Smartsheet Inc. (NYSE:SMAR) shares are trading higher on Tuesday after funds managed by Blackstone Inc. (NYSE:BX) and Vista Equity Partners disclosed they are acquiring the company for around $8.4 billion in cash.

As per the terms, the companies will fully acquire Smartsheet shares for $56.50 per share in cash at the closing of the proposed transaction.

The price represents a 41% premium over the volume-weighted average closing price of Smartsheet stock for the 90 trading days ending July 17, 2024, and a 16% premium over the highest closing price in the past 12 months.

The Smartsheet Board unanimously supported the deal and recommended that shareholders vote in favor of it at a special meeting.

The merger agreement includes a 45-day “go-shop” period, ending on November 8, 2024, during which Smartsheet and its advisors can actively seek alternative acquisition proposals. Smartsheet’s Board of Directors can terminate the agreement to accept a superior proposal.

The transaction is expected to close in the fourth quarter of Smartsheet’s fiscal year, ending January 31, 2025, pending shareholder approval, regulatory clearances, and other conditions.

Post deal closure, Smartsheet will become a privately held company, with its Class A common stock delisted, while continuing to operate under its current name and brand.

Blackstone plans to invest in Smartsheet through its flagship private equity vehicle and its private equity strategy tailored for individual investors.

Martin Brand, Head of North America Private Equity and Global Co-Head of Technology Investing at Blackstone, and Sachin Bavishi, a Senior Managing Director at Blackstone, said, “Across increasingly distributed, cross-functional and global workforces, Smartsheet’s innovative and market-leading solutions are mission-critical in helping teams collaborate at scale to achieve superior results.”

“Modern enterprises rely on Smartsheet’s simple and scalable solutions to manage a diverse range of business-critical processes every single day because they enable seamless collaboration, enhanced productivity and faster and more informed decision-making,” stated Monti Saroya, Co-Head of Vista’s Flagship Fund and Senior Managing Director, and John Stalder, Managing Director at Vista.

This month, Smartsheet reported a second-quarter adjusted EPS of $0.44, surpassing the $0.29 estimate. Sales reached $276.41 million, beating the $274.19 million estimate.

Investors can gain exposure to Smartsheet via Managed Portfolio Series Tremblant Global ETF (NYSE:TOGA) and Motley Fool Small-Cap Growth ETF (BATS:TMFS).

Price Action: SMAR shares are up 6.56% at $55.51 at the last check Tuesday.

Image via Shutterstock

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