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 Feb. 2, Insight Partners and TPG Global sent Weller a nonbinding indication of interest to acquire all of Datto for $30.50 per share in a deal that would combine Datto with Kaseya. Kaseya and Insight Partners and TPG Global were jointly referred to as “Kaseya Parties.”
On Feb. 10, Datto’s board met with its management team and a Kirkland & Ellis representative to discuss the terms of both the Party C and the Insight Partners and TPG Global proposals, with the board determining neither high enough to consider. The board also discussed engaging a financial advisor to assist with evaluating and responding to any further proposals and settled on Qatalyst Partners based on its Datto relationship and its technology M&A experience.
On Feb. 14, Qatalyst Partners told Party C that its proposal was not at a level that would warrant further discussion at that time and the next day told Evercore and Insight Partners and TPG Global the same.
On Feb. 17, Party B submitted an unsolicited indication of interest to Weller to acquire all of Datto for $32.50 per share. On the same day, another private equity firm, referred to as “Party D” by Datto, contacted Qatalyst Partners on an unsolicited basis to say it had an interest in Datto.
On Feb. 18, Datto’s board met with members of the management team and representatives of Kirkland & Ellis to discuss management’s recent discussions with Qatalyst Partners and the preliminary indications of interest in acquiring the company. The board directed management to tell Qatalyst Partners to reach out to certain other private equity firms and potential strategic acquirers to see if there was interest in potential transactions with Datto.
After the Feb. 18 meeting, Qatalyst Partners contacted Insight Partners and TPG Global, Party B and Party C to tell them that Datto had received multiple unsolicited proposals and that they would have to submit revised proposals with increased offer prices. Qatalyst Partners also contacted Party A and Party D, seven other private equity firms, and six strategic parties that might have been interested in exploring a transaction with Datto. Party A, Party D and one other private equity firm referred to as Party E by Datto indicated they might be interested in making a proposal, while the other private equity companies and all the strategic parties passed.
On Feb. 23 Datto reported its financial results for the 2021 fiscal year, which were in line with and, in certain instances, exceeded, the company’s previously announced guidance.
On Feb. 24 Party C reached out to Qatalyst Partners to request a call with Weller to discuss Datto’s recent earnings release and other high-priority questions as Party C considered submitting a revised proposal.
On Feb. 25, Insight Partners and TPG Global submitted a revised indication of interest, proposing a price of $34 per share, as well as a draft merger agreement.
On Feb. 28, Datto and Party C signed a confidentiality agreement that allowed Party C to make acquisition proposals at any time following Datto’s entry into a definitive agreement for a third party to acquire Datto. After signing, Party C discussed recent financial results with Weller and then submitted a revised indication of interest valuing Datto at $33 to $34 per share.