Engagesmart Stock Is Soaring Today - Here's Why

Engagesmart Inc ESMT shares are trading higher by over 10% after the company inked a deal to be acquired by Vista Equity Partners for around $4.0 billion or $23 per share in an all-cash transaction.

As per the terms, ESMT shareholders will receive $23.00 per share in cash upon completion of the deal. 

The purchase price represents a premium of about 23% to the unaffected closing price of ESMT's shares on October 4, 2023, and a premium of about 30% over the volume-weighted average price (VWAP) for the 30 days ending October 4, 2023.

For the deal, ESMT penned support agreements with affiliates of General Atlantic and Summit Partners, owners of 52% and 14% of the fully diluted shares of the company, respectively, as per which they have agreed to vote all of their shares in favor of the deal, subject to certain terms.

Post transaction completion, affiliates of Vista will hold around 65%, and affiliates of General Atlantic will take the remaining 35%.

The transaction is anticipated to be completed in Q1 2024, subject to customary closing conditions, regulatory approvals, and other terms.

The transaction includes a 30-day "go-shop" period that will expire on November 22, 2023, which permits the Special Committee and its financial advisors to solicit and consider alternative acquisition proposals. 

"We continue to see attractive growth and customer retention in our vertically tailored 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," stated Bob Bennett, EngageSmart CEO.

ESMT expects to release Q3 FY23 earnings results on November 2, 2023.

Price Action: ESMT shares are up 11.8% at $22.58 on the last check Monday.