Pluralsight announced on Dec. 13 that it has agreed to be acquired by international investment firm Vista Equity Partners in an all-cash deal valued at $3.5 billion. Shares gained 6.7% in Monday’s pre-market trading session.
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Notably, Vista will pay $20.26 per share to Pluralsight (PS) shareholders, which translates to a premium of about 7% to the stock’s last closing price on Dec. 11. The purchase consideration reflects a 25% premium to Pluralsight’s volume-weighted average closing stock price for 30 trading days preceding the announcement, the company said.
Following the deal, Pluralsight, a provider of technology workforce development solutions, will become a privately held company, and its shares will cease to trade.
Aaron Skonnard, Pluralsight CEO, said, “Through this partnership with Vista, we will be able to move faster and be more agile, accelerate our strategic vision and, ultimately, deliver deeper, more powerful solutions that help companies adapt and thrive in the digital age.”
Vista’s Monti Saroya commented, “We have seen firsthand that the demand for skilled software engineers continues to outstrip supply, and we expect this trend to persist as we move into a hybrid online-offline world across all industries and interactions, with business leaders recognizing that technological innovation is critical to business success.”
The transaction is expected to close in 1H21, subject to approval from Pluralsight shareholders and regulatory bodies.
Pluralsight shares have advanced 10.3% year-to-date and are trading at a 16.4% discount to their 52-week high. (See PS stock analysis on TipRanks)
The stock has an analyst consensus of a Moderate Buy based on 5 Buys, 3 Holds, and 1 Sell. The average price target of $21.29 implies an upside potential of $12.2% to current levels.
Meanwhile, J.P. Morgan analyst Sterling Auty on Dec. 9 downgraded the stock’s rating to Sell from Hold and left the price target unchanged at $20, citing a high multiple.
Auty cautioned that the company is “likely to have 1-2 or more quarters of revenue deceleration that could hinder stock price performance.”
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