Announcement • Oct 09
Entwistle & Cappucci LLP Files A Securities Class Action Complaint Against Engagesmart, Inc. and Vista Equity Partners Management, LLC
Entwistle & Cappucci LLP announced that its ongoing investigation has led to the filing of a class action complaint against EngageSmart, Inc. and certain of the Company’s officers and directors (Defendants) on behalf of a class consisting of public holders of EngageSmart common stock as of the December 21, 2023 record date who were entitled to vote on the “take-private” acquisition (“Merger”) of the Company by Vista Equity Partners Management, LLC and its affiliates (“Vista”) and all persons or entities (excluding Defendants) that sold shares of EngageSmart common stock from October 23, 2023, the announcement date of the Merger, through the close of the Merger on January 26, 2024 (Class Period), including those who sold into the Merger and were damaged thereby (Class Members). The case was filed in the United States District Court for the District of Delaware (the “Court”) and is captioned: AltShares Event-Driven ETF versus EngageSmart, Inc., No. 24-cv-1083-RGA (D. Del.) (Action). The complaint asserts claims under Sections 10(b), 14(a) and 20(a) of the Securities Exchange Act of 1934, and U.S. Securities and Exchange Commission Rules 10b-5 and 14a-9, promulgated thereunder. EngageSmart provides vertically tailored customer engagement software and integrated payment solutions through two segments: the SMB Solutions segment that provides end-to-end practice management solutions geared toward the health and wellness industry and the Enterprise Solutions segment that provides Software-as-a-Service (SaaS) solutions that simplify electronic billing and digital payments. At all times from the initial public offering of the Company to the Merger, General Atlantic, L.P. (“General Atlantic”) and Summit Partners, L.P. owned at least 52% and 15%, respectively, of the Company’s common stock. The complaint alleges Defendants repeatedly issued or caused to be issued SEC filings that contained materially false or misleading statements or omitted material facts concerning: the lack of independence of the special committee of EngageSmart’s board of directors, controlling shareholder General Atlantic and Vista; conflicts of interest concerning Special Committee advisor Evercore Group, L.L.C. that compromised its advice to the Committee; General Atlantic’s interference with the sales process and preferential treatment of Vista; and the overall conflicts that rendered the sales process inadequate, ultimately resulting in the inability of Class Members to evaluate the Merger. On October 23, 2023, EngageSmart and Vista issued a press release filed with the SEC on Form 8-K, announcing the Company had agreed to be acquired by Vista in a take-private transaction that valued the Company at approximately $4 billion. The October 2023 Press Release represented that the Merger was purportedly the result of a deliberative process by an “independent” Special Committee, advised by the Committee’s “independent” financial advisors. This statement was allegedly false and misleading and omitted material facts necessary to make the statement not false or misleading because (i) the Special Committee was not truly independent, but was formed as a pretext to rubber-stamp the Merger driven by General Atlantic, and (ii) Evercore was conflicted and not independent. On December 19, 2023, EngageSmart issued a proxy statement (“Proxy”) in advance of the shareholder vote on the Merger. The Proxy repeatedly characterized the Special Committee as “independent and disinterested,” and asserted that the Committee was represented by “independent financial and legal advisors.” Like the statements in the October 23 Press Release, these statements were materially false and misleading because the Special Committee was not truly independent and Evercore suffered from material conflicts of interest. The Proxy also stated that the Special Committee had determined the Merger was “advisable, fair to, and in the best interests of EngageSmart and its shareholders.” However, contrary to these assertions, the Special Committee’s lack of independence and Evercore’s deep conflicts of interest allegedly caused the Merger to be unfair and not in the best interests of EngageSmart and its public shareholders.
