INVESTOR ALERT: Pomerantz Law Firm Reminds Investors with Losses on their Investment in Smartsheet, Inc. of Class Action Lawsuit and Upcoming Deadlines

Pomerantz LLP filed a securities class action alleging Smartsheet failed to disclose Blackstone and Vista Equity’s $56.25-$56.50 per-share acquisition offers while repurchasing stock under a $150 million authorization. The complaint alleges shares were repurchased from investors at an average $46.45 during June 1-September 23, 2024, before the $56.50 transaction was disclosed on September 24, 2024. The merger closed on January 22, 2025, and investors have until October 5, 2026 to seek appointment as lead plaintiff.

Analysis

This is principally a post-close litigation overhang rather than an operating-risk event for BX: any direct damages exposure should sit primarily with the former public issuer, its directors/officers, and applicable D&O coverage. For BX, the relevant transmission channel is reputational—whether plaintiffs uncover process or disclosure evidence that complicates future public-to-private transactions—not a material change to fee-related earnings, realizations, or deployable capital.

The near-term market impact should be negligible because the acquired company is no longer publicly traded and the alleged conduct predates the consortium’s ownership. Over the next 1-3 months, monitor whether a complaint survives dismissal, produces discovery into BX/Vista communications, or prompts regulatory interest; those developments could marginally widen the perceived execution-risk discount on BX-led take-private deals, especially in software where boards continue to face heightened scrutiny around sale-process disclosure and issuer buybacks.

The contrarian view is that plaintiff-firm announcements are often event-driven solicitation notices, not evidence of a viable claim or economic liability. A settlement or dismissal would have little read-through for BX, while an adverse ruling is more likely to raise legal and diligence costs across PE than impair BX’s existing asset economics. The more consequential second-order effect is that public software boards may become less willing to authorize buybacks during private discussions, reducing a potential valuation-support mechanism for sub-scale SaaS peers rather than changing sponsor demand itself.

Key Decisions for Investors

• No standalone BX position change on this notice; treat it as a low-materiality governance watch item. Reassess only if discovery names BX personnel, a court denies dismissal, or BX discloses reserve/indemnity exposure.
• For existing BX longs, maintain a 1-3 month alert around formal pleadings and any SEC/regulatory inquiry rather than hedging immediately; a litigation-driven selloff absent evidence of direct liability would likely be a buyable dislocation given limited earnings sensitivity.
• For public software merger-arbitrage or prospective takeout candidates, require a wider process-risk buffer where issuers are actively repurchasing shares or have undisclosed strategic-review rumors; the practical risk is delayed closing or revised disclosure, not a broad deterioration in PE bid appetite.
• Falsification trigger for the benign thesis: credible allegations that BX participated in, directed, or benefited from nondisclosure, followed by adverse motion-to-dismiss outcomes or a disclosed indemnification obligation. Until then, expected financial impact to BX remains immaterial.