DEFM14A: Semrush to Merge with Adobe in $12.00 Cash Deal

Semrush Holdings, Inc. stockholders are urged to approve a definitive merger agreement for acquisition by Adobe Inc. at $12.00 per share in cash.

Summary

• Semrush Holdings, Inc. (Semrush) has entered into an Agreement and Plan of Merger with Adobe Inc. (Adobe) and Fenway Merger Sub, Inc., a wholly owned subsidiary of Adobe.
• Merger Sub will merge into Semrush, with Semrush surviving as a wholly owned subsidiary of Adobe.
• Each share of Semrush Class A and Class B Common Stock will be converted into the right to receive $12.00 in cash, without interest.
• The Semrush Board of Directors unanimously approved the Merger Agreement and recommends stockholders vote FOR the Merger Agreement Proposal and other related proposals.
• The $12.00 per share consideration represents a 77.5% premium to the closing price of Semrush's Class A Common Stock on November 18, 2025, the last trading day prior to the signing of the Merger Agreement.
• Stockholder approval requires a majority of the voting power of outstanding Semrush Common Stock.
• Key stockholders, including Oleg Shchegolev, Dmitry Melnikov, William R. Wagner, and Greycroft Growth II, L.P., collectively representing approximately 75% of the voting power, have entered into voting and support agreements.
• Semrush equity awards will be treated as follows: vested options and RSU Awards held by non-employee directors or certain contractors/service providers will be cashed out at the Merger Consideration minus exercise price (for options) or full Merger Consideration (for RSUs); unvested in-the-money options, other RSU Awards, and PSU Awards will be assumed and converted into Adobe RSU Awards with no less favorable vesting terms; options with an exercise price equal to or greater than the Merger Consideration will be cancelled for no consideration.
• The merger is expected to be completed in the first half of 2026, subject to stockholder approval and regulatory clearances, including the expiration or termination of the HSR Act waiting period.

Sentiment

Score: 8

Explanation: The sentiment is highly positive for Semrush stockholders, driven by a substantial cash premium and unanimous board recommendation. The financial advisor's fairness opinion and the lack of superior alternative offers reinforce the favorable terms. While standard merger risks are present, the overall outlook for existing shareholders is strong.

Positives

• The Merger Consideration of $12.00 per share provides attractive and compelling value for Semrush stockholders.
• The offer represents a significant premium of 77.5% to the closing price of Class A Common Stock on November 18, 2025.
• The all-cash nature of the Merger Consideration offers near-term value certainty and liquidity to stockholders.
• Negotiations with Adobe resulted in an increased offer price from an initial $10.00 per share to $12.00 per share, along with contractual protections to increase closing certainty.
• A market check conducted by Semrush's financial advisor, Centerview Partners LLC, did not yield any superior written offers from other potential buyers, indicating the current offer is the best available.
• The likelihood of consummation is high due to limited closing conditions, the absence of a financing condition, and the parties' commitment to obtain regulatory approvals.
• Adobe's strong business reputation and financial resources provide confidence in its ability to complete the acquisition.
• The Merger Agreement includes provisions allowing the Semrush Board to consider unsolicited superior proposals and to change its recommendation in response to an intervening event, subject to certain conditions and a termination fee.
• Voting and Support Agreements from stockholders representing approximately 75% of the voting power increase the certainty of obtaining stockholder approval.
• Appraisal rights are available to eligible Semrush stockholders under Delaware law, allowing them to seek a judicial determination of fair value for their shares.

Negatives

• As a cash transaction, Semrush stockholders will not participate in the future earnings or growth of the surviving corporation or benefit from any appreciation in its value.
• There is a risk that the merger might not be completed, potentially due to failure to obtain regulatory approvals, which could lead to a significant decline in the Class A Common Stock price and disrupt Semrush's business operations.
• The $63,000,000 termination fee payable by Semrush under certain circumstances, along with restrictions on soliciting other acquisition proposals, could potentially discourage competing third-party offers.
• The merger process may cause disruption to Semrush's business, distract management from day-to-day operations, and potentially lead to attrition of key employees.
• Restrictions on Semrush's business operations and activities prior to the completion of the merger may limit its ability to pursue new business strategies or opportunities.
• The announcement of the merger could negatively impact relationships with employees, customers, suppliers, and other parties, and may lead to litigation.
• Semrush is subject to various remedies available to Adobe under the Merger Agreement in certain circumstances, and enforcing Semrush's rights and remedies through litigation could be expensive and difficult.

Risks

• The timing to consummate the Merger is uncertain.
• A condition of closing of the Merger may not be satisfied, or the closing may not otherwise occur.
• A required regulatory approval for the Merger may not be obtained or may be subject to unanticipated conditions.
• Management and employee time may be diverted to transaction-related issues, impacting ongoing business operations.
• Announcements related to the proposed transaction could adversely affect the market price of Class A Common Stock.
• The proposed transaction and its announcement could adversely affect Semrush's ability to retain customers, hire key personnel, and maintain relationships with suppliers and customers.
• An event, change, or circumstance could give rise to the termination of the Merger Agreement, potentially requiring Semrush to pay a termination fee.
• Competing offers may be made.
• Unexpected costs, charges, or expenses may result from the Merger.
• Potential litigation relating to the Merger could be instituted against the parties or their directors, managers, or officers.
• Worldwide economic or political changes could affect demand for Semrush's products and impact profitability.
• Disruptions in global credit and financial markets, changes in international trade agreements, cyber-security vulnerabilities, foreign currency volatility, swings in consumer confidence, raw material issues, and outcomes of legal proceedings are potential challenges.

