Vista Equity Partners to acquire EngageSmart for $4bn

January 2024 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

January 2024 Issue

In a deal that takes the software company private, EngageSmart, Inc. is to be acquired by an affiliate of US private equity firm Vista Equity Partners in an all-cash transaction valued at approximately $4bn.

Under the terms of the definitive agreement, EngageSmart stockholders will receive $23 per share in cash upon completion of the proposed transaction. Affiliates of Vista will hold approximately 65 percent and affiliates of leading global investor General Atlantic will hold approximately 35 percent of the outstanding equity.

Vista intends to finance the transaction with fully committed equity financing that is not subject to a financing condition, whereupon EngageSmart will become a privately held company and EngageSmart common stock will no longer be listed on any public market.

“We have built an amazing business by putting our customers at the centre of everything we do,” said Bob Bennett, chief executive of EngageSmart. “We continue to see attractive growth and customer retention in our vertically tailored software as a service (SaaS) solutions – a testament to the strength of our business model and our leading products. We believe the partnership with Vista and General Atlantic will enable us to continue investing in innovation and people to drive growth.”

A special committee of EngageSmart’s board of directors comprised of independent directors, and advised by independent legal and financial advisers, was formed to conduct a deliberate and thoughtful process to evaluate this proposal and other potential value-creation opportunities for EngageSmart.

“EngageSmart is a demonstrated leader in delivering mission-critical solutions for modern businesses and simplifying customer and client engagement for over a hundred thousand organisations,” said Michael Fosnaugh, senior managing director at Vista Equity Partners. “We look forward to working with EngageSmart as they continue to innovate, scale and empower organisations to better serve their customers.”

A leading global investment firm with more than $101bn in assets under management, Vista Equity partners invests in enterprise software, data and technology-enabled organisations

“We have long admired EngageSmart’s vertical domain expertise – proven by an established track record of growth and profitability,” added Jeff Wilson, managing director at Vista Equity partners. “We are eager to build on EngageSmart’s momentum and look forward to working closely with the talented leadership team to provide even more powerful, innovative and seamless solutions for customers.”

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.

Acting as exclusive financial adviser to EngageSmart is Goldman Sachs & Co. LLC, with Kirkland & Ellis LLP acting as legal counsel to Vista Equity Partners. Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal counsel to General Atlantic. Acting as financial adviser to the special committee is Evercore, with Skadden, Arps, Slate, Meagher & Flom LLP acting as legal counsel.

Mr Bennett concluded: “We look forward to continuing to serve our customers and support our employees who are relentless in their pursuit of customer satisfaction.”

Fraser Tennant