Technology
Monday, May 13th, 2024 2:06 pm EDT
Key Points
- Squarespace, a website-building platform, announced its decision to go private in a $6.9 billion all-cash deal with private-equity firm Permira after facing nearly three turbulent years on the public market.
- Permira agreed to pay $44 per share in cash, representing a roughly 30% premium to Squarespace’s unaffected share price. Squarespace struggled to gain public-market support, opening below its reference price in 2021 and never trading above its open price.
- Squarespace’s move to go private reflects a trend among smaller technology companies in recent years, with some believing they can create more value by being amalgamated with other private equity portfolio companies. This trend has been observed in examples like Qualtrics and Toshiba. Investors are closely monitoring deal-making activities, especially after a relatively quiet period in 2022 and 2023, with signs of M&A picking up again.
Squarespace, a prominent website-building platform, made headlines by announcing its decision to go private in a $6.9 billion all-cash deal with private-equity firm Permira, marking the end of its nearly three-year stint on the public market. Permira’s offer of $44 per share in cash represented a significant premium of approximately 30% to Squarespace’s unaffected share price. Despite its struggles to garner support in the public market, with shares never trading above its open price since its debut in 2021, Squarespace’s founder and CEO, Anthony Casalena, expressed enthusiasm about the partnership with Permira, noting that 90% of the company’s voting shares controlled by him, along with current investors Accel and General Atlantic, have approved the transaction. Squarespace faces competition from platforms like Wix and Shopify in the website-building and e-commerce sector. Following the announcement, Squarespace’s shares surged nearly 13% to $43 per share in pre-market trading. Permira intends to finance the deal with the assistance of Ares Capital, Blackstone, and Blue Owl. Squarespace’s decision to go private reflects a broader trend among smaller technology firms in recent years, as some believe they can create more value by being amalgamated with other private equity portfolio companies, especially after facing challenges in the public market. This trend is exemplified by examples like Qualtrics, which was spun off from SAP and then taken private again in 2023, and Toshiba, which also went private in a significant deal in 2023. The move comes at a time when investors are closely monitoring deal-making activities, especially after a relatively quiet period in 2022 and 2023. Squarespace was advised by Centerview, J.P. Morgan, Skadden, and Richards, Layton & Finger, while Permira was advised by Goldman Sachs and Latham & Watkins.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/05/13/squarespace-to-go-private-in-7-billion-private-equity-deal.html
