Kaseya Ltd., a provider of software tools for managing information technology infrastructure, today announced that it is acquiring fellow software maker Datto Inc. in a $6.2 billion deal.

The acquisition price amounts to $35.50 per Datto share, a 52% premium to the price at which the company’s stock closed on March 16. Kaseya will finance the transaction with funding from an investor consortium led by Insight Partners. TPG, Temasek and Sixth Street are also among the participants in the investor consortium. 

NYSE-traded Datto has a similar focus as Kaseya: It makes software that IT teams use to maintain infrastructure. Moreover, the companies focus on similar market segments. The companies’ products are popular among small and medium-sized businesses, as well as among managed service providers, or MSPs, firms that specialize in managing other organizations’ IT infrastructure. 

Privately held Kaseya is backed by more than $554 million in funding. The company offers an extensive lineup of software products designed to help MSPs and companies’ internal IT departments carry out their day-to-day work more efficiently. 

One of Kaseya’s most popular tools, Kaseya VSA, helps with device maintenance. Administrators use the tool to perform tasks such as logging into a malfunctioning device to carry out troubleshooting.   

Kaseya’s other offerings are organized into several different categories. Some of the company’s products focus on easing IT maintenance tasks such as network monitoring. Other Kaseya tools are designed to streamline operational workflows, such as processing technical support requests from employees. Kaseya also has a professional services business that helps organizations protect their networks from cyberattacks.

Similarly to Kaseya, Datto offers a wide range of products. It too provides tools that help IT teams maintain devices and streamline operational processes such as answering technical support requests. But the company has a more established presence than Kaseya in certain areas, notably the data protection segment.  

Datto offers an extensive array of data protection features as part of its product portfolio. The company’s software can back up business information stored on employee devices, in software-as-a-service applications and on Microsoft Corp.’s Azure platform. The acquisition of Datto will enable Kaseya to expand its presence in the lucrative data protection market. 

“Datto has always been committed to creating world-class technology for SMBs and delivering it through our global network of MSPs to align our growth with the channel,” said Datto Chief Executive Officer Tim Weller. “Combining with Kaseya brings together a broader array of technology products to create additional opportunities for MSPs.”

The deal is also set to significantly expand Kaseya’s customer base. About 40,000 organizations use Kaseya software, while 18,500 MSPs rely on Datto’s tools. Datto’s customer base generated $153.2 million in revenue for the company last quarter.

Kaseya, for its part, is privately held and doesn’t disclose revenue on a regular basis. But the company stated in 2020 that it had achieved annual bookings of “well over” $300 million during 2019. Kaseya more recently disclosed that its revenue grew by more than 20% in 2020 and by 25% last year. 

Kaseya’s acquisition of Datto is on track to complete in the second half of the year. After the deal closes, the company plans to enhance the integrations that some of its products provide for Datto’s software. Kaseya also intends to build new integrations. 

Photo: Kaseya