LogMeIn, a remote-access software developer has acquired LastPass, the password management company for $125 million in cash and plans to combine its technology into a single offering.
Founded in 2008, the startup LastPass is a password management service that ease one’s online life by remembering passwords for the user. It is important to have long, strong, unique password for every online account and improve online security for which LastPass is useful in managing the logins. It made its password management app free for Android, iOS and Windows Phone smartphones and tablets two months ago. The company claims to provide service for 7 million users with 15,000 corporate customers.
The acquisition is expected to significantly boost its position in the identity and access management segment. All the 30 employees of LastPass have been offered jobs in LogMeIn.
Joe Siegrist, CEO of LastPass said, “LogMeIn and LastPass share a great common vision on reshaping identity and access management in ways that not only increase productivity but also improve security for individuals and companies, alike. The striking commonality between our businesses, our products and cultural DNA make this a great fit for both teams, and we believe a great win for our customers.”
Under the terms of the transactions, LogMeIn will pay $110 million in cash after closing all outstanding equity interests in LastPass with up to an additional $15 million in cash payable in contingent payments. The additional amount is expected to be paid to equity holders and key employees of LastPass upon the achievement of certain milestone and retention targets in the two-year period after the closure of the deal.
“LastPass has a great business, a beloved and award-winning product, millions of loyal users and thousands of great business customers – they are synonymous with the category. We believe this transaction instantly gives us a market leading position in password management, while also providing a highly favourable foundation for delivering the next generation of identity and access management solutions to individuals, teams and companies.
LogMeIn plans to use some of the features of LastPass with other identity management solutions like Meldium that the company acquired last year. Though the company plans to integrate the two credentials management solutions in the future, Meldium and LastPass will remain separate for now.
Though the two companies are excited about the acquisition, it’s not the same with the users of the password software. The users seem to be angry with the LogMeIn not with the password management leader. As the information dealt are passwords, users are not happy about merging with a company they do not know much about. A user Thoralf Will stated, “I’m a happy LastPass Premium user for quite some time. Guess that will change soon and I’ll start looking for alternatives. LogMeIn managed to scare me away from their service once and I have no intention of repeating that. Sad to see a good service being doomed.”
This negative user experience is assumed to be associated with their transaction a few years ago, which was moved from a free service to a paid one, said Bill Wagner, COO and president of LogMeIn.