Vista Equity Partners will take the Northern Virginia event planning company private.
AB Wire
WASHINGTON, DC: Cvent, a Northern Virginia event planning company founded by Indian American Reggie Aggarwal, is being bought by the private equity firm Vista Equity Partners LLC for a whopping $1.65 billion.
The San Francisco-based Vista will take Cvent private once the acquisition is completed. The purchase price is 69 percent more than Cvent’s market capital. The event management technology company’s shares closed at $21.30 on Friday, the last trading day before the deal was announced.
A press release issued by the Tysons Corner, VA,-based company on April 18, announcing the “all-cash deal,” said: “Vista will acquire 100 percent of the outstanding shares of Cvent common stock for a total value of approximately $1.65 billion. Cvent stockholders will receive $36.00 in cash per share, representing a premium of approximately 69 percent over Cvent’s closing price on April 15, 2016 and a 70 percent premium to Cvent’s average closing price over the past 30 trading days.
Cvent has a global work force of 2,000 employees and a customer base of over 15,800.
“We are pleased to announce this transaction that provides a significant premium for Cvent stockholders,” Aggarwal said. “This milestone is the next chapter in our 17-year history. With Vista’s financial strength to invest in Cvent now and in the future, we will be better positioned to deliver innovative solutions that transform the meetings and events industry, and to offer employees new opportunities for career growth.”
The Cvent release said the company’s headquarters will remain in Tysons Corner. “The transaction is expected to close in the third calendar quarter of 2016,” it added.
Aggarwal, a lawyer by profession, founded the company in 1999, using his own savings. His other investors were his parents and a few cofounders. During the dotcom boom, it raised $17 million. But after 9/11, the company went through a rough patch and, with only $400,000 in the bank, it had to lay off 80 percent of its employees.
Aggarwal didn’t take salary for three years and lived in the basement of his parents.
“We went back to the basics,” he told the Washington Business Journal in a 2014 interview. “Hire the best people, build the best products, and focus on your customers.”
Going back to basics led to a period of sustained growth. In 2011, the company raised $136 in first round funding, and two years later, it would raise $135 million during its IPO.