Smartsheet to go private in $8.4bn deal backed by Blackstone and Vista Equity

Smartsheet, a cloud-based work management platform, has announced a monumental acquisition deal valued at $8.4 billion, in which it will be taken private by investment giants Blackstone and Vista Equity Partners. Under the agreement, Blackstone and Vista will purchase all outstanding shares of Smartsheet at $56.50 per share, representing a 41% premium based on the company’s 90-day average share price prior to acquisition rumours.

This acquisition comes at a critical juncture for Smartsheet, as the platform, known for its role in modernising enterprise work management, serves 85% of Fortune 500 companies worldwide. Blackstone and Vista are optimistic about accelerating Smartsheet’s growth in the collaborative work software market, capitalising on the global trend toward remote work solutions.

A deal with big numbers

The acquisition brings Smartsheet, headquartered in Bellevue, Washington, under private ownership, ending its time as a publicly traded company. The company has been a leading innovator in the SaaS (software-as-a-service) market, where it has built a strong reputation among large-scale enterprises for streamlining workflow and fostering collaboration. With this deal, Smartsheet is expected to continue its operations under the same brand but will no longer be listed on any public exchange.

This deal follows reports of a potential sale in July 2024, which sparked speculation in the market. Investors will receive a significant 16% premium over Smartsheet’s highest stock price in the last year, further solidifying Blackstone and Vista’s commitment to ensuring shareholder value. As part of the merger, Smartsheet will undergo a 45-day “go-shop” period, allowing the board to entertain superior offers before finalising the agreement in the fiscal fourth quarter of 2024.

Expert opinions on the acquisition

Industry experts believe that this acquisition could be a game-changer for Smartsheet. By leveraging the financial power of Blackstone and the software expertise of Vista Equity, Smartsheet is expected to double down on expanding its capabilities and strengthening its foothold in the enterprise software market. Martin Brand of Blackstone and Monti Saroya from Vista Equity expressed confidence that Smartsheet’s innovative solutions will continue to transform work management globally.

In a strategic context, this move follows an industry-wide trend of private equity firms taking over high-growth tech firms to spur innovation without the pressures of public markets. Analysts see this acquisition as an opportunity for Smartsheet to expand its market share in the increasingly competitive SaaS sector, which is evolving at a breakneck pace.

Transaction terms and future outlook

Shareholders are expected to vote on the deal at a special meeting, with regulatory approvals required before the transaction can close. Once the acquisition is completed, Smartsheet will exit the public market and refocus its efforts on developing new enterprise solutions under the direction of Blackstone and Vista Equity. The company’s executives believe that going private will allow Smartsheet to innovate more freely while continuing to support its growing community of global customers and partners.

Smartsheet to retain its brand

Though Smartsheet will become privately held, the company has assured customers that its services, platform, and mission to modernise work management will remain intact. In fact, Blackstone and Vista aim to enhance Smartsheet’s capabilities, helping it provide even greater value for its enterprise customers.