Smartsheet Acquires Outfit Bolstering Its Industry-Leading Digital Asset Management Platform Brandfolder

Rhea-AI Summary

Smartsheet (NYSE: SMAR) has acquired Outfit, a leader in design automation, to enhance its Brandfolder platform. This strategic move aims to empower users with advanced templating and creative automation tools, enabling efficient production of on-brand marketing materials. The acquisition, funded through existing cash, is expected to be neutral to Smartsheet’s fiscal 2023 earnings but accretive afterward. Mark Mader, CEO of Smartsheet, emphasized the value of integrating Outfit’s capabilities to strengthen their position in digital asset management.

Positive

• Acquisition of Outfit enhances Brandfolder's capabilities in design automation and templating.
• Expected to strengthen Smartsheet's position in the digital asset management market.
• Transaction funded through existing cash, indicating strong liquidity.
• Integrating Outfit's technology is anticipated to create greater efficiency for marketing teams.

Negative

• Integration challenges could arise from merging Outfit's operations with Smartsheet.
• No immediate financial uplift expected for fiscal 2023 earnings.

Brandfolder customers to gain best-in-class design automation and templating capabilities

BELLEVUE, Wash.--(BUSINESS WIRE)-- Smartsheet, the enterprise platform for dynamic work, has acquired brand management, templating and creative automation platform, Outfit, deepening the company’s investment into its industry-leading digital asset management (DAM) offering, Brandfolder by Smartsheet.

(Graphic: Business Wire)

“Digital assets are the lifeblood for many organizations. More and more we are seeing the value that collaborative work management and digital asset management platforms working together can deliver for our customers,” said Mark Mader, CEO of Smartsheet. “Our goal with Brandfolder is to be the leading creative automation solution on the market, and we’re strategically investing to strengthen our leadership position. Adding Outfit to our award-winning Brandfolder platform extends the content experience we can offer our new and existing customers who want to create content at scale, at speed, on brand–every time.”

Smartsheet plans to quickly integrate Outfit’s design automation and templating capabilities into Brandfolder so existing and new customers can realize ever greater value from a more powerful DAM and content automation experience.

As its fifth acquisition in four years, following Converse.AI, Slope, 10,000ft and Brandfolder, this investment represents Smartsheet’s latest step towards cementing its position as the collaborative work management platform of choice.

The Unique Needs of Today’s Marketers and Creatives

The fast-paced world of marketing and creative design is not slowing down–and in today’s macroenvironment, teams made up of creatives and non-creatives are often being asked to do even more with less. They need to be empowered with the tools they need to do their jobs well, including simple ways to create data-driven, on-brand marketing materials.

The Value of a World-Class DAM Platform

A leader on G2’s Grid for Digital Asset Management Software for 18 consecutive quarters and number one in the 2022 Summer Grid Report, Brandfolder’s unified platform has the power to improve the way marketers and creatives work together to deliver high-velocity, impactful brand experiences with unparalleled efficiency and speed. Brandfolder was also recently named to the Constellation ShortList™ for Digital Asset Management (DAM) for High-Volume Commerce in Q3 2022. A new commissioned study, The Total Economic Impact^TM of Brandfolder, recently found that organizations using Brandfolder realized greater efficiencies for both marketing and creative teams, including a 40% increase in team efficiency and up to 90% time savings when searching for digital assets.

The Power of Automated Templating Solutions

Established in 2015 and headquartered in Brisbane, Australia, Outfit helps organizations around the globe maintain brand consistency and solve marketing production challenges by automating the production of digital and print marketing materials with flexible, constraints-based templates. Outfit’s customers, including Subaru, Cloudera, Red Hat, Monash University and Durham University, gain more control over their brand while empowering teams to produce more quality material, faster, in widely distributed locations.

“There’s a world-class product and technology fit between Outfit and Brandfolder by Smartsheet, but equally important for me was joining an incredible company who values excellence, innovation, and the pursuit of progress in the same way that we have at Outfit,” said Bruce Stronge, Founder and CEO of Outfit. “I’m excited for our talented team to join the Smartsheet family where together we will create incredible value for our mutual customers.”

