A class action complaint has been filed against San Luis Obispo-based MINDBODY and the company’s Board of Directors over plans to sell the tech company.
The complaint was filed Thursday in San Luis Obispo County Superior Court on behalf of a plaintiff, Joseph Schmit, as well as other stockholders in the company.
The complaint names MINDBODY, Inc, as well as its Co-Founder and CEO, Rick Stollmeyer, and seven others affiliated with the company.
It says the company breached its fiduciary duty by selling the company to affiliates of Vista Equity Partners.
In December, MINDBODY announced it had entered in an agreement to be acquired by Vista Equity Partners for $1.9 billion.
At the time, Stollmeyer released a statement in a press release saying, “MINDBODY’s purpose is to help people lead healthier, happier lives by connecting the world to fitness, beauty, and wellness. We are thrilled to provide immediate liquidity to our shareholders at a significant premium to market prices and to leverage Vista’s resources and deep expertise to accelerate our growth while achieving that purpose more effectively than ever before.”
The complaint, however, claims the sale process and buying price were unfair.
Stockholders will receive $36.50 in cash for each share of MINDBODY as part of the sale, according to court documents. The complaint says the company had traded as high as $45.50 per share within the past year.
The complaint reads in part, “defendants have accepted an offer to sell MINDBODY at a price that fails to reflect the true value of the company, thus depriving stockholders of the reasonable, fair, and adequate value of their shares.”
The plaintiff is demanding a jury trial in the case.
KSBY reached out to MINDBODY for comment.
A spokesperson for the company said due to SEC regulations, the company is unable to comment on anything involving the acquisition outside of information included in a press release on December 24.
MINDBODY provides tech products to customers in the health and wellness industry.
As of last update, the sale to Vista Equity Partners was expected to be completed in the first quarter of 2019.