Avalara said on Monday (Aug 8) it had agreed to be acquired by private equity firm Vista Equity Partners in a deal that values the automation software platform at US$8.4 billion including debt.
Private equity companies have lately ramped up dealmaking activity as valuations of companies across sectors have dropped due to a sell-off triggered by high inflation and tightening monetary policy.
In the first half of the year, the PE firms were the chief drivers of global dealmaking even as overall M&A hit a roadblock.
Vista’s offer of US$93.50 per share, which marks a 2 per cent discount to Avalara stock’s last close, sent shares down nearly 4 per cent in premarket trading.
However, the price marked a 27 per cent premium to stock’s close on Jul 6, after which it surged nearly 30 per cent on media reports of a possible takeover.
Founded in 2004, Avalara runs a cloud-based platform that helps companies with tax compliance. The Seattle-based company counts Pinterest, Zillow Group and Roku among its customers.
Goldman Sachs & Co advised Avalara on the deal, which is expected to close in the second half of 2022.
Vista, which focuses on investments in technology and business software companies, managed nearly US$96 billion in assets as of Mar 31.
In January, the company teamed up with activist investment firm Elliott Management for a US$16.5 billion buyout of software company Citrix Systems.
