Pluralsight Comments on ISS Report
Pluralsight Highlights Significant, Immediate, Certain Value Delivered through Transaction with
Vista Equity Partners
Pluralsight Strongly Disagrees with ISSs Analysis of Valuation, Process and Standalone Prospects
Pluralsight Urges Shareholders to Vote FOR the Transaction with Vista Equity Partners
on the WHITE Proxy Card Today
SILICON
SLOPES, Utah February 18, 2021 Pluralsight, Inc. (NASDAQ: PS), the technology workforce development company, today issued the following statement in response to a report issued by Institutional Shareholder
Services (ISS) relating to the proposed acquisition of Pluralsight by affiliates of Vista Equity Partners (Vista):
We strongly believe that ISS reached the wrong conclusion in failing to recommend that Pluralsight shareholders vote FOR the
transaction with Vista.
The transaction delivers significant, immediate and certain value to Pluralsight shareholders, at 26% and 25%
premiums to the undisturbed price and 30-day volume weighted average price prior to the announcement of the transaction, respectively. The transaction represents a compelling multiple well above the median of
relevant precedent M&A transactions on an EV/NTM revenue basis, and among the highest both on a Rule of 40 basis and for public SaaS companies acquired by a financial sponsor. ISS, however, ignores these facts, and its analysis disregards
critical industry dynamics and associated valuation, nowhere more evident than through its dismissal of Rule of 40 multiple analysisa widely used metric for valuing SaaS companies by accounting for both their growth rate and
profitabilityas a seemingly novel approach,1 and its reliance on gross margins in peer selection that overlooks the lower sales efficiency of Pluralsight relative to the broader
enterprise market.
The transaction also eliminates the significant execution risks and other meaningful challenges facing
Pluralsight as it operates in a highly competitive, rapidly evolving and fragmented market, which has modest barriers to entry, low switching costs and increasing numbers of well-capitalized competitors. However, ISSs analysis fails to
recognize these and other structural challenges facing Pluralsight, including decelerating billings and revenue growth, pricing pressure and increasing customer acquisition costs. The reality is that the market (which has, since the second quarter
of 2019, consistently valued Pluralsight substantially below its peers) does not share ISSs or Eminences views of Pluralsights standalone value or prospects.
The transaction is the product of a robust, independent process to maximize shareholder value, led by an independent Transaction Committee. The
two highly qualified directors comprising the independent Transaction Committee negotiated an offer price 23% higher than Vistas original
1
|
Permission to use quotation neither sought nor obtained.
|