Vista acquires Smartsheet for $8.4B

The news of the morning is Vista and Blackstone’s acquisition of Smartsheet for $8.4B. I’ve only been able to read tidbits on Twitter, but it appears that the price was a 40% premium over what the stock was trading for which was a big surprise.

It appears that Vista and Blackstone both thought that Smartsheet was very undervalued. Some financial highlights I saw were that the company had a $1B of revenue growing at 20% with 80% gross margins. That’s a pretty healthy topline growth in a tough year for SaaS sales at their level of scale. The margins are in-line with top tier SaaS companies as well.

The big downside to Vista is that they have struggled to generate a profit which is probably why Vista and Blackstone are salivating right now at this acquisition. They probably saw a company that had a good product and good growth which they could improve in the coming years.

Probably more exciting for them is that they saw a very inefficient sales and marketing motion that was burning too much cash. Unfortunately, I’d imagine there will be a lot of people at the company that will have to move on.

On the surface, it seems like this is right up Vista and Blackstone’s alley and they could turn a big profit here in the next few years.