Datto is up 20% after announcing the Kaseya acquisition agreement

Datto (NYSE: MSP), a top provider of cloud-based and security software options for MSPs, and Kaseya, a leading provider of security and IT management software for SMBs and MSPs, announced that they had executed a definitive purchase agreement whereby Kaseya will acquire Datto. Datto stock shot up by 20% after this announcement.

This all-cash agreement will be attended to by an equity consortium. The consortium will be led by Insight Partners along with the investments from Temasek and TPG Capital. Sixth Street will also be one of the notable investors.

Management statements

Kaseya Chief Executive Officer, Fred Voccola, said:

Datto Chief Executive Officer, Tim Weller, said:

Mr Weller claimed that combining with Kaseya will help bring together a wider variety of technological products to encourage further the rise of additional opportunities. He said that he was encouraged by all the continued investments in the expanding worldwide MSP space.

Details of the agreement

According to the purchase agreement, Datto shareholders will get about $30.50 per share in an all-cash deal that values the company at roughly $6.2 billion. This includes a 52% premium to the company’s unaffected share price of around $23.37. The deal also includes a 48% premium to Datto stock’s unaffected 30-day volume-weighted average price as of March 16, 2022.

The transaction is expected to close by the end of the second quarter of 2022. Stockholders holding in aggregate roughly 70% of the outstanding and issued shares of Datto’s common stock approved this deal via written consent.