ConnectWise CEO Jason Magee said the company is in a private equity “time horizon” of four to seven years to be acquired despite market conditions being unfavorable.
“Long story short, day one when TB (Thoma Bravo) acquired us we were for sale,” he told CRN in an exclusive interview. “Every PE company is in the business of buying, but more importantly, selling companies. So it’s not a matter of if, it’s when.”
There has been speculation for months about a possible acquisition of the Tampa, Fla.-based vendor, which was acquired by Thoma Bravo in 2019, with sources close to the deal saying the bidding war had been heating up and that ConnectWise was mulling bids from private equity players.
But Magee said that he is “always talking” to private equity companies.
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“I meet with bankers and talk with people on a monthly basis,” he said. “You’ve got to always have the relationships and establish relationships. So when that time comes, they already know who we are, what we’re about and they know about our business and whatnot.”
Within months of Thoma Bravo buying ConnectWise, the company was introduced to bankers such as Goldman Sachs, JP Morgan, Morgan Stanley, “you name it,” he said.
A source close to the deal told CRN that Thoma Bravo was happy with offers they recently received but they know the company can be worth more a year from now, with the possibility of an IPO.
“This space is still in an infancy right now, it’s growing tremendously and it’s going to keep growing and building value. Thoma Bravo and the board know that,” the source told CRN. “It wasn’t only about the money being offered, it was about the culture fit.”
ConnectWise, which has more than 3,000 employees worldwide, was acquired by Thoma Bravo for an undisclosed amount, though estimates at the time say the deal’s value sat at about $1.5 billion. Six of ConnectWise’s eight board members are from Thoma Bravo.
Sources told CRN in April that one private equity frontrunner for a possible buyout was Bain Capital but the firm has since been knocked out of the running.
“Bain [Capital] was considered a front-runner, but they were not selected to go forward,” a source close to the bidding process told CRN at the time. “Everyone in that very, very tight circle of people that know what is going on was stunned that Bain was not selected to go forward. That was really shocking to a lot of people involved because Bain had the most buzz.”
Another source said Bain did not “meet the minimum asking price during what was described as an invitation-only auction orchestrated by ConnectWise’s private equity owner Thoma Bravo.”
The vendor is being valued between $6 billion and $8 billion, sources said, and they weren’t getting that price from Bain.
Magee did not disclose whether a bidding war is currently happening or not. But since he said the company is always for sale, he’s ready to act when the opportunity presents itself.
“As a CEO at some point, they’re going to say, ‘Hey, let’s do something here.” And I’ve got to be ready. That’s what relationships are about,” he said. “But that’s up to them. If they ask, I’ll go deliver.” LEARN MORE: Mergers and Acquisitions
CJ Fairfield is an associate editor at CRN covering solution providers, MSPs and distributors. Prior to joining CRN, she worked at daily newspapers, including The Press of Atlantic City in New Jersey and The Frederick News-Post in Maryland. She can be reached at [email protected].
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