San Francisco and London-based enterprise content collaboration company Huddle has announced plans to be acquired by private equity firm Turn/River in a deal estimated at $89 million, according to Business Insider.
As Huddle has struggled to free up cash in the recent period, the enterprise software firm has been urgently seeking a buyer or a new round of funding.
The tech firm was reportedly valued between $250 million and $300 million in a previous fundraising round. Backed by investors including Zouk Capital, Icon Ventures, Matrix Partners and Eden Ventures, Huddle has raised about $89 million in venture funding to date.
The company rivals Silicon Valley firms such as Box and Dropbox in the high-growth collaboration software space.
In a blog post on Sunday, which was later deleted, Huddle announced Turn/River as a majority shareholder. On Monday, the company sent a letter to shareholders and employees notifying them that San Francisco-based Turn/River would be acquiring its shares.
“Huddle is delighted to announce that private equity firm, Turn River, will become its majority shareholder. Huddle has become the de facto tool for document collaboration within many industries (most notably public sector, and advisory,) and it is now time to expand the success across other sectors, and in other geographies,” Chief Executive Officer Morten Brogger wrote in the post.
The letter confirms that Turn/River, operating in the UK as “Harmony,” will acquire Huddle’s shares under a “drag along” covenant. This means that majority shareholders can force minority shareholders to accept a buyout. As a result, only Huddle’s preferred shareholders will see a payout, while early investors and some management may profit and ordinary shareholders, including current and former employees, will lose out. Huddle will pay its ordinary shareholders $100 each as a gesture of goodwill.
In April, Huddle said it needed to quickly raise at least $5 million or find a buyer by June.