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What the LogMeIn Acquisition Means

In a move that Bill Wagner, president and CEO of LogMeIn, says addresses "the unique needs of both core and growth assets," LogMeIn yesterday announced it has entered into a definite agreement to be acquired by affiliates of private equity firms Francisco Partners and Evergreen Coast Capital. Per the agreement, the firms would acquire the company with an all-cash transaction valued at approximately $4.3 billion. The deal is expected to close in mid-2020, pending customary closing conditions.
 
The news of the acquisition came as a shock to many who saw LogMeIn’s recent market activities as a clear path to creating a strong UCC offering. Recently, LogMeIn introduced a new GoToMeeting experience, dubbing it the “next step” in its UCC journey. This move followed on the “GoTo” UCC portfolio rebranding announced in March at Enterprise Connect 2019, along with the launch of GoToConnect and GoToRoom offerings. LogMeIn itself acquired the GoTo nomenclature in the $1.8 billion acquisition of Citrix’s GoToMeeting division in July 2016, to bring together two of the biggest web and videoconferencing providers into one. More recently, LogMeIn last year acquired Jive Communications as a means of accelerating its "growth and presence" in the SME and large enterprise UCC markets.
 
On face value, investors believe "they can create more value” for LogMeIn through ownership, Dave Michels, principal analyst at TalkingPointz, told No Jitter. Under private equity ownership, companies are typically given license to focus on long-term growth without the added pressure of being publicly traded, or they’re broken into parts that investors deem of value, Michels explained.
 
Based on a prepared statement, Francisco Partners at least seems interested in the former. In that statement, Andrew Kowal, senior partner at the firm, said, “We look forward to working with Bill and the leadership team at LogMeIn to accelerate growth and product investment organically and inorganically,” citing that the company “has a compelling product portfolio and leadership in the unified communications and collaboration, identity, and digital engagement markets.”
 
LogMeIn is far from the only company that has gone the private equity route. For example, it has been almost two years since Mitel was acquired by an investor-led group, and it is full steam ahead on delivering on its category roll-up strategy. Whether the Mitel model proves true for LogMeIn, only time will tell.

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