equity. The move is a big reversal for one of the most high-profile software deals from 2021.
The deal puts private credit under the spotlight as loans shift from a paper loss to ownership. Lenders who backed pricey software buyouts aren’t just writing down debt now. With Medallia, they’re set to take over the company itself.
Medallia said June 17 that it reached a deal to reduce its debt, raise $150 million in new capital and shift ownership to an investor group led by Blackstone, Apollo and FS KKR Capital Corp. The company expects the deal to close by year-end, pending customary conditions and regulatory sign-offs. Medallia said it does not expect the transaction to disrupt operations for customers, employees or partners.
Medallia CEO Mark Bishof said the deal will help the company move faster into AI-led products. He said Medallia plans to invest over $500 million in products and services in the next few years, and that the new funds let it speed that up. Blackstone’s Brad Marshall said the company is still profitable and has a strong history with large clients.
Thoma Bravo’s 2021 deal to take Medallia private at a $6.4 billion valuation is facing losses. In April, Reuters reported that Medallia was burdened with about $3 billion in debt to Blackstone, KKR, Apollo and Antares Capital. The company’s value has also come under pressure as investors worry AI could replace some of its customer-feedback tools.
Thoma Bravo’s Orlando Bravo called it a “big mistake” at the Sohn Conference, per FT and CMSWire. He said the firm paid too much, betting on growth that didn’t happen. CMSWire.com
The restructuring is putting pressure on private credit managers. WithIntelligence said Medallia’s debt was trading at about 61.2 cents on the dollar. Blackstone’s main non-traded private credit fund had over $1.1 billion in par value exposure at the end of the first quarter, according to WithIntelligence.
Customer-experience software faces rough timing. In May, Qualtrics wrapped up its $6.75 billion deal for Press Ganey Forsta, saying the acquisition brings healthcare experience data from over 41,000 sites onto its AI and data platform. Medallia now has a simpler balance sheet, but the space is still crowded.
Medallia still has some strong points. Gartner analyst Maria Marino told CMSWire that Medallia is a leader among voice-of-the-customer platforms, which help firms gather and use feedback from customers. Vendors in Gartner’s Magic Quadrant for the space saw average revenue growth of 22% in 2025. The market was estimated at $10.6 billion.
But the downside is clear. Cutting debt and raising capital buys Medallia time, but not product-market fit. With AI driving down the cost of surveys and feedback, Medallia’s new owners will have to show they can turn customer data into action faster than competitors. More money alone is not enough.
Equity holders took the hit, with lenders keeping their options by taking over the business. That’s market discipline at work. It’s also a sign the software buyout cycle is no longer just about valuations—actual losses are landing now.
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