A California-based private equity firm is suing software giant Synopsys for allegedly violating an exclusivity agreement with regards to the security testing solutions within the tech company’s software integrity unit.
Investor firm Sunstone Partners is reportedly suing Synopsys as it states it had signed a letter with the tech giant to buy the testing elements within the latter’s software integrity unit called SIG.
However, before any deal was reached it has been reported that Synopsys commenced with a public sale of the SIG division. This was before the end of an agreed-upon exclusivity period.
It has now emerged that Sunstone has taken the, in its own words ‘unusual’ step to file a lawsuit with the Delaware Chancery Court in the U.S.
‘Bigger fish to fry’
The investor is reportedly demanding monetary damages as well the reimbursement for “millions of dollars in fees and expenses.”
Sunstone claims that Synopsys has failed to respect the agreement when it kicked off the public sale at the end of last year, because – in October of last year – the private equity firm had reportedly signed a deal to acquire the security testing solutions within the SIG unit.
“We have never done anything like this before.”
– Sunstone Partners’ statement
Sunstone alleges in court filing 2024-0261 that Synopsys was aware a public sale of its SIG subsidiary would breach the agreement but the company “just did not care.”
“Soon after its earning calls on November 30, Synopsys wrote in an email to Sunstone that ‘we have much bigger fish to fry right now,’ namely the recently announced ‘decision regarding the whole SIG business,’” Sunstone lawyers stated in the complaint.
In a reported statement, Sunstone Partners said with regards to the legal action that “we have never done anything like this before and do not expect that we would ever do this again in the absence of extraordinary circumstances.”
When approached by QA Financial, a representative for Synopsys declined to comment on the ongoing Sunstone Partners Management v. Synopsys, 2024-0261, which is currently pending at Delaware Chancery Court in the U.S.
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