Canadian enterprise software company OpenText has secured its bid to acquire cloud backup and security platform Carbonite for $1.2 billion last Nov. 11, 2019.
For the past few months, takeover rumors have been going around due to the decline in the company’s revenue. Carbonite CEO Mohamad Ali stepped down into his position and was replaced by board chair Steve Munford.
According to the company statement, there are a lot of offers that reached the table prior to OpenText. However, the Canadian enterprise company has the best deal that would maximize shareholder value.
Before accepting the offer from OpenText, Carbonite made a notable acquisition of cybersecurity credentials Webroot for $618 million.
Munford said, “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. The board strongly believes that a transaction with OpenText delivers compelling, immediate, and substantial cash value to shareholders.”
According to Venture Beat, OpenText offered a stock price of $23 per share, which is a 78 percent premium on Carbonite’s September closing price. Before the official announcement on the acquisition, companies such as Evergreen Coast Capital, KKR, and Vector Capital already showed interest in Carbonite.
The Boston-based company raised about $200 million for its 2011 IPO. Its shares went up to $10 and hit an all-time high price of $40 last year, before falling to $12 in August this year.
The acquisition announcement was made to coincide with its third-quarter earnings, which record a loss of $14 million net. This loss was bigger compared to last year’s $600,000.
Meanwhile, OpenText viewed the acquisition as a strategic plan to strengthen the company’s security and protection of iCloud platforms. CEO and CTO Mark Barrenechea said, “[Acquisition] will open a new route to connect with customers, through Carbonite’s marquee SMB/prosumer channel and products.”
Expanding Enterprise Footprint
OpenText has been expanding its asset portfolio by acquiring companies just like Carbonite. So far, the company has made notable acquisitions such as the Dell EMC’s enterprise content division for $1.6 billion in 2017 and the file-sharing service Hightail in 2018.
In addition to iCloud protection and security, OpenText plans to utilize Carbonite’s smart endpoints to be a leader in the cloud platforms.
The deal is still not finalized and is still subject to shareholder approval.