Highlights:

  • Squarespace’s annual sales soared to over USD 1 billion by the end of 2023. During the same period, the company’s adjusted EBITDA, also known as earnings before interest, taxes, depreciation, and amortization, more than doubled.
  • Squarespace anticipates concluding 2024 with sales ranging between USD 1.19 billion and USD 1.2 billion, marking a 19% increase compared to the previous year, with the upper end of the range.

Permira, a private equity firm, is finalizing the acquisition of Squarespace Inc., a leading website development and hosting solutions provider, in an all-cash deal valued at USD 6.9 billion.

The Permira Squarespace acquisition agreement was recently unveiled. Shareholders of Squarespace are poised to receive USD 44 per share, representing a 15% premium over the closing price on Friday.

Squarespace debuted in 2003, and seven years later, it secured its first external investment. In March 2021, Squarespace concluded its latest funding round, raising USD 300 million and achieving a valuation of USD 10 billion. Approximately two months later, Squarespace debuted its shares on the New York Stock Exchange (NYSE), entering the market with an initial market capitalization of USD 6.6 billion.

The software maker amassed USD 621.1 million in revenue in the year preceding its public debut. Squarespace’s annual sales soared to over USD 1 billion by the end of 2023. During the same period, the company’s adjusted EBITDA, also known as earnings before interest, taxes, depreciation, and amortization, more than doubled.

Clients gain access to cloud infrastructure and tools, expediting activities like domain name registration and landing page design. Including a built-in template library eliminates the necessity of constructing everything from the ground up.

Squarespace offers two hosting plans, part of their Commerce brand, which are tailored explicitly for online stores. These plans have marketing features enabling merchants to showcase shopping suggestions and establish product waitlists. The higher-priced Commerce subscription also includes the option to offer discounts and free shipping.

Last quarter, Squarespace’s Commerce revenue segment, which covers its online merchant tools and Ecommerce transaction processing fees, saw an 11% year-over-year growth. The Presence segment of the company, which comprises its standard website hosting plans, experienced growth twice as rapid as the Commerce segment. During the quarter, the Commerce segment contributed approximately two-thirds of Squarespace’s USD 281.1 million in revenue.

Squarespace anticipates concluding 2024 with sales ranging between USD 1.19 billion and USD 1.2 billion, marking a 19% increase compared to the previous year, with the upper end of the range. The projected unlevered free cash flow is estimated to fall from USD 298 million to USD 318 million.

Squarespace’s founder and Chief Executive Officer, Anthony Casalena, also one of the company’s largest shareholders, is endorsing Permira’s acquisition proposal, along with institutional stakeholders General Atlantic and Accel. Their combined holdings constitute approximately 90% of the voting shares of the software maker. However, for the deal to proceed, it must also garner approval from investors holding many remaining voting shares.

Casalena plans to retain a “substantial majority” of his shares in Squarespace once it transitions from the stock market, a move anticipated to occur before the fourth quarter. Following the transition, he will remain at the company’s helm alongside the existing management team.

Casalena stated, “Squarespace has been at the forefront of providing services to businesses looking to establish themselves online for more than two decades. We are excited to continue building on that foundation and expanding our offerings for years to come.”

Permira’s acquisition of Squarespace marks the latest addition to its portfolio of tech firms taken private in recent years. In 2022, it collaborated with several other investors to purchase customer service software provider Zendesk Inc. for USD 10.2 billion. Permira previously acquired email security provider Mimecast Ltd. for USD 5.8 billion.