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Private equity in action - Case Study

LogMeIn

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Country Hungary
Region Eszak-Magyarorszag
Investor 3TS Capital Partners
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When Hungarian software as a service provider LogMeIn took on investment from 3TS Capital Partners in 2004, there was an overwhelming need to establish a presence on the international stage in order to achieve scale. In addition, the company required management guidance, rebranding and access to crucial networks.

3TS and its co-investors provided this, redefining the company’s strategy and overseeing the relocation of the company HQ to Boston, Massachusetts, USA, to give it international reach - while still creating jobs in Europe. 3TS’s sector knowledge, coupled with operational insight and financial expertise, allowed it to put LogMeIn in the position it is today. Its flotation on NASDAQ in 2009 shows just how far small businesses can go when given the right support.

Pekka Mäki

Managing Partner

3TS

LogMeIn has now accomplished probably the largest ever technology IPO by a company with Eastern European origins. Quotation Marks Graphic
57%

IRR achieved for investors

10x

increase in employee numbers

What did the business need?

  • Investment in product development
  • Access to international networks
  • Management improvement
  • Building of corporate identity

How did private equity backing create lasting value?

  • Active board-level work and a strong management structure introduced
  • Strategic branding and marketing advice
  • Company headquarters relocated to Boston, USA, to improve global positioning, but employee numbers in Europe continued to increase
  • Main development centre remains in Budapest, Hungary, and represents more than 40% of LogMeIn’s worldwide workforce
  • Support in IPO process

What outcomes did private equity investment achieve?

  • Revenue grew from $2.6m at entry to $74.4m at exit, while EBITDA rose from -$2.3m to $13m
  • Returns of 9.1x for 3TS investors 9.1x, equating to a 57% IRR realised
  • Employee levels rose from 30 (2004) to 340 (2009)
  • Listing on NASDAQ in 2009 – share price has remained substantially abovethe IPO price since flotation

More information

LogMeIn

3TS Capital Partners

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