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Squarespace Goes Private in $7 Billion Deal

Squarespace revealing its decision to go private in a $6.9 billion all-cash deal with private-equity firm Permira
May 13, 2024

Squarespace, the renowned website-building platform, made headlines on Monday as it announced its decision to go private in a $6.9 billion all-cash deal with private-equity firm Permira. This move comes after nearly three years of turbulence on the public market for Squarespace.

Permira has agreed to acquire Squarespace for $44 per share in cash, representing a significant premium of approximately 30% to Squarespace’s unaffected share price. Over the past few years, Squarespace has faced challenges in garnering public-market support, with its stock opening below its $50 reference price in 2021 and never trading above its $48 open price thereafter.

Anthony Casalena, the founder and CEO of Squarespace, expressed his excitement about the partnership with Permira, stating, "We are thrilled to be partnering with Permira on this new leg of our journey." Casalena, along with current investors Accel and General Atlantic, who collectively control 90% of Squarespace’s voting shares, have approved the transaction. They will remain investors in Squarespace even after the Permira deal is finalized.

Competing with industry giants like Wix and Shopify in the website-building and e-commerce marketplace, Squarespace saw its shares surge by nearly 13% to $43 per share in pre-market trading following the announcement. Permira will finance the deal with assistance from Ares Capital, Blackstone, and Blue Owl.

David Erlong, a partner at Permira, expressed his enthusiasm about the partnership, stating, "We are excited to partner with Anthony and his team to support the company in unlocking its full potential."

Squarespace's decision to go private reflects a growing trend among smaller technology companies over the last two years. Many of these companies have faced challenges in the public markets or believe that they can create more value by aligning with other portfolio companies of private equity firms. For example, Qualtrics was spun off from SAP in 2021 and was subsequently taken private again in 2023 by Canada’s pension plan and Silver Lake in a $12.5 billion deal. Similarly, Japanese giant Toshiba went private in 2023 in a $13.6 billion deal after years of speculation and turmoil, including a sustained engagement with activist investor Elliott.

Investors are closely monitoring the deal-making space, particularly after a quiet period in 2022 and 2023 left many late-stage companies in an IPO holding pattern. There are indications that merger and acquisition activity is picking up again, with some late-stage companies already going public or planning to do so.

Squarespace's move to go private in a $6.9 billion deal with Permira underscores the evolving landscape of technology companies and their strategic decisions regarding public and private markets. As the tech industry continues to witness dynamic shifts, this deal marks a significant development in Squarespace's journey, offering new avenues for growth and expansion.

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