(Reuters) – Buyout firms Vista Equity Partners and Blackstone will acquire collaboration software maker Smartsheet for $8.4 billion in one of the largest privatization transactions this year, the companies said on Tuesday.

Vista and Blackstone offered $56.50 in cash for each Smartsheet share, a premium of 24.6 percent over the stock’s closing price on July 17. At that time, Reuters first reported that Smartsheet had hired investment bankers following interest from buyout firms.

Smartsheet shares rose 6.1% to $55.1 in premarket trading.

Private equity firms are targeting acquisitions in the technology sector this year amid strong expectations of a rate cut by the US Federal Reserve after high interest rates weighed on leveraged buyouts in 2023.

Previously, Silver Lake completed the largest privatization deal of the year in April, acquiring talent and entertainment agency Endeavor Group Holdings for $13 billion, according to LSEG data.

The Smartsheet deal is expected to close in the fourth quarter and includes a 45-day “go-shop” period ending Nov. 8, during which the company and its advisers can review offers from other interested parties.

(Reporting by Rishi Kant in Bengaluru; Editing by Tasim Zahid)