Customer engagement and payments software vendor EngageSmart said it would be taken private by Vista Equity Partners for about US$4 billion ($6.32 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 percent in premarket trading — would receive US$23.00 per share in cash.
The offer represents a premium of nearly 23 percent to the stock’s closing price on October 4, a day before Reuters reported that private equity firm General Atlantic, which owns a 52 percent 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 percent stake.
Upon completion of the transaction, affiliates of Vista would hold roughly 65 percent and affiliates of General Atlantic would hold about 35 percent of the outstanding equity.
EngageSmart raised US$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 US$2.3 billion in August. New Relic had agreed to be taken private by TPG and Francisco Partners in a US$6.5 billion deal in July.
EngageSmart software simplifies customer activities for companies such as paying a bill and going paperless.
The 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 November 2.
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