E-Signature Company DocuSign Explores a Deal
Suitors for the $11 billion company could include private equity and technology firms
E-signature company DocuSign DOCU 14.22%increase; green up pointing triangle is working with advisers to explore a sale, in what could be one of the largest leveraged buyouts in recent memory.
Conversations are in the early stages, people familiar with the situation said, and there are no guarantees a deal will be reached. DocuSign could attract interest from private-equity firms and technology companies.
A deal could be sizable, given the San Francisco company’s market capitalization of over $11 billion.
DocuSign’s technology allows users to securely send and sign documents from almost anywhere, using any device. Customers range from individual business owners to large corporations, including smartphone maker Apple, and Aon, the big insurance broker, according to the company’s website.
DocuSign went public in 2018 and was valued at about $6 billion at the time. The company, founded in 2003, was among a class of unicorns that made their public market debut that year, including Spotify and Dropbox.
The company thrived during the pandemic as ubiquitous remote work fueled demand for virtual signing of deals, mortgage papers and other documents. However, demand for the technology eased faster than expected as return-to-office trends accelerated and the combination of rising inflation and fears of a recession cooled the market.
DocuSign’s stock is close to flat so far this year. For the period ended Oct. 31, its quarterly revenue rose 9%, beating market expectations, and it swung to a profit.
Private-equity firms have been less active this year than normal due to a consistent gap between buyer and seller price expectations as well as elevated interest rates that make doing deals more expensive. Leveraged buyouts, in which firms employ swaths of debt to do their largest deals, are down some 30% so far this year, according to data-provider Dealogic.