Carbonite to Buy Webroot, Beef Up Data Protection Chops
Carbonite, the cloud-based data protection provider, said Thursday that it plans to acquire cybersecurity provider Webroot for nearly $619 million. It’s just the latest example of consolidation in enterprise IT.
Carbonite said the two companies would combine Carbonite’s backup and disaster recovery (BDR) solutions with Webroot’s machine-learning capabilities to address endpoint vulnerability.
“The acquisition of Webroot dramatically accelerates our progress towards becoming the leading data-protection company,” said Mohamad Ali, President and CEO of Carbonite. “With threats like ransomware evolving daily, our customers and partners are increasingly seeking a more comprehensive solution that is both powerful and easy to use. Backup and recovery, combined with endpoint security and threat intelligence, is a differentiated solution that provides one, comprehensive data-protection platform.”
The move gives Carbonite the R&D to expand beyond BDR and provide customers with a more comprehensive solution, as well as access to Webroot’s extensive managed-services channel. Carbonite can leverage Webroot’s integrations with RMM and PSA providers, which will help even the playing field between it and competitors like Datto, which acquired RMM provider Autotask in 2017, and Unitrends, which RMM provider Kaseya bought last year.
Webroot also has strong security training and network-security plays. Integrating its capabilities with Carbonite’s creates a broader security portfolio with a stronger competitive position in the MSP market.
“I’m personally thrilled for the opportunity ahead for both our MSP community and our RMM/platform partners,” said Charlie Tomeo, vice president of worldwide business sales at Webroot. “While we are in the early stages of transition planning, I can share that our commitment to creating MSP-friendly solutions that are both easy-to-use and efficient will not change.”
Carbonite has embraced the “expand through acquisition” strategy in recent years, snapping up providers with deep roots in the SMB and midmarket like Dell EMC Mozy and EVault.
Carbonite announced the deal on its fourth-quarter and full-year 2018 call with investors, in which we also learned that the company posted a total revenue of more than $296 million, a year-over-year increase of 24 percent, missing Wall Street estimates by approximately $3 million. The Webroot announcement wasn’t enough to placate the market, and Carbonite’s shares dropped by nearly 6 percent in after-hours trading.
“We delivered on our strategic priorities in 2018,” said Ali. “We significantly strengthened our product platform and introduced one of the most complete software-as-a-service data protection portfolios in the market; we did this while successfully continuing our acquisition integration work and driving meaningful improvements in profitability. In 2019 we plan to build upon these efforts, further expanding our data-protection platform and delivering a broader set of solutions to our customers, while we invest aggressively in our distribution channels with a focus on driving continued growth and profitability.”
A pair of MSPs we talked to were both bullish on the acquisition.
“I think it’s a good play for two firms with very similar customer bases and covers a gap for each firm that competitors are trading on — BDR that skips malware,” said Jason Ingalls, CEO of MSSP Ingalls Information Security.
“[It] will give an MSP peace of mind knowing that the data that’s being backed up can be recovered without the risk of recovering the malware itself,” noted Chris Noles, CEO of MSP Beyond Computer Solutions.
The acquisition will be an all-cash transaction paid for from Carbonite’s cash on hand. The deal is expected to close this quarter, subject to regulatory approval and closing conditions. Based on Webroot’s current operating plan and existing customer contracts, Carbonite says the transaction is expected to be immediately accretive on an earnings and cash-flow basis following the close of the transaction.