ConnectWise finalising deal to buy Axcient: Sources
Sources said ConnectWise is crafting a deal to buy the business continuity and disaster recovery vendor for as much as $500m
ConnectWise is finalising a deal to buy business continuity and disaster recovery vendor Axcient for between $400m and $500m, according to two people with knowledge of the deal.
The move would provide ConnectWise with a full-fledged MSP-focused business continuity and disaster recovery offering to go head-to-head with MSP platform powerhouse Kaseya, which acquired storage backup vendor Datto in June 2022 for $6.2bn.
Axcient is an attractive target for ConnectWise, bringing in about $75m in revenue with nearly $30m in EBITDA and year-over-year growth of 25 per cent, sources said.
ConnectWise CEO Jason Magee did not return a phone call or text message seeking a response. A ConnectWise spokesperson also did not respond to a request for comment.
Axcient declined to comment.
Partner reaction
Dustin Bolander, CIO and managing partner, and founder of Austin, Texas-based Clear Guidance Partners, said the Axcient acquisition is an MSP game-changer for ConnectWise.
"I think it's a really good fit that gives ConnectWise some intellectual property. Backup has been a gap for them," said Bolander. "The Axcient product has really matured. I'm actually looking forward to hearing how they're going to offer this to us. There are probably going to be some deals, and that is a call I would pick up the phone for."
Axcient's x360 Platform gives MSPs "flexible capabilities for disaster recovery. With just one platform for MSPs to protect everything, you can ensure business continuity, lower recurring costs, and drive profits and business growth," according to the company's website.
Rodney Bergeron, a cybersecurity fellow for Sherweb, an MSP-focused distributor, said the ConnectWise acquisition will be a big boost to MSPs and the SMB customers they serve.
"This joining of forces makes it easier for MSPs to offer complete, reliable IT services, helping to ensure their clients experience limited downtime, even during unexpected problems," said Bergeron in an email to CRN. "This move—and similar consolidation moves by others providing business continuity solutions—shows that the MSP industry is maturing and getting more serious about providing the most reliable solutions to meet the changing needs of businesses."
Both Axcient and ConnectWise are backed by private equity.
Thoma Bravo acquired ConnectWise in 2019, while Axcient has secured investments from Silver Lake, Peninsula Ventures, Scale Venture Partners, among others.
ConnectWise doesn't currently have its own line of business continuity products.
"I consider this a good move for ConnectWise as it gives them the chance to be more of a direct competitor in a space they couldn't effectively compete in before," said long-time ConnectWise partner Jason Slagle, president of Toledo, Ohio-based solution provider CNWR.
The move will increase parity with Kaseya, Slagle said.
Kaseya in April unveiled Kaseya 365, an MSP platform that incorporates endpoint management, endpoint security, backup and automation.
"As an answer to the [Kaseya 365] stuff, bringing in other tools to help compete there is good," he said.
Luis Alvarez, president and CEO of Alvarez Technology Group, a longtime Axcient and ConnectWise partner, said he expects the acquisition will quickly lead to timesaving, "seamless" integration of the Axcient offering with the ConnectWise platform.
"Right now, we have two portals, one to manage the Axcient backup system and the other to manage the ConnectWise RMM," he said. "With the tight integration that is sure to come from this, my team will be able to manage end points and backups from a single pane of glass. That is going to be a huge timesaver for us. Anything we can do to automate hardware and software management gives us more time to help drive the business success of our customers."
Alvarez, who is a member of the Axcient partner advisory board, said couldn't be happier about the increased opportunity that the deal will provide to expand the Axcient partner base under the ConnectWise umbrella.
"With the ConnectWise acquisition, Axcient is going to have access to deeper pockets and technology capabilities to pursue greater innovation for MSPs and their customers," he said. "This deal is going to allow Axcient to drive additional breakthrough innovation."
Alvarez said his Axcient sales are up double digits this year, as the platform is fully baked into every one of his MSP offerings. He expects that his Axcient sales will grow even more with his company's aggressive move to build out an AI practice for both its internal operations and for its customers.
He credited Axcient CEO Rod Mathews, who took the helm of the company nearly two years ago, for driving increased MSP profitability and big improvements in ease of doing business with the company.
"Axcient has always been partner-friendly, but the last few years under Rod Mathews they have really listened to their partners and made big improvements that have definitely increased partner profitability," he said.
As for ConnectWise, Alvarez said, the deal fills a huge gap in its product portfolio that will ultimately benefit the entire MSP community. "This provides the ConnectWise community with a really good option for backup and disaster recovery," he said. "I really appreciate the amount of investment we have seen from ConnectWise to make their products better and more secure. They are constantly adding new features and functionality."