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ZILLOW GROUP, INC.

(ZG)
  Report
Delayed Nasdaq  -  04:00 2022-10-05 pm EDT
30.13 USD   -4.50%
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Avalara to go private in $8.4 bln deal with Vista with direct lenders' help

08/08/2022 | 07:18am EDT

Aug 8 (Reuters) - Avalara Inc said on Monday it has agreed to be acquired by private equity firm Vista Equity Partners in a deal that values the tax automation software platform at $8.4 billion including debt, one of the largest take-private deals this year as the M&A market slows down.

Vista managed to secure a $2.5 billion loan from private lenders and bring in institutional investors as co-investors, according to a source familiar with the matter.

Vista's offer of $93.50 per share, which marks a 2% discount to Avalara stock's closing price on Friday, sent shares down 3.86% on Monday.

However, the price marked a 27% premium to the stock's close on July 6, after which it surged nearly 30% on media reports of a possible takeover.

Founded in 2004, Avalara runs a cloud-based software platform that helps companies with tax compliance. The Seattle-based company counts Pinterest Inc, Zillow Group and Roku Inc among its customers.

Avalara went public in June 2018 and has benefited from the digital transformation during the global pandemic, when more businesses are turning to software tools to automate their tax needs. This year, its shares have taken a hit, as have many companies that previously prospered during the pandemic.

Private equity buyers have lately ramped up take-private activities as valuations of public tech companies have dropped due to a selloff triggered by high inflation and tightening monetary policy.

But a tougher environment for debt syndications has hindered some buyers' ability to raise enough capital, and many sponsors have turned to private lenders. Ping Identity, a security firm that was taken private by Thoma Bravo in a $2.8 billion deal last week, also secured loans from direct lenders.

In the first half of the year, PE firms were the chief drivers of global dealmaking even as overall M&A hit a road block.

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 $96 billion in assets as of March 31.

In January, the company teamed up with activist investment firm Elliott Management for a $16.5 billion buyout of software company Citrix Systems Inc. Banks that have provided loans to the Citrix buyout are set to lose millions on the syndications, sources told Reuters. (Reporting by Niket Nishant and Eva Mathews in Bengaluru and Krystal Hu in Los Angeles; Editing by Shailesh Kuber and Matthew Lewis)


© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
AVALARA, INC. -0.27% 92.5 Delayed Quote.-28.16%
CITRIX SYSTEMS, INC. 0.00% 103.9 End-of-day quote.9.84%
PING IDENTITY HOLDING CORP. 0.18% 28.3 Delayed Quote.23.47%
PINTEREST, INC. -1.08% 24.63 Delayed Quote.-31.50%
ROKU, INC. -4.33% 59.7 Delayed Quote.-72.66%
ZILLOW GROUP, INC. -4.50% 30.13 Delayed Quote.-49.29%
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Analyst Recommendations on ZILLOW GROUP, INC.
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Financials (USD)
Sales 2022 6 168 M - -
Net income 2022 -83,4 M - -
Net cash 2022 1 118 M - -
P/E ratio 2022 -109x
Yield 2022 -
Capitalization 7 605 M 7 605 M -
EV / Sales 2022 1,05x
EV / Sales 2023 3,02x
Nbr of Employees 5 791
Free-Float 91,4%
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Mean consensus OUTPERFORM
Number of Analysts 21
Last Close Price 31,55 $
Average target price 40,97 $
Spread / Average Target 29,9%
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Managers and Directors
Richard N. Barton Director
Lloyd D. Frink Director & Vice President
Susan Daimler President
Allen W. Parker Chief Financial Officer
David A. Beitel Chief Technology Officer
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