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EVBG.US

id: 2142

Everbridge ($EVBG) 85M Settlement

The settlement terms have been submitted to the court for approval.

$85,000,000

Cash Settlement

C.D. California

Court

2:22-cv-02249

Case number

02/18/2020

Class period Start

02/24/2022

Class period End

Everbridge and two of its former executives have agreed to pay $85 million to settle investor claims that the company concealed integration problems from a string of acquisitions and misled the market about the impact of COVID-19 on its sales.

Outline:

Everbridge acquired nine companies in 2019–2021 while telling investors integration was seamless and organic growth stayed strong. Plaintiffs alleged Everbridge, its CEO, and its CFO knew the acquisitions had caused real integration and sales problems, and that COVID was shrinking deal sizes rather than being a "net-net" positive as claimed. Two disclosures — a CEO resignation and cut guidance in December 2021, then an admission of integration failures in February 2022 — drove the stock down 45% and 34%. The parties settled for $85,000,000

Timeline:
2019–2021: Everbridge acquires nine companies, including NC4 (2019) and xMatters (May 2021), while telling investors integration is going "great" and "so far, so good."
December 9, 2021: Everbridge discloses CEO David Meredith's sudden resignation and cuts 2022 revenue growth guidance to 20%–23%, down from a historical 30%+ baseline. Stock falls 45.4%, from $115.37 to $63.00 per share.
February 24, 2022: Everbridge discloses that acquired product lines created "integration challenges," that international deal sizes were "seeing meaningful contraction," and that COVID had exacerbated the decline; guides 2022 growth down further to 15%–17%. Stock falls another 33.9%, closing at $30.61 per share.
June 13, 2026: Parties reach a $85,000,000 settlement-in-principle following the mediator's recommendation.
Background:

Everbridge provides critical-event-management software used by governments, corporations, and institutions to respond to emergencies, cyberattacks, and other disruptive events. Beginning shortly before the Class Period, the company embarked on an unusually aggressive acquisition strategy, purchasing nine companies in roughly two years, including NC4, xMatters, and Anvil Group, while consistently telling investors — including in specific statements like "the integration is just starting, but it's already going great" and "so far, so good" — that these businesses were being successfully folded into Everbridge's platform.

The complaint alleged that, in reality, the acquired companies ran on different internal systems with separate, differently trained sales staffs, many of whom left the company amid the disorganized integration effort — and that this growing complexity made it increasingly difficult for Everbridge to sell a coherent, unified product to customers. Separately, executives repeatedly described the COVID-19 pandemic as a "net-net" positive for the business, denying any negative effect on deal sizes, even as the pandemic was allegedly compressing average selling prices and revenue.

The truth emerged in two steps. On December 9, 2021, Everbridge disclosed CEO David Meredith's abrupt, unexplained resignation alongside sharply reduced 2022 growth guidance, sending shares down 45%. 

Then, on February 24, 2022, the company's interim leadership admitted for the first time that the acquired products had created "incremental product line complexity that produce[d] integration challenges," that international public-warning deal sizes were shrinking, and that the COVID slowdown in deal sizes had been real and "exacerbated" the company's problems — cutting guidance again and sending shares down another 34%.

What Can Investors Expect Now?

Everbridge and two of its former executives have agreed to pay $85 million to settle investor claims that the company concealed integration problems from a string of acquisitions and misled the market about the impact of COVID-19 on its sales.

If you were damaged due to this situation, you can file for a payout and get your share of the settlement once the Court grants preliminary approval and the claims process opens. You can check if you are eligible and other details in the FAQ section below.

Case Type

US Securities Class Action

Case Status

Stipulative Settlement

Alleged Offence

Misleading Statements,

Financial Misrepresentation,

Fraud,

Failure to Disclose,

Omissions

Suspected Party

Directors,

Management

Security Type

Stocks

Trade Direction

Long

Payout per Share

2.32

Filing date

04/04/2022

Plaintiffs

Sylebra Capital Partners Master Fund Ltd; Sylebra Capital Parc Master Fund; Sylebra Capital Menlo Master Fund

Attorneys

Labaton Sucharow LLP

Defendants

David Meredith ; Patrick Brickley ; Jaime Ellertson

Attorney fee

$24,475,000

Trades matching type

FIFO

Everbridge ($EVBG) 85M Settlement

Frequently Asked Questions