Case Name

Smartsheet Tender Offer Securities Class Action

Defendant

Insight Venture Partners VII, L.P., Insight Venture Partners (Cayman) VII, L.P., Insight Venture Partners VII ( Co-Investors), L.P., Insight Venture Partners (Delaware), VII, L.P., Insight Venture Partners Coinvestment Fund II, L.P. Insight Venture Associates VII, L.P. Insight Venture Associates Coinvestment II, L.P., Insgith Venture Management, LLC, Insight Holding Group, LLC, Ryan Hinkle

Court

King County Superior Court

Case Number

19-2-33469-0 SEA

Date Filed

12/19/2019

Case Status

Active

Smartsheet Tender Offer Securities Class Action

In June and July 2017, various private equity funds associated with Insight Venture Partners conducted a “tender offer”: they offered to buy shares of stock of Smartsheet, Inc.—then a privately-held corporation—from Smartsheet’s existing shareholders. Many shareholders decided to participate; by the end of the Tender Offer, Smartsheet shareholders tendered a total of 6,477,843 shares of common and convertible preferred stock for a total price of approximately $55 million—$45 million of which was purchased by the Insight private equity funds.

 

In December 2019, one of the shareholders who tendered his stock filed a class action complaint against the Insight entities and their principal Ryan Hinkle for breaches of the Washington State Securities Act (“WSSA”). The complaint alleges that as part of that tender offer, the defendant Insight entities violated WSSA by purchasing shares in the tender offer but failing to disclose material information related to Smartsheet and Smartsheet’s plans to conduct an Initial Public Offering. As of the date the Complaint was filed, the shares that the Insight entities purchased in the tender offer were worth approximately five times what they paid for them.

 

Since the tender offer, the Insight entities liquidated all of their shares in Smartsheet, and Ryan Hinkle is no longer a member of Smartsheet’s Board. Plaintiff seeks to recover, on behalf of the class, all of the profits that the Insight entities realized as a result of their breaches of the WSSA.

 

Below are copies of Plaintiff’s complaint and the Court’s order denying the defendants’ motion to dismiss, which the Court issued on May 1, 2020.

 

If you tendered any or all of your shares of Smartsheet, Inc. stock as part of the tender offer in June/July 2017, you may be part of the proposed class. We are happy to answer any questions you have, and we would like to discuss the facts surrounding this transaction with you. You can reach us at (206) 682-5600 or by contacting any of the attorneys listed on their page by clicking their profile and sending them an email.