Website builder Squarespace is going private in an all-cash deal that values the company on an equity basis at $6.6 billion, or a $6.9 billion enterprise valuation. The acquiring company is U.K.-based private equity firm Permira.
Founded in 2004 by CEO Anthony Casalena, Squarespace is best known for its no-code platform designed to help SMEs and freelancers build websites, blogs, and online stores. It includes customizable templates and a “what you see is what you get” (WYSIWYG) interface that users can configure by dragging and dropping different elements.
Shortly after raising $300 million at a hefty $10 billion valuation in 2021, Squarespace filed to go public on the New York Stock Exchange (NYSE), and hit a $8 billion peak valuation in mid-2021. In the intervening months, the company’s valuation went into freefall, dropping to a low of $2 billion in 2022 — but this year seen its stock rebound to its highest peak since late 2021, soaring past the $5 billion mark off the back of strong earnings.
As part of its offer, Permira said it will offer Squarespace shareholders $44.00 per share, representing a 29% premium on its average 90-day trading price and a 15% premium on its Friday (May 10, 2024) closing price.
In what is a huge vote of confidence in someone who steered the company from blog-hosting service while at university to a billion-dollar business, Casalena will remain both as CEO and board chairman, and will continue to be “one of the largest” Squarespace shareholders post-acquisition.
Take-private
There has been a flurry of activity in the private equity space of late: Thoma Bravo took cybersecurity company Darktrace private in a $5 billion deal, shortly after a similar deal to take critical event management software company Everbridge private for $1.8 billion.Vista Equity also last month announced plans to acquire revenue optimization platform Model N for $1.25 billion, while EQT subsidiary EQT Private Capital Asia snapped up API and identity management software company WSO2 for more than $600M.
Permira, for its part, has been involved in some mega acquisitions these past few years, including its 2022 take-private deal that saw it team up with Hellman & Friedman to acquire Zendesk for $10.2 billion and its $5.8 billion purchase of email security firm Mimecast a year previous.
Less than two weeks ago, Permira acquired a majority stake in BioCatch, a Tel Aviv-based cybersecurity firm that uses AI and machine learning to help customers such as banks track users’ online behavior to establish whether a person is real or potential fraudster.
Squarespace, as a consumer-grade website builder, is fairly far removed from Permira’s previous acquisitions. But it is clearly an alluring proposition for a private equity firm looking for a solid business that has largely underperformed. Squarespace passed $1 billion in revenue in a single year for the first time last year, and with additional investments in generative AI (GenAI) to help businesses produce web content and email campaigns, its trajectory is one of the reasons why Permira came calling.
“The Squarespace ecosystem provides SMBs with a broad offering — from demand generation to powerful payment solutions, all seamlessly interwoven with intuitive GenAI,” Permira partner Andrew Young said in a statement. “We share Anthony and the team’s vision to further invest in these tools to help customers grow.”
