Permira, a London-based investment firm, today took website tooling provider Squarespace Inc. private in a deal valued at $7.2 billion.
The milestone comes six months after the companies first announced the transaction.
Squarespace operates a cloud platform that businesses and consumers use to host websites. The company also offers several related features, including a tool that provides the ability to create website designs without writing any code. Customers can optionally extend the platform with third-party extensions that are distributed through a Squarespace-run marketplace.
Permira inked a deal to acquire the company in May. The original transaction terms valued Squarespace at $6.9 billion, $300 million more than the market capitalization it achieved in its 2021 public offering. The bid amounted to a 15% premium over the company’s unaffected stock price.
The deal received approval from the Squarespace’s board, but hit a snag in September when Institutional Shareholder Services recommended that investors vote against the deal. The influential financial advisory firm argued that Permira’s $6.9 billion offer undervalued the software maker. It cited Squarespace’s strong earnings results and outlook as the main factors behind its assessment.
Squarespace generated $296.8 million in revenue last quarter, up 20% from the same time a year earlier. In May, the company forecasted full-year sales of $1.19 million to $1.2 billion, which represents a 19% growth rate on the high end of the range.
Squarespace’s Presence segment, which covers its core website hosting plans for businesses and consumers, accounts for more than two-thirds of its revenue. The rest comes from the company’s two specialized subscription tiers for online store operators. Those plans offer an additional set of e-commerce features, including tools that make it easier to offer discounts, provide free shipping and sell subscriptions.
Presence is not only its largest revenue segment but also the fastest growing. The unit grew its sales by 25% year-over-year last quarter, or 5% faster than the company as a whole. Revenue from e-commerce hosting plans, in turn, increased 8%.
To address the concerns raised by Institutional Shareholder Services over the initial acquisition price, Permira boosted its offer by 5.7%, to $7.2 billion. That offer was ultimately accepted by investors, clearing the way to the deal’s completion today. Permira purchased most of Squarespace’s shares through a tender offer that closed on Monday and bought the remaining shares this morning.
According to the investment firm, Squarespace founder and Chief Executive Officer Anthony Casalena retained a “substantial majority” of his stake in the company. He will continue to lead the software maker alongside the rest of the current management team.
“For more than 20 years we have provided customers with all the tools they need to stand out and succeed,” Casalena said. “This commitment will remain the same as we continue to offer our customers more and more tools to grow their businesses online.”