Private equity group Advent International can't rely on fallout from the pandemic to cancel a $1.9 billion acquisition of Forescout Technologies, the cybersecurity company said in a lawsuit, adding to the pile of broken deals in Delaware Chancery Court.
Forescout argues the purchase agreement specifically bars Advent from citing the coronavirus as creating a "material adverse effect" that excuses the investment fund from finalizing the deal. Advent executives "expressly agreed to bear the risk of adverse impacts on the company from a pandemic," Forescout's lawyers said in the complaint, filed Tuesday.
The San Jose, Calif.-based security company said in the suit it was proceeding "diligently" with the transaction and that it expected to have a "strong" second quarter. "We have satisfied all conditions to closing under our merger agreement," Theresia Gouw, chair of Forescout's board of directors, said in a statement Wednesday.
In February, Boston-based Advent agreed to pay $33 a share for Forescout. It notified Forescout earlier this month that it was putting the buyout on hold over the effects of the pandemic.
Disputes over the impact of the virus have sent at least nine busted-deal cases to Delaware's business court, the premier venue for resolving high-dollar corporate scraps. During a seven-day period in early May, more than $10 billion of mergers, acquisitions and investments were terminated, according to data compiled by Bloomberg, with more under threat as acquirers try to back out of agreements or renegotiate terms.