Smartsheet’s $8.4 Billion Buyout by Blackstone and Vista Marks Major Shift for Collaboration Software Sector

Smartsheet, a leading collaboration software provider, has agreed to be taken private by Blackstone and Vista Equity Partners in an all-cash deal valued at approximately $8.4 billion, marking a significant move in the software sector. Under the agreement, stockholders will receive $56.50 per share, representing a 41% premium to Smartsheet’s three-month average closing price and an 8.5% premium to its closing price of $52.09 on Monday. This acquisition comes at a time when private equity firms are showing renewed interest in software makers after a slowdown in deal activity.

Smartsheet’s Strategic Shift

Smartsheet, based in Bellevue, Washington, went public in 2018 with the backing of major investors such as Insight Partners and Madrona Venture Group. Its platform focuses on work management and team collaboration, facilitating functions like task assignment, process automation, and data sharing — an area that saw increased demand during the pandemic as businesses embraced remote work and more collaborative operations.

The acquisition follows a 45-day “go-shop” period, allowing Smartsheet to solicit alternative bids until November 8, though RBC Capital Markets analyst Rishi Jaluria suggests a higher bid is unlikely. Jaluria told the Wall Street Journal that “Smartsheet could be an attractive addition to a number of technology companies,” pointing to potential buyers such as Google, Salesforce, Zoom, and Cisco. However, he was “a little surprised that it is private equity” that sealed the deal, adding, “I felt like Smartsheet might be something that belongs as part of a larger platform.”

Why Private Equity?

The involvement of Blackstone and Vista Equity Partners highlights private equity’s growing influence in the software industry. Vista has a proven track record in the tech space, holding stakes in companies like Lucid Software and Quickbase, both of which could synergize with Smartsheet’s work management offerings. Jaluria noted the possibility of Smartsheet being expanded through acquisitions of other companies in the work management sector, stating, “If you’re a believer in the collaborative work-management…