We are investigating whether the directors of Sumo Logic, Inc. (Nasdaq: SUMO) (“SUMO”) acted in the best interests of SUMO shareholders in approving the sale of SUMO to Francisco Partners for $12.05 per share in cash.
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Why is there an investigation?
On February 9, 2023, SUMO announced that it had agreed to be acquired by Francisco Partners for $12.05 per share in cash. The agreement has been approved by the SUMO board of directors (“Board”).
“We are investigating whether SUMO’s Board acted in the best interests of SUMO shareholders in approving the sale,” explained Joshua Fruchter, one of the law firm’s name partners. “This includes whether the acquisition price adequately compensates SUMO shareholders, and whether all material information regarding the transaction has been fully disclosed.”
Notably, according to an analysis of Wall Street price targets for SUMO in the last 90 days published on Seeking Alpha, there is a high price target of $18.00 per share. This is above the deal price, which suggests at least one Wall Street analyst thinks the deal price is too low.
Additionally, the deal price is well below the $22.00 per share at which SUMO priced its IPO on September 16, 2020, which suggests that Francisco Partners may be taking advantage of the temporary market downturn to acquire SUMO at an unfair price.