Waterloo, ON – 2019-11-11 – OpenText, a global leader in Enterprise Information Management (EIM), today announced that it has entered into a definitive agreement to acquire Carbonite, Inc. (“Carbonite”), provider of cloud-based subscription data protection, backup, disaster recovery and end-point security to small and medium-sized businesses and consumers.
“Cloud platforms and secured, smart end-points are essential Information Management technologies as businesses transform into Industry 4.0,” said Mark J. Barrenechea, OpenText CEO & CTO. “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, through Carbonite’s marquee SMB/prosumer channel and products. We are very excited about the opportunities that Carbonite will bring, and I look forward to welcoming our new customers, partners and employees to OpenText.”
“We entered Fiscal 2020 with a solid balance sheet and we are off to a strong start with the announced acquisition of Carbonite as part of our Total Growth strategy,” added OpenText EVP & CFO, Madhu Ranganathan. “We are excited by the opportunity to bring forth exceptional leadership in operational execution and integration capabilities to Carbonite. Once integrated, we expect to increase our annual recurring revenues, deliver strong cloud growth, and expand cloud margins and adjusted EBITDA. 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.”
OpenText CEO & CTO, Mark J. Barrenechea and OpenText EVP, CFO Madhu Ranganathan will host a conference call today at 9:00 a.m. Eastern Time to discuss today’s announcement. Conference call details are included further below.
The acquisition of Carbonite is expected to extend OpenText’s leadership in the Enterprise Information Management (EIM) market by complementing OpenText’s security offerings in data loss prevention, digital forensics, end-point detection and response with the addition of Carbonite’s data protection and end-point security solutions. The acquisition also adds significantly to OpenText’s Cloud business and further complements OpenText’s routes to market, strong enterprise customer base in the Global10K, enhanced SMB and prosumer markets.
About the Transaction and Terms of the Agreement:
- Tender offer to be commenced for all outstanding Carbonite shares for $23.00 per share in cash(1)
- Total purchase price of approximately $1.42 billion, inclusive of Carbonite’s cash and debt
- Total purchase price is approximately 2.8x TTM (Trailing Twelve Months) Carbonite GAAP revenues (as of September 30, 2019), inclusive of annualized full year reported Webroot GAAP revenues, a significant acquisition which closed in March 2019
- Expect significant expansion of cloud revenues, cloud margins, adjusted EBITDA and cash flows in Fiscal 2021
- Current Carbonite Annual Recurring Revenues (ARR) of 90%
- Accretive, and targeting to be on the OpenText operating model by end of Fiscal 2021
- Funded with OpenText’s existing cash on hand and revolver
- Estimated OpenText net leverage ratio at closing of approximately 2.5x, with a target to return to less than 2x net leverage during the 4-6 quarters post close of transaction
- Financial projections and target models will be provided upon closing of transaction
- Expect the transaction to close within 90 days of this announcement
OpenText, through a wholly-owned subsidiary, intends to commence the tender offer for all of the shares of common stock of Carbonite within 10 business days. Pursuant to the agreement, the tender offer will be followed by a merger to acquire any untendered shares. The tender offer is subject to the tender of a majority of Carbonite’s shares and certain other regulatory approvals and customary closing conditions. The transaction is expected to close within 90 days.
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