Datto Holding IPO. Largest MSP Technology Unicorn With A Clear Path To Profitability

Datto is the leading provider of cloud-based software, backup, recovery and business continuity solutions. Managed Service Providers (MSPs) rely on Datto for mission-critical business continuity, disaster recovery, file backup and sync solutions. Tech unicorn secures, protects and provides access to mission-critical SMB data delivering solutions through extensive global network of 17,000+ MSP partners. According to IDC, by 2023 67% of SMBs will have digital transformation as a key part of IT strategy. SMBs are collecting, generating and storing data to perform mission-critical functions.

Datto plans to use all of the net proceeds of this IPO to repay outstanding borrowings of ~$600 million under Credit Facilities. Interest expenses totaled more than $100 million for the last 2.5 years and paying off the borrowings may significantly improve profitability and operating cash flows of the company. Lead underwriters of the deal are Morgan Stanley, BofA Securities, Barclays and Credit Suisse.