Vista Equity Partners and Blackstone Inc are in talks with private credit lenders to secure a $3.2bn debt package to support their planned acquisition of software maker Smartsheet Inc, according to a report by Bloomberg.
The report cites unnamed sources familiar with the deal as confirming that the private equity firms are reportedly seeking a $2.9bn recurring revenue loan and an additional $300m revolving credit facility. The discussions are still in the early stages, and the terms of the deal could change, according to Bloomberg’s sources.
Vista and Blackstone, along with other private equity firms, are part of a consortium interested in acquiring the workplace software provider, which currently has a market capitalisation of about $7bn. News of the potential acquisition was originally reported by Reuters on 5 September.
For the debt package, Vista and Blackstone have proposed pricing of 6.25 to 6.5 percentage points over the Secured Overnight Financing Rate (SOFR). They are also seeking the ability to pay up to half of the interest margin in kind, meaning some interest payments could be made with additional debt. Once Smartsheet generates sufficient positive earnings to switch to an earnings-based loan, the pricing would drop to 5.75 percentage points over SOFR.
Representatives from Vista, Blackstone, and Smartsheet declined to comment on the ongoing discussions.
