Thoma Bravo-backed workplace software firms Condeco and iOffice + SpaceIQ merge

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

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

Personal fairness companies 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, mentioned Thoma Bravo senior accomplice A.J. Rohde mentioned in an interview with CNBC.

“Individuals do not discuss that lots … however that was taking place earlier than Covid,” Rohde mentioned. “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 mentioned, as a result of many individuals felt employees would not be again within the workplace for a very long time. Nevertheless, Rohde anticipated {that a} hybrid mannequin would emerge and firms would want to handle the ebb and circulation of employees into firm amenities.

“We felt that distant work, … or extra importantly, that hybrid work was right here eternally, and that backing the very best vendor out there to consolidate that market was really a extremely optimistic thesis,” he mentioned.

In current months, quite a few giant employers have been pushing to carry workplace employees again. After Labor Day, there was a bump up in workplace occupancy, in keeping with information from Kastle Methods, a safety administration agency that displays entry swipes on the 2,600 buildings in its community. Based mostly 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 mentioned the variety of employees getting into workplaces varies from day after day, with midweek seeing the best attendance. Final week, the index hit 54.8% — its highest day by day occupancy charge because the pandemic started.

“When an employer will get their staff again into the workplace, they should have an surroundings that is creating a necessity for these staff to come back again. In order that they’re on the lookout for software program and expertise to make that have a collaborative expertise,” mentioned Brandon Holden, the chief govt of iOffice + SpaceIQ, who shall be named CEO of Eptura.

Brandon Holden, CEO Eptura

Supply: Eptura

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

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

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

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

A.J. Rohde, a Senior Accomplice at Thoma Bravo

Supply: Eptura

That scale shall be helpful. In a analysis observe Monday, Morgan Stanley analyst Josh Baer mentioned he expects the “future of labor” is a crucial theme for software program distributors as the dimensions of the market might double over the following 5 years. However corporations might want to stand out in an more and more crowded surroundings.

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

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