Vista Equity continues to work toward getting its house in order, following last Thursday's stunning admissions of personal tax fraud by founder and CEO Robert Smith.
Why it matters: Smith has settled with the Justice Department and the IRS, but the story isn't over yet.
Three updates:
- There has not yet been any resolution to the conflict between Smith and firm president Brian Sheth.
- Vista recently removed Sheth from the board of Datto, a data protection software company that last night raised nearly $600 million in its IPO (at an initial market cap of $4.25 billion). Multiple sources say Sheth is credited with selling the original buyout to Datto founder and former CEO Austin McChord, after the pair connected at a Morgan Stanley tech event. He had been listed on Datto's original IPO paperwork, filed on Sept. 29.
- Vista isn't sitting on its hands while all of this plays out. Axios has learned that the firm quietly agreed to buy a 50% stake in SmartBear, a Somerville, Mass.-based software development and testing company, for around $1.7 billion from Francisco Partners (which retains the other half).
The bottom line: The tension isn't just between two top execs at one of private equity's largest firms. It's also between the appearance of stability and the reality of volatility.
