Online-collaboration and identity-management vendor LogMeIn will double down on its market position after the Boston-based company agreed to go private through a $6.3b ($US4.3b) acquisition by private-equity firms.
LogMeIn has 45 days to canvass potential alternatives after conditionally accepting the offer of $126 ($US86.37) per share – a 25 per cent premium on the share price after rumours of the sale emerged on 18 September.
The deal, president and CEO Bill Wagner said, will position the company for “sustained growth over the long term” and “acknowledges the significant value of LogMeIn and provides our stockholders with a meaningful and certain cash offer at a compelling premium.”
The takeover bid was lodged by a consortium of private investors Francisco Partners and Evergreen Coast Capital Corporation, an affiliate of Elliott Management Corporation.
Investors were lured by the firm’s “compelling product portfolio and leadership” in core markets including unified communications and collaboration (UCC), identity, and digital engagement, Francisco Partners senior partner Andrew Kowal said.
Jesse Cohn, a partner with Elliott Management Corporation, said the deal, which is set to close by the middle of next year, would herald “the next phase of growth and value creation for LogMeIn”.
Diversifying the collaboration space
The acquisition marks a pivot point for LogMeIn, which has acquired numerous companies in recent years to expand its core business – which began as a remote-access product in 2003.
In 2015, LogMeIn acquired password-management stalwart LastPass for $162m ($US110m), giving it a strong position in the market for tools to help businesses reduce their exposure to security breaches due to weak or reused passwords.
Two years later, the company merged with GetGo, the Citrix Systems spinoff whose portfolio includes online-collaboration tools like GoToMeeting, GoToMyPC, GoToWebinar, and more.
In 2018, LogMeIn also acquired telephony provider Jive Communications in a deal that, Wagner said, would “complete our UCC vision”.
With over 2,700 employees and revenues of $1.77b ($US1.21b) in its last full financial year, LogMeIn – which opened its APAC headquarters in Sydney’s Martin Place last year – has a full and broad portfolio of variously integrated products.
Yet propelling LogMeIn’s vision forward drove it to repeatedly raise prices for some of its products – and eliminating free products – prompting a wave of customer complaints and defections.
Wagner is now looking towards artificial intelligence, launching its first AI-powered product – a digital customer-engagement platform called Bold360ai that Wagner called “one of LogMeIn’s great successes of 2018”.
AI also forms the basis of tools providing features such as automatic transcription and summarisation of online meetings, which will help it continue its expansion and further diversify its revenue base.
Leaning into the future
The acquisitions and product diversification are part of a strategy around “eliminating friction” in customer experience, Wagner – who joined the company in 2013 and became CEO in 2015 with a mandate to pivot it into the future – previously told Information Age.
The securing of private finance comes after a global restructuring this year, which was intended to increase the company’s sales capacity, improve awareness of key growth brands through better marketing programs, and stronger investment in R&D efforts around new opportunities.
It’s the latest step in what Wagner has called a “bold long-term strategy to move beyond our historic markets and expand into three larger, faster growing adjacencies that we believe will significantly increase our addressable market opportunity.”
LogMeIn’s future, he said, lies in bolstering its position in UCC, customer engagement and support, and identity-as-a-service (IDaaS) markets that surged from less than $147m ($US100m) in 2017 to $353m ($US240m) the next year.
IDC has projected the worldwide UCC market will grow at a “healthy” 7.1 per cent annually through 2023, with UCC program research director Rich Costello noting that “a more productive, intuitive end-user experience is still top of mind for many organisations, while the concept of integrating/embedding business processes and applications with 'intelligent' communications continues to gain mindshare."
With the private funding secured, Wagner intends to keep LogMeIn at the forefront of this trend.
“We believe we have the forward-leaning technology, leadership, market share and enviable scale necessary to become the defining leader in much bigger and faster growing markets,” he wrote. “We have validated our strategy and our ability to prosecute it.”
