Investment firm Vista Equity Partners has signed a definitive agreement to buy software company EngageSmart in a deal valued at $4bn.

As per the terms of the agreement, EngageSmart shareholders are entitled to receive $23 in cash for every stock held.

EngageSmart said the offer price is at a 23% premium to its closing price on 4 October 2023.

Based in Massachusetts, US, EngageSmart provides industry-specific customer engagement software and payment solutions.

The company’s offerings include SimplePractice, InvoiceCloud and DonorDrive, and its clientele operates in health and wellness, utilities, financial services, and healthcare sectors.

Following the deal, EngageSmart will be approximately 65% owned by affiliates of Vista, which is focused on investing in software, data and technology companies.

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The remaining 35% stake will be held by affiliates of General Atlantic.

Subject to regulatory approvals and customary closing conditions, the deal is expected to be completed in the first quarter of 2024.

EngageSmart will become a privately held company upon the closing of the deal, and its common stock will no longer be available for purchase on any public exchange.

EngageSmart CEO Bob Bennett said: “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.”

Vista flagship fund co-head and senior managing director Michael Fosnaugh said: “EngageSmart is a demonstrated leader in delivering mission-critical solutions for modern businesses and simplifying customer and client engagement for over a hundred thousand organisations.

“We look forward to working with EngageSmart as they continue to innovate, scale and empower organisations to better serve their customers.”

In June 2023, IBM signed a $4.6bn deal to buy software provider Apptio from Vista.