Channel programs News
ConnectWise To Be Sold To Thoma Bravo As CEO Arnie Bellini Steps Aside
The pioneering MSP platform provider ConnectWise announced today that it has agreed to be acquired in a deal that will see IT trailblazer Arnie Bellini step down as CEO, and hand private equity giant Thoma Bravo its third managed service company.
Bellini said the search for a bigger pool of capital investment – as well as his own succession -- has been ongoing for five years. He said while the company flirted with going public and nearly did so in 2015, he picked Thoma Bravo because its expertise in the technology market, along with its deep capital reserves, will allow Tampa, Fla.-based ConnectWise to focus on organic growth and strategic acquisition.
“We interviewed eight different companies, eight different private equity firms,” he told CRN. “That’s very different from what most companies do. They go to auction and they say ‘Hey shop us and the highest price wins.’ We did the opposite. It wasn’t about the highest price. It was about the very best fit strategically for our partners, for our colleagues, for our vision and our mission … Thoma Bravo was the clear and obvious choice, because it matched up on all of those: strategy, vision, mission, our culture, and our management team.”
While the terms of the deal were not disclosed, the purchase price is somewhere north of $270 million, which is the payout that ConnectWise employee-shareholders will receive, Bellini said. He said while that is separate from what is due to the founders of the company, he is proud that ConnectWise colleagues can share in the company’s sale.
“So, everyone is going to get cash for their stock and that will amount to $270 million dollars in the hands of ConnectWise colleagues, and we’re really excited about that,” he said.
However, not every employee will have a job under the new ownership, the company said. Through ongoing assessments, ConnectWise determined that “its resourcing balance was out of sync with its needs and strategic plan,” the company said.
“The decision was made to remove 110 positions but add 70 new different ones in 2019, and they’ll be adding more in the next few years,” the company said about the job losses in a statement. “For those that are leaving, ConnectWise has provided placement services, providing them with resume writing, social media update assistance, interview assistance, matching them with jobs based on experience.”
One key personnel change that will result from the sale is Bellini himself.
The IT visionary who has been using technology to solve business problems since 1982, will hand the job of CEO to ConnectWise President and Chief Operating Officer Jason Magee. Bellini said Magee was one of three internal candidates he groomed for CEO. He said of them, Magee was the “clear and obvious choice.”
[RELATED: ConnectWise Names Jason Magee President, COO]
Magee – who has been at ConnectWise for eight years -- has a deep channel pedigree. Before joining ConnectWise, Magee held director-level positions at CA Technologies, managing teams, and channel partners. Prior to that, he spent five years gaining industry and channel experience at reseller companies Interactive Futures and Global Computers, where he held sales, marketing, and product management positions. He told CRN that he has no plans to turn his back on what makes ConnectWise a great company to do business with.
“We want to continue what we built this company on, which is strive to get our partners to be successful,” he said. “So we’ll continue to do that internally as well as work with our customers to get them there. So 2019 is going to be more of the same: cyber security, technology as a service, one click ecosystem and customer success.”
Thoma Bravo is certainly no stranger to MSP platforms. The investment company bought rival Continuum in June 2017 as that company was also hoping to grow its investment and acquisition engines. In October 2015, the private equity firm partnered with Silver Lake in to purchase IT infrastructure management vendor SolarWinds, owner of SolarWinds N-Able (now SolarWinds MSP), and announced plans to up their investment in cloud, hybrid and MSP environments.
Thoma Bravo has thus far shown no interest in combining the operations of SolarWinds and Continuum. Bellini said just as those two properties stand on their own, he foresees that ConnectWise will likewise be a separate operation.
“There are no plans on brining any of us together,” Bellini said. “Typically, private equity firms need each investment to stand on their own. Combining acquisitions is a major undertaking. Private equity firms don’t often engage their investments at deep operational levels. They apply financial leverage and fertilize growth.”
Bellini said he couldn’t be happier to hand the company over to Thoma Bravo and Magee.
“I feel very good because I spent five years on a mission to find the right next chapter for ConnectWise,” he said. “You think about most acquisitions like this, usually you see a new CEO from the outside coming in. No this is from within. So the management team stays intact, the leadership stays intact, the mission and the vision stay intact … I feel good about it. I feel really good about it. I feel like I did my homework right.”