EngageSmart to go private in a $4 billion buyout deal with Vista Equity Partners

In the technology sector’s latest mega buyout deal, Vista Equity Partners, a well-known private equity firm with a strong focus on investing in enterprise software companies, is set to acquire EngageSmart for approximately $4 billion. The acquisition is anticipated to be finalized in the first quarter of 2024. EngageSmart is a provider of cloud-based customer engagement software tailored for professional service businesses.

As part of the agreement, EngageSmart shareholders, whose shares saw a nearly 12% surge in premarket trading, will receive a cash payment of $23.00 per share, the company said in a statement on Monday.

The news of the acquisition comes just a few weeks after General Atlantic announced it was exploring the sale of EngageSmart. The company made its debut on the New York Stock Exchange, where it raised $378 million in its initial public offering (IPO). General Atlantic is the majority owner of EngageSmart with a 54% stake.

EngageSmart’s software plays a pivotal role in assisting businesses like dentists, veterinarians, and accountants in effectively managing their customer relationships, marketing endeavors, and payment processes. The company boasts an impressive customer base exceeding 130,000 in both the United States and Canada.

With a history of successful investments in the realm of enterprise software, Vista Equity Partners has amassed a robust portfolio through its acquisition of more than 100 companies since its establishment in 2000. Notable enterprises in their lineup include the likes of Citrix, Tibco, and Pluralsight.

This strategic move to acquire EngageSmart underscores Vista Equity Partners’ commitment to bolstering its presence in the cloud-based customer engagement software sector. They foresee sustained growth in this market, particularly as businesses continue their transition to cloud-based operations.

The deal holds mutual benefits for both EngageSmart and Vista Equity Partners. EngageSmart stands to gain from the deep industry knowledge and substantial financial resources that Vista Equity Partners brings to the table, enabling the expansion of their business. In turn, Vista Equity Partners secures a prominent position in the cloud-based customer engagement software market.

For EngageSmart’s existing clientele, this acquisition spells positive news. Vista Equity Partners is known for actively collaborating with its portfolio companies to drive innovation and foster growth. As a result, we can expect to see new features and products from EngageSmart that will enhance the experience for its valued customers.

Founded on February 17, 2008, the Braintree, Massachusetts-based EngageSmart provides software solutions for simplifying customer interactions. The software vendor offers a range of services to help businesses and organizations streamline their customer engagement processes.

EngageSmart’s software enables customers to perform tasks such as bill payments and transition to paperless transactions, making it easier for companies to interact with their clients. The company serves a diverse clientele across various sectors, including health and wellness, government, utilities, and financial services.