Future Outlook

The merger is expected to be completed in the first half of 2026, after which Semrush will cease to be a publicly traded company and its Class A Common Stock will be delisted from the NYSE and deregistered under the Exchange Act. If the merger is not completed, Semrush will remain an independent public company, and its stock price is likely to decline significantly from current levels, which reflect the anticipated merger.

Management Comments

• William Wagner, Chief Executive Officer, expressed gratitude for continued stockholder support.
• The Semrush Board of Directors unanimously determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, are fair to, and in the best interests of, Semrush and Semrush stockholders.
• The Semrush Board of Directors unanimously recommends that Semrush stockholders vote FOR the Merger Agreement Proposal, FOR the Merger-Related Compensation Proposal and FOR the Adjournment Proposal.

Industry Context

Semrush, a leading online visibility management SaaS platform, is being acquired by Adobe, a global technology company focused on personalized digital experiences. This acquisition suggests a strategic move by Adobe to integrate Semrush's AI-powered tools for SEO, paid advertising, social media, local marketing, brand marketing, and content marketing into its broader digital experience offerings. This aligns with a broader industry trend towards comprehensive, integrated marketing and digital solutions, where companies seek to provide end-to-end platforms for managing digital presence and customer engagement.

Comparison to Industry Standards

• Centerview Partners LLC's 'Selected Public Company Analysis' compared Semrush to companies like Amplitude, Braze, DoubleVerify Holdings, Freshworks Inc., Similarweb Ltd., Sprinklr, Inc., Sprout Social, Inc., and Zeta Global Holdings, Corp. The Merger Consideration of $12.00 per share implies NTM Revenue Trading Multiples and NTM Adj. EBITDA Trading Multiples that are generally at or above the median of these comparable companies.
• Centerview's 'Selected Precedent Transactions Analysis' reviewed transactions involving companies such as Jamf Holding Corp., Integral Ad Science Holding Corp., PROS Holdings, Inc., Olo Inc., Zuora, Inc., WalkMe Ltd., Livevox Holdings, Inc., and Momentive Global Inc. The implied NTM Revenue Multiples for the Semrush merger fall within the upper end of the range observed in these precedent transactions, suggesting a favorable valuation compared to similar past acquisitions.

Management Changes

Corporate Governance

Legal Proceedings

• Several purported Semrush stockholders have sent letters alleging that the preliminary proxy statement omits and/or misleadingly describes certain material information about the transaction, seeking additional disclosures. Semrush believes these claims are without merit but cannot predict the outcome or future similar claims.

Related Party Transactions

• Oleg Shchegolev, Dmitry Melnikov, William R. Wagner, and Greycroft Growth II, L.P. (Support Stockholders) entered into Voting and Support Agreements with Adobe, agreeing to vote their shares (approximately 75% of voting power) in favor of the merger.
• Semrush's directors and executive officers have interests in the merger that differ from general stockholders, including accelerated vesting of equity awards, potential severance payments, and transaction bonuses, which were considered by the Semrush Board of Directors.

Stakeholder Impact

• **Shareholders**: Will receive $12.00 cash per share, providing immediate liquidity and a significant premium. Those who do not vote in favor of the merger may exercise appraisal rights.
• **Employees**: Continuing employees will receive no less favorable base salary/wage, target incentive cash compensation, and aggregate long-term incentive opportunities and benefits for 12 months post-merger. Equity awards will be converted to Adobe RSU/RS Awards with no less favorable vesting terms. There is a risk of business disruption and employee attrition.
• **Customers, Suppliers, Distributors, Partners**: The announcement and consummation of the merger could affect existing business relationships, potentially leading to changes or disruptions.
• **Directors and Officers**: Will benefit from accelerated vesting of equity awards, potential severance payments, transaction bonuses, and continued indemnification and insurance coverage for six years post-merger.

Next Steps

• Semrush stockholders will vote on the Merger Agreement Proposal, Merger-Related Compensation Proposal, and Adjournment Proposal at a Special Meeting on February 3, 2026.
• The HSR Act waiting period is expected to expire on January 20, 2026, unless terminated or extended.
• The merger is expected to be completed in the first half of 2026, subject to satisfaction or waiver of closing conditions.
• Upon completion of the merger, Semrush's Class A Common Stock will be delisted from the NYSE and deregistered under the Exchange Act.

Key Dates

Recommendation

For existing Semrush stockholders, the recommendation is to hold shares to receive the $12.00 per share cash consideration upon the merger's completion. The Semrush Board of Directors unanimously recommends approving the merger, and the financial advisor has deemed the consideration fair. The significant premium offered and the high likelihood of closing, supported by key stockholders, make holding for the cash payout the most logical strategy to capture the announced value. For new investors, the stock price is expected to trade near the offer price, making a 'buy' recommendation less applicable as the arbitrage opportunity is minimal.

Keywords

Semrush Holdings Inc., Adobe Inc., Merger, Acquisition, Cash consideration, Proxy statement, SEC filing, Stockholder vote, Regulatory approval, SaaS platform, Online visibility management, Digital experience, Corporate governance, Risk management, Financial analysis