Cloud, edge and decentralized computing Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Cloud, edge and decentralized computing

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

From: Glenn Petersen	12/3/2014 4:03:53 PM
	of 1685

Carbonite gets a bid: J2’s Bid Could Unfreeze Carbonite By Dan Gallagher Heard on the Street Wall Street Journal Dec. 3, 2014 3:00 p.m. ET Carbonite has spurned J2 Global ’s advances once before. It may not be able to resist again. On Wednesday, J2 made an unsolicited offer to buy the shares of Carbonite it doesn’t already own for $15 each. That is 28% above where the online-storage company’s stock closed the day before. It is also 43% higher than the offer J2 made for Carbonite in 2012. Carbonite, which specializes in online-data backup for small businesses and consumers, spurned that earlier offer on the belief that its own plans would deliver better returns to shareholders. The company has made some progress in that respect. Bookings, which represent the amount of subscription revenue for a given period, totaled $30.6 million in the third quarter of this year. That is up 26% from the same period two years ago when J2 made its first offer. But this has become an expensive business to operate in. Cloud-based storage has been rapidly commoditized by Amazon.com , Google and Microsoft as they compete for business customers. Meanwhile, smaller, venture-backed competitors such as Dropbox and Box also offer low-cost data-storage services. For all its growth, Carbonite has generated an operating profit only once in the past 12 quarters. J2 wants to add Carbonite to its own portfolio of cloud-based data services that are focused on small businesses. And the company is willing to pay up for it. At $15 a share, the latest offer values Carbonite at about 3.1 times estimated revenue for the next four quarters. That compares with an average multiple for the stock since its initial public offering in 2011 of about 2.5 times, according to FactSet. That premium is designed to dissuade other potential bidders and tempt shareholders who haven’t seen the stock trade above the $15 mark for more than a year. Moreover, Carbonite is still hunting for a successor to Chief Executive David Friend, who announced plans to retire back in February. Caught between fear and greed, Carbonite’s investors will be hard-pressed to turn away a persistent suitor. Write to Dan Gallagher at dan.gallagher@wsj.com online.wsj.com

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next