Private equity firms to acquire LastPass parent for $4.3 billion

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LogMeIn, the Boston-based software company that owns password manager LastPass, said it will sell itself to two private equity companies as part of a cash deal valuing LogMeIn at roughly $4.3 billion.

LogMeIn announced Tuesday it has agreed to be acquired by affiliates of Francisco Partners and Elliott Management Corp. at a purchase price totaling $86.05 per share. LogMeIn’s best known product likely is GoToMeeting, a video conferencing tool, but the company also purchased LastPass for $110 million in 2015. LastPass, with its 18.6 million stated users, is one of a number of password management tools promising to store and protect subscribers’ usernames and passwords.

LastPass competitors include Dashlane, which has raised $210 million in venture capital, and 1Password, which announced in November a $200 million funding round, among others.

The plan now is for LogMeIn’s new owners to “accelerate growth and product investment organically and inorganically,” Andrew Kowal, senior partner at Francisco Partners, said in a statement.

The deal is slated to close by mid-2020, but includes a provision granting LogMeIn 45 days to shop for another buyer that offers a better deal.

The sale is the latest example of private equity firms investing in cybersecurity companies. The British private equity firm Apax Partners said on Dec. 13 its agreed to acquire Coalfire, the cyber consulting firm, for an undisclosed sum, while Thoma Bravo confirmed in October it would spend $3.8 billion on Sophos.

Upon taking over a company, private equity firms typically seek to mold businesses in a way that benefits investors. That could mean focusing time and budget on fewer products, laying off employees and finding new ways to monetize existing offerings, among other strategies.

Exactly what this change could mean for the future of LastPass remains unclear.

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Elliott Management Corp., Francisco Partners, LastPass, mergers and acquisitions
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