Seattle-based tax software company Avalara Inc. is officially a private company.
The company on Wednesday announced the close of its $8.4 billion acquisition by Austin-based private equity firm Vista Equity Partners, and the company's shares have stopped trading on the New York Stock Exchange. The acquisition closed after facing opposition from some individual shareholders and shareholder firms.
"We thank our employees, customers, partners and shareholders for their trust during this process, and we are excited to begin our work alongside Vista,” Scott McFarlane, co-founder and CEO of Avalara, said in a release. “We look forward to partnering with their experienced team to advance our mission.”
Avalara faced eight lawsuits, four of which have closed, from individual shareholders over the acquisition. The lawsuits say, among other claims, the deal would benefit Avalara's leadership while leaving behind individual shareholders, and the company misled shareholders in a Sept. 12 proxy statement meant to encourage the acquisition.
Avalara made certain changes to the proxy statement in an Oct. 4 filing with the Securities and Exchange Commission but called the lawsuits "without merit." The company also released a presentation in late September urging shareholders to approve the deal and citing various negative predictions if the deal didn't go through. That same month, Avalara pointed to a third-party proxy advisory firm report that highlighted the company's "expected underperformance" as a key reason to sell.
Multiple shareholder firms, meanwhile, said they opposed the acquisition and planned to vote against it.
"The sale process appears to have been a spur-of-the-moment decision, driven by the desires of opportunistic acquirers and guidance from a financial advisor, Goldman Sachs, who was highly incentivized to pursue and close a transaction," Altair, an angel investor in Avalara, wrote in a release. "The board's 'process' engaged with a very limited number of potential buyers, and given the close relationship between Vista, Avalara's financial advisor and members of the Avalara board, we are concerned that Vista may have been the preferred buyer all along."
In a vote Friday, however, 66% of Avalara's total outstanding shares voted in favor of the deal, clearing the way for it to close this week. Avalara first announced the acquisition in August. Vista Equity is paying $93.50 per share to acquire Avalara.
Avalara was founded in 2004 and went public in 2018. The company's software helps with sales and use tax, consumer use tax and international compliance, and its clients include Zillow and Pinterest. According to an SEC filing, Avalara had 4,465 full-time employees at the end of last year.
