Shareholders of medical technology company Greenway Medical Technologies are investigating whether or not Greenway’s board breached its fiduciary duty in the company’s take-private deal with Vista Equity Partners.
On Monday, Vista agreed to pay Greenway stockholders $20.35 in cash for each share of Greenway common stock, according to a Greenway statement.
This represents a 62 percent premium to Greenway’s 90-day volume weighted average stock price and a 20 percent premium to Greenway’s closing share price the day before the merger agreement was signed.
The Greenway board unanimously approved this all-cash transaction, which is valued at approximately $644 million. Vista plans to merge Greenway with its existing portfolio company Vitera Healthcare Solutions and operate the privately-held company under the Greenway brand.
But litigation law firm Brower Piven said Tuesday that it is leading an investigation into the actions of the Greenway board on behalf of disgruntled stockholders.
The investigation seeks to determine, among other things, whether the Greenway’s board breached their fiduciary duties by failing to maximize shareholder value, according to the law firm’s statement.
Vista and Brower Piven were unavailable for further comment at press time. Greenway declined to comment.
JP Morgan is serving as financial advisor to Greenway, and Paul Hastings LLP is serving as Greenway’s legal advisor. Jefferies and BMO Capital Markets are serving as financial advisors to Vista, and Kirkland & Ellis LLP is serving as Vista’s legal advisor.