OpenText to Acquire Carbonite

“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, Interim