Squarespace to go private in $7 billion private equity deal

Square spacethe website building platform, announced Monday that it will go private in a $6.9 billion all-cash deal with private equity firm Permira, after nearly three turbulent years on the public market.

Permira agreed to pay $44 per share in cash, a premium of about 30% to Squarespace’s unaffected stock price. In recent years, Squarespace has struggled to gain support from the public market: it opened below its benchmark price of $50 in 2021 and never again traded above its opening price of $48.

“We are thrilled to partner with Permira on this next stage of our journey,” Anthony Casalena, founder and CEO of Squarespace, said in a statement. Casalena, along with existing investors Accel and General Atlantic, control 90% of Squarespace’s voting shares. All three have approved the transaction and will continue to be investors after the Permira deal closes.

Squarespace competes with Wix and Shopify for share of the website builder and e-commerce market. Shares rose nearly 13% to $43 per share in premarket trading. Permira will finance the transaction with the help of Ares Capital, black stone and Blue Owl.

“We are excited to partner with Anthony and his team to help the company unlock its full potential,” Permira partner David Erlong said in a statement.

Squarespace’s decision to go private marks a trend of smaller tech companies over the past two years, some of which have been burned by public markets or believe they could create more value by merging with other companies in Squarespace’s portfolio. capital investment. Qualtrics, for example, was spun off from SAP in 2021 and was quickly taken private in 2023 by Canada Pension Plan and Silver Lake in a $12.5 billion deal.

Japanese giant Toshiba also went private in 2023 in a $13.6 billion deal, after years of speculation and tumult, including sustained engagement with activist investor Elliott.

Investors are closely watching the trading space, after a quiet 2022 and 2023 that left many late-stage companies in a holding pattern for IPOs. There are signs that mergers and acquisitions are picking up, and some early-stage companies have already gone public or are considering doing so.

Centerview, JP Morgan, Skadden and Richards, Layton & Finger advised Squarespace and its special committee. Goldman Sachs and Latham & Watkins advised Permira.