EngageSmart
stock was surging Monday after the business-software company agreed to be acquired by private-equity firm Vista Equity Partners for $4 billion.
EngageSmart
(ticker: ESMT) stockholders will receive $23 a share. That represents an 11% premium to the stock’s closing price on Friday of $20.20.
Shares of
EngageSmart
jumped 12% Monday to $68 and were on path for their largest percentage increase on record and highest close since February 2022, according to Dow Jones Market Data. The stock has now climbed 29% this year, and was on pace for its best year since going public in 2021.
Affiliates of Vista will hold about 65% of the company, upon completion of the deal, while affiliates of global investor General Atlantic will hold about 35% of outstanding equity.
“We believe the partnership with Vista and General Atlantic will enable us to continue investing in innovation and people to drive growth,” EngageSmart Chief Executive Bob Bennett said in the news release.
The deal is expected to close in the first quarter of 2024. As a part of the agreement, EngageSmart has been granted a 30-day “go shop” period, which permits the company to consider alternative acquisition offers.
EngageSmart is scheduled to report third-quarter earnings on Nov 2. The company will no longer host an earnings conference call in light of the acquisition announcement.
Vista Equity Partners’ decision to acquire EngageSmart comes during a slow period for M&A. According to financial markets platform Dealogic, for the first nine months of 2023 dealmakers agreed to 26,608 deals totaling $2.1 trillion globally, a 29% decline in volume from the same period last year. This comes as interest rates are anticipated to stay higher for longer, making financing more expensive.
Write to Angela Palumbo at [email protected]
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