Financial Details

Smartsheet has funded the transaction with existing cash on its balance sheet. The transaction is expected to be neutral to Smartsheet’s fiscal year 2023 non-GAAP earnings per share and free cash flow, and accretive thereafter.

The transaction, which has been unanimously approved by the board of directors of both Smartsheet and Outfit, closed today. Stronge and a majority of the Outfit team will join Smartsheet as full-time employees, reporting up through Steven Baker, VP and General Manager, Brandfolder.

Additional details regarding the anticipated financial impact of the acquisition will be provided in conjunction with Smartsheet’s second quarter of fiscal year 2023 earnings conference call and webcast today at 4:30 p.m. ET (1:30 p.m. PT). The dial-in number to access the call will be (888) 440-6385 or +1 (646) 960-0180 (outside of the U.S.). The conference ID is 7672979. The webcast will be open to listeners through the events section of the Smartsheet investor relations website: https://investors.smartsheet.com.

A replay of the call via webcast will be available at https://investors.smartsheet.com or by dialing (800) 700-2030 or +1 (647) 362-9199 (outside of the US). The dial-in replay will be available until the end of day on September 8, 2022. The webcast replay will be available for one year.

Forward-Looking Statements

This press release contains “forward-looking” statements that are based on our management’s beliefs and assumptions and on information currently available to management. Forward-looking statements include, but are not limited to, statements about Smartsheet’s outlook for the third fiscal quarter and the full fiscal year ending January 31, 2023, and Smartsheet’s expectations regarding possible or assumed business strategies, potential growth and innovation opportunities, new products, and potential market opportunities.

Forward-looking statements generally relate to future events or our future financial or operating performance. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “believe,” “continue,” “could,” “potential,” “remain,” “will,” “would,” or similar expressions and the negatives of those terms. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These risks include, but are not limited to, risks and uncertainties related to: our ability to achieve future growth and sustain our growth rate; our ability to attract and retain customers and increase sales to our customers; our ability to develop and release new products and services and to scale our platform; our ability to increase adoption of our platform through our self-service model; our ability to maintain and grow our relationships with strategic partners; the highly competitive and rapidly evolving market in which we participate; our ability to identify targets for, execute on, or realize the benefits of, potential acquisitions; our international expansion strategies; and the impact of the COVID-19 pandemic. Further information on risks that could cause actual results to differ materially from forecasted results is included in our filings with the SEC, including our Quarterly Report on Form 10-Q for the quarter ended July 31, 2022 to be filed with the SEC. Any forward-looking statements contained in this press release are based on assumptions that we believe to be reasonable as of this date. Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons if actual results differ materially from those anticipated in the forward-looking statements.

About Smartsheet

Smartsheet (NYSE: SMAR) is the enterprise platform for dynamic work. By aligning people and technology so organizations can move faster and drive innovation, Smartsheet enables its millions of users to achieve more. Visit www.smartsheet.com to learn more.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220901005813/en/

Chrissy Vaughn

pr@smartsheet.com

Source: Smartsheet

FAQ

What is the purpose of Smartsheet's acquisition of Outfit?

The acquisition aims to enhance Brandfolder's design automation and templating capabilities, providing users with better tools for creating marketing materials.

When was the acquisition of Outfit by Smartsheet finalized?

The acquisition was closed on September 1, 2022.

How will the acquisition impact Smartsheet's financial performance?

The transaction is expected to be neutral to Smartsheet's fiscal year 2023 non-GAAP earnings but accretive thereafter.

What strategic advantages does Smartsheet gain from acquiring Outfit?

Smartsheet strengthens its digital asset management offering and improves its capabilities in marketing automation and brand consistency.

What will happen to Outfit's team after the acquisition?

The majority of Outfit's team will join Smartsheet as full-time employees.