Private equity firm General Atlantic LLC is exploring a sale of EngageSmart Inc, a payments software vendor that has a market value of $3.3 billion, according to people familiar with the matter.
Investment banks Goldman Sachs Group Inc and Evercore Inc are working with EngageSmart on a sale process, which is in its early stages, the sources said.
Several private equity firms are participating in the process, the sources added. The first-round of bidding for the company is underway, with initial offers due later on Thursday, according to two of the sources.
The sources, who requested anonymity because the matter is confidential, cautioned that no deal is certain and General Atlantic, which owns 54% of EngageSmart, could elect to sell down its stake in the stock market over time.
Spokespeople for General Atlantic and Goldman Sachs declined to comment. EngageSmart and Evercore did not respond to requests for comment.
EngageSmart shares jumped 7% on the news to $20.04 in New York on Thursday.
EngageSmart software simplifies customer activities for companies such as paying a bill and going paperless. The Braintree, Massachusetts-based company serves clients across the health and wellness, government, utilities and financial services sectors.
The company reported in August a 28% year-on-year rise in second-quarter revenue to $94.4 million as demand grew from corporate clients. It reported $19.4 million in adjusted earnings before interest, taxes, depreciation and amortization, up from $12 million a year earlier.
Investors, however, have been concerned about the potential impact of a slowdown in consumer spending on EngageSmart’s business. Its shares have dropped almost 14% over the past 12 months, underperforming a 39% rise in the S&P 500 Application Software index.
General Atlantic acquired a majority stake in the company, previously known as Invoice Cloud, in 2018. Summit Partners, a private equity firm that was already an investor in EngageSmart, retains an approximately 15% stake.
EngageSmart raised $378 million when it listed in New York in an initial public offering in 2021.
