Smartsheet to go private in $8.4 billion deal with PE firms Vista and Blackstone

:Workplace collaboration software maker Smartsheet will be taken private by Vista Equity Partners and Blackstone in a deal worth $8.4 billion, the companies said on Tuesday, in the latest sign that buyout deals were picking up steam after a dull 2023.
Smartsheet investors will get $56.50 per share in cash, an 8.5 per cent premium over Monday’s closing price. The stock rose 6.4 per cent to trade just a dollar shy of the offer price.
The company’s software allows organizations to manage, track, and automate workflows through a unified platform. Smartsheet serves 85 per cent of Fortune 500 companies including industry giants such as Pfizer and Procter & Gamble.
Reuters previously reported the buyout firms were nearing Smartsheet’s acquisition in a deal that valued it close to $8 billion.
The deal is expected to close in the fourth quarter and includes a 45-day “go-shop” period that will expire on Nov. 8, during which the company can weigh rival proposals.
“Strategic interest from companies such as Google, Salesforce, Zoom and Cisco could still remain as collaborative work management software belongs as part of a larger platform,” RBC Capital Markets analyst Rishi Jaluria said.
But he added “a superior bid is unlikely to emerge.”
If successful, the deal would rank as one of the largest take-private transactions of the year. It comes at a time when the start of an interest rate easing cycle by the U.S. Federal Reserve has stoked hopes of a jump in leveraged-buyout activity.
The deal also bodes well for Vista, which has several portfolio companies in the project management and collaboration space, such as Lucid and Quickbase, said Jaluria.
“There are overlapping/adjacent businesses in Vista’s portfolio and potentially there’s room to combine them,” he added.
Smartsheet will have to pay $250 million to Vista and Blackstone if it cancels the deal, but only $125 million if it finds a better offer during the go-shop period. If Blackstone and Vista back out, Smartsheet gets a $500 million fee.