Thoma Bravo acquires ConnectWise for approximately $ 1.5 billion, according to ChannelE2E

by Joe Panettieri • February 25, 2019

Thoma Bravo acquires ConnectWise, the automation software company for management and IT. Financial terms have not been revealed. However, ChannelE2E estimates According to our previous reports, Thoma Bravo has disbursed approximately $ 1.5 billion for ConnectWise, as well as introductory information from the previous IT Nation conference and other publicly available information.

Jason Magee succeeds Arnie Bellini, CEO of ConnectWise, who currently advises the MSP (Managed Computer Service Provider) software company. The agreement will end on February 28, announced the companies.

Thoma Bravo Acquires ConnectWise: Full Coverage and Analysis

Our complete analysis of the transaction includes:

1. Acquired ConnectWise – Jason Magee and Arnie Bellini explain why: an in-depth interview explaining the path forward for this transaction, the transition of the CEO, maintaining the interest of partners and some staff changes.
2. New ConnectWise CEO Jason Magee: 10 Things to Know
3. ConnectWise founder Arnie Bellini: What he taught us
4. ConnectWise employees receive $ 270 million from the sale of their business
5. New ConnectWise Owner, Thoma Bravo: 10 Things to Know

Thoma Bravo acquires ConnectWise: the background

ChannelE2E hinted in a February 4 blog that this historic deal was imminent. The companies confirmed the agreement to ChannelE2E on February 19 under embargo and publicly announced the buyout on February 25. Financial conditions have not been disclosed.

Thoma Bravo disbursed approximately $ 1.5 billion for ConnectWise, ChannelE2E estimates based on our research and our long-term relationships in the industry. What is the calculation? Here are the clues:

• ConnectWise did do not disclose the value of the transaction, but the company confirmed that $ 270 million of the sale would go to employee shareholders.
• Bellini had previously revealed during a speech in IT Nation what share of the company's stock was owned by employees compared to the founders of the company. We believe that the employee shareholding / founder ratio has remained stable since that time.
• Additional background figures appeared in this 2018 Tampa Bay Business Journal article.
• Ride all these vague indications from us, and you will arrive at the approximate stage of valuation of $ 1.5 billion, ChannelE2E. estimates.

Thoma Bravo Acquires ConnectWise: Highlights

According to Thoma Bravo and ConnectWise, as well as our interview with Magee and Bellini, here are some key facts about the deal:

• The software company remains committed to fostering the success and growth of its partners.
• The company will continue its organic growth and strategic acquisitions (although ConnectWise does not anticipate impending mergers and acquisitions, as the company is still digesting HTG and the Sierra Group).
• The main areas of intervention remain the services, cybersecurity and training of partners that improve the performance of the company.
• After managing the company for 37 years, Arnie Bellini is given a consulting role with the company.
• President and Chief Operating Officer Jason Magee moves to the position of Chief Executive Officer.
• Over the past three years, ConnectWise's EBITDA has grown at a compound annual growth rate (CAGR) of 81%, while revenue has a CAGR of 21%. Magee oversaw the day-to-day operations of the company during this growth.
• There are staff reductions – about 110 positions were removed, or about 10% of the workforce, according to ChannelE2E – as part of the buyout. However, the company is also planning to recruit about 70 people in other areas as part of a more aggressive campaign for SaaS and security.
• Rumors about ConnectWise's potential merger with Thoma Bravo companies (such as Continuum) are false, Bellini told ChannelE2E.

Follow all the covers on the transaction here.