Dive Brief:
- Kaseya, an IT security and remote monitoring firm, said Monday it will buy Datto for $6.2 billion cash. The deal comes about nine months after Kaseya was hit by a major ransomware and supply chain attack that targeted the company's small- and medium-size customers.
- The price tag is being funded by an equity consortium, led by Insight Partners, along with significant participation from TPG and Temasek, as well as other firms, including Sixth Street. The agreement represents a 52% premium to Datto's stock price of $23.37 as of March 16th.
- Also on Monday, software investment firm Thoma Bravo announced it struck a $6.9 billion deal for identity management firm SailPoint Technologies Holdings and will take the firm private. SailPoint stockholders will receive $65.25 per share in cash, a 48% premium above the 90-day volume weighted average price. However, the deal has a special “go-shop” provision that allows the board to seek higher bids until May 16th.
Dive Insight:
The acquisitions are the latest in a wave of consolidation in the cybersecurity space, including last month's $5.4 billion acquisition of Mandiant by Alphabet’s Google.
Thoma Bravo completed a deal in August 2021 to buy Proofpoint for $12.3 billion in cash, and holds a vast portfolio of cybersecurity acquisitions and investments. The company also acquired Barracuda in 2018 for $1.6 billion, and Sophos in 2020 for $3.9 billion.
The SailPoint deal, first reported by Financial Times, comes at a time of radical transformation in the identity governance and administration market.
The market is increasingly mature and vendors offer many of the same core features, according to Henrique Teixeira, senior research director at Gartner.
"Converged, SaaS-delivered identity and access management platforms are becoming more popular, because they offer a broader set of capabilities and are easier to adopt," Teixeira said via email.
By 2025, Gartner estimates 70% of new access management, governance, administration and privileged access deployments will be converged identity and access management platforms.
Teixiera noted that Thoma Bravo also owns a stake in Delinea, a privileged access firm, and the SailPoint deal could allow them to work an alliance involving PAM and IGA.
Mark McClain, SailPoint founder and CEO, said in a statement, "The transaction will also allow us to pursue our long-term growth trajectory with greater flexibility and effectiveness to support our customers, expand our markets, and accelerate innovation in identity security with the backing of a strong financial partner with deep sector expertise."
Kaseya, which is privately held, will retain the Datto brand and said there are no plans to phase out Datto products or lay off staff, according to an FAQ released by Kaseya. Datto will post its first quarter 2022 financial results on or before May 10, but will not host a live conference call.
"Combining with Kaseya brings together a broader array of technology products to create additional opportunities for MSPs," Datto CEO Tim Weller said in the announcement.
The Russian invasion of Ukraine has underscored the heightened cybersecurity threat facing U.S. enterprises from both nation-state attacks and criminal ransomware gangs. Small- to medium-sized businesses have historically been vulnerable due to their relative lack of in-house personnel and funding to staff up a sophisticated cyberdefense perimeter.
"Small and midsize enterprises have to address the same cyber risks as their large enterprise cousins," Paul Furtado, Gartner Research VP told Cybersecurity Dive via email. "What changes is how they have to address them. They have limited people, budget and time resources and aren’t always selecting industry leaders for their tools."
Editor’s note: The story was updated to reflect Thoma Bravo currently holds a stake in Delinea. Also, the equity consortium behind the Datto acquisition includes TPG, according to an updated release from the companies.
