Live data from Hacker News

Squarespace to Go Private in $6.9B All-Cash Transaction with Permira

investors.squarespace.com

11–20 of 414 posts

Re: Squarespace to Go Private in $6.9B All-Cash Transaction with Permira

#11
post #8
post #3

Can someone explain why this is happening? Thanks! Personally having used squarespace I'm not a fan of their product, but that's beside the point!

PE realises you can fire most of the team and stop R&D, jack up prices by 50-100% due to lock in, and have something low risk that returns like four times bonds.

What R&D was Squarespace doing over the last 10 years?

Re: Squarespace to Go Private in $6.9B All-Cash Transaction with Permira

#12

It is interesting how most M&A transactions trend to have a 30% premium above the trading price. I have tried to investigate why but could not find a good explanation to why this number is so prevalent.

There is a baseline trading volume that still expects to have access to the stock. As you buy more stock, less stock is available to buy, driving up the price.

Re: Squarespace to Go Private in $6.9B All-Cash Transaction with Permira

#13

It is interesting how most M&A transactions trend to have a 30% premium above the trading price. I have tried to investigate why but could not find a good explanation to why this number is so prevalent.

If everyone does 30% it quickly becomes what "you should do" and anything lower is looked at with suspicion, and anything higher is suspect from the other side or a "what do they know we don't" viewpoint.

In many transactions, being like all the other ones is the way to go.

Re: Squarespace to Go Private in $6.9B All-Cash Transaction with Permira

#14
It must be nice for the founder to pocket $2 billion in cash from selling his company.

For users, on the other hand, I'll hardly trust a PE firm with a SaaS product. There's just too much incentive to jack up prices to service the debt taken to acquire Squarespace, and cut costs on customer support and building new features.

Re: Squarespace to Go Private in $6.9B All-Cash Transaction with Permira

#15
post #4

how odd, all my google domains just transferred to squarespace today. now thru no consent of my own all my domain and payment information are belong to this private equity shop i dont know anything about that is also likely to strip it for parts. idk how to feel about that

I feel terrible and I’m transferring everything elsewhere immediately.

Re: Squarespace to Go Private in $6.9B All-Cash Transaction with Permira

#16
post #8

Earlier quoted context omitted.

PE realises you can fire most of the team and stop R&D, jack up prices by 50-100% due to lock in, and have something low risk that returns like four times bonds.

What R&D was Squarespace doing over the last 10 years?

Their website builder and templates I imagine

Re: Squarespace to Go Private in $6.9B All-Cash Transaction with Permira

#17
post #8

Earlier quoted context omitted.

PE realises you can fire most of the team and stop R&D, jack up prices by 50-100% due to lock in, and have something low risk that returns like four times bonds.

What R&D was Squarespace doing over the last 10 years?

All software companies have R&D going on constantly.

“How do I push this user metric” “How do we increase conversion” “How can we increase conversion for our customers” “Can square space be easier to use”

Re: Squarespace to Go Private in $6.9B All-Cash Transaction with Permira

#18

It is interesting how most M&A transactions trend to have a 30% premium above the trading price. I have tried to investigate why but could not find a good explanation to why this number is so prevalent.

Wall St has rules of thumb like any field. 7% commission, 30% premium, 10% layoff, etc.

Re: Squarespace to Go Private in $6.9B All-Cash Transaction with Permira

#20

It is interesting how most M&A transactions trend to have a 30% premium above the trading price. I have tried to investigate why but could not find a good explanation to why this number is so prevalent.

It could be that is the number we always used, and deals seem to get approved with that number. Anything less might be questioned as not enough premium since there is precedent for a 30% premium during a buyout.
Post reply on HN