Squarespace (SQSP) Acquisition: Glazer Capital Deems Permira’s $44/Share Offer Inadequate
Key Highlights
- Permira’s $6.6 billion offer to acquire Squarespace for $44 per share has been rejected by Glazer Capital, a significant shareholder.
- Glazer Capital argues that the offer undervalues Squarespace’s growth potential and strong market position in the e-commerce and SaaS sectors.
- The proposed acquisition price is lower than Squarespace’s recent IPO price of $48 per share and Wall Street analysts’ price targets of $50 per share.
- Similar e-commerce companies have received higher valuations in recent acquisitions, setting a precedent for a higher valuation for Squarespace.
Squarespace’s Market Position and Growth Potential
Squarespace’s strong market position in the e-commerce and SaaS sectors is a key factor in Glazer Capital’s rejection of Permira’s offer. The company’s website creation and hosting solutions have positioned it as a leader in the rapidly growing e-commerce industry. Squarespace’s ability to raise $200 million at a $1.7 billion valuation in 2017 and its recent IPO price of $48 per share highlight its growth trajectory and market value.
Historical Context and Industry Precedents
The tech industry has witnessed several notable acquisition bids in recent years, with companies in the e-commerce and SaaS sectors commanding premium valuations. For instance, Shopify’s acquisition by Permira in 2019 and Wix’s acquisition by private equity firms in 2020 both reflected higher valuation multiples compared to Squarespace’s current offer. These historical examples lend credence to Glazer Capital’s stance that Permira’s offer is inadequate.
Permira’s Strategy and Industry Reactions
Permira’s acquisition of Squarespace is driven by its desire to expand its portfolio in the e-commerce space, leveraging Squarespace’s SaaS offerings and potential synergies with its existing investments. However, the proposed acquisition price has raised concerns among investors and analysts, who question whether the deal is undervalued based on Squarespace’s recent performance and market position.
Shareholder rights advocacy firms, such as Julie & Holleman LLP, are scrutinizing the proposed deal, highlighting potential conflicts of interest among Squarespace’s major shareholders. Other analysts and investors have also expressed concerns about the offer, citing the recent IPO price and Wall Street analysts’ price targets as evidence of Squarespace’s higher value.
Squarespace Acquisition – Conclusion and Future Outlook
The current situation surrounding Permira’s acquisition offer for Squarespace highlights the complexities of valuation and the importance of accurately assessing a company’s growth potential and market position. Glazer Capital’s rejection of the offer may lead to further negotiations or alternative acquisition bids, potentially impacting Squarespace’s future strategies and investor relations.
