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Squarespace's $6.9 Billion Permira Buyout

Published by MEXEM EUROPE

May 13, 2024 4:19 PM
(GMT+2)

Squarespace {{ m-tag option="price" ticker="SQSP" currency="USD" }} is the latest tech firm to go private after continued struggles and underperformance as a publicly traded company.
Squarespace will go private in a $6.9 billion, all-cash deal with Permira.
Permira agreed to pay $44 per share in cash, a roughly 30% premium to Squarespace's unaffected share price. In recent years, Squarespace struggled to capture public-market support: It opened below its $50 reference price in 2021 and never again traded above its $48 open price.

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"We are thrilled to be partnering with Permira on this new leg of our journey," Squarespace founder and CEO Anthony Casalena said in a release. Casalena and current investors Accel and General Atlantic control 90% of Squarespace's voting shares.
All three have approved the transaction and will continue to be investors after the Permira deal closes.

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Competitive Landscape:
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Squarespace competes with Wix {{ m-tag option="price" ticker="WIX" currency="USD" }} and Shopify {{ m-tag option="price" ticker="SHOP" currency="USD" }}for a slice of the website-builder and e-commerce marketplace. In pre-market trading, shares rose nearly 13% to $43 per share. Permira will finance the deal with the help of Ares Capital, Blackstone, and Blue Owl.

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Market Trends and Strategic Moves:
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Squarespace's strategic decision to go private reflects a trend among smaller technology companies over the past two years. Many of these firms have either experienced setbacks in the public markets or believe they can generate more value by aligning with other PE portfolio companies. For instance, Qualtrics, which was spun off from SAP in 2021, swiftly returned to private ownership in 2023 through a $ 12.5 billion deal with Canada's pension plan and Silver Lake.

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Company Statement and Future Direction: 
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"Squarespace has been a pioneer in providing services to businesses seeking to establish their online presence for over two decades. We are excited to continue building on this strong foundation and expanding our offerings in the years ahead," affirmed Casalena. "We are delighted to embark on this new phase of our journey with Permira alongside our steadfast long-term investors, General Atlantic and Accel, who share our unwavering belief in the future of Squarespace."

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The information on mexem.com is for general informational purposes only. It should not be regarded as investment advice. Investing in stocks involves risk. A stock's past performance is not a reliable indicator of its future performance. Always consult a financial advisor or trusted sources before making any investment decisions.

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