Vista Equity Partners has partnered with Blackstone in a $8.4 billion take-private acquisition of Smartsheet, a project management software provider, in the latest of a string of club deals by the software-focused PE investor.
In the current environment of elevated capital costs, club deals—buyouts involving more than one PE sponsor—allow managers to share the risk of a large transaction.
This consortium builds on an established partnership between Blackstone and Vista, as the firms closed a deal in May to acquire Energy Exemplar, a provider of energy simulation software. The Smartsheet deal follows by two weeks Vista’s partnership with Warburg Pincus to acquire Redwood Software.
Historically, Vista has not been known to “share,” preferring to go it alone on tech buyouts, said Tim Clarke, lead PE analyst at PitchBook.
According to PitchBook data, the Smartsheet acquisition is the fourth-largest club deal in the U.S. year-to-date.
Shareholders of Bellevue, Wash.-based Smartsheet will receive $56.50 per share in cash, representing around a 41% premium from where it was trading before news of the possible deal broke on July 17.
Vista and Blackstone—through its flagship private equity vehicle and its PE strategy for individual investors—along with Abu Dhabi Investment Authority, a sovereign wealth fund, will provide financing for the transaction. Lenders to the deal will provide debt financing of approximately $3.2 billion, per the merger agreement.
Founded in 2005, Smartsheet focuses on providing work management and automation solutions that enhance team productivity. The company serves a diverse range of organizations, from Fortune 500 companies to non-profits.
Smartsheet is being advised by Qatalyst Partners and Fenwick & West. The PE buyers worked with Goldman Sachs, Morgan Stanley, Kirkland & Ellis and Simpson Thacher & Bartlett.
Featured image by Andrey Maximenko/Getty Images/iStockphoto
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