A consortium of private credit lenders, comprising Blackstone Inc. (NYSE:BX), Blue Owl Capital Inc. (NYSE:OWL), and Ares Management Corp. (NYSE:ARES), is set to provide a $2.65 billion credit facility to support the $6.9 billion acquisition of Squarespace Inc. by Permira Holdings, sources close to the matter reveal. Blackstone Inc. will manage half of the facility, with Blue Owl Capital Inc. and Ares Management Corp. each handling a quarter. Blue Owl will also serve as the administrative agent.
The financing package includes a $2.1 billion term loan, a $300 million delayed draw loan, and a $250 million revolving credit facility. This financial arrangement is integral to the acquisition strategy, although representatives from Squarespace, Blackstone, Blue Owl, Ares, and Permira have not provided comments on the record.
As of March 31, Squarespace reported over $500 million in outstanding debt. The new financing is expected to increase the company’s borrowing costs, with pricing on its syndicated debt varying between 1.25 and 2.25 percentage points above the Secured Overnight Financing Rate, as per recent filings.
The terms of the private loan include an interest rate of 5 percentage points over the benchmark, with an initial offer price of 99 cents on the dollar. Depending on the leverage, the spread could reduce to 4.75 percentage points.
In a related development, Squarespace announced that existing investors General Atlantic and Accel plan to reinvest in the company under the new agreement. The transaction is slated for completion by the fourth quarter of 2024.
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