Squarespace, the popular website-building platform, is making waves with its decision to go private in a massive $6.9 billion all-cash deal with private equity firm Permira. After nearly three years of turbulence on the public market, this move comes as no surprise to industry insiders.

The deal is set at $44 per share, which is about a 30% premium to Squarespace’s recent share price. For a company that opened below its $50 reference price in 2021 and never traded above its $48 open price, this premium is a significant sweetener for shareholders. The decision was backed by major shareholders, including Accel, General Atlantic, and CEO Anthony Casalena, who together control 90% of Squarespace’s voting shares.

Anthony Casalena, the founder and CEO, expressed his excitement about the partnership with Permira, highlighting the potential for growth and innovation. “We are thrilled to be partnering with Permira on this new leg of our journey,” Casalena stated, indicating a strong commitment to the company’s future.

Squarespace competes with giants like Wix and Shopify in the website-builder and e-commerce markets. Despite its efforts, Squarespace struggled to gain traction in the public markets. This privatization is seen as a strategic move to unlock the company’s full potential without the pressures of public market performance.

Permira, along with financing help from Ares Capital, Blackstone, and Blue Owl, is expected to provide the resources needed to support Squarespace’s growth ambitions. David Erlong, a partner at Permira, shared his optimism, saying, “We are excited to partner with Anthony and his team to support the company in unlocking its full potential.

This move by Squarespace is part of a larger trend where smaller tech companies, disillusioned with public markets, are opting to go private. Similar moves have been made by companies like Qualtrics, which was taken private by Canada’s pension plan and Silver Lake, and Toshiba, which went private in a $13.6 billion deal in 2023.

The deal-making space is heating up after a quiet period in 2022 and 2023, with many late-stage companies either holding off on IPOs or choosing the private route. Investors are keenly watching this space for signs of increased M&A activity.

In conclusion, Squarespace’s decision to go private marks a significant shift in its business strategy. With the backing of Permira and continued support from major shareholders, the company is poised for a new chapter of growth and innovation. This move underscores a broader trend in the tech industry, where going private is becoming an attractive option for companies seeking to maximize their potential away from the pressures of public markets.

Stay tuned as we watch Squarespace navigate this exciting transition and strive to make its mark as a private entity.