Why Vista Equity Partners Is Buying Avalara (AVLR) For $8.4 Billion

By Amit Chowdhry ● Aug 8, 2022
  • Vista Equity Partners announced it is buying Avalara (AVLR) for $8.4 billion. This is why.

Avalara – a leading provider of tax compliance automation for businesses of all sizes – announced it has entered into a definitive agreement to be acquired by Vista Equity Partners, a leading global investment firm focused exclusively on enterprise software, data, and technology-enabled businesses, in partnership with institutional co-investors.

Under the terms of the agreement, Vista is going to 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% over the company’s closing share price as of July 6, 2022, the last trading day prior to media reports regarding a potential transaction.

Launched in 2004, Avalara’s success is built upon 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. And 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.

Deal Details

The deal – which was unanimously approved by the Avalara Board of Directors – is expected to close in the second half of 2022, subject to customary closing conditions, including approval by Avalara shareholders and receipt of regulatory approval. Closing of the transaction is not subject to a financing condition.

Upon completion of the deal, Avalara’s shares will no longer trade on the New York Stock Exchange, and Avalara will become a private company. And the company will continue to operate under the Avalara name and brand.

KEY QUOTES:

“For nearly two decades, Avalara has ambitiously pursued its vision to automate global compliance, making tax less taxing for businesses and governments around the world. As a leader in this category, we believe our continued investment in innovation and experience is exciting for our customers, partners, and employees. We are pleased to partner with Vista and will benefit from their expertise in enterprise software as we build and improve upon our cloud compliance platform.” 

— Scott McFarlane, co-founder and CEO of Avalara

“Vista has built a reputation as a preferred partner for founder-led, next-generation software companies. We look forward to working with Scott and the entire Avalara team to advance their vision and continue delivering innovative solutions to customers.”

— Monti Saroya, Co-Head of Vista’s Flagship Fund and Senior Managing Director

“Avalara is a mission-critical platform serving customers in a variety of end-markets, including retail, manufacturing, hospitality, and software. Avalara’s solutions, its commitment to product innovation, and its network of extensive partner integrations, resellers, and accountants make it a true leader in the space.”

— Adrian Alonso, Managing Director at Vista