Pluralsight Independent Transaction Committee and Board of Directors Reiterate Support for Transaction with Vista Equity Partners

Author: Benzinga Newsdesk | February 01, 2021 06:15am

All-Cash Transaction Delivers Significant, Immediate and Certain Value to Shareholders

Independent Transaction Committee and Pluralsight Board of Directors Comment on Process and Strategic Benefits of the Transaction

Urge Shareholders to Vote “FOR” the Proposed Transaction

SILICON SLOPES, Utah, Feb. 01, 2021 (GLOBE NEWSWIRE) -- Pluralsight, Inc. (NASDAQ:PS), the technology workforce development company, today issued the following shareholder letter from Pluralsight's Board of Directors recommending shareholders vote “FOR” the pending acquisition of Pluralsight by affiliates of Vista Equity Partners (“Vista”), announced on December 13, 2020:

Dear Pluralsight Shareholders:

Pluralsight recently announced a value-maximizing transaction for its shareholders under which it will be acquired by affiliates of Vista, a leading global investment firm, for $20.26 per share in cash. Pluralsight’s independent Transaction Committee and the full Pluralsight Board are each confident that this transaction, which follows a thoughtful and thorough examination of Pluralsight’s future prospects and challenges and is the result of a robust market-check process, is in the best interests of all Pluralsight shareholders. Your vote is very important. Please vote the WHITE proxy card “FOR” the merger proposal and all other proposals included in the definitive proxy statement for the March 2, 2020 Special Meeting of Pluralsight Shareholders.

THE TRANSACTION PROVIDES SIGNIFICANT, IMMEDIATE AND CERTAIN VALUE TO PLURALSIGHT SHAREHOLDERS

The Transaction Committee and the Pluralsight Board each believes that the transaction with Vista is in the best interests of all Pluralsight shareholders. The transaction delivers certainty in the form of an all-cash offer with committed financing at compelling premia and multiples, including:

• Approximately 25% premium to the 30-day volume-weighted average price of the Class A common stock prior to announcement of the transaction;
• Approximately 26% premium to the undisturbed closing price of the Class A common stock on November 9, 2020 (the last trading day before market rumors that Pluralsight was in discussions regarding a potential sale);
• 9.2x and 8.1x the last 12 months’ and next 12 months’ revenue, respectively, which compare favorably to precedent M&A transactions; and
• 0.54x the Rule of 40 Adjusted next 12 months’ revenue multiple, which compares favorably to precedent M&A transactions.

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/105e8c29-9593-44a8-b48d-7a40784babcf

THE TRANSACTION REFLECTS A CAREFUL CONSIDERATION OF PLURALSIGHT’S PERFORMANCE AND RISKS TO ITS LONG-TERM PROSPECTS

Pluralsight competes in a highly competitive, rapidly evolving and fragmented market. While Pluralsight’s total addressable market is substantial, so is the extent of our competition. In the past few years, Pluralsight has seen significant changes in the competitive landscape through (1) the emergence of new, well-capitalized competitors; (2) industry consolidation; and (3) the continued evolution of free video tutorial options from user-generated communities leveraging YouTube and other social media platforms. We compete with a range of in-person ILT, legacy enterprise SaaS, consumer-centric SaaS and free solutions, including those backed by some of the largest companies in the world. Moreover, the discretionary nature of our services creates significant volatility based on changes in customer budgets and timing, making Pluralsight particularly susceptible to changes in market conditions.

Since we went public, we have at times not met Wall Street expectations for billings in our quarterly financial results. In addition, market expectations for Pluralsight have declined, with Wall Street’s two-year revenue CAGR target decreasing from 30% in June 2018 to 27% in November 2019 and 21% in November 2020. In addition, Pluralsight has historically been unprofitable. As a result of sustained volatility and slowing growth, Pluralsight’s stock has traded down after eight of our 10 quarterly earnings releases, with an average decline of 6%.

While we are pleased to have delivered growth in revenue and billings this quarter, albeit continuing to lag historical year-over-year growth rates, the Transaction Committee and the Pluralsight Board remain concerned about the challenges facing Pluralsight and the impact—in terms of stock price volatility—that these challenges will have on the value of our shares for shareholders. In addition, Pluralsight increasingly believes that a meaningful portion of its future growth is likely to be inorganic and will occur through the purchase of other companies and product offerings. The pursuit of these growth opportunities is likely to require substantial additional capital resources. These capital resources might only be available at significant cost to Pluralsight (if available at all) or through equity offerings that would potentially significantly dilute our shareholders. Even if capital is available, these growth opportunities may not be successful, thereby increasing the risk to Pluralsight’s shareholders associated with Pluralsight remaining a public company.

Given the significant risks to Pluralsight’s business, long-term prospects and shareholder value, Pluralsight’s Transaction Committee and Board concluded that the price offered by Vista was superior to the potential long-term value that might be achieved by Pluralsight on a standalone basis. Both the Transaction Committee and the Pluralsight Board believe that unless Pluralsight can achieve sustained superior growth, there is a significant risk that Pluralsight’s multiple could decline meaningfully and remain depressed for some time. In contrast, the transaction with Vista provides immediate and certain value to our shareholders.

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