(Reuters) -Workplace collaboration software maker Smartsheet (NYSE:SMAR) will be taken private by buyout firms Vista Equity Partners and Blackstone (NYSE:BX) in a deal worth $8.4 billion, the companies said on Tuesday.
Smartsheet shareholders will receive a cash payment of $56.50 per share, an 8.5% premium over the last closing price of $52.09.
Shares of the Bellevue, Washington-based company hit an over two-year high and were up 6% in early trading.
Smartsheet develops software that offers more features and capabilities than Microsoft (NASDAQ:MSFT)’s Excel, targeting organizations seeking to manage, track, and automate workflows through a unified platform.
The company serves 85% of Fortune 500 companies, according to its website, including industry giants such as Pfizer (NYSE:PFE), Procter & Gamble (NYSE:PG), and American Airlines (NASDAQ:AAL).
The take-private deal also comes at a time when private equity deal-making has been on the rise, with an increase of 41% in deal volumes during the first half of the year, driven by several take-private deals.
The deal includes a 45-day “go-shop” period that will expire on Nov. 8, during which the company and its advisors can weigh proposals from other interested parties.
Reuters had previously reported that the buyout firms were nearing the acquisition of Smartsheet in a deal that valued it close to $8 billion.
The buyout has been unanimously approved by Smartsheet’s board, and the now privately-held company will continue to operate under the Smartsheet name and brand.
Smartsheet will have to pay $250 million to Vista and Blackstone if it cancels the deal, but only $125 million if it finds a better offer during the go-shop period. If Blackstone and Vista back out, Smartsheet gets a $500 million fee.
The enterprise software maker is known for prioritizing growth over profitability, having recorded losses since its 2005 inception, with the exception of the second quarter of this year, despite revenue growth.
