Conflicts Tainted KnowBe4 Take-Private Merger, Investor Says

Most KnowBe4 Inc. investors received less value than they should have from the online security company’s 2023 take-private merger into Vista Equity Partners Management LLC, according to a proposed class action.

“Vista acquired KnowBe4 at an unfairly discounted price” through a rushed, conflicted process that included misrepresentations to investors who weren’t part of a controlling group of stockholders, the Water Island Event-Driven Fund says. The fund filed its complaint Thursday in the US District Court for the Southern District of Florida.

The transaction was structured to allow KnowBe4’s founder and other controlling shareholders—KKR & Co., Elephant Partners, ...