Avalara Q2 2022 Financial Analysis
In Our View, Avalara's Board Did Not Negotiate "Heavily"; It Caved
Avalara heavily negotiated to maximize potential shareholder value
Preliminary Bids
6/23/22
$97.00-$101.00
Preliosisory
indication of interest
Source Avalara x
7/10/22
Preview of Oz
earnings with
Vate and Party A
6/23/22
$90.00 - $95.00
Polimery
cor of ot
2/12/22
Party A informet
submit a revised indic
erence
unfavorable moerotis
and the revised in and
Mely beaubriantiully buen tie
preminary la
June 2022
Subsequent Negotiation
8/4/22
597.00-101.00
Ascona
8/5/22
505.75
Avera
second co
7/19/22
$91.00
Unsolicited revised
indication of interest
8/4/22
$91.00
Verbal
Indication
July 2022
8/4/22
$92.25
Revised
indicarian
Avalara
August 2022
3
O O
Avalara
Vista
0
8/5/22
$93.50
"Best and fina
per Vista
Party A
1
2
3
Avalara attempts to depict Party A as a genuine competitor to Vista, but Party A
never submitted a final bid; by July 12, Vista was the only party left in the
process
Like several other parties, Party A withdrew citing, among other issues,
continued deterioration of the macroeconomic environment¹
After Vista failed to submit a bid by the due date, the Board terminated the sale
process²
In our view, the Board should have held firm in its decision that the sale process
had not yielded an acceptable offer and recommitted to achieving Avalara's
transformation in the public markets
Instead, the Board appeared to eagerly re-engage with Vista even after it
presented a significantly inferior indication of interest³
Avalara's Board seems to desire recognition for "heavily negotiating" a 3% price
bump
However, this "heavily negotiated” price is nearly 4% lower than the low end of
Vista's initial indication of interest
In our view, the Avalara Board should not be credited for re-engaging with Vista and accepting an offer price that was below
Vista's initial indication of interest
13
2 Id.
1 Source: Avalara Definitive Proxy Statement, filed with the SEC on September 12, 2022 at page 41 ("Party A informed Goldman Sachs that they would not submit a definitive proposal because... general macroeconomic conditions were uncertain and unfavorable...").
3 Id. at page 42 (indicating that after Vista submitted a revised indication of interest at $91/share - which Scott McFarlane noted was significantly lower than Vista's initial range - the Board nevertheless directed its counsel to advance the merger agreement with Vista).
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