The archive · Developer & Business Tools · Strategic decision · 2016–2020
LogMeIn's GoToMeeting buy bet ends in a $4.3B PE sale
After buying GoToMeeting for $1.8B to win crowded video conferencing, LogMeIn agreed in Dec 2019 to go private for $4.3B.
LogMeIn
What the business is
LogMeIn sells remote-access and collaboration software — best known for GoToMeeting video conferencing and its remote support tools — to businesses; it raised $30M in venture funding before going public in 2009, then expanded into unified communications by buying GoToMeeting from Citrix and Jive Communications.
Starting capital：$30M in venture funding before its 2009 IPO, per Crunchbase data cited by TechCrunch; the 2019 buyout valued the company at $4.3B, or $86.05 per share in cash.
How it started
LogMeIn raised $30M in venture funding and went public in 2009, building a business on remote access tools. In 2016 it paid Citrix $1.8B for GoToMeeting, and in 2018 it agreed to buy Jive Communications for up to $357M to deepen its position in enterprise unified communications and collaboration.
What happened
The additions made the portfolio bigger without making the market easier: GoToMeeting competed with Zoom, WebEx, BlueJeans and Google Hangouts in a crowded video-conferencing space. Reports that LogMeIn was up for sale leaked in September 2019; on 2019-12-17 the company announced an all-cash agreement at $86.05 per share — a 25% premium over the closing price on the day the leak hit, though below its $96.87 52-week high.
How it ended up
LogMeIn agreed on 2019-12-17 to be acquired by Francisco Partners and Evergreen Coast Capital for $4.3B in cash; the deal was expected to close in mid-2020 after a 45-day go-shop and standard regulatory review.
Background
LogMeIn started as a venture-backed remote-access software company, raised $30M, and went public in 2009. Its growth bet was acquisition: in 2016 it paid Citrix $1.8B for GoToMeeting to enter web conferencing, and in 2018 it agreed to buy Jive Communications for up to $357M to push deeper into enterprise unified communications and collaboration.
The portfolio grew without making the core market easier: GoToMeeting faced Zoom, WebEx, BlueJeans and Google Hangouts in a crowded video-conferencing space. By September 2019, media reports leaked that LogMeIn was up for sale.
On 2019-12-17 LogMeIn announced it had agreed to be acquired by affiliates of Francisco Partners and Evergreen Coast Capital — the private-equity arm of Elliott Management — for $4.3B, or $86.05 per share in cash. That was a 25% premium over the closing price on the day the sale reports leaked, but below its $96.87 52-week high.
CEO Bill Wagner framed the price as delivering a meaningful return to stockholders, with the PE owners expected to pursue the operational benefits needed for sustained long-term growth. The deal was slated to close in mid-2020, after a 45-day go-shop and regulatory review.
What has to be true
- $1.8B for GoToMeeting in 2016 and up to $357M for Jive in 2018 bought scale in unified communications, but GoToMeeting still faced Zoom, WebEx, BlueJeans and Google Hangouts.
- The pattern was consistent: a venture-funded startup that IPO'd in 2009 chose M&A over building, betting that buying distribution in a crowded market was faster than organic growth.
- The pressure became public in September 2019 when media reports leaked that LogMeIn was up for sale, which set the reference price for the deal that followed.
- The $86.05-per-share price was a 25% premium over the pre-leak close yet below the $96.87 52-week high — a premium to a leak-depressed price, not to the stock's peak.
What can be applied
Buying a competitor makes revenue bigger, not growth faster; when the acquired market commoditizes, the exit that follows can still be at a premium to a leak-depressed share price.
Aftermath
As of 2019-12-17 LogMeIn had agreed to the $4.3B all-cash sale to Francisco Partners and Evergreen Coast Capital, with a 45-day go-shop still to run and closing expected around mid-2020; the source material ends at the announcement.
Sources
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