Avalara Inc., a leading tax compliance automation provider for businesses, has agreed to be bought by Vista Equity Partners for $8.4 billion.
Vista Equity Partners is a leading global investment firm led by America’s richest Black person, Robert Smith.
The transaction received unanimous approval from the Avalara board of directors and is expected to close in the second half of 2022, subject to customary closing conditions such as shareholder and regulatory approval.
Under the terms of the deal, Vista will acquire all outstanding shares of Avalara common stock for $93.50 per share in an all-cash transaction valued at $8.4 billion, including Avalara’s net debt.
According to a source familiar with the situation, Vista has secured a total of $2.5 billion in loans from private lenders as part of the move to bring in institutional investors as co-investors.
The purchase price represents a 27-percent premium over the company’s closing share price on July 6, the last trading day prior to the announcement of the deal.
“For nearly two decades, Avalara has ambitiously pursued its vision of automating global compliance, making tax less taxing for businesses and governments around the world,” Avalara Co-Founder and CEO Scott McFarlane said.
“As a category leader, we believe that continuing to invest in innovation and experience is exciting for our customers, partners, and employees,” he said. “We are excited to work with Vista and will benefit from their enterprise software expertise as we build and improve our cloud compliance platform.”
After the conclusion of the deal, Avalara shares will no longer trade on the New York Stock Exchange. Avalara will become a private company managed by Vista.
Smith has an $8-billion stake in Vista and directs its investment strategy.
He also serves on its executive committee, the company’s governing and decision-making body for all matters affecting overall management and strategic direction. He has supervised more than 570 completed transactions, with a total transaction value of more than $265 billion.