Datto opens up on impending IPO

MSP vendor reveals that PE backer will retain controlling stake following IPO and will have major input over its future

Datto's owner Vista Equity Partners will hold on to a controlling stake over the MSP vendor following its IPO and will retain its majority voting power within the business.

In an update on its original IPO filing at the end of September, Datto revealed that Vista will own roughly 72.2 per cent of common stock in Datto following the IPO.

This will mean Vista will retain key powers such as controlling who is elected to Datto's board of directors, a voting majority on matters that require shareholder approval, and significant influence on Datto's business plans and policy.

In another new update on its IPO, Datto claims it is anticipating its IPO price to land between $24 and $27 a-share.

This means Datto is aiming to raise net proceeds of $521.7m through its IPO assuming a value of $25 a-share.

The value is much higher than both the $100m in net proceeds that Datto forecasted in its initial filing on 30 September and the $400m forecast by Renaissance Capital.

Datto will use $521.7m in net proceeds to repay outstanding debts, which totalled $591.60m as of 30 June 2020.

The IPO filing will cost Datto $8.4m, consisting of around $3.2m in legal fees.

In a letter accompanying the filing, CEO Tim Weller invited potential public investors to join Datto.

"We would be thrilled to have you join us. Our story has always been one of creation, disruption and growth. We believe in the growth of the MSP industry as they simplify the management of technology for SMBs in an increasingly complex world, where new technology is both opportunity and threat. We are on this journey with our MSP partners and just getting started," he said.