Blackstone and Vista Equity Partners’ $8.4bn acquisition of work management software company Smartsheet has set the stage for a major payday for New York-based hedge fund Eminence Capital, known for its strategic bets on future takeover targets, according to a report by Forbes.
Smartsheet announced the all-cash deal on Tuesday with shareholders set to receive $56.50 per share, a 41% premium over the stock’s average closing price for the past three months, according to the company’s press release.
Eminence Capital, led by founder Ricky Sandler, has emerges as one of the potential big winners in this deal, with the $7.2bn value investing firm having held 4.3 million Smartsheet according to its second-quarter filings. While that position may have changed since then, Eminence was the largest hedge fund holder of the stock at the end of June. Smartsheet was also the fund’s sixth largest holding, according to FactSet.
Eminence began purchasing Smartsheet shares in the latter half of 2022 when the stock hit its lowest point of the decade. The firm initially bought 2.4 million shares at approximately $34 each and later expanded its position to 4.3 million shares, with an average purchase price of around $36 per share. With Smartsheet’s acquisition price set at $56.50, Eminence is poised to secure a profit of roughly $90 million – a 60% gain in just two years.
Eminence Capital did not immediately respond to requests for comment on the Smartsheet deal, which is expected to close by the end of January.
