Permira bids for Squarespace as public-to-private activity ramps up

May 15, 2024 (Preqin News) – London-headquartered private equity firm Permira has announced a $6.9bn deal to take NYSE-listed website development company Squarespace private in an all-cash deal.

Permira bid $44 per share, a 29% premium over Squarespace’s 90-day volume weighted average price, and 15% over the $38.19 closing price on May 10. Squarespace’s shares have been lackluster since its May 2021 IPO at $49.6, falling below $20 in April 2022 before slowly climbing towards last week’s closing price, which was 23% below the IPO price. The NYSE Composite Index has risen 10.6% over the same period.

The bid has been accepted by private equity shareholders General Atlantic, Accel Partners, and Founder & CEO Anthony Caselena, representing approximately 90% of the voting shares. Caselena will continue to act as the company’s CEO and Board Chair as it becomes privately held.

Caselena founded the company in 2003 and raised $38.5mn from Index Ventures and Accel in 2010, with General Atlantic investing $40mn in 2014.

Take-private transactions surged in 2021, when 85 deals were completed worldwide with an aggregate deal value of $187.2bn, up from $101.6bn across 71 deals in 2020, according to Preqin data. Activity hit a record in 2022 with $291.6bn from 85 deals, which was followed by an increase in the number of deals to 133 but a decline in value to $198.8bn in 2023, though it was still the second-highest year on record.

After a slow start with just 17 deals with an aggregate value of $5.3bn announced in the first quarter of 2024, momentum is building. So far in the second quarter, 16 bids have been tabled with a combined value of $52.4bn. Silver Lake’s $13bn purchase of sports and entertainment company Endeavor Group, the Squarespace transaction, EQT’s deal to take digital consultancy Perficient private for $3bn, and Apollo’s purchase of US Silica for $1.9bn are among the biggest deals of the year so far.

Law firm Cleary Gottlieb expects a continued increase in take-private equity activity, with funds focused on interesting rather than enormous opportunities. ‘Take-private activity perhaps did not take off as fully as sponsors had expected in 2023,’ it said in its Private Equity Outlook: Five Predictions for 2024. ‘However, private equity firms are finding interesting opportunities. In some cases, these are companies that were previously owned by private equity, and which now publicly trade at levels that firms (including sometimes their former owners) believe to be below intrinsic value.’

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