The transaction, announced on Wednesday, cements one of the largest equity wipeouts in the history of the $4tn private equity industry.
Under the terms of the deal, Thoma Bravo will lose the entire $5bn it invested when it took Medallia private in 2021.
The Blackstone-led group will assume control of the business and inject $150m of fresh capital to reduce its debt load. All three lenders had financed the company heavily, so its deterioration had become a direct concern for them well before the handover.