OpenText Acquires Carbonite For £1.1bn

Matthew Broersma,
cloud security

Cash deal sees OpenText expand its cloud business while adding Carbonite’s data protection and end-point offerings to its own security range

Cloud backup firm Carbonite has agreed a $1.42 billion (£1.1bn) acquisition by OpenText, following more than two months of speculation about a possible deal.

The offer of $23 per share in cash represents a 78 percent premium on Carbonite’s closing share price on 5 September, the last day before media reports first suggested a deal was imminent.

The buyout culminates Carbonite’s transition in recent years from straightforward online backup services toward an increasing focus on security.

Carbonite bought endpoint security firm Webroot for $618.5m in February, a year after its purchase of cloud backup company Mozy for $145m.

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At the time of the acquisition Carbonite had revenues of $125.6m, up 62 percent year-on-year, for losses of $14m, slightly below analysts’ average expectations of $131.5m in revenues.

Waterloo, Ontario-based OpenText specialises in cloud and on-premises enterprise information management software.

The company said it expects Carbonite’s data protection and end-point security offerings to complement OpenText’s existing data loss prevention, digital forensics and end-point detection and response systems.

The buy also adds significantly to OpenText’s cloud business, the firm said.

OpenText’s previous cloud acquisitions include EasyLink, GXS, ANX, Covisint, Recommind, Hightail, Catalyst and Liaison.

OpenText said its first quarter net income was $74.4m on revenue of $696.9m, with cloud sales accounting for $237.3m.

The company ended the first quarter with about $1bn in cash.