What happened
Shares of network security company Forescout Technologies (FSCT) fell on Monday, after the company announced its acquisition by Advent International would not close today as scheduled. As a result, the stock was down a whopping 25% as of 12:30 p.m. EDT.
Beyond the deal not going through today, it's possible it won't go through at all.
The acquisition of Forescout Technologies was close, but hasn't been completed. Image source: Getty Images.
So what
Back in February, Forescout Technologies announced its agreement to be acquired by private equity firm Advent International for $33 per share. Later in April, 99% of shareholders voted in favor of the acquisition, all but cementing the deal.
The deal was scheduled to close today. On Friday, however, Advent International informed Forescout Technologies that it wouldn't finalize the deal as planned. Now both sides are back at the negotiating table, discussing the terms of the buyout and when it might go through.
After its fall today, shares of Forescout Technologies trade near all-time lows.
Now what
Since Advent International approached Forescout Technologies, it's safe to assume this isn't good news for shareholders hoping for $33 per share. Advent likely wants to acquire the company at a cheaper valuation, perhaps due to economic uncertainties brought about by the COVID-19 pandemic. But there's no guarantee that Forescout Technologies' management will approve a less favorable offer.
It's a reminder that buyouts aren't final until they're final. For shareholders of this technology stock, it's best to review your long-term investing thesis now, in case no deal with Advent International materializes later.
