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Squarespace, the seller of software used by entrepreneurs and businesses to build websites, is being taken private in a $6.9bn deal just three years after it was went public by its founder and private equity owners.
London-based private equity group Permira has agreed to buy the company for $44 a share in cash, a 15 per cent premium over Squarespace’s closing price on Friday. Shares in the tech group are down about a fifth since going public via a direct listing in 2021, when the pandemic drove a wave of start-ups to its website design and ecommerce tools.
At almost $7bn, including debt, the transaction funded by a consortium of private credit backers is one of the largest deals ever supported by non-bank lenders, highlighting the growing influence these institutions have in the mergers and acquisitions business.
Private credit funds including Blackstone’s credit arm, Blue Owl and Ares Capital are providing $2.65bn in financing for the deal, said people briefed on the matter. Private equity firms have increasingly tapped private credit funds for leveraged buyouts as the cost of debt financing has increased.
The deal continues a trend of multibillion-dollar takeovers of companies that private equity groups listed between 2019 and 2022, when markets were buoyant.
Squarespace’s existing private equity investors, General Atlantic and venture capital firm Accel, which together own more than 20 per cent of the company, will participate in Monday’s takeover alongside the software company’s founder Anthony Casalena.
Private equity groups have struck a handful of recent deals to take private companies that were recently listed over the past few years by themselves or other private equity groups.
Last year, Blackstone acquired Cvent, a Vista Equity-owned events software company that had gone public in 2021 through a merger with a blank cheque company. Earlier this year, Silver Lake struck a more than $13bn take-private deal for Endeavor, a live sports and entertainment company with a large talent agency, in which it is already a controlling shareholder.
Casalena, who founded New York-based Squarespace in 2003, will remain in his role and roll over a “substantial majority” of his shareholding, according to a statement. Casalena’s shares are worth about $2bn at current prices, according to securities filings.
Goldman Sachs acted as financial adviser to Permira, while Latham & Watkins gave the private equity firm legal advice. Squarespace worked with JPMorgan on the financial terms of the deal, and Skadden Arps provided legal counsel.