Squarespace announces $6.9bn acquisition by Permira to go private

In a significant development in the tech sector, Squarespace, Inc. (NYSE: SQSP) has announced its decision to go private through an acquisition by the global private equity firm Permira. The transaction is valued at approximately $6.9 billion in an all-cash deal. Under the terms of the agreement, Squarespace shareholders will receive $44.00 per share, a substantial premium over recent trading prices.

Transaction Details and Shareholder Impact

This transaction places the equity value of Squarespace at about $6.6 billion and its enterprise value at approximately $6.9 billion. The offer price of $44.00 per share represents a 29% premium over Squarespace’s 90-day volume weighted average price and a 15% premium over the closing share price of $38.19 as of May 10, 2024. Post-transaction, Squarespace will transition from a public entity to a private company, providing it with enhanced flexibility to invest in and expand its services.

Anthony Casalena, the founder and CEO of Squarespace, will continue leading the company and remain one of its largest shareholders. The existing leadership team is expected to maintain their roles following the close of the transaction.

Squarespace to go private in a $6.9 billion acquisition by Permira, offering substantial shareholder value with a strategic vision for growth.

Strategic Vision and Future Prospects

“Squarespace has been a pioneer in helping businesses establish robust online presences for over two decades. We are excited to build on this legacy and expand our offerings in the years ahead,” commented Anthony Casalena. Permira Partner David Erlong highlighted Squarespace’s distinct global brand and its platform that empowers entrepreneurs and small businesses to thrive online.

The partnership is set to deepen investments in tools such as demand generation, powerful payment solutions, and GenAI integrations, further enhancing the Squarespace ecosystem for small and medium businesses (SMBs).

Advisors and Legal Considerations

The transaction was unanimously approved by a Special Committee of independent directors at Squarespace and recommended by the entire Board of Directors. Advisory services were provided by JP Morgan to Squarespace, while Permira was advised by Goldman Sachs & Co LLC. Legal advice was furnished by Skadden, Arps, Slate, Meagher & Flom LLP to Squarespace, and Latham & Watkins LLP to Permira Advisors.

Market Reaction and Closure Details

The transaction, subject to regulatory approvals and customary closing conditions, is expected to close by the fourth quarter of 2024. Following the closure, Squarespace’s common stock will no longer be listed publicly.

From an expert perspective, this acquisition reflects a strategic pivot for Squarespace towards greater operational flexibility and intensified focus on innovation without the quarterly pressures of public markets. This move could serve as a benchmark for similar tech companies considering private equity partnerships to fuel their growth and expansion strategies.