Kaseya to acquire Datto, expanding opportunities for MSPs

Managed service providers (MSPs) are watching Kaseya’s acquisition of Datto; the US$6.2 billion deal seems aimed at creating a market leader for MSP platforms with next-level capabilities to combat the ransomware threat.

Datto is a data backup and disaster response company based in Connecticut. Kaseya is a Florida-based cloud security and management company. Both companies provide software to customers worldwide, including ransomware prevention and detection, remote monitoring and management (RMM), as well as cloud data protection.

Both companies offer their services through channel partners. Datto had more than 18,500 partners, while experts estimate that Kaseya has several thousand global partners. Kaseya said that more than 40,000 organizations worldwide use a Kaseya software solution.

With the new merged company, Kaseya will double its workforce from 1,700 to 3,500.

Michael Goldstein, chief executive officer of LAN Infotech, whose company works closely with both Datto and Kaseya, believes that the merger of the two companies will differentiate them from competitors such as ConnectWise and N-Able.

“This allows Kaseya to leapfrog ahead of the competition by adding all this technology together. Now, Kaseya’s product SKUs are endless,” said Goldstein. “It brings two big MSP-focused companies—Datto is 100 percent MSP-focused and Kaseya is up there too—so it’s bringing together a lot of great technology and combining a great backup strategy out there.”

Fred Voccola, CEO of Kaseya, stated that global customers can expect more functional, innovative and integrated solutions once the transaction is completed.

Datto CEO Tim Weller said that the merger with Kaseya will bring together a wider range of technology products to create more opportunities for MSPs.

Datto has a number of other holdings that will be included in the purchase. It owns Infocyte, a Texas-based security firm that helps MSPs protect, detect and respond to cyber threats emanating from endpoints and cloud environments. Infocyte also continuously collects and correlates data from endpoints to identify potential threats, and its technology is supported by experts in a Security Operations Center who are able to respond to cyber threats in real time.

Datto also acquired the threat detection company BitDam in March 2021. The Israel-based company developed Advanced Threat Protection (ATP) technology, which provides comprehensive defenses against malware, phishing, business email compromise attacks, account compromises and spam.

Kaseya’s all-cash purchase of Datto will be financed primarily by an equity consortium led by Insight Partners. Datto shareholders will receive US$35.50 per share, giving the company a market valuation of US$6.2 billion. The deal is expected to close in the second half of 2022.

Datto was founded in 2007 and went public on the New York Stock Exchange on October 23, 2020 with a opening stock price of US$27.10 per share, which peaked at US$32.72 per share a few weeks later.

Prior to the announcement of the acquisition, Datto’s stock had been trading between US$24 and US$26 per share since 2021.

In late trading on Monday, Datto shares surged 26 per cent on takeover news and are currently trading at an all-time high of US$34.72 a share.

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Jim Love, Chief Content Officer, IT World Canada

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