Avalara Goes Private at $93.50/share

Avalara announced on August 8, 2022 that they intend to go private at a per share price of $93.50 which is about a 2% discount off the Friday 8/5/2022 closing price of $95.55. This remains subject to shareholder approval.

The company’s stock price had traded as high as $191.67 within the past year. Avalara went public on June 15, 2018 when it’s shares closed at $44.94.

From the release:

Under the terms of the agreement, 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, inclusive of Avalara’s net debt. The per share purchase price represents a premium of 27 percent over the Company’s closing share price as of July 6, 2022, the last trading day prior to media reports regarding a potential transaction.

Founded in 2004, Avalara’s success is built up on an extensive partner network; large tax content data and repository to help customers stay up to date on dynamic tax rules and regulations; and its cloud-native, end-to-end multi-product tax compliance portfolio. In partnering with Vista, Avalara will look to build on its successful platform by refining its go-to-market strategy, expanding its international workforce, streamlining its systems architecture, and continuing to pursue value-accretive M&A opportunities.

What Does It Mean?

Avalara should get ready for some R&R. Reorganize and Re-Sell. This is a company that has grown pretty quickly yet hasn’t achieved GAAP net income since going public in June 2018. Should the deal receive shareholder approval it almost certainly sets the stage for changes that the company prefers to have play out behind the curtain of a privately held company.

As with most private equity deals, the ultimate outcomes is a sale to another buyer or perhaps an IPO.