The suit, filed yesterday in United States District Court in Cambridge, Massachusetts, alleges breach of contract, violation of federal securities laws, common law fraud, and negligent misrepresentation in connection with the acquisition.
Cambridge Technology Partners, in a prepared statement, called the claims "without merit" and said the services company intends to "vigorously defend" the lawsuit.
The services and consulting company acquired Bellevue, Washington-based Excell on August 31 for about 1.68 million shares in exchange for all Excell shares.
Under terms of the acquisition agreement, none of the shareholders now suing Cambridge Technology Partners continued working for the company. The former Excell employees are seeking unspecified damages.
Excell was founded in 1991 and had a compound annual growth rate of 120 percent from 1992 through 1997. Through the acquisition of the company, Cambridge Technology Partners aimed to increase its presence in the Bellevue, Washington, Portland, Oregon, and Denver, Colorado, markets by adding approximately 513 employees in those locations.