On Wednesday, RBC Capital set a price target for Smartsheet Inc . (NYSE: NYSE: ) shares, raised to $56.50 from a previous target of $51.00. The company maintains a Sector Perform rating on the stock. This adjustment follows the announcement that Smartsheet has entered into a definitive agreement to be acquired by private equity firm Blackstone (NYSE: ) and Vista Equity Partners.
The acquisition deal values ​​Smartsheet at $56.50 per share in cash, with an equity value of approximately $8.4 billion. This offer is an 8% premium to the stock’s closing price on Monday and a 41% premium compared to its 90-day volume weighted average price. The transaction is also valued at 6.1x enterprise value to multiple of trailing twelve month (NTM) revenue and 29x NTM free cash flow (FCF).
RBC Capital’s commentary on the acquisition highlighted the premium offered as “appropriate” given Smartsheet’s limited total addressable (TAM) market and the highly competitive nature of the market. The analyst stated that the acquisition price reflects the market conditions.
The deal is an important step for Smartsheet, a company that specializes in cloud-based platforms for work management and automation. The acquisition of Blackstone and Vista Equity Partners will provide Smartsheet with additional resources and potential for growth in the sector.
Investors and market watchers will be monitoring Smartsheet’s stock performance and other developments regarding the acquisition process. The announcement has had a significant impact on Smartsheet’s market value and may affect the company’s future financial trajectory.
In other recent news, Smartsheet Inc. has agreed to a private acquisition by Vista Partners and Blackstone, a deal valued at $8.4 billion. This transaction has led to changes in the stock’s rating, with Canaccord Genuity, William Blair, and JPMorgan adjusting their ratings to be in line with the acquisition price of $56.50 per share. In addition to these major developments, Smartsheet reported a 17% increase in revenue for the second quarter of fiscal year 2025, totaling $276.4 million, and a similar increase in annual recurring revenue, reaching $1.093 billion.
At the same time, the company announced changes to its executive structure, with Chief Operating Officer Stephen Branstetter moving into an advisory role.
InvestingPro Insights
In light of RBC Capital’s price target adjustment for Smartsheet Inc. (NYSE: SMAR) and the company’s recent acquisition news, a look at the latest InvestingPro data provides additional context for investors. Smartsheet has a market capitalization of $7.71 billion, which is in line with the equity value of the acquisition deal. Despite the negative P/E ratio indicating that the company is currently unprofitable, Smartsheet’s gross profit margin remained 81.61% for the last twelve months in Q1 2023, indicating a strong ability to control costs relative to revenue.
InvestingPro Tips suggests that Smartsheet’s net income will grow this year, with 10 analysts revising earnings upward for the coming period. This optimism is further evidenced by the company’s revenue growth of more than 20% over the same period. Additionally, Smartsheet shares have performed strongly, with returns of 30.99% over the past three months and trading near 52-week highs, reflecting positive sentiment among investors.
For those looking to dig deeper into the company’s prospects, InvestingPro offers additional insights, including more tips on Smartsheet’s financial health and future prospects. To explore further, investors can visit https://www.investing.com/pro/SMAR, where more than 10 additional InvestingPro Tips are available, providing a comprehensive analysis of the company’s performance and potential.
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