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

investors.squarespace.com

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

#151

Post by matwood »

Karellen wrote: post #37
dannyw wrote: post #5

Earlier quoted context omitted.

It’s probably just a good rule of thumb. 10%? Go away. 20%? You can certainly negotiate it up to 30%. 30%? There’s considerable value here, and threats to walk away will be felt. 40%? Why, when you can get it to 30%?

Why is that a better rule of thumb than, e.g. 5%/10%/15%/20%?

Remember that shareholders are in the stock because they expect some type of risk adjusted return. 5% is out because that's the risk free return. 7-10% can be gotten with lower risk by index investing. 15-20-30 we're starting to get into a range where the investor is willing to part with their stock given the risk they took on. 30% tends to be enough to get everyone to sell. If it was a hot, fast growing company, it would be higher - if it was possible to get everyone to sell at all.

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

#152

Post by pyoung »

armchairhacker wrote: post #127

I hear that PE destroys products and culture to make money at all costs, but i don’t get how that can net them back the >$6 billion they paid for a company with <$300 million yearly revenue and negative profit.

I think they just load up on debt, so they aren't really buying it with their money. But what I don't understand is how they get people to loan them money when they know that they are just going to strip mine the company for all valuable assets and leave a shell of a company for the lenders to fight over.

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

#153

Post by njovin »

gzer0 wrote: post #63
dpflan wrote: post #22

Has the trend of PE owning things increased in the last decade? Has PE gotten more money in the past years so that they can hoover up companies?

The current state of the markets and private equity is deeply troubling. Gone are the days when companies like Microsoft went public at reasonable valuations, allowing everyday investors to participate in their massive growth. Now, companies like Uber and Airbnb debut on the stock market at sky-high valuations, leaving little room for the average investor to profit. Worse still, the concentration of wealth has enable…

I would hope that this results in a reduction of companies seeking to go public in the first place. We've seen many cycles of: innovation -> growth -> IPO -> happy customers + employees -> not enough growth -> PE -> layoffs -> product/user decline.

The demand for ever-increasing a growth demanded by the markets is not sustainable for a majority of businesses. IMO the employees, customers, and general public would benefit from companies growing to a healthy size and then maintaining that plateau.

SquareSpace has ~44% of the self-hosted website market. Shouldn't that be enough?

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

#154

Post by MyFirstSass »

gzer0 wrote: post #63
dpflan wrote: post #22

Has the trend of PE owning things increased in the last decade? Has PE gotten more money in the past years so that they can hoover up companies?

The current state of the markets and private equity is deeply troubling. Gone are the days when companies like Microsoft went public at reasonable valuations, allowing everyday investors to participate in their massive growth. Now, companies like Uber and Airbnb debut on the stock market at sky-high valuations, leaving little room for the average investor to profit. Worse still, the concentration of wealth has enable…

[flagged]

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

#155

Post by itslennysfault »

xyst wrote: post #140
renegade-otter wrote: post #60

The gold rush is over - private equity is going to squeeze every little drop from the companies that have been built and we will move on to Web 3.0 - which will be just like web 1.0 - self-hosting, link directories, newsletters, and guestbooks.

I'm already self hosting an e-mail server with no problems in deliverability or receiving. No limitations on aliases. No more artificial limits. Cyrus-imap + postfix. If I need to scale up, can migrate from sqlite to postgres.

I did this for about a decade (ending about a decade ago), and eventually gave up and went to gmail. I agree that it is a really easy thing to do and maintain, BUT when it did (rarely) break it was always at the worst possible time. The day a client was sending an important document. While I was on vacation. Etc. I probably only had to drop everything to fix my email server a handful of times, but that handful of times was painful enough to make me just let google worry about it.

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

#156

Post by JumpCrisscross »

berkeleyjunk wrote: post #2

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.

> why this number is so prevalent

It comes from a 2004 Delaware court case, which found “recent appraisal cases that correct the valuation for a minority discount by adding back a premium ‘that spreads the value of control over all shares equally’ consistently use a 30% adjustment” for the control premium [1]. (Under Delaware law, shareholders are entitled to the pro rata share of a company’s fair value. The courts can and do revise merger prices to reflect this.)

Also, this one is a 15% premium [2].

[1] https://casetext.com/case/doft-co-v-travelocitycom-inc-2

[2] https://www.prnewswire.com/news-releases/squarespace-to-go-p...

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

#157

Post by 2Gkashmiri »

xyst wrote: post #140
renegade-otter wrote: post #60

The gold rush is over - private equity is going to squeeze every little drop from the companies that have been built and we will move on to Web 3.0 - which will be just like web 1.0 - self-hosting, link directories, newsletters, and guestbooks.

I'm already self hosting an e-mail server with no problems in deliverability or receiving. No limitations on aliases. No more artificial limits. Cyrus-imap + postfix. If I need to scale up, can migrate from sqlite to postgres.

Over 3 years running mailinabox. Zero problems after first month of hiccups.

Installed a second server last year. That had 0 problems since day 1.

I feel like people overblow the whole email thing. Want you to pay for tuta et al when you can build your own and manage it.

I havent updated both servers in a year. Zero problems.

Again, people maybe confuse miab and other email servers maintenance with maintaining nextcloud which is a real pita

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

#158

Post by coldpie »

prmoustache wrote: post #139
coldpie wrote: post #46

Earlier quoted context omitted.

What evidence do you have that the new owners are interested in making Squarespace profitable or sustainable? PE firms are the "selling the car for scrap" of business acquisitions.

But can they "sell it for scrap" for more than they bought it in the first place?

Presumably, or else they wouldn't have bought it. Plenty of ways to make a profit while hollowing out a company: fire as many employees as possible, steal as much as possible from their employees and vendors, raise prices on customers, make closing customer accounts as difficult as possible, do some silly accounting tricks to make someone else hold the bag, try to find someone to fob off the brand name to for a few bucks once there's nothing left to extract. The usual stuff, they know the routine.

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

#159

Post by freeAgent »

jesprenj wrote: post #61

I don't understand how capitalism works now. So can people just forcibly buy stocks from you for $44 now?

There will be a shareholder vote, but they only need a majority to approve the sale (assuming their equity shareholder structure is "normal" and voting rights exist for common shareholders). However, the majority of any given public company tends to be owned by institutional asset managers like Blackrock and Vanguard. They owe a fiduciary duty to their customers to act in their best interests, and when a deal offers those shareholders a large margin over the market value of their holdings, it's almost impossible for them to vote against it, even if they wanted.

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

#160

Post by xyst »

djbusby wrote: post #138
armchairhacker wrote: post #127

I hear that PE destroys products and culture to make money at all costs, but i don’t get how that can net them back the >$6 billion they paid for a company with <$300 million yearly revenue and negative profit.

They gonna increase prices

not just increase prices but likely saddle the company with mountains of debt (which happens to be owned directly or indirectly by the PE firm).

red lobster acquired by Golden Gate PE in cash deal in 2020 [1]

red lobster subsequently squeezed for any value at all costs (cuts in labor, switching suppliers) [2]

[1] https://www.restaurantbusinessonline.com/financing/asian-inv...

[2] https://www.cnn.com/2024/05/03/food/red-lobster-seafood-rest...

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