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Forescout Commences Litigation Against Advent International

SAN JOSE, Calif., May 20, 2020 (GLOBE NEWSWIRE) -- Forescout Technologies, Inc. (NASDAQ:FSCT), the leader in device visibility and control, filed a complaint with the Delaware Court of Chancery asserting that affiliates

Benzinga · 05/20/2020 12:17

SAN JOSE, Calif., May 20, 2020 (GLOBE NEWSWIRE) -- 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.