Vista Equity Partners has teamed up with Blackstone to acquire Smartsheet, a provider of project management software, valued at $8.4 billion. This is the latest in a series of club deals by the software-focused private equity investor.
In the current environment of rising capital costs, club deals – acquisitions with more than one private equity sponsor – allow managers to share the risk of a large transaction.
This consortium builds on an established partnership between Blackstone and Vista, which completed the purchase of Energy Exemplar, a provider of energy simulation software, in May. The Smartsheet deal follows two weeks after Vista's partnership with Warburg Pincus to acquire Redwood Software.
Vista has not been known in the past for 'sharing', but has preferred to act alone in tech acquisitions, said Tim Clarke, senior private equity analyst at PitchBook.
According to PitchBook data, the Smartsheet acquisition is the fourth-largest club deal in the U.S. since the beginning of the year.
Shareholders of the Bellevue, Washington-based company Smartsheet will receive $56.50 per share in cash, representing a premium of about 41% over the price the company was trading at before the potential deal was disclosed on July 17.
Vista and Blackstone – through their leading private equity vehicle and their PE strategy for individual investors – will join the Abu Dhabi Investment Authority, a sovereign wealth fund, in financing the transaction. According to the merger agreement, the deal lenders will provide about $3.2 billion in debt financing.
Smartsheet was founded in 2005 and focuses on providing work management and automation solutions that boost team productivity. The company serves a wide range of organizations, from Fortune 500 companies to non-profits.
Smartsheet is advised by Qatalyst Partners and Fenwick & West. The PE buyers worked with Goldman Sachs, Morgan Stanley, Kirkland & Ellis, and Simpson Thacher & Bartlett.
Leading US PE buyout club Deals (YTD)
| Company name | Date | Estimated deal size ($B) | Investors |
|---|---|---|---|
| TIH | 5/6 | $12.4 | Clayton, Dubilier & Rice, Mubadala Investment Company, Stone Point Capital |
| Discover Financial Services (Student Loan Portfolio in the United States) | 7/16 | $10.8 | Kohlberg Kravis Roberts, The Carlyle Group |
| R1 RCM | 8/1 | $8.9 | Clayton, Dubilier & Rice, TowerBrook Capital Partners |
| Smartsheet | 9/24 | $8.4 | Blackstone, Vista Equity Partners, Abu Dhabi Investment Authority |
| Paramount Global | 7/7 | $8.0 | Kohlberg Kravis Roberts, RedBird Capital Partners, Skydance Media |
| Allete | 5/6 | $6.2 | CPP Investments, Global Infrastructure Partners |
| Cotiviti | 4/30 | $5.6 | Ardian, Kohlberg Kravis Roberts, Stemar Capital |
| Instructure | 7/25 | $4.8 | Dragoneer Investment Group, Kohlberg Kravis Roberts |
| Envestnet | 7/11 | $4.5 | Bain Capital, BlackRock, Fidelity Investments, Franklin Templeton, Reverence Capital Partners, State Street Global Advisors |
| Redwood Software | 9/10 | $2.5 | Vista Equity Partners, Warburg Pincus |
Source: PitchBook data
As of Sept 24, 2024
