This story originally appeared in our sister publication the Boston Business Journal.
Enterprise software company LogMeIn Inc. is the latest company to be gobbled up by private equity firms in a $4.3 billion exit that reflects the growing interest of cash-rich PE firms in New England companies.
Boston-based LogMeIn announced on Tuesday the company has entered into a definitive agreement to be acquired in a deal led by affiliates of Francisco Partners, a technology-focused private equity firm with offices in San Francisco, New York, and London. Evergreen Coast Capital Corporation, the private equity affiliate of Elliott Management Corporation, participated in the all-cash transaction.
The sale, which comes after weeks of rumors LogMeIn declined to confirm, values the company at $86.05 per share, an aggregate equity valuation of approximately $4.3 billion.
A deal with private equity would make “perfect sense” for the firm, according to one M&A lawyer who spoke with the Business Journal amid the rumors. “Private equity is looking to do large deals with companies that have a good, solid revenue model and cash flow," said Neil Aronson, an M&A lawyer and partner at Needham-based Gennari Aronson.
Earlier this month, Anshuman Kanwar, the former vice president and CTO of LogMeIn’s Unified Communications and Collaboration business unit became the latest longtime executive at LogMeIn who left the company (or announced plans to retire) in the space of a few months.
LogMeIn, led by CEO Bill Wagner, will become a privately held company a little over a year after Watertown-based athenahealth Inc. was acquired by Veritas Capital and a private equity subsidiary of Elliott Management for $5.7 billion in cash.
“We have deep appreciation for the LogMeIn franchise and leadership team from our long-term involvement in the business,” said Elliott Partner Jesse Cohn and Portfolio Manager Jason Genrich in a statement. “We look forward to partnering with Bill and the entire executive leadership team alongside Francisco Partners on the next phase of growth and value creation for LogMeIn as a private company.”
The agreement includes a 45-day go-shop period. If LogMeIn doesn't accept another offer, the transaction is expected to close in mid-2020.
Qatalyst Partners and J.P. Morgan Securities LLC are acting as financial advisers to LogMeIn, and Latham & Watkins LLP is serving as the company’s legal adviser.
