Medallia Is Just the Opening Act: 12+ PE SaaS Deals With $50B+ in Debt at Risk of Blowing Up

Thoma Bravo handed the keys to Medallia over to its lenders yesterday. Blackstone, KKR, Apollo, and Antares are taking control of a company Thoma Bravo bought for $6.4 billion in 2021, wiping out roughly $5.1 billion in equity held by the firm and its co-investors.

And it’s not a one-off. Medallia is the second giant SaaS equity wipeout in 18 months after Vista’s Pluralsight handover in 2024. It’s likely going to get worse before it gets better. Because there are many more software leaders PE acquired, that took on large debt positions, and now … don’t have the cash flow to pay back that debt.

How Medallia Actually Broke

The mechanics matter because the same mechanics apply to roughly a dozen other deals.

Medallia’s annual debt service had climbed to about $300 million by early 2026, against roughly $200 million in annual earnings.

The breaking point was the expiration of Payment-in-Kind relief at the end of 2025. Until then, this arrangement let Medallia defer cash interest by piling it onto principal. When Blackstone, holding $1.5B of the debt, declined to extend the PIK window again, there was no viable path other than restructuring.

Lenders had already been marking the debt down for months. FS KKR Capital Corp had it at 79 cents on the dollar. Apollo Debt Solutions had it at 74 cents. Once the biggest lender in the syndicate refused to extend, the rest followed.

This is the template. Peak-vintage LBO + aggressive leverage + revenue growth that stalled + PIK toggles expiring + no refinancing window because enterprise SaaS multiples collapsed. Median revenue multiples for mature SaaS platforms have dropped from 9x in 2021 to roughly 6x in 2026, which makes refinancing at a level that preserves equity essentially impossible.

The Backdrop: $46.9B in Distressed Software Debt

More than $17.7 billion in US tech loans dropped to distressed trading levels over a four-week stretch earlier this year, the largest surge since October 2022. That brings the total tech distressed debt pile to about $46.9 billion, dominated by pre-AI B2B / SaaS.

From 2015 to 2025, PE bought more than 1,900 software companies in deals totaling over $440 billion.

Roughly 20-25% of all private credit is now exposed to software. About one-fifth of that debt has to refinance by 2028.

Tier 1: Already Over (Sponsor Equity Wiped Out)

Pluralsight — Vista Equity Partners, 2021, $3.5B take-private. Lenders led by Blue Owl and Ares took control in 2024 in a deal that wiped out roughly $4 billion of equity held by Vista and co-investors. Medallia — Thoma Bravo, 2021, $6.4B. As of April 22, 2026: done.

Tier 2: Deeply Distressed, Restructuring Likely

Proofpoint (Thoma Bravo, $12.3B, 2021). Total debt load is now around $4.67B. Watch for any PIK conversion or covenant relief discussion. Qualtrics (Silver Lake + CPP Investments, $12.5B, 2023). A group of banks led by JPMorgan halted a $5.3 billion Qualtrics debt deal on March 17 after failing to win over investors. HealthEdge (Bain Capital). Bain bought HealthEdge from Blackstone at 30x EBITDA financed with $2.6 billion of debt at 8.72% interest. Alteryx (Clearlake + Insight, $4.4B, 2024). ~$2B debt at SOFR + 650 bps. Analytics automation is arguably the single most AI-exposed SaaS category. Quest Software (Clearlake). Clearlake’s lowest-graded Quest Software debt is trading around 25 cents on the dollar. Cornerstone OnDemand (Clearlake). Multiple term loans underperforming.

Tier 3: Under Real Pressure

Cloud Software Group (Vista + Elliott, $16.5B Citrix + TIBCO, 2022). About $15-16B of new leverage. Citrix’s DaaS/VDI business is structurally squeezed. Coupa (Thoma Bravo, $8B, 2022). Debt-to-equity ratio roughly 65:35. Procurement is threatened by autonomous agents. New Relic (Francisco Partners + TPG, $6.5B, 2023). Priced at SOFR + 6.75%. That’s roughly $300M of annual interest. Anaplan (Thoma Bravo, $10.7B, 2022). Loans near par for now, but same vintage and sponsor concentration. Zendesk (Hellman & Friedman + Permira, $10.2B, 2022). ~$4.6-5B in private credit. Customer support is ground zero for agent replacement. Avalara (Vista, $8.4B). ~$2.5B in private credit led by Blue Owl.