Funds managed by Blackstone and Vista Equity Partners have agreed to acquire enterprise work management platform Smartsheet in an all-cash deal valued at nearly $8.4bn.
According to the terms of the agreement, Smartsheet’s shareholders will receive $56.5 per share. The consideration marks a premium of around 41% to the volume-weighted average closing price of Smartsheet stock for the 90 trading days ending on 17 July 2024. It also represents a premium of 16% to the highest closing stock price over the last 12 months ending on the same date.
Established in 2005, Smartsheet offers a portfolio of views, workflows, reports, and dashboards to adapt to clients’ requirements ranging from projects to multi-faceted company-wide initiatives. Headquartered in Bellevue, Washington, the firm has more than 3,000 employees and serves customers in 190 countries.
Earlier this month, Smartsheet reported its GAAP net income for the second quarter of fiscal 2025 (Q2 FY25) at $7.9m compared to a GAAP net loss of $33.4m in the corresponding quarter of the prior year.
In Q2 FY25, the enterprise work management platform’s total revenue was $276.4m, an increase of 17% year-over-year (YoY). This included subscription revenue of $263.5m, a 19% YoY growth, while professional services revenue stood at $12.9m, a decrease of 8% YoY.
Smartsheet chief executive hails deal
Following the completion of the proposed deal, Smartsheet will become a privately held company and its class A common stock will no longer be listed on any public market. The work management solutions provider will continue to operate under the same name and brand.
“For more than a decade, we have built a thriving community of employees, partners, and customers, each focused on building and benefiting from Smartsheet’s industry-leading work management platform,” said the firm’s chief executive, Mark Mader. “Our next phase of growth and customer success is underway, and we look forward to partnering with Blackstone and Vista Equity Partners to accelerate our vision of modernising work management for enterprises, globally.
“This transaction is a testament to our employees’ outstanding work in serving customers and partners, and building an enterprise-grade, market-leading platform.”
Blackstone intends to invest in Smartsheet through its flagship private equity vehicle and its private equity strategy for individual investors.
The transaction includes a 45-day “go-shop” period, expiring on 8 November 2024, during which Smartsheet and its advisers can actively seek alternative acquisition proposals.
The company’s board reserves the right to accept a superior proposal, although there is no guarantee that such an offer will materialise.
Blackstone senior managing director Sachin Bavishi and technology investing global co-head and North America private equity head Martin Brand said: “Across increasingly distributed, cross-functional and global workforces, Smartsheet’s innovative and market-leading solutions are mission-critical in helping teams collaborate at scale to achieve superior results.
“We are excited to partner with Smartsheet’s management team to drive long-term growth by leveraging our and our partner Vista’s combined scale and resources to accelerate investments in the next generation of work management solutions.”
Smartsheet board of directors unanimously approved the agreement. The board also proposes that Smartsheet shareholders vote their shares in support of the deal.
The deal is subject to Smartsheet shareholders’ approval, regulatory clearances, and other customary conditions. Following these, it is anticipated to close in Q4 of the firm’s fiscal year ending 31 January 2025.
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