Vista Equity Partners to buy EngageSmart for $4 billion

Reuters
Updated ·2-min read

(Reuters) -Payments software vendor EngageSmart said on Monday it would be taken private by Vista Equity Partners for about $4 billion, marking the latest buyout deal in the technology sector.

Under the terms of the deal, shareholders in EngageSmart — shares of which jumped nearly 12% in premarket trading — would receive $23.00 per share in cash.

The offer represents a premium of nearly 23% to the stock's closing price on Oct. 4, a day before Reuters reported that private equity firm General Atlantic, which owns a 52% stake, was exploring a sale of the company.

General Atlantic had acquired a majority stake in the company, previously known as Invoice Cloud, in 2018. Summit Partners, a private equity firm that was already an investor in EngageSmart, has a 14% stake.

Upon completion of the transaction, affiliates of Vista would hold roughly 65% and affiliates of General Atlantic would hold about 35% of the outstanding equity.

EngageSmart raised $378 million when it listed in New York in an initial public offering in 2021.

Tech-focused private equity Thoma Bravo had taken identity and access management software firm ForgeRock private for $2.3 billion in August. New Relic had agreed to be taken private by TPG and Francisco Partners in a $6.5 billion deal in July.

EngageSmart software simplifies customer activities for companies such as paying a bill and going paperless. The Braintree, Massachusetts-based company serves clients across the health and wellness, government, utilities and financial services sectors.

The deal is expected to close in the first quarter of 2024. EngageSmart's third-quarter results are scheduled for Nov. 2.

Investment banks Goldman Sachs Group and Evercore Inc are acting as financial advisers for the deal.

(Reporting by Samrhitha Arunasalam in Bengaluru; Editing by Dhanya Ann Thoppil and Shilpi Majumdar)

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