MindBody Investors Seek to Shed Light on $1.9B Deal with Vista Equity Partners

(CN) – Cloud-based software company MindBody Inc. is set to be acquired by Vista Equity Partners for $1.9 billion but investors claim in a class action that they’re in the dark about the deal.

Lead plaintiff Sunil Kumar, an investor in the California-based company, which caters to the beauty and wellness industries, filed suit in the U.S. District Court for Central California alleging violations of the Securities Exchange Act against MindBody and its senior officers.

The deal was announced on Dec. 24, 2018, where MindBody investors will receive $36.50 per share in cash from U.S.-based investment firm, Vista, representing a 68 percent premium to the company’s closing price on December 21.    

The lawsuit alleges that not only are MindBody executives facing conflicts of interest, having secured “unique benefits” for themselves not available to investors, but the proxy statement filed with the Securities Exchange Commission in connection with the deal allegedly contains misleading or omitted information.

According to the lawsuit, the proxy statement fails to disclose details of employment-related discussions between the two companies, and the financial analysis used in a fairness opinion provided by Qatalyst, acting as MindBody’s financial advisor.

“The individual defendants were aware of their duty to disclose this information and acted negligently (if not deliberately) in failing to include this information in the proxy statement,” the suit alleges.

The class is represented by Joel E. Elkins of WeisLaw LLP in Beverly Hills and Richard A. Acocelli in New York, and also Melissa A. Fortunato of Bragar Eagel & Squire, P.C. in New York.

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