Sprout Social's founders in bid to take social media tools provider private, sources say

Sprout Social

20/05/2024 20:11

By Milana Vinn and Anirban Sen
       NEW YORK, May 20 (Reuters) - The founders of Sprout
Social  SPT.O  are in talks to take the provider of social media
tools to businesses private, changing course after listing the
company in the stock market five years ago, people familiar with
the matter said on Monday. 
    Founders including Justyn Howard, Gil Lara, Aaron Rankin and
Peter Soung control Sprout through a special class of shares.
They have held talks with private equity firms that could
partner with them on a deal, the sources said.
    The Chicago, Illinois-based company's board has formed a
special committee of independent directors to consider a deal
and has hired investment bank Morgan Stanley  MS.N  as its
adviser, the sources added.
    The sources cautioned that no deal is certain and requested
anonymity because the matter is confidential. Sprout Social and
Morgan Stanley did not immediately respond to requests for
comment. 
    Sprout Social makes cloud-based software and technology
tools that helps companies manage their social media strategy.
Prominent customers include enterprise software maker Salesforce
 CRM.N , writing tools maker Grammarly, and financial services
firm Plaid  4165.T .
    The company's shares, which have risen about 87% since its
initial public offering in 2019, have lost a third of their
value since May 2, when Sprout forecast full-year revenue below
market expectations. The company now has a market value of $1.7
billion.
    Last month, Sprout Social said the company's president, Ryan
Barretto, would succeed Howard as CEO starting in October.

 (Reporting by Milana Vinn and Anirban Sen in New York; Editing
by Lisa Shumaker)
 ((Anirban.Sen@thomsonreuters.com; Twitter: @asenjourno; Reuters
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