Vista Equity Partners to Acquire Tax Compliance Software Maker Avalara for $8.4 Billion

Avalara Inc., a leading provider of corporate tax compliance software, today announcement that it has agreed to be acquired by Vista Equity Partners in an $8.4 billion deal.

The announcement comes about a month after the first reports of the transaction were published. Vista Equity Partners’ $8.4 billion offer is $93.50 by Avalara stock, a 27% premium to its last closing price before acquisition reports. The deal is expected to be completed by the end of the year.

Avalara provides a cloud-based tax compliance platform that automates tasks such as applying sales tax to in-store purchases and facilitates related calculations. The platform also offers other features, including a tool that helps companies keep up with regulatory developments. Avalara provides its core feature set alongside industry-specific capabilities for businesses in industries such as the retail and manufacturing segments.

According to Avalara, its platform is used by more than 30,000 organizations ranging from small businesses to publicly traded companies. The company counts Box Inc., Pinterest Inc. and Adidas AG among its customers.

Avalara published its second quarter earnings report in conjunction with today’s acquisition announcement. The company posted a net loss of $55.8 million on revenue of $208.6 million in the quarter ended June 30. Compared to the second quarter of 2021, Avalara’s revenue increased by 23%.

“For nearly two decades, Avalara has ambitiously pursued its vision to automate global compliance, lowering taxes for businesses and governments around the world,” said Avalara Co-Founder and Chief Executive Officer Scott. McFarlane. “We are excited to partner with Vista and benefit from their enterprise software expertise as we develop and enhance our cloud compliance platform.”

Avalara said it plans to work with Vista Equity Partners to improve its go-to-market strategy and expand internationally. At the same time, the company intends to make further acquisitions to support its growth plans. Avalara has acquired several other tax compliance software market players in recent quarters to expand its product portfolio.

“Vista has established a reputation as the preferred partner for next-generation, founder-led software companies,” said Monti Saroya, co-manager of Vista Equity Partners flagship fund and senior managing director of the firm.

The acquisition of Avalara is the latest in a series of recent enterprise software investments by Vista Equity Partners. Previously, the investment firm bought a majority stake in BetterCloud Inc., the developer of a platform that helps companies manage software-as-a-service applications used by their employees. Vista Equity Partners has partnered with several other investors to to acquire Citrix Systems Inc. for $16.5 billion.

Image: Avalara

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