Smartsheet Attracts Buyout Interest Amid Tech Sector Deals

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Smartsheet, a popular workplace software company, is attracting attention from buyers. Valued at $6.6 billion, it has caught the eye of buyout firms. To handle this interest, Smartsheet is working with Qatalyst Partners. However, they haven’t decided whether to sell or stay independent.

Smartsheet’s shares rose 5.5%, closing at $47.81. This increase shows that investors are hopeful about the company’s future. Buyout firms are looking for tech deals this year after taking a break in 2023 due to high interest rates.

Smartsheet’s software helps big companies manage and automate their work. It is more advanced than traditional tools. Big companies like Pfizer, Cisco, and American Airlines use Smartsheet. Impressively, 85% of Fortune 500 companies are their clients.

Even though Smartsheet makes strong sales, it still operates at a loss. However, they are working on improving their profits. In the last fiscal year, their revenue went up from $714 million to $904 million. At the same time, their losses decreased from $213 million to $96 million. By April, they had $334 million in cash and no debt.

Banks are careful about lending money for buyouts. Because of this, private equity firms are looking at other lenders known as shadow banks. These lenders give loans based on sales, not cash flow. For example, Vista Equity had trouble with Pluralsight after taking a loan based on sales.

Private equity deals increased by 41% in the first half of this year. This rise is due to many companies going private. Smartsheet might become part of this trend, though they haven’t decided yet.

Smartsheet focuses on growth over profits, which attracts buyers. They keep improving their services for big clients. This approach is gaining market interest despite their financial losses.

Smartsheet’s future is still undecided, but the interest shows its value. Whether they sell or stay independent, Smartsheet’s role in workplace collaboration is clear. Their advanced platform and strong client base make them a major player in the industry.