Squarespace (NYSE:SQSP) surged in pre-market trading after the company entered into a buyout deal with Permira, worth $6.9 billion. The design-driven platform announced that Permira, a private equity firm, will take SQSP private in the all-cash deal.
Details of the Deal
According to the terms of the deal, Squarespace stockholders will receive $44 per share in cash, indicating that the deal was valued at more than $6.6 billion on an equity value basis and around $6.9 billion based on enterprise value. The purchase price represents a premium of around 29% over Squarespace’s 90-day volume-weighted average trading price and a premium of 15% over the company’s closing share price of $38.19 on May 10.
Anthony Casalena, the company’s current CEO and Chairman, will retain 90% of his voting shares following the transaction and will remain its CEO. Furthermore, Squarespace’s current leadership team is likely to continue following the close of the deal. The deal is expected to close by the end of this year.
Is SQSP a Buy?
Analysts remain cautiously optimistic about SQSP stock, with a Moderate Buy consensus rating based on 10 Buys and five Holds. Over the past year, SQSP has surged by more than 30%, and the average SQSP price target of $42.17 implies an upside potential of 10.4% from current levels.
