Law Firm Probes Two Sponsor-Backed Take-Privates
The Ademi law firm has launched investigations into two recently announced transactions involving private equity firms Searchlight Capital Partners and Abry Partners. The firm is examining potential breaches of fiduciary duty and whether public shareholders are receiving a fair price in the take-privates of KORE Group Holdings and European Wax Center.
The take-private of KORE Group, an Internet of Things (IoT) provider, is valued at approximately $726 million. Shareholders are set to receive $9.25 per share in cash, a figure that represents a massive 691% premium over the closing price on December 18, 2024. This earlier date is significant as it was the day before Searchlight Capital amended its SEC filing to signal a potential full acquisition. Despite the substantial premium, investigations into the deal question whether the process ensures a fair price for public shareholders. Financially, KORE has faced challenges, including a history of net losses and declining revenue. However, the company has shown growth in other areas, with its total IoT connections increasing 9% year-over-year to 20.5 million in the third quarter of 2025 and an increase in Adjusted EBITDA. The second investigation targets the buyout of European Wax Center, a franchisor of waxing services, by General Atlantic in a deal valued at about $330 million. The offer is for $5.80 per share, a 45% premium to the closing price the day before the announcement. General Atlantic was already a major shareholder, holding approximately 42% of the company's stock since an initial investment in 2018. Ademi's probe into the European Wax Center deal centers on potential breaches of fiduciary duty and whether the board secured the best possible value for shareholders. Notably, at the time of the buyout announcement, at least one analyst had a price target of $15.00 per share for the company's stock. The company's recent performance includes a year-over-year revenue decrease of 2.2% in Q3 2025, but also improved profitability and a significant beat on adjusted EBITDA estimates. These "fair price" investigations are common in take-private transactions and scrutinize the actions of the company's board. Directors have a fiduciary duty to maximize shareholder value, which means they must demonstrate a thorough and independent process to secure the best reasonably available offer. Courts often apply an "enhanced scrutiny" standard in these cases, looking beyond just the final price to the fairness of the deal-making process itself.
