EngageSmart to be acquired by Vista Equity for $23.00 per share in all cash

EngageSmart announced that it has entered into a definitive agreement to be acquired by an affiliate of Vista Equity in an all-cash transaction valued at approximately $4B. Under the terms of the agreement, EngageSmart stockholders will receive $23.00 per share in cash upon completion of the proposed transaction. The purchase price represents a premium of approximately 23% to the unaffected closing price of EngageSmart’s common stock on October 4, and a premium of approximately 30% over the volume weighted average price of EngageSmart’s common stock for the 30 days ending October 4. Upon completion of the transaction, affiliates of Vista will hold approximately 65% and affiliates of General Atlantic, a leading global investor, will hold approximately 35% of the outstanding equity. A special committee of EngageSmart’s board comprised of independent directors, advised by independent legal and financial advisors, was formed to conduct a deliberate and thoughtful process to evaluate this proposal and other potential value creation opportunities for EngageSmart. Transaction negotiations were led by the special committee and following its unanimous recommendation, the EngageSmart board of directors unanimously approved the merger agreement with Vista and agreed to recommend that EngageSmart stockholders vote to adopt the merger agreement. EngageSmart has entered into support agreements with affiliates of General Atlantic and Summit Partners, owners of 52% and 14% of the fully diluted stock of the company, respectively, under which they have agreed to vote all of their shares in favor of the transaction, subject to certain terms. The transaction is expected to close in the first quarter of 2024, subject to customary closing conditions and receipt of customary regulatory approvals, as well as the affirmative vote of the holders of a majority of the outstanding shares of the company’s common stock held by stockholders other than affiliates of General Atlantic and certain officers of the company. Vista intends to finance the transaction with fully committed equity financing that is not subject to a financing condition. Upon completion of the transaction, EngageSmart will become a privately held company and EngageSmart common stock will no longer be listed on any public market. The definitive agreement includes a 30-day “go-shop” period that will expire at 11:59 PM ET on November 22, which permits the special committee and its financial advisors to solicit and consider alternative acquisition proposals. There can be no assurance that this process will result in a superior proposal, and the company does not intend to disclose developments with respect to the “go-shop” process unless and until it determines such disclosure is appropriate or is otherwise required.