Kaseya's pending $6.2 billion acquisition of Datto, funded by private equity firm Insight Partners, is expected to close in the second half of 2022. The deal will create a massive software provider that assists MSPs with business automation, IT management, security and data protection capabilities.
But what's truly next -- especially in terms of Kaseya-Datto M&A deal milestones? Glad you asked. Here's a timeline of dates and developments for MSPs to note. Keep checking back for new dates and milestones.
November 2021 to April 10, 2022: The secret negotiations to buy Datto -- Who bid, how much and when.
April 11, 2022 - Kaseya announces agreement to acquire Datto:
Potential MSP Upside: The deal provides clear potential upside for MSPs that run Datto's data protection and PSA (professional services automation) software, and Kaseya's popular RMM (remote monitoring and management) software platforms.Potential MSP Concerns: Some MSPs -- particularly some smaller service providers -- worry that the two corporate cultures won't blend, and that Datto's fanatical focus on MSP community could suffer. Also of concern: Some MSPs fret about Kaseya's licensing policies and support.A Key Priority for Kaseya: Datto supports more than 18,500 MSPs -- and roughly 1,400 of those MSPs spend at least $100,000 in ARR (annual recurring revenue) with Datto, according to a February 2022 earnings report from the company. It's a safe bet Kaseya will work hard to retain and grow relations with those influential MSPs. Week of April 19, 2022
Kaseya CEO Vows MSP Support: Kaseya CEO Fred Voccola -- through multiple media reports and during an appearance at Robin Robins' conference -- vowed to properly support the Datto partner base.Big Antitrust Concerns? Not Really, But: Multiple sources check in with ChannelE2E, asking if the Kaseya-Datto deal will potentially trigger antitrust scrutiny from the U.S. Department of Justice. It's safe to expect the U.S. federal government to give the pending M&A deal a look. But we expect the deal to be approved.ConnectBooster Chatter: Some MSPs have threatened to petition the government with complaints about licensing changes and price hikes involving ConnectBooster -- a business that Kaseya allegedly owns. Still, Kaseya as of March 2022 said it had "no information to share" regarding ConnectBooster and that ownership rumor, ChannelE2E reported at the time.Bottom Line: Again, ChannelE2E suspects the federal government will give the Kaseya-Datto deal a look. If a request for more information surfaces -- which is common -- it could trigger another 30-day cycle on the M&A timeline, some sources suggest. Still, ChannelE2E does not anticipate the deal getting blocked. The MSP software industry, after all, is filled with healthy established rivals and well-funded upstarts that are gaining traction. April 26, 2022 - Datto's Strength -- And Potential Weakness?:
Cloud-Managed Hardware: Datto announced a new storage appliance called the SIRIS 5. The news essentially reinforces one of Datto's greatest strengths -- and a potential weakness. Namely, the company's dependence on hardware appliances.Reality Check: Datto and mainstream media continue to position the company as a provider of security and cloud-based software solutions. That's mostly true. And the business has been growing. But the descriptors gloss over the fact that Datto has a massive installed base of on-premises storage devices that link to cloud-based services. If pure cloud storage services somehow disrupt appliance-based business models, one of Datto's greatest revenue streams could be at risk. Moreover, Datto's network hardware business hasn't lived up to company expectations, ChannelE2E believes.Datto Pivots: Datto remains committed to that SIRIS appliance business, but the company has also pushed hard into pure cloud storage and data protection services that don't require on-premises hardware appliances. Examples include Cloud Continuity for PCs, and Continuity for Microsoft Azure. Still, the Azure service is quite new and essentially late to market compared to multiple venture-backed data protection services that run on Azure, AWS and Google Cloud. April 27, 2022 - Kaseya-Datto Clean-Room? (Not Yet)
What is an M&A Clean Room?: A clean room team is a "secure environment in which consultants, designated employees, or both can receive competitively sensitive information while continuing to adhere to the antitrust laws" during the M&A process, Deloitte notes.Not Yet: Kaseya and Datto have not yet set up an M&A clean-room team, Kaseya confirmed to ChannelE2E. The apparent reason? It's simply too early in the M&A process, and communications between the companies remains minimal but cordial ahead of the deal's expected finalization in the second half of 2022.An example M&A Clean Room: When Hewlett-Packard acquired Compaq in 2002, a clean room team (spanning both companies) worked to identify and coordinate HP-Compaq product roadmaps and organizational changes ahead of the M&A deal's finalization. May 9, 2022 - Datto Quarterly Earnings: The results show Datto had momentum heading into the Kaseya M&A deal.
May 13, 2022 - Who Bid for Datto: An SEC filing and ChannelE2E reporting reveal who bid for Datto, how much and at what point in the M&A process.
Mat 14, 2022 - Why Thoma Bravo Exited the Bidding for Datto: ChannelE2E revealed exclusive details.
Still to Come: Next Kaseya-Datto M&A Milestones
June 20-23, 2022 - Kaseya Conference: Kaseya is scheduled to host the Kaseya Connect IT Global 2022 conference for MSPs and IT professionals in Las Vegas.
September 11-13, 2022 - Datto Conference: Datto is scheduled to host the DattoCon 2022 conference for MSPs in Washington, D.C. As of May 4, 2022, the official DattoCon 2022 conference website still lists a "save the date" rather than conference speakers, agendas and content. Among the big wildcards: Will the M&A deal with Kaseya close before or after DattoCon?
November 11, 2022: The deal needs to be completed by this date. However, a variable such as an "order or injunction arising under any Antitrust Law" can extend the deal completion deadline to April 11, 2023, according to a filing with the SEC.
Blog originally published May 4, 2022. Updated regularly thereafter. Keep checking back for continued timeline updates.
