Exclusive: Francisco Partners to buy Jamf in take-private deal, sources say

Private equity firm Francisco Partners is reportedly close to acquiring device management software provider Jamf, taking the company private approximately five years after its market debut. Vista Equity Partners, which holds a 34% stake, is expected to exit its position as part of the transaction. This move follows a significant decline in Jamf's stock, which has plunged 65% since its July 2020 IPO, despite recent 15% year-over-year revenue growth in Q2, as the company has struggled with profitability.

Analysis

Private equity firm Francisco Partners is reportedly nearing a deal to acquire device management software provider Jamf (JAMF.O), taking the company private five years post-IPO. This transaction facilitates an exit for Vista Equity Partners, which holds a 34% stake in Jamf and has generated approximately $1.3 billion in gross proceeds from prior sales. The deal, expected to be finalized and announced this week, follows a significant 65% decline in Jamf's stock since its July 2020 IPO and a 32% drop over the past 12 months.

Despite its stock performance, Jamf reported robust 15% year-over-year revenue growth, reaching $175.5 million in the second quarter, and subsequently raised its full-year guidance. The company specializes in managing Apple devices for enterprises, indicating a strong niche market. However, the article highlights Jamf's persistent struggle to achieve profitability, which likely contributed to its underperforming stock and the current take-private scenario.

The proposed acquisition at a market capitalization of roughly $1.5 billion provides a liquidity event for existing Jamf shareholders, albeit after a challenging public market tenure. This move underscores the increasing trend of public companies with growth but profitability challenges being absorbed by private equity. The mixed sentiment surrounding the news reflects the dual nature of an exit opportunity for shareholders against the backdrop of prior stock underperformance.

Key Decisions for Investors

• Current Jamf shareholders should assess the acquisition terms against their cost basis and the company's challenging public market performance to determine the optimal exit strategy.
• Investors holding similar growth-oriented, yet unprofitable, technology companies should consider the implications of this take-private deal, as it underscores the market's increasing demand for clear profitability pathways.
• Institutional investors should monitor the prevalence of such take-private transactions, as they indicate private equity's continued appetite for public companies with strong underlying assets but valuation pressures due to profitability concerns.