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Squarespace stock soared 13% at market open on Monday after it announced that it will go private as part of its acquisition by private equity firm Permira.
The New York-based website-building platform reached a $6.9 billion all-cash takeover deal with Permira, with Squarespace stockholders slated to receive $44.00 per share in cash as part of the transaction.
The purchase price represents a premium of roughly 29% over Squarespace’s 90-day volume weighted average trading price, and a premium of 15% over the company’s closing share price of $38.19 as of Friday, the company said. Squarespace has a market capitalization of $5.94 billion.
At the completion of the transaction, Squarespace will become a privately held company “with the flexibility and resources to invest in enabling entrepreneurs to build better online brands and more easily transact with their customers,” it said. Squarespace went public on the New York Stock Exchange in May 2021.
Anthony Casalena, who founded the startup in 2003, will continue to serve as Squarespace’s CEO. He is also slated to roll over most of his existing equity and continue to be one of its largest shareholders. Casalena and long-time investors General Atlantic and Accel make up about 90% of Squarespace’s voting shares.
The company reported its first-quarter earnings last week, with revenue growing 19% and bookings increasing 23% year-over-year. Net income fell to $0.1 million, compared to $0.5 million in the first quarter of 2023. In the report, Casalena said the results show “tremendous opportunity to drive long-term growth and profitability in the business.”
As a result of the agreement, Squarespace cancelled its annual Investor Day, which was scheduled for Wednesday. The deal is expected to close by the fourth quarter of 2024.