Shareholder Lawsuit Looms Over Smartsheet Buyout Details

Smartsheet US83200N1037

While Smartsheet's tenure as a public company concluded with a multi-billion dollar acquisition, a critical legal deadline is now approaching for former shareholders. The focus is a class action lawsuit alleging deficiencies in the information provided prior to the software company's sale. The core allegation is that investors were not adequately informed before approving the deal.

The takeover by private equity firms Blackstone and Vista Equity Partners was finalized in early 2025, resulting in the company's delisting from the New York Stock Exchange. A subsidiary of the Abu Dhabi Investment Authority also participated in the transaction, which carried an approximate total value of $8.4 billion. Shareholders received $56.50 per share.

However, specialized law firms have recently notified former investors of ongoing litigation in a Washington district court. The plaintiffs contend that the proxy statement, a key document guiding the shareholder vote, contained misleading statements. Specifically, the lawsuit claims the financial performance and true success of the software platform were misrepresented to secure approval for the sale at an unfair price. The legal argument suggests that with full transparency, investors would not have accepted the deal on its existing terms.

Key Deadline and Implications

A pivotal date for affected investors is February 24, 2026. This marks the final opportunity to join the class action. Participation is open to all investors who purchased shares in the relevant period leading up to the merger.

Since transitioning to private ownership, Smartsheet is no longer obligated to make public disclosures. Nevertheless, this legal dispute brings the final months of its public trading back under judicial scrutiny. The court's ultimate decision will determine whether former shareholders receive additional financial compensation for their sold equity.