Freshworks acquires Device42 for $230 million to boost capabilities in advanced IT asset management

Freshworks, the Chennai/US-based SaaS company has acquired the US-based startup Device42 for $230 million. This is the first acquisition Freshworks has made post the company’s IPO in September, 2021 that will boost its capabilities in advanced IT asset management.

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Announced the entry into a definitive agreement to acquire Device42, an IT asset management company with more than 800 customers in over 60 countries, further strengthening Freshworks’ IT solutions for mid-market and enterprise companies, Freshworks said in a statement.

In a filing with the United States Securities and Exchange Commission, Freshworks said that on April 30, 2024, it entered into an Agreement and Plan of Merger with D42 Parent, Inc., a Delaware corporation, pursuant to which Freshworks, through its wholly-owned subsidiary Doppler Merger Sub, Inc., a Delaware corporation, will acquire all of the outstanding equity interests of Device42 for an aggregate purchase price of $230 million on a cash-free, debt-free basis, subject to customary purchase price adjustments as set forth in the Merger Agreement.

The purchase price will be paid in the form of $215 million of cash and an equity rollover of $15 million by Raj Jalan and certain of his affiliates..

Girish Mathrubootham, Founder, Freshworks, in a call with analysts while discussing the company’s first quarter financial results on Thursday said with more than 800 customers around the world, Device42 provides enterprise grade IT asset management capabilities, which the company believes can further strengthen Freshservice offering.

“This is our first acquisition since we became a public company in 2021 and I’m excited about how this will enhance Freshservice, which is currently our fastest growing business,” he said. Freshservice On-Call Management enables companies to limit the disruption caused by critical incidents and restore business operations fast by streamlining incident response.

“With this acquisition, we will be able to provide advanced asset discovery and application dependency mapping across data center and cloud environments”, he added.

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“We have been partnering with them for the last 18 months. So, we have a product integration that allows an IT Service Management customer to easily flip into the Device42 environment. We’ve been co selling with them to large customers. We called out one of the customers last quarter was a large apparel retailer. Device42 is integral to that sale”, he said.

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