Kaseya, one of the largest names in managed services software, has bought Datto, one of its top competitors.
The blockbuster all-cash deal, which is valued at $6.2 billion, is expected to close in the second half of 2022. It is backed by Kaseya’s private equity owners, Insight Partners and TPG Capital, as well as Temasek and other investors.
When completed, the transaction will reduce the four biggest players in software and services for MSPs, which in addition to Kaseya and Datto includes ConnectWise and N-able, to three formidable companies challenged by smaller, up-and-coming names like MSP360, NinjaOne, and Syncro.
“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’s CEO, in a media statement.
“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,” Voccola continued. “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.”
Together, Kaseya and Datto will oversee a sprawling product lineup that includes two RMM solutions, two PSA products, and twin families of backup solutions and appliance-based BDR offerings it must reconcile.
Datto’s still budding cybersecurity business, which includes the SaaS Defense solution it shipped last October and a forthcoming EDR offering based on software acquired along with Infocyte in January, will tuck more easily into Kaseya’s already robust portfolio, which includes IAM, dark web monitoring, and security awareness training vendor ID Agent; email security vendor Graphus; managed detection and response vendor RocketCyber; and vulnerability scanning and assessment vendor RapidFire Tools.
Founded in 2007, Datto was acquired by Vista Equity Partners and merged with PSA vendor Autotask ten years later. Three years after that, in October 2020, it completed an initial public offering with an opening price of $27 per share. Kaseya will pay Datto stock owners $35.50 a share, which Kaseya says is a 52% premium to Datto’s $23.37 share price as of March 16th.
Both companies’ boards have approved the deal unanimously. Shareholders representing 70% of the issued and outstanding shares of Datto’s common stock have OKed the transaction by written consent as well.
“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,” said Datto CEO Tim Weller in prepared comments. “I’m encouraged by the continued investment in the rapidly-expanding global MSP community, and this transaction is another important validation of the channel.”
MSPs and vendors who serve them are hot acquisition targets in a private equity market currently awash in uninvested capital. PE firms had some $3.4 trillion of so-called “dry powder,” including approximately $1 trillion sitting in buyout funds, at the end of last year, according to recent data from Bain & Company.
