Forescout Commences Litigation Against Advent International
May 20 2020 - 8:00AM
Forescout Technologies, Inc. (Nasdaq: FSCT), the leader in device
visibility and control, filed a complaint with the Delaware Court
of Chancery asserting that affiliates of Advent International
Corporation (“Advent”) have violated the terms of their merger
agreement with Forescout. Forescout is asking the Court to compel
Advent to honor its commitments and immediately complete the
pending acquisition of Forescout.
On May 15, 2020, Advent notified Forescout that it
would not consummate the acquisition on May 18, 2020, as scheduled.
Advent’s purported excuse for its wrongful conduct is that a
closing condition to the transaction has not been satisfied because
a “material adverse effect” has occurred at Forescout. Forescout
believes that no material adverse effect has occurred, that all
closing conditions are satisfied, and that Advent is obligated to
close the transaction. Forescout believes that Advent has relied on
meritless excuses to support its position.
The merger agreement explicitly allocated the risk
of any impacts from COVID-19 to Advent. Since announcing the
transaction, Forescout shareholders overwhelmingly approved the
transaction.
“We have satisfied all conditions to closing under
our merger agreement, and a material adverse effect has not
occurred,” said Theresia Gouw, Chair of the Forescout Board.
“The only change since the merger agreement was jointly executed in
February is the deepening of the COVID-19 pandemic, which has
significantly impacted global macro-economic conditions. All
companies have been challenged by this pandemic, and it is highly
disappointing that Advent would attempt to exploit market
volatility to renege on its contractual obligations, particularly
when the merger agreement explicitly excludes the effects of a
pandemic as a material adverse event. Advent is required to
promptly complete the transaction. We are taking immediate action
to enforce Forescout’s rights and ensure that Advent fulfills its
obligations. We are confident that the steps that we are taking are
in the best interests of Forescout and its shareholders.”
“I remain confident in the strength of Forescout
and its incredible team,” said Michael DeCesare, CEO and President
of Forescout. “Forescout is in a strong financial position, with
$100 million of cash on hand as of March 31, 2020. We are well
positioned for success and the fundamentals of our business have
not changed. Customers around the world trust Forescout to help
solve their most pressing security challenges, and that’s exactly
what we are doing.”
Prior to announcing the Advent transaction on
February 6, 2020, the Forescout Board conducted a robust and
comprehensive process with the assistance of independent legal and
financial advisors. Advent is a sophisticated and experienced
investor, and over the course of its due diligence investigation –
which lasted hundreds of hours over multiple months – Forescout
shared with Advent all relevant information, including detailed
financial and technical information as well as Forescout’s internal
estimates and projections. The Forescout Board and management team
dedicated significant time and resources to providing Advent with
detailed and transparent information in response to its every
request, ensuring that Advent had a complete picture of Forescout’s
business and market opportunity.
About Forescout
Forescout provides security at first sight. Our
company delivers device visibility and control to enable
enterprises and government agencies to gain complete situational
awareness of their environment and orchestrate action. Learn more
at forescout.com.
Forward-Looking Statements
This press release contains forward-looking
statements that involve risks and uncertainties, including
statements regarding the pending acquisition of Forescout by
Advent. These forward-looking statements involve risks and
uncertainties. If any of these risks or uncertainties materialize,
or if any of our assumptions prove incorrect, Forescout’s actual
results could differ materially from the results expressed or
implied by these forward-looking statements. These risks and
uncertainties include risks associated with: the risk that the
conditions to the closing of the transaction are not satisfied;
litigation relating to the transaction; uncertainties as to the
timing of the consummation of the transaction and the ability of
each party to consummate the transaction; risks that the proposed
transaction disrupts the current plans and operations of Forescout;
and the risks described in the filings that Forescout makes with
the Securities and Exchange Commission from time to time, including
the risks described under the headings “Risk Factors” and
“Management Discussion and Analysis of Financial Condition and
Results of Operations” in our Annual Report on Form 10-K, which was
filed with the Securities and Exchange Commission (SEC) on February
28, 2020, as amended by Amendment No. 1 on Form 10-K/A to our
Annual Report on Form 10-K, which was filed the SEC on April 29,
2020, and which should be read in conjunction with our financial
results and forward-looking statements, and is available on the SEC
filings section of the Investor Relations page of our website at
https://investors.Forescout.com. Additional information is set
forth in our Quarterly Report on Form 10-Q for the quarter ended
March 31, 2020, which was filed with the SEC on May 11, 2020. All
forward-looking statements in this press release are based on
information available to us as of the date hereof, and we do not
assume any obligation to update the forward-looking statements
provided to reflect events that occur or circumstances that exist
after the date on which they were made, except as required by
law.
Contacts
Investor Relations:Michelle
Spolver408-721-5884michelle.spolver@forescout.com
Media Relations:Katie
Beck650-314-8705katie.beck@forescout.com
or
Joele Frank, Wilkinson Brimmer
Katcher:Joele Frank / Jed Repko / Andrew Siegel
212-355-4449
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