My friend Mike just asked me for thoughts about today's announcement that LogMeIn is being acquired for $4.3 billion by a consortium of private equity firms.
It's certainly significant to anybody with a financial stake in the company! That's a huge chunk of change (it's an all-cash deal), which should set up the current management team for life. Stockholders make out well too, as the price per share includes a healthy premium over recent trading prices.
But this kind of deal is a different beast than Microsoft acquiring Placeware, or Cisco acquiring WebEx. In cases where software vendors take over other software vendors, they usually want to make sweeping changes as fast as possible. Either the product needs to be integrated into the acquirer's existing product suites, or it needs to be killed off so that the customer base can be transitioned to the acquirer's preferred products.
Customers in those situations can expect noticeable inconveniences, as knowledgeable employees leave the acquired company, sales and renewal terms get altered, and support staff struggle to come up to speed on the acquired technology.
In this case though, we are faced with a change of financial ownership that does not immediately impact operations. Sure, the new owners MAY elect to restrategize and change development, sales, or support priorities. But it's not inevitable, and it's not time-critical. For the moment, we can assume they see the potential for continued growth in the existing company and that they want to keep things expanding to keep driving up valuation to make their investment pay off.
There are other, less stable scenarios of course. The investment team could try to "flip" their new asset and sell it off to another vendor. Or the LogMeIn team could be following through on the sentence buried deep in the press release:
The definitive agreement for the transaction includes a customary 45-day "go-shop" period which permits LogMeIn and its advisors to actively solicit alternative acquisition proposals, and potentially enter negotiations with other parties that make alternative acquisition proposals. LogMeIn will have the right to terminate the definitive agreement to accept a superior proposal subject to the terms and conditions of the definitive agreement.
If they had seen prior interest from another acquirer, but not at an attractive enough price, this lets LogMeIn see if the interest is strong enough to stimulate a bidding war. That's a high stakes gamble, and not necessarily what's happening here.
So facing a lack of any other information, I'd tell existing customers not to panic. And congratulations to the current owners and shareholders!