Managed services News
Kaseya-Datto: SEC Filing Reveals Private Equity Interest Behind The Scenes
Joseph F. Kovar
While Kaseya’s private equity owner was the first to reach out to Datto to talk about an acquisition, the timeline released by Datto via an SEC filing shows that several private equity companies were pursuing the company as well.
On Nov. 23, an Insight Partners representative reached out on an unsolicited basis to a representative of Datto’s majority stockholders to look into scheduling a discussion about Datto. Insight Partners, via two unspecified investments, owns the majority of Kaseya.
On Nov. 29, Insight Partners representatives spoke to John Stalder, managing director of Vista Equity Partners, and Jack Dillon, senior vice president of Vista Equity Partners, about Insight Partners’ interest in a potential transaction with Datto. Stalder and Dillon, both of whom are on Datto’s board of directors, said they would inform the board of Insight Partners’ potential interest at the next board of directors meeting.
Vista Equity Partners in late 2017 acquired Datto and merged it with Autotask to turn Datto into an MSP-focused platform developer. Vista Equity Partners owns just shy of 70 percent of Datto.
On Dec. 6, a representative from an unnamed private equity firm, referred to as “Party A” by Datto, contacted Stalder on an unsolicited basis to set up talks about a potential transaction with Datto.
Later that day, the board of directors met with Datto’s management and a representative of Datto’s outside legal advisor Kirkland & Ellis. Stalder discussed the inquiries from Insight Partners and Party A and their interest in acquiring Datto. The board told Stalder to inform them that Datto was not for sale but instead was focused on its upcoming investor day and on executing its plan for the remainder of the fourth quarter. The board also said that there was enough public information for private equity firms to consider potential transactions and that the board was open to discussing opportunities that created shareholder value. Stalder delivered the message to Insight Partners and Party A.
Stalder on Dec. 16, in a meeting with Datto’s board, its management team and a Kirkland & Ellis representative, said he delivered the message. The board agreed to send the same message to any other party showing similar interest in the future. No decision was made to pursue a transaction.
On Dec. 22, a representative of a second private equity firm, referred to as “Party B” by Datto, contacted Stalder on an unsolicited basis to generally discuss Datto’s business sector. No discussions about a transaction with Party B were held at the time.