Private equity firms Francisco Partners and Evergreen Coast Capital have agreed to purchase cloud-based connectivity provider LogMeIn for US$4.3 billion.
The company said the proposed acquisition by Francisco and Elliott Management affiliate Evergreen will help the company deliver the operational benefits needed to achieve sustained growth over the long term. The $86.05 per share offer represents a 25 percent premium over LogMeIn’s Sept. 18 stock price, the last business day before media reports appeared about a potential sale process.
“LogMeIn has a compelling product portfolio and leadership in the Unified Communications and Collaboration, Identity, and Digital Engagement markets,” Francisco Partners Senior Partner Andrew Kowal said in a statement. “We look forward to working with … the leadership team at LogMeIn to accelerate growth and product investment organically and inorganically.”
LogMeIn’s stock rose to $3.33 (3.96 percent) to $85.70 after the announcement.
The deal is expected to close in mid-2020 - if it happens, because the transition includes a 45-day “go-shop” period, allowing LogMeIn and its advisors to actively solicit alternative acquisition proposals.
“This transaction acknowledges the significant value of LogMeIn and provides our stockholders with a meaningful and certain cash offer at a compelling premium,” LogMeIn President and CEO Bill Wagner said in a statement. “Together, Francisco Partners and Evergreen are committed to addressing the unique needs of both our core and growth assets.”
The company was founded in 2003, and has been publicly traded on the Nasdaq stock exchange since July 2009. LogMeIn has made eight acquisitions over its 16-year history, most recently purchasing hosted VoIP and unified communications provider Jive Communications for $357 million in April 2018.
“This investment builds on the strength of our infrastructure and security software franchise and we are thrilled to partner with the company to achieve its long-term strategic vision,” Francisco Partners CEO Dipanjan “DJ” Deb said in a statement.
Francisco has a position in several communications and security companies including BeyondTrust, Metaswitch, Sectigo, SonicWall, and WatchGuard. The private equity firm has raised more than $15 billion and has invested in more than 275 technology companies since its founding 20 years ago.