BELLEVUE, Wash. - Smartsheet Inc . (NYSE:SMAR), a leading enterprise platform for work management, has entered into a definitive agreement to be acquired by investment firms Blackstone (NYSE:BX) and Vista Equity Partners in an all-cash deal valued at approximately $8.4 billion.
According to the terms of the agreement, Smartsheet shareholders will receive $56.50 per share in cash, which is a 41% premium over the 90-day volume-weighted average price leading up to July 17, 2024, the day before speculation about a potential sale was publicized. This offer also represents a 16% premium over the company's highest stock closing in the past year.
Mark Mader, CEO of Smartsheet, expressed that the acquisition is a nod to the company's community and platform, and with Blackstone and Vista's resources, they anticipate accelerated growth and innovation. Blackstone plans to fund the investment through its flagship private equity vehicle and a private equity strategy for individual investors.
Vista, a firm that focuses on enterprise software, data, and technology-enabled businesses, echoed the sentiment of supporting Smartsheet's ambition to expand its platform's reach.
The transaction includes a 45-day "go-shop" period ending on November 8, 2024, during which Smartsheet may seek alternative acquisition proposals. The deal is expected to close in the fourth quarter of Smartsheet's fiscal year ending January 31, 2025, subject to shareholder approval and customary closing conditions. Upon completion, Smartsheet will become a privately held company and its Class A common stock will be delisted from public markets.
Qatalyst Partners is serving as the exclusive financial advisor to Smartsheet, with Fenwick & West LLP providing legal counsel. Blackstone and Vista Equity Partners have engaged Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC as financial advisors, with Kirkland & Ellis LLP and Simpson Thacher & Bartlett LLP as legal counsel.
Smartsheet is known for its work management platform, which is trusted by a significant portion of Fortune 500 companies as of 2024. Blackstone and Vista's investment is set to propel the company's growth in the enterprise software market. This news is based on a press release statement.
In other recent news, Smartsheet Inc. announced a 17% increase in revenue for the second quarter of fiscal year 2025, amounting to $276.4 million. This growth also reflected in the company's annualized recurring revenue, which also saw a 17% rise, reaching $1.093 billion. The company's future looks promising with an expected revenue between $1.116 billion and $1.121 billion for fiscal year 2025, and a projected increase in free cash flow to $240 million.
In addition to these financial highlights, Smartsheet is reportedly in acquisition discussions with a private equity group, as noted by KeyBanc Capital Markets, which maintains a Sector Weight rating on the company. According to KeyBanc's analysis, Smartsheet could command a higher value in a private equity transaction.
Furthermore, Smartsheet's Chief Operating Officer, Stephen Branstetter, has resigned from his position, transitioning to an advisory role. This development is part of the company's restructuring of its executive structure, introducing a dual President model and eliminating the COO position.
Finally, Smartsheet has introduced a new pricing model that has resulted in high engagement and thousands of new transactions, indicating positive response from the market. These are some of the recent developments in the company's journey.
InvestingPro Insights
As Smartsheet Inc. (NYSE:SMAR) prepares for its transition into a privately held entity under the wings of Blackstone and Vista Equity Partners, the company's current financial standing and market performance provide a glimpse into its valuation and the potential that the investment firms see in it. Smartsheet's market capitalization stands at $7.24 billion, reflecting the scale and the investor confidence in its enterprise platform capabilities.
InvestingPro Tips highlight that Smartsheet holds more cash than debt on its balance sheet and that analysts are optimistic about the company's future, with net income expected to grow this year. This financial stability and growth potential are likely factors that made Smartsheet an attractive acquisition target. Moreover, the company's impressive gross profit margins, which have reached 81.61% over the last twelve months as of Q2 2025, underscore its efficiency in generating income from its revenue streams.
Despite the company not being profitable over the last twelve months, there is a strong belief among analysts that Smartsheet will turn a profit this year. This sentiment is reinforced by the fact that 10 analysts have revised their earnings upwards for the upcoming period. The company's stock has also been trading near its 52-week high, with a price 95.58% of the peak, indicating a robust market performance with a significant price uptick over the last six months.
For readers looking to delve deeper into the financial nuances of Smartsheet and explore additional InvestingPro Tips, there are currently 11 more tips available for SMAR at InvestingPro, providing further insights into the company's performance and future prospects.
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