(Bloomberg) -- Blackstone Inc. and Vista Equity Partners have agreed to acquire software provider Smartsheet Inc. for about $8.4 billion in one of the year’s largest take-private deals.
The buyout firms will pay $56.50 a share in cash for Bellevue, Washington-based Smartsheet, according to a statement on Tuesday. Abu Dhabi Investment Authority is also part of the buying consortium, a separate filing with the Securities and Exchange Commission shows.
The acquisition price represents a premium of roughly 41% to Smartsheet’s volume-weighted average closing price for the 90 trading days ending July 17, the last full trading day prior to reports of a possible sale.
Shares in Smartsheet were up 6.6% at 11:53 a.m. in New York on Tuesday, giving the company a market value of about $7.7 billion.
Private equity firms have been hunting for targets in the software sector, searching for businesses that tend to have reliable cash flows and can be scaled up through acquisitions. In July, Bain Capital and Reverence Capital Partners agreed to take Envestnet Inc. private.
Smartsheet provides software that companies can use to help automate their workflows. More than 80% of Fortune 500 companies use its work-management platform, according to its website.
Under the terms of the deal with Blackstone and Vista, Smartsheet and its advisers will have a 45-day go-shop period in which they can solicit and negotiate alternative proposals.
Qatalyst Partners is acting as exclusive financial adviser to Smartsheet, while Goldman Sachs Group Inc. and Morgan Stanley are working with Blackstone and Vista Equity Partners. The transaction is expected to close in the fourth quarter of Smartsheet’s fiscal year ending January 31, 2025.
(Adds detail on ADIA in second paragraph.)
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