Carbonite Sale Rumors Confirmed: OpenText Shelling Out $1.42 Billion
OpenText has entered into an agreement to acquire Carbonite, the provider of cloud-based subscription data protection, backup, disaster recovery and endpoint security to SMBs and consumers, for $1.42 billion .
Carbonite has more than 300,000 SMB customers, 14,000 MSPs and 7 million professional users. The acquisition is a continuation of OpenText’s “total growth strategy” both through acquisitions and organic growth, the company said.
The transaction is expected to close within 90 days.
Mark J. Barrenechea, OpenText‘s CEO and CTO, said this acquisition will further strengthen his company as a “leader in cloud platforms, complete endpoint security and protection,” and will open a new route to connect with customers through Carbonite’s “marquee SMB/(professional user) channel and products.”
“They’ve created an amazing business, scaled cloud service operations and a superior channel distribution organization,” he said. “Data protection and endpoint security are strategic industrial markets that are relevant to all size customers, enterprise, SMB and [professional users]. The total addressable market … for these end markets is over $15 billion and growing mid to mid-to-high single digits.”
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Amy DeCarlo, GlobalData’s principal analyst of security and data-center services, tells us that with its Webroot acquisition earlier this year, Carbonite expanded its backup and recovery focus to include endpoint protection.
“OpenText picks up a set of data protection solutions through the Carbonite deal that is a good complement to its existing enterprise information management suite,” she said. “There have been rumors that Carbonite was going to be acquired for a few months. The company’s financials have been somewhat disappointing; however, its recent WebRoot investment makes it an attractive acquisition target.”
Carbonite is the first vendor to combine data protection and endpoint security, and together with OpenText, “we’ll be in a market-leading position for total endpoint protection that also includes digital forensics and endpoint response,” Barrenechea said.
“Once integrated, we expect to increase our annual recurring revenues, deliver strong cloud growth, and expand cloud margins and [operating performance],” said Madhu Ranganathan, OpenText’s executive vice president and CFO. “The resulting growth in cash flows will enable us to maintain a healthy balance sheet, deliver strong earnings, and continue to deliver consistent growth in dividends to shareholders.”
“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,” said Steve Munford, Carbonite‘s interim CEO and board president/executive chairman. “Carbonite has expanded its solutions to become a leader in cyber resiliency. We have grown through both organic and inorganic opportunities over the years, enhancing our routes to market, diversifying our customer base, and assembling a talented workforce, while adding meaningful scale. Joining with OpenText is an exciting next step for Carbonite.”