Translation:All the students told me that their teacher is very smart.
For British etc speakers of English 'smart' is not so much used - at least not in quite that sense. Probably also need to allow of in a sentence like:
"All of the students told me that their teacher is very intelligent"
I wrote "their teacher was very smart" because the "telling" was in the past. That seems to me to convey the same meaning even though it's less literal.