Website builder Squarespace is being taken private by U.K.-based private equity firm Permira in an all-cash deal that gives the company an enterprise valuation of $6.9 billion.
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), reaching a market cap high of $8 billion in mid-2021. In the intervening months, the company’s stock went into freefall, dropping its worth to a low of $2 billion in 2022. This year has seen its stock rebound to its highest point since late 2021, and its market cap has soared past the $5 billion mark off the back of strong earnings.
As part of its offer, Permira will offer Squarespace shareholders $44 per share, representing a 15% premium on its Friday (May 10, 2024) closing price. The deal gives the company an equity valuation of $6.6 billion.
In a huge vote of confidence in Casalena, who steered the company from blog-hosting service while at university to a billion-dollar business, Permira is keeping him on as CEO and board chairman. He will also continue to be “one of the largest” Squarespace shareholders post-acquisition.
Are PEs coming back strong?
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 $600 million.
Permira, for its part, has been involved in some big acquisitions these past few years. In 2022, it struck a take-private deal that saw it team up with Hellman & Friedman to acquire Zendesk for $10.2 billion, and a year before that, it shelled out $5.8 billion for email security firm Mimecast.
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 a 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 annual revenue for the first time last year, and it has made additional investments in generative AI (GenAI) to help businesses produce web content and email campaigns. Its trajectory may be one of the reasons 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.”
