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Advent International May Abandon Forescout Acquisition

Advent International has called off its $1.9 billion buyout of Forescout Technologies, though the private equity firm and cybersecurity company are trying to negotiate their way to revised deal terms, Forescout says.

In a May 18 statement from Forescout, the company said:

“On May 15, 2020, Advent provided notice to Forescout that it would not be proceeding to consummate the acquisition of Forescout on May 18, 2020, as scheduled. Forescout and Advent are engaged in ongoing discussions regarding timing to close and the terms of the transaction. There can be no assurance that Forescout and Advent will be able to reach agreement on terms.”

Short Seller Bet Against the Buyout

Advent’s buyout of Forescout has faced multiple question marks in recent weeks. Short seller Bex Axler of Spruce Point Capital bet weeks ago that Advent would walk away from the Forescout acquisition because of alleged weakness in the seller’s business, PE News reported on May 1.

Even before the coronavirus pandemic arrived, Forescout missed Wall Street sales estimates in the third and fourth quarters of 2019, the PE News report notes.

Forescout CEO Mike DeCesare

Fast forward to present day, and Forescout CEO Michael DeCesare says negotiations with Advent continue — but he concedes a revised deal may not be reached. In a statement he said:

“This is an uncertain time for everyone, as businesses and communities across the world navigate the challenges created by the COVID-19 pandemic. We continue to believe that Advent is the right partner for Forescout and we remain committed to completing the transaction in the near-term. We thank our employees for their extraordinary efforts and commitment to Forescout, and we remain focused on continuing our course of advancing our innovation roadmap and strategic cloud and business transformation.”

Ironically, Forescout and Advent have received all necessary approvals to complete transaction.

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