(Bloomberg) — Blackstone Inc. and Vista Equity Partners have agreed to acquire software provider Smartsheet Inc. for about $8.4 billion in one of the largest privatization deals of the year.
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The buyout firms will pay $56.50 per share in cash for Bellevue, Washington-based Smartsheet, they said in a statement Tuesday. The Abu Dhabi Investment Authority is also part of the consortium of buyers, according to a separate filing with the U.S. Securities and Exchange Commission (SEC).
The purchase price represents a premium of approximately 41% to Smartsheet’s volume-weighted average closing price for the 90 trading days ending July 17, the last full trading day before announcements of a possible sale.
Smartsheet shares rose 6.6 percent at 11:53 a.m. in New York on Tuesday, giving the company a market value of around $7.7 billion.
Private equity firms are looking for acquisition targets in the software sector, looking for companies that typically have reliable cash flows and can expand through acquisitions. In July, Bain Capital and Reverence Capital Partners agreed to take Envestnet Inc. private.
Smartsheet provides software that helps businesses automate their workflows. According to the company’s website, more than 80% of Fortune 500 companies use the company’s work management platform.
Under the terms of the agreement with Blackstone and Vista, Smartsheet and its consultants have a 45-day trial period during which they can solicit and negotiate alternative proposals.
Qatalyst Partners is acting as exclusive financial advisor to Smartsheet, while Goldman Sachs Group Inc. and Morgan Stanley are working with Blackstone and Vista Equity Partners. The transaction is expected to close in the fourth quarter of Smartsheet’s fiscal year ending January 31, 2025.
(Adds details about ADIA in the second paragraph.)
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