Kaseya acquires Datto in $6.2bn deal
Insight Partners leads equity consortium in all-cash transaction
Kaseya has acquired MSP service provider Datto in a deal valued at $6.2bn as consolidation in the MSP tools space continues.
The all-cash transaction will be funded by an equity consortium led by Insight Partners and with significant investment from TPG Capital and Temasec as well as a contribution by Sixth Street.
Datto stockholders will receive $35.50 per share, valuing the MSP vendor at $6.2bn.
The offer is a 52 per cent premium on Datto's unaffected stock price of $23.37 as of March 16 2022, and a 48 per cent premium on the unaffected 30-day volume-weighted average price of Datto stock leading up to 16 March 2022.
The deal is expected to close in the second half of 2022 and is subject to customary closing conditions and regulatory approvals. Datto shareholders collectively holding 70 per cent of shares in the company have unanimously approved the acquisition by written consent.
Datto will be de-listed from the New York Stock Exchange once the transaction has completed.
Datto raised $594m in its IPO on the New York Stock Exchange in October 2020, reaching a valuation of $4bn.
Its share price has risen by more than 197 per cent since its IPO to $34.58 a-share, and has so far jumped by 20 per cent today since the Kaseya acquisition was announced.
"This is exciting news for Kaseya's global customers, who can expect to see more functional, innovative and integrated solutions as a result of the purchase," said Fred Voccola, Kaseya CEO.
"Datto has a legendary commitment to its customers and employees. The alignment of our missions and focus makes us a natural fit, that will help our greatly appreciated customers reach new levels of success."
He added: "Kaseya is known for our outstanding track record of retaining the brands and cultures of the companies we acquire and supercharging product quality. We couldn't be more excited about what lies before us - Kaseya and Datto will be better together to serve our customers."
Datto CEO Tim Weller added that the acquisition will create new opportunities for MSPs.
"Datto has always been committed to creating world-class technology for SMBs and delivering it through our global network of MSPs to align our growth with the channel. Combining with Kaseya brings together a broader array of technology products to create additional opportunities for MSPs," he said.
"I'm encouraged by the continued investment in the rapidly-expanding global MSP community, and this transaction is another important validation of the channel."
Datto has undergone several seismic changes over the last few years. It merged with fellow IT management solutions vendor Autotask in 2017 to create a business with 1,300 staff and offices in nine countries globally.
But in 2020, Datto confirmed that it planned to lay off an unspecifcied number of employees from its 1,700-strong workforce as a result of economic consequences from the pandemic.
At the time, Kaseya's Voccola commented that he "was surprised that anyone in this sector is doing layoffs", claiming that Kaseya was growing throughout the pandemic.
Kaseya has been threatening to IPO for some time. Voccola told CRN in January 2021 that he expected the firm to become a publicly-listed company by the end of that year, claiming that the pandemic had caused it to push back its IPO timeline of Q2 2020.
The MSP vendor, which Voccola told CRN last year was valued at around $3bn, has acquired multiple IT management software companies over the years including RapidFire Tools, IT Glue and RocketCyber.
It comes after other high-profile acquisitions from vendors in the same arena, including Thoma Bravo-backed firm ConnectWise which acquired Continuum in 2019.
Kaseya made global headlines last year after it was hit by a cyberattack through its VSA solution which Russian-speaking ransomware group REvil claimed responsibility for.
The attack affected around 50 of its MSP partners as well as between 800 and 1,500 businesses globally.