Stockholders will receive $44.00 per share in cash, which represents a premium of 29% over the 90-day volume weighted average trading price of $34.09 Squarespace, Inc. (NYSE: SQSP ), the design-driven platform helping entrepreneurs build brands and businesses online, today announced that it has entered into a definitive agreement to go private by Permira, the global private equity firm, in an all-cash transaction valued at approximately $6.9 billion. Under the terms of the agreement, Squarespace stockholders will receive $44.00 per share in cash representing a transaction valued at over $6.6 billion on an equity value basis and approximately $6.9 billion on an enterprise value basis. The purchase price represents a premium of approximately 29% over Squarespace’s 90-day volume weighted average trading price, and a premium of 15% over Squarespace’s closing share price of $38.19 on the NYSE on May 10, 2024. Upon completion of the transaction, Squarespace will become a privately held
There will likely be no benefit for the employees or the users. For the PE firm, the goal is usually to pump up the value and resell or reenter the market, at a massive profit, in a few years. To do that, they’ll have to make a lot of unpopular choices, such as layoffs and other cost cutting measures. If they’re privately held, those choices have far less impact on the value of the company, since the stock market is heavily swayed by public perception.
Or if they can’t do that, they’ll load it up with the debt of its failed businesses and then let it loose to fail.
Probably going to be what happened to Toys R Us where the company currently has value but private equity will pull out cash and anything not bolted down and load up what remains with extreme amounts of debt before abandoning what remains. The skeleton of a company that remains will be viewed as unviable as it will have large amounts of debt and no cash once the vultures have stripped everything off.