K1 to Exit Axcient, a Category Leader in Business Continuity and Disaster Recovery Solutions

Rhea-AI Summary

K1 Investment Management has announced the upcoming acquisition of its portfolio company Axcient by ConnectWise. Axcient, a provider of advanced business continuity and disaster recovery (BCDR) solutions for managed service providers (MSPs), has seen significant growth under K1's investment. Key highlights include:

- Annual recurring revenue grew 7.5x during K1's investment period
- K1 facilitated strategic acquisitions of Anchor, Cloudfinder, and Replibit
- Axcient established itself as a category leader in backup and disaster recovery software
- The acquisition by ConnectWise aims to accelerate Axcient's mission to protect MSPs from cybersecurity risks
- K1 has realized over $1.8 billion of liquidity in the past ten months across its portfolio

Positive

• Axcient's annual recurring revenue grew 7.5x during K1's investment period
• K1 facilitated strategic acquisitions of Anchor, Cloudfinder, and Replibit, enhancing Axcient's market presence
• Axcient established itself as a category leader in backup and disaster recovery software
• K1 has realized over $1.8 billion of liquidity in the past ten months across its portfolio

Negative

• None.

Insights

Financial Analyst

The acquisition of Axcient by ConnectWise marks a significant milestone in the BCDR sector. K1's strategic investment has yielded impressive results, with Axcient's annual recurring revenue growing by 7.5x during their partnership. This growth, coupled with strategic acquisitions, has positioned Axcient as a category leader.

The transaction, while undisclosed, is likely to be substantial given Axcient's market position and growth trajectory. For K1, this exit contributes to an impressive $1.8 billion in liquidity realized over the past ten months, showcasing their successful investment strategy in the enterprise software space.

The consolidation trend in the MSP software market continues, with larger players like ConnectWise expanding their portfolios. This acquisition could lead to increased competition and potentially higher valuations for similar companies in the sector.

Tech Expert

Axcient's success in the BCDR space underscores the growing importance of robust cybersecurity and data protection solutions for MSPs. The company's x360 platform, recognized for its seamless and scalable protection, aligns well with the increasing demand for comprehensive IT management tools.

The integration of Axcient's BCDR expertise with ConnectWise's suite of solutions could create a more powerful, end-to-end offering for MSPs. This synergy may accelerate product development and innovation in the MSP software market, potentially raising the bar for competitors.

As cyber threats continue to evolve, the combined entity is likely to be better positioned to address the complex security needs of businesses, potentially leading to increased market share and customer retention.

Market Research Analyst

The BCDR market is experiencing rapid growth, driven by increasing cyber threats and the critical need for business continuity. Axcient's success and subsequent acquisition highlight the value investors and larger tech companies place on robust BCDR solutions.

This transaction reflects a broader trend of consolidation in the MSP software market, as larger players seek to offer comprehensive, integrated solutions. For investors, this trend suggests potential opportunities in identifying and investing in niche players with strong technology and growth potential.

The exit also demonstrates K1's successful strategy in the enterprise software space, with multiple high-value transactions in a short period. This track record could attract more capital to similar investment firms and potentially drive up valuations in the sector.

K1's strategic investment established Axcient as a BCDR leader, and the firm will have realized over $1.8B of liquidity in the past ten months

MANHATTAN BEACH, Calif. , Sept. 10, 2024 /PRNewswire/ -- K1 Investment Management, LLC ("K1"), one of the largest investors in small-cap enterprise software companies, today announced that its portfolio company Axcient, a provider of advanced business continuity and disaster recovery (BCDR) solutions for managed service providers (MSPs), has entered into a definitive agreement to be acquired by ConnectWise, with the transaction expected to close in the coming weeks.

Following K1's initial investment, Axcient focused on customer-driven innovation and strategic growth, resulting in annual recurring revenue growing by 7.5x over its investment period. During the partnership, K1 facilitated the strategic add-on acquisitions of Anchor, Cloudfinder and Replibit, further enhancing the company's market presence and product offerings, and solidifying its position as a category leader in backup and disaster recovery software.

"K1's partnership with Axcient has helped to transform the company's product offerings and establish itself as a leader in the BCDR space," said Taylor Beaupain, Managing Partner at K1."Through our operational support and growth initiatives, Axcient has continued to evolve its solutions, positioning itself as a trusted name for MSPs globally."

The acquisition by ConnectWise seeks to further accelerate Axcient's mission to protect MSPs and their clients from growing cybersecurity risks, combining its BCDR expertise with ConnectWise's comprehensive suite of IT management, cybersecurity, and data protection solutions. Axcient's robust technology, including its x360 platform, has earned industry recognition for offering seamless, scalable protection to businesses of all sizes.

"Axcient's partnership with K1 has been instrumental in scaling the company's technology and expanding its reach," said Rod Mathews, CEO of Axcient. "As we join the ConnectWise family, we are excited to continue delivering leading solutions that help MSPs protect their customers from ransomware attacks and other disruptions."

With the sale of Axcient, K1 has now realized over $1.8 billion of liquidity in the past ten months across its portfolio. This exit follows a series of successful transactions, including the recent take-private of MariaDB, the strategic growth investment in Board Intelligence, and the sale of GoCanvas to Nemetschek Group (FRA:NEM).

About Axcient
Axcient is an award-winning provider of Business Continuity and Disaster Recovery (BCDR) solutions, offering advanced cloud-based data protection services that ensure businesses can recover quickly from disruptions. Axcient's commitment to product innovation and strong partner support have earned it a trusted reputation for MSPs.

About K1
K1 is one of the largest investors in small-cap enterprise software companies. Headquartered in Manhattan Beach, California, K1 partners with strong management teams of high-growth software businesses, utilizing operationally-focused growth strategies to rapidly scale portfolio companies. Dedicated to transforming industries and driving productivity, K1 has collaborated with over 240 enterprise software companies since inception.

K1's exclusive focus, driven by its single team, single office, and single fund strategy, has resulted in realizations for many of its portfolio companies. Examples include Apttus (sold to Thoma Bravo), Buildium (sold to RealPage, NASDAQ: RP), Certent (sold to insightsoftware), Checkmarx (sold to Insight Partners and Hellman & Friedman), Clarizen (sold to Planview), FMG Suite (sold to Aurora Capital Partners), GoCanvas (sold to Nemetschek Group, FRA: NEM), Granicus (sold to Vista Equity Partners and Harvest Partners), Inthinc (sold to Orbcomm, NASDAQ: ORBC), Litera (sold to Hg Capital), Rave Mobile Safety (sold to TCV; now owned by Motorola Solutions, NYSE: MSI), TeamDynamix (sold to Level Equity), Unified (now owned by iHeartMedia), WorkForce Software (now owned by Insight Partners and Elliott Investment Management) and Zapproved (sold to Exterro).

For more information, visit k1.com and follow K1 Investment Management on LinkedIn.

 

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SOURCE K1 Investment Management

FAQ

What is the significance of ConnectWise acquiring Axcient?

ConnectWise's acquisition of Axcient aims to accelerate Axcient's mission to protect MSPs and their clients from growing cybersecurity risks. It combines Axcient's BCDR expertise with ConnectWise's comprehensive suite of IT management, cybersecurity, and data protection solutions.

How did K1's investment impact Axcient's growth?

K1's investment helped transform Axcient's product offerings and establish it as a leader in the BCDR space. Under K1's partnership, Axcient's annual recurring revenue grew by 7.5x, and the company made strategic acquisitions to enhance its market presence and product offerings.

What notable transactions has K1 Investment Management been involved in recently?

K1 has realized over $1.8 billion of liquidity in the past ten months across its portfolio. Recent transactions include the take-private of MariaDB, a strategic growth investment in Board Intelligence, and the sale of GoCanvas to Nemetschek Group.