Last night, Boston-based RMM, BDR, and network operations vendor Continuum announced its acquisition by private equity firm Thoma Bravo LLC for an undisclosed sum. Here’s a ChannelPro FAQ on that deal based on an interview this morning with Continuum CEO Michael George.
Why did Continuum make the deal now?
To some extent, George says, simply because the time was right. Private equity investors typically sell companies they own five to seven years after acquiring them, and investment firm Summit Partners launched Continuum, shortly after buying the former Zenith Infotech’s RMM and NOC assets, just about six years ago.
“The timing of this was pretty normal and pretty natural,” George observes.
Why did Continuum choose to be acquired by Thoma Bravo specifically?
That’s a doubly relevant question given that Continuum has apparently been turning away offers for a while.
“We’ve been pursued for the last several years, frankly, by the private equity markets,” George says. Indeed, Thoma Bravo was among those suitors.
“They’ve been after us for a while, frankly, and we’ve never felt the timing was quite right until now,” George notes.
The company ultimately won over Continuum and Summit Partners because it has a demonstrated track record of buying top names in targeted markets, pouring money and expertise into them, and generating significant ROI.
“They’ve had just absolutely extraordinary returns and results,” says George, noting that Thoma Bravo is also thoroughly familiar with the terrain Continuum competes in, thanks to prior investments in companies like management software maker LANDESK (which is now part of Ivanti) and remote access vendor Bomgar Corp.
“They understand the space, this category, really, really well and they’re enormously bullish on it,” George says.
Will Continuum’s change of ownership affect the way it works with partners?
Not according to George, anyway.
“There’s nothing to be nervous about,” he says.
In particular, he continues, no one should lose any sleep over the future of Continuum’s pay-as-you-go licensing scheme, in which MSPs pay for software and services only when needed instead of upfront. According to George, Thoma Bravo views that model as a competitive differentiator.
“They want us to invest more and better resources into furthering that go-to-market, so that we can provide more and better tools, and technology, and training, and everything else for our partners to help them grow,” he says.
What changes lie ahead for Continuum in the long term?
Continuum’s revenue has been climbing north of 30 percent on a year-over-year basis for a while, George says. Access to Thoma Bravo’s financial resources and best practices advice arms the company to raise that figure even higher.
“This is really about accelerating our growth,” George says.
In particular, he continues, Thoma Bravo’s deep pockets and M&A know-how position Continuum to get more aggressive about making acquisitions of its own.
“These guys are…extraordinarily well experienced and well versed in how to go and identify and acquire [and] integrate other companies,” George says.
Is Continuum going to merge with SolarWinds Worldwide LLC?
Thoma Bravo†completed its $4.5 billion acquisition of SolarWinds†last February. SolarWinds then bought LOGICnow, combined it with the former N-able Technologies, and†created SolarWinds MSP†four months later. Are Continuum and SolarWinds MSP about to become one?
“Absolutely not,” George declares. “If we were going to do that, we would have done that.”
Imposing a shotgun wedding on Continuum and SolarWinds makes no sense for Thoma Bravo either, he continues.
“These guys are smart,” George says. “They want us to be wildly successful. They made an investment in SolarWinds and they want that to be wildly successful.” Making radical changes to either company would only put Thoma Bravo’s sizeable stakes in those firms at risk.
Besides, he adds, just because Continuum and SolarWinds have the same owners now doesn’t mean they have the same managers.
“There are no board members and no investors on our board from Thoma that have any board or advisory relationship with SolarWinds,” George says. “There’s a bit of a firewall between the two.”
Speaking of the board, who’s on it now?
Continuum posted updated information about that on its website a few hours ago, actually. In addition to George himself, Continuum’s board of directors now includes two investment partners from Thoma Bravo named A.J. Rohde and AJ Jangalapalli and two operating partners from outside the firm named Paul Zuber and Erik Akopiantz.
The sixth and final board member is David Murphy, former president and CEO of Blue Coat Inc., the cloud security vendor bought by Symantec Corp. roughly a year ago. Is it a coincidence that George and his new colleagues from Thoma Bravo chose to bring a security executive into the boardroom?
