Earlier today, it was announced that AVG Technologies has agreed to acquire the business of LPI. Below are a few thoughts on what
Trustworthy? I know both companies well, and when you introduce an acquisition into the mix, it can alter the culture of the combined companies. In fact, if you don’t mind a Pocket MBA moment, most mergers fail due to cultural (not financial) reasons. Grading trustworthiness, I’d give LPI high marks and AVG nearly the same. I do think this merger makes more since than the worst-kept-secret-in-the-SMB-channel possible merger of Symantec = LPI (obviously this acquisition did not occur). You grade Symantec for yourself as a long-term, trustworthy channel vendor, and you’ll have your overall answer about the goodness of fit between AVG and LPI.
(Pictured): Peter Sandiford, LPI's CEO, announced this morning that his company was acquired by AVG Technologies.
Community. LPI is a homegrown entity that grew up with SMB Nation participating in our second fall conference (2004 in Seattle) and attending its first European conference at our 2006 Amsterdam three-day conference. I also enjoyed the opportunity to introduce LPI into India as the guest of MSPONE in 2009.
Another example of LPI’s community outreach strategy was its formation of the MSP Partners trade group in the mid-2000s that is ultimately sold to CompTIA in late 2009. Overall, LPI was viewed as part of the community and sincerely caring for the small guy. It was (and remains) an asset in its next stage in life assuming it can retain core community talent such as Dave Sobel. LPI’s competitors, such as Kaseya, weren’t as warmly embraced in the SMB community, plus brought channel conflict baggage with a direct sales model competing with partners.
Stability. Another “gossip” item concerned LPIs financial performance in recent quarters. It had layoffs along the way. It’s facing an increasingly mature market where cloud computing solutions arguably don’t require the same degree of on-premises/remote management and monitoring. So AVG acquiring LPI scores high marks in terms of LPI remaining a viable and on-going concern. There’s a certain comfort zone for Joe the Computer Guy with this knowledge.
Innovation. I’d ask hard questions about AVG’s commitment to research and development. AVG is better known for its aggressive consumer marketing than cross-platform relationships. For example, hats off to Peter Sandiford when three years ago he was developing an RMM solution for NetSuite, the cloud-based ERP solution (we once used this at SMB Nation). I spoke with Sandiford about this, and it was promoted at the time within NetSuite’s annual May conference called SuiteWorld. I always watched LPI explore RMM in the telecom space. I hope the innovation continues.
Turnover. Both parties are restricting the flow of information regarding the acquisition prices, terms and conditions. The reason stated was “synergy,” which is directly from the M&A playbook. I hope that AVG warmly welcomes the team from LPI, and that the brain drain is minimized.
I’ll close with this. Everyone wants to know what LPI “got” from AVG in terms of $$$. The answer is that I don’t know. It’s highly unlikely that it will even approach the SolarWinds acquisition of N-able recently for over $100M. If all that was really purchased was the customer list, the acquisition price could be as low as one-tenth the price paid by SolarWinds for N-able. Just my SWAG on that one.