Thoma Bravo-backed office software program corporations Condeco and iOffice + SpaceIQ merge

Places of work are busier now than they have been at any level since Covid first despatched staff dwelling in March 2020. However firms are nonetheless within the thick of adapting to a extra distributed workforce, creating a possibility for office know-how firms like Condeco and iOffice + SpaceIQ.

The 2 firms are merging to create Eptura, Thoma Bravo will announce Tuesday. The deal gives the brand new firm with higher scale to compete in a extremely fragmented market, which is estimated to be value about $25 billion.

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Personal fairness corporations Thoma Bravo and JMI Fairness had beforehand invested in Condeco, a number one supplier of workspace scheduling software program, and iOffice + SpaceIQ, a world office and asset administration firm, and can stay Eptura’s main traders. Monetary phrases weren’t disclosed.

Lengthy earlier than the pandemic, the shift to a extra distributed workforce was already underway, stated Thoma Bravo senior accomplice A.J. Rohde stated in an interview with CNBC.

“Folks do not speak about that rather a lot … however that was taking place earlier than Covid,” Rohde stated. “Covid put it into hyperdrive.”

Within the early days of the pandemic, Thoma Bravo’s curiosity in office-centric software program was a little bit of a contrarian view, Rohde stated, as a result of many individuals felt staff would not be again within the workplace for a very long time. Nonetheless, Rohde anticipated {that a} hybrid mannequin would emerge and corporations would wish to handle the ebb and circulation of staff into firm services.

“We felt that distant work, … or extra importantly, that hybrid work was right here without end, and that backing the most effective vendor out there to consolidate that market was truly a extremely constructive thesis,” he stated.

In current months, various massive employers have been pushing to convey workplace staff again. After Labor Day, there was a bump up in workplace occupancy, based on information from Kastle Techniques, a safety administration agency that screens entry swipes on the 2,600 buildings in its community. Primarily based on its 10-city common, occupancy charges have held regular round 47% in two weeks ended Sept. 21. That is up from 43.8% on the finish of August.

Kastle stated the variety of staff coming into workplaces varies from each day, with midweek seeing the best attendance. Final week, the index hit 54.8% — its highest every day occupancy fee because the pandemic started.

“When an employer will get their staff again into the workplace, they need to have an atmosphere that is creating a necessity for these staff to return again. So that they’re in search of software program and know-how to make that have a collaborative expertise,” stated Brandon Holden, the chief govt of iOffice + SpaceIQ, who will likely be named CEO of Eptura.

Paul Statham, founder and CEO of Condeco, will be a part of Eptura’s board and can proceed working with Thoma Bravo. The mixed firm will likely be primarily based in Atlanta, and make use of greater than 1,000 worldwide and serve 16,000 firms together with Slack, Zoom, Nasdaq and Johnson & Johnson.

The formation of Eptura is the newest step in a course of that started greater than a 12 months in the past, Rohde stated. In August 2021, iOffice and SpaceIQ merged and now Condeco’s capabilites are being added to the combo.

“This isn’t your backyard selection, plain vanilla non-public fairness deal in software program. It is a lot of market work, a variety of perception in a market,” Rohde stated.

“The businesses had been all good merchandise however subscale,” he stated. “Now, the corporate may be very massive. … The businesses had been possibly barely extra regionalized, and possibly extra … one-solution targeted, now we have now a platform.”

That scale will likely be helpful. In a analysis notice Monday, Morgan Stanley analyst Josh Baer stated he expects the “future of labor” is a vital theme for software program distributors as the dimensions of the market may double over the following 5 years. However firms might want to stand out in an more and more crowded atmosphere.

“The aggressive panorama addressing the market has intensified,” Baer wrote.