Thoma Bravo's Mike Hoffmann: We Are 'Big Advocates' For Channel-Led Approach

The private equity firm sees itself as a "supporter and facilitator" for existing management at its acquired companies, Hoffmann told solution providers at NexGen 2019.


As private equity firm Thoma Bravo continues adding to its stockpile of major channel-led vendors, the firm remains committed to supporting partner-friendly strategies at its portfolio companies, Thoma Bravo Principal Mike Hoffmann said Wednesday.

Thoma Bravo has become a massive force in channel-focused sectors such as MSP software and cybersecurity through a string of acquisitions in recent years including ConnectWise, Continuum, Barracuda Networks and Imperva. Just last week, Thoma Bravo offered to buy security powerhouse Sophos for $3.82 billion.

[Related: 10 Things To Know About The Planned $3.82 Billion Thoma Bravo-Sophos Deal]

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Hoffmann spoke Wednesday during the NexGen 2019 Conference and Expo in Anaheim, Calif., an event hosted by The Channel Company, which publishes CRN.

Thoma Bravo, Hoffmann noted, has been gearing its investments toward vendors that depend heavily upon solution providers. The software-focused private equity firm, which has headquarters in Chicago and San Francisco, has a "great appreciation" for the role of channel partners in the tech industry, he said.

"By nature, we're specifically investing in a lot of companies that leverage the channel so successfully. We like to come in and see them continue to do that really, really effectively. Because it's the best way to access a bunch of customers," Hoffmann said. "We certainly are big advocates of continuing to do it that way."

When asked about the vision for ConnectWise, which was acquired by Thoma Bravo earlier this year, Hoffmann answered that his firm sees itself primarily as a "supporter and facilitator"--both for ConnectWise and other portfolio companies. Thoma Bravo reports having made more than 230 acquisitions since 2003 across application software, infrastructure software and security software.

Whatever a Thoma Bravo portfolio company does, strategically or operationally, "it's the company themselves driving it," Hoffmann said.

"For ConnectWise specifically, we'd made a number of investments in the space, and had always admired the company that [co-founder] Arnie [Bellini] had built," Hoffmann said. "And I really appreciated how big of a driving force [ConnectWise] was in creating the landscape as it is today."

ConnectWise was attractive because it represented "all the things that we liked about the managed services provider space," he said.

The company was also appealing because Bellini had "created a really large organization with a great team and a great set of people around him"-- which carried on as Bellini passed the reins as CEO to COO Jason Magee following the acquisition.

Jeremy MacBean, director of marketing and communications for Brampton, Ontario-based IT Weapons, said solution providers appreciate the commitment to stability that Thoma Bravo has brought in its acquisition activity.

"They're thoughtful about making sure that they don't do business with people that don't have a strong leadership culture. So they don't have to parachute in and intervene, and potentially mess up something that was working well," MacBean said. "For anybody who like us is a longtime ConnectWise partner, hearing him speak that way is encouraging--that there is stability and respect for what the ConnectWise leadership team had built."

Going forward, Thoma Bravo wants to see ConnectWise continue to build more product functionality and make acquisitions that the company leadership desires, Hoffmann said.

Thoma Bravo just wants to "pour gas on the fire," MacBean said. "It's about trying to build out a bigger ecosystem that can add more value upstream and downstream for customers. That I think was really compelling."

Dave Seibert, CIO at Irvine, Calif.-based IT Innovators, said Thoma Bravo appears to be a "very channel-friendly" private equity firm, based on its recent record.

"A lot of times you view private equity or VC funding as a little desensitized--they're just after the profit," Seibert said. Thoma Bravo, however, clearly prefers keeping the existing management team in place in its acquired companies, he said.

"Those are the people that we watch grow those companies, and that we build relationships with," Seibert said. "I think it's great that they let the existing team--the team we all know--run with the same vision."