Blackstone and Vista acquire Smartsheet for $8.4bn

December 2024 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

December 2024 Issue

Workplace collaboration software maker Smartsheet has agreed to be taken private by Vista Equity Partners and Blackstone in a deal worth $8.4bn.

The deal is expected to close in the fourth quarter of 2024, subject to the approval of Smartsheet’s shareholders, the satisfaction of required regulatory clearances and other customary closing conditions. The Smartsheet board unanimously approved the merger agreement and recommended that Smartsheet shareholders support the transaction at a special meeting of shareholders.

The deal includes a 45-day ‘go-shop’ period expiring on 8 November, during which the company can weigh rival proposals. If the deal does not go ahead, Smartsheet will have to pay $250m to Vista and Blackstone if it cancels the agreement, but only $125m if it finds a better offer during the go-shop period. If Blackstone and Vista back out, Smartsheet will receive a $500m fee.

Under the terms of the deal, Smartsheet investors will receive $56.50 per share in cash, an 8.5 percent premium over the company’s closing price on Monday 23 September, the day before the deal was announced, a premium of approximately 41 percent to the volume weighted average closing price of Smartsheet stock for the 90 trading days ending on 17 July 2024, the last full trading day prior to media reports regarding a possible sale transaction involving the company, and a 16 percent premium to the highest closing stock price over the last 12 months ending 17 July 2024.

Upon completion of the transaction, Smartsheet’s class A common stock will no longer be listed on any public market and Smartsheet will become a privately held company. The company will continue to operate under the Smartsheet 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 Mark Mader, chief executive of Smartsheet. “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 modernizing 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,” he continued. “As we look to the future, we are confident that Blackstone and Vista’s expertise and resources will help us ensure Smartsheet remains a great place to work where our employees thrive, while driving innovation and delivering even greater value for customers and stakeholders.”

“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,” said Martin Brand, head of North America private equity and global co-head of technology investing at Blackstone, and Sachin Bavishi, a senior managing director at Blackstone. “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.

“Blackstone will invest in Smartsheet through its flagship private equity vehicle and its private equity strategy for individual investors,” they added.

“Modern enterprises rely on Smartsheet’s simple and scalable solutions to manage a diverse range of business-critical processes every single day because they enable seamless collaboration, enhanced productivity and faster and more informed decision-making,” said Monti Saroya, co-head of Vista’s Flagship Fund and senior managing director, and John Stalder, managing director at Vista. “We look forward to partnering closely with Blackstone and Smartsheet to support its ambitious goal of making its platform accessible for every organization, team and worker relying on collaborative work to achieve successful outcomes.”

Vista is a leading global investment firm focused exclusively on enterprise software, data and technology-enabled businesses.

Smartsheet’s software allows organisations to manage, track and automate workflows through a unified platform. It serves 85 percent of current Fortune 500 companies.

Richard Summerfield