OpenText acquires data backup and security platform Carbonite for $1.42 billion
Paul Sawers [url=http://www.twitter.com/psawers]@psawers [/url]
VentureBeat
November 11, 2019 5:42 AM
Above: Carbonite's homepage
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Enterprise information management (EIM) company OpenText is acquiring cloud data backup and protection service Carbonite in a deal worth $1.42 billion.
Carbonite, which offers a number of data backup and protection services for consumers and businesses, has been the subject of significant takeover rumors over the past few months after its revenue dropped. CEO Mohamad Ali stepped down in July, and was replaced on an interim basis by chairman Steve Munford.
Boston-based Carbonite had raised nearly $200 million from big-name investors ahead of its 2011 IPO, and its shares went on to soar well above its $10 IPO price to hit an all-time high of more than $40 last year, before falling to around $12 in August. Private equity firms including Evergreen Coast Capital, KKR, and Vector Capital were among the companies rumored to be circling Carbonite, but OpenText has now swooped in with an offer of $23 per share — a bid that represents a 78% premium on its September 5 closing price, before the media first reported that a sale could be on the cards.
“Following expressions of interest from multiple parties, the Carbonite board conducted a thorough and comprehensive process, which included contact with a number of strategic and financial parties, to identify the best way to maximize shareholder value,” Munford said in a press release. “The board strongly believes that a transaction with OpenText delivers compelling, immediate and substantial cash value to shareholders.”
Carbonite’s announcement was timed to coincide with its Q3 2019 financials, which revealed a net loss of $14 million, compared to a small net income of $600,000 on the same period last year.
Cloud giant
Founded in 1991, OpenText is among Canada’s biggest software companies, specializing in helping enterprises manage all their content and unstructured data in the cloud or on-premises. The company has made a number of other notable acquisitions in the recent past, including Dell EMC’s enterprise content division which it bought for $1.6 billion in 2017, and file-sharing service Hightail, formerly YouSendIt, which it bought for an undisclosed amount last year.
Carbonite itself made one particularly notable acquisition earlier this year, when it bolstered its cybersecurity credentials with the acquisition of Webroot for $618 million. This deal that may have enhanced Carbonite’s prospects for future suitors, given that it promised to bring together data protection and cybersecurity into a single platform.
While OpenText hasn’t given any specifics around how it will leverage Carbonite’s technology post-acquisition, given that Carbonite’s focus lies squarely in backing up and protecting data stored in the cloud, it’s not difficult to see how the two platforms could complement each other as a growing number of businesses migrate to the cloud.
“Cloud platforms and secured, smart end-points are essential Information Management technologies as businesses transform into Industry 4.0,” added OpenText CEO and CTO Mark J. Barrenechea, in a separate press release. “This acquisition will further strengthen OpenText as a leader in cloud platforms, complete end-point security and protection, and will open a new route to connect with customers.”
The deal is not yet finalized, as it’s still subject to shareholder approval and the usual regulatory processes.
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