Vision Solutions Completes Double-Take Acquisition
Published: July 26, 2010
by Timothy Prickett Morgan
Backed by the cash of private equity firm Thoma Bravo, high availability software maker Vision Solutions was able to take the lion's share of the i HA space and get a good foundation for AIX HA through its acquisitions of rivals iTera and Lakeview Technology. And now, with the completed acquisition of long-time Windows clustering and replication partner Double-Take Software, Vision Solutions is expanding mightily into the Windows and Linux space and gearing up to do a whole lot of cross-selling into the IBM server base and expanding into other server bases.
To get the deal done, Double-Take had to settle some shareholder lawsuits in Massachusetts and Delaware, the details of which you can see here at the Securities and Exchange Commission's Edgar site. If you can make heads or tails out of the legalese, you are less tired than I am. Suffice it to say, some shareholders were not happy with the $242 million deal that Vision Solutions (or rather Thoma Bravo) cut to take over the public company. The exact nature of the settlements was not made clear, and at this point, it is moot. The deal is done, and after taking out the $88.7 million in cash and equivalents that Double-Take had in the bank when the acquisition was announced in May, Thoma Bravo is taking possession of a company that did $83.2 million in sales and had $13.5 million in net earnings in 2009 for $153.3 million net of cash. That's about 22 months of revenue, which seems pretty reasonable.
Nicolaas Vlok, Vision Solutions' president and chief executive officer, said in an interview that Double-Take will become a subsidiary of the HA provider and will be gradually integrated into it, much as iTera and Lakeview Technology were several years ago. Vision Solutions managed those acquisitions by not disrupting the engineering teams, and still has development labs in its headquarters in Irvine, California, as well as in Rochester, Minnesota, and Salt Lake City, Utah, where Lakeview and iTera techies coded their bits for the iSeries HA products; the company also does AIX and Windows HA software development in a lab in Waltham, Massachusetts. Double-Take's headquarters are in Southborough, Massachusetts, and its development labs are in Indianapolis, Indiana. Vlok said these Double-Take operations will stay where they are, with the obvious consolidation of back office functions that happens with all mergers and acquisitions.
Just as Vision Solutions did not mess around with the HA products of its former rivals when it acquired iTera and Lakeview Technology, Alan Arnold, Vision Solutions' chief technology officer said the company "was not going to mess with" Double-Take's products. "There's some synergies we can bring to our IBM products," Arnold hinted, but precise plans have not been hammered out yet because you can't do roadmaps until you actually own the company. Arnold and his tech team will be staying in Indianapolis to analyze the Double-Take products and their roadmaps. Unlike the iTera and Lakeview acquisitions, this one does not involve products that overlap, so it should be a much simpler task.
The real opportunity with Double-Take is not technology, but cross-selling and channel expansion. "It is less a technology integration than a go-to-market and services organization," says Vlok. "We think of this as a great cross-selling opportunity."
Vlok is not expecting a huge uptake of the i-based HA products among the 20,000-strong Double-Take base of Windows and Linux shops, but the 5,000 shops using i-based HA usually have Windows and/or Linux, and there are plenty of opportunities. The merged company will have over 800 distribution partners and will have a strong relationship with IBM (from the Vision Solutions side) and with Hewlett-Packard, Dell, Microsoft, and VMware (from the Double-Take side).
One immediate change that Vision Solutions will be making is to package up the EchoStream data replication and EchoCluster clustering tools for AIX (which came out of iTera) and rebrand them as Double-Take for AIX, mirroring the Double-Take for Windows products. Similarly, the Vision replicate1 data replication tool for AIX (which came out of Lakeview) will be rebranded Double-Take Share.
Over time, as the techies from the four formerly independent HA companies exchange ideas and code, there will be cross-pollination that will improve all of the products, says Arnold. The key thing is to keep the existing Double-Take customer base happy and grow it.
Vision to Buy Double-Take for $242 Million
Vision Solutions Acquires HA Rival Lakeview Technology
Double-Take Bolsters Data Recoverability in GeoCluster
Double-Take to Deliver Virtual HA Software with VMware
Thoma Cressey Strikes Again: Buys iTera to Merge with Vision Solutions
Venture Capitalist Thoma Cressey Acquires Vision Solutions
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