ConnectWise Mulls Sale To Private Equity: Sources

“The talk went from ‘ConnectWise is being sold’ to ‘PEs are in their house having meetings day in and day out, and they’re all in there bidding,” one source tells CRN, noting that Bain Capital is currently a strong candidate. Bain declined to comment when asked by CRN about a potential deal.

MSP platform powerhouse ConnectWise is mulling bids from private equity players, sources told CRN.

Among the private equity companies in the running are Bain Capital, according to two people close to the deal.

“Bain has been very aggressive,” said one source who valued the company at between $6 billion and $8 billion. “But the big names are all in there.”

The other source said the bidding process has heated up recently.

“The talk went from ‘ConnectWise is being sold’ to ‘PEs are in their house having meetings day in and day out, and they’re all in there bidding,” one source told CRN, noting that Bain Capital is currently a strong candidate.

The groundwork for a potential deal may have started earlier this year when ConnectWise raised prices by as much as 10 percent on some of its IT operations software and raised sales quotas for its internal sales teams, sources told CRN.

Moves like that typically are made to boost profitability ahead of the due diligence that comes as part of the acquisition process, the sources told CRN.

One MSP executive said a ConnectWise insider told him recently to expect a sale of the company sometime after April.

ConnectWise, which has more than 3,000 employees worldwide, was acquired by private equity firm Thoma Bravo in 2019 for an undisclosed amount, though estimates at the time pegged the deal’s value at $1.5 billion. Six of ConnectWise’s eight board members are from Thoma Bravo.

[RELATED: ConnectWise Security Exec On MSP Threat Report: ‘It’s An Arms Race’]

Sources who spoke with CRN cautioned that ConnectWise could reject all offers or accept an offer from a buyer not currently part of the bidding process.

ConnectWise CEO Jason Magee and a ConnectWise spokesperson did not respond to a request for comment as of press time.

A Thoma Bravo spokesperson said CRN’s request for comment had been forwarded to the appropriate team for response. Bain Capital declined to comment when asked by CRN about a potential deal.

Executives at multiple MSPs told CRN they have been interviewed about ConnectWise in recent weeks by research firms that drilled them about the company’s products, practices and competitive strengths and weaknesses.

Such firms routinely call on the channel as part of the due diligence process ahead of large acquisitions or funding rounds, MSP executives told CRN.

“The last time it was this intense, the Datto merger was announced about 60 days later,” said one MSP executive who was interviewed by research firms prior to Kaseya announcing its $6.2 billion acquisition of Datto last year. “The [most recent] interview I did was about ConnectWise. At the end, I asked the guy how many more he had, and he said they do 250 interviews before they’re done.”

Tampa, Fla.-based ConnectWise was founded by Arnie Bellini, who stepped down as CEO when the company was sold in 2019. At the time, Thoma Bravo also owned ConnectWise competitor Continuum, which was then folded into ConnectWise in October 2019.