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

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Offices are now at their busiest level since Covid first sent staff home in March 2020. But companies are still in the midst of adapting to a more distributed workforce, creating an opportunity for workplace technology companies like Condeco and iOffice + SpaceIQ.

The two companies are merging to form Eptura, Thoma Bravo announced on Tuesday. The deal gives the new company greater scale to compete in a highly fragmented market estimated to be worth approximately $25 billion.

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Private equity firms Thoma Bravo and JMI Equity previously invested in Condeco, a leading provider of workplace scheduling software, and iOffice + SpaceIQ, a global workplace and asset management company, and will remain the principal investors in Eptura. Financial terms were not disclosed.

Well before the pandemic, the shift to a more distributed workforce was underway, said AJ Rohde, senior boss at Thoma Bravo, in an interview with CNBC.

“People don’t talk about it a lot … but that happened before Covid,” Rohde said. “Covid put it in hyperdrive.”

In the early days of the pandemic, Thoma Bravo’s interest in office-centric software was somewhat contrary, Rohde said, because many people felt workers wouldn’t be back in the office for long. However, Rohde anticipated that a hybrid model would emerge and that companies would have to manage the ebb and flow of labor across operations.

“We felt that remote work…or more importantly, that hybrid work was here forever, and that it was a really positive proposition to support the best vendor out there to help consolidate that market,” he said.

In recent months, some big employers have been pushing to bring back office workers. After Labor Day, office occupancy rose, according to data from Kastle Systems, a security management firm that monitors access credentials to the 2,600 buildings on its network. Based on the 10-city average, the occupancy rate remained steady at about 47% in the two weeks ended September 21. That’s up from 43.8% at the end of August.

Kastle said the number of workers entering the offices fluctuates from day to day, with weekdays seeing the greatest number of visitors. Last week, the index hit 54.8% — the highest daily utilization since the pandemic began.

“When an employer brings their employees back into the office, they need to create an environment that creates the need for those employees to come back. So they’re looking for software and technology to make that experience a collaborative experience,” said Brandon Holden , CEO of iOffice + SpaceIQ, who will be appointed CEO of Eptura.

Brandon Holden, CEO of Eptura

Source: Eptura

Paul Statham, Founder and CEO of Condeco, will join the Eptura Board of Directors and continue to work with Thoma Bravo. The combined company will be based in Atlanta, employ more than 1,000 people worldwide and serve 16,000 companies including Slack, Zoom, Nasdaq and Johnson & Johnson.

The formation of Eptura is the latest step in a process that began more than a year ago, Rohde said. In August 2021 iOffice and SpaceIQ merged and now the capabilities of Condeco are coming along.

“This is not your classic private equity deal in software. That’s a lot of market work, a lot of belief in a market,” said Rohde.

“The companies were all good products but underperformed,” he said. “Now the company is very big. … The companies were maybe a little more regionalized and maybe more … focused on one solution, now we have one platform.”

AJ Rohde, Senior Partner at Thoma Bravo

Source: Eptura

This scale will be useful. In a research note Monday, Morgan Stanley analyst Josh Baer said he expects the “future of work” to be a key issue for software vendors given the market’s potential to double in size over the next five years. However, companies need to differentiate themselves in an increasingly crowded environment.

“The competitive landscape in the market has intensified,” Baer wrote.