Leading Independent Proxy Advisory Firm ISS Recommends Avalara Shareholders Vote "FOR" The Transaction With Vista Equity Partners

Avalara Urges Shareholders to Vote "FOR" Value Maximizing Transaction on WHITE Proxy Card

Avalara, Inc. (NYSE:AVLR), a leading provider of tax compliance automation for businesses of all sizes, today announced that leading independent proxy advisory firm Institutional Shareholder Services ("ISS") has recommended that shareholders vote "FOR" the pending transaction with Vista Equity Partners ("Vista") at the Company's upcoming Special Meeting of Shareholders (the "Special Meeting") scheduled for October 14, 2022.

In its September 30, 2022, report, ISS noted1:

• "… the proposed transaction provides certainty of value, at a premium to the unaffected price, compared to the significant downside risk of non-approval and the uncertainty surrounding a potential market recovery."
• "There is a significant downside risk of non-approval; technology companies that revise guidance and miss earnings are heavily penalized in the current market environment, which amplifies the downside risk. Absent this transaction, it appears that AVLR shares could trade in the mid-to-high $60's per share. There has been a marked decline in valuations of AVLR's peers over the last year, a trend that has continued since the transaction announcement."
• "There is also significant uncertainty regarding how much time would be needed for some combination of revenue growth, profitability, and multiple expansion to deliver shareholder value that is in line with historic trading levels, given significant macroeconomic impacts including rising interest rates and inflation. These factors raise substantial doubt that shareholders are better served by rejecting the merger."
• "Nonetheless, when the modest decline in projections is evaluated in concert with the decline in valuation multiples for AVLR and its peers, and taking into account the company's anticipated challenges, the expected underperformance appears to support the board's argument that the present moment is an appropriate one to sell the company."

The Company is pleased that ISS shares its belief that the transaction with Vista is in the best interests of all Avalara shareholders and supports the Board's unanimous recommendation that shareholders vote FOR the transaction. The transaction with Vista delivers significant, immediate, and certain value to shareholders, eliminating shareholders' exposure to the execution risks and significant macroeconomic headwinds associated with continuing as a standalone company. The Company strongly urges all Avalara shareholders to follow the recommendation of ISS by voting "FOR" the value maximizing transaction with Vista on the WHITE proxy card today to receive $93.50 per share in cash.

The transaction is expected to close in the second half of 2022, subject to customary closing conditions, including approval by Avalara shareholders.

Avalara shareholders who need assistance in voting their shares may call toll-free Avalara's proxy solicitor, Innisfree M&A Incorporated, at (877) 687-1873 (U.S. or Canada) or +1 (412) 232-3651 (international).

A special meeting of Avalara's shareholders to be held virtually in connection with the proposed merger on October 14, 2022, at 9:00 a.m., Eastern Time. Shareholders will be able to attend the meeting by visiting www.cesonlineservices.com/avlr22_vm, where they will be able to listen to the special meeting, submit questions, and vote. To participate in the special meeting, shareholders must pre-register at www.cesonlineservices.com/avlr22_vm by 9:00 a.m., Eastern Time on Thursday, October 13, 2022. Shareholders will not be able to attend the meeting in person.