Private equity firm Thoma Bravo to acquire managed and professional services software pioneer for undisclosed amount
ConnectWise has become the latest managed service software vendor to sell to a private equity firm. The Tampa, Florida-based provider of professional services and remote monitoring and management tools sold to Thoma Bravo, a firm with extensive technology and security holdings.
The Lowdown: Rumors have been circulating for weeks that a sale of ConnectWise to a private equity or larger software company was imminent. ConnectWise says the sale is the culmination of a five-year process that examined and executed on strategies intended to facilitate the maturation and growth of the ConnectWise managed service platform.
The Details: Neither ConnectWise nor Thoma Bravo disclosed the value of the deal. ChannelE2E estimates that ConnectWise sold for $1.5 billion.
The deal between ConnectWise and Thoma Bravo will close on Feb. 28. Jason Magee, currently COO at ConnectWise, will assume the role of CEO, succeeding founder Arnie Bellini, who is transitioning to an advisory role.
The Impact: ConnectWise says the rest of its management team will remain in place. The Thoma Bravo acquisition will provide ConnectWise with the resources for continued development of holistic managed services delivered under “a single pane of glass.” The expectation is that no changes in the short term will impact the company’s products, go-to-market relationships, or partner operations.
Background: ConnectWise, a 37-year-old company that started as an integrator and managed service provider, is a pioneer in professional services automation (PSA) software for the managed service community. Over the past decade, ConnectWise expanded its capabilities and portfolio through acquisitions and strategic partnerships, including the purchase of LabTech for remote monitoring and management software and of Quosal for automated quoting.
ConnectWise is just the latest in a series of acquisitions and private equity investments reshaping the landscape for managed service tools.
In October 2017, Vista Equity Partners acquired backup specialist Datto and merged it with ConnectWise rival Autotask. Since then, founder Austin McChord left the company to join General Catalyst, leaving the CEO post to Tim Weller.
In June 2017, Thoma Bravo also bought ConnectWise rival, Continuum, for an undisclosed amount. Continuum remains under the leadership of CEO Michael George.
Kaseya, the other big managed service house, was acquired by private equity firm Insight Venture Partners in
Earlier this month, Barracuda Networks bought Avast’s remote monitoring and management software business, which was essentially an artifact of Level Platform’s business that passed through the security company’s acquisition of AVG Technologies.
The Buzz: “Thoma Bravo has long recognized ConnectWise’s position as a leader and pioneer in the MSP and broader IT services space. For nearly 40 years, the company has been the market leader in providing the most comprehensive integrated software solutions to its community of partners,” said Robert Sayle, partner at Thoma Bravo. “Under the strong leadership of Arnie and the management team, ConnectWise has innovated and created top-tier products and services, and we are thrilled to partner with Jason to enable further success and opportunity for ConnectWise partners.”
“Five years ago, we began exploring all of the financial options to accelerate the ConnectWise mission and our partners’ success. Thoma Bravo was the clear and obvious choice over an IPO and seven other private equity firms,” said ConnectWise founder Arnie Bellini. “Thoma Bravo is the premier investor in Software-as-a-Service (SaaS) technology. ConnectWise and Thoma Bravo have co-created a multi-year strategy that is aligned with our mission, vision, culture, and partners. With this new relationship, we plan to accelerate our partners’ success worldwide.”
Channelnomics Point of View: The managed service segment remains dynamic, but is consolidating. Vendors such as ConnectWise, Datto, and Kaseya built strong revenue streams and valuations by creating networks of managed service providers. The acquisitions are likely the result of management teams and owners looking to take some equity out of their businesses and unlock resources for future development. The ConnnectWise acquisition demonstrates that the managed service segment is maturing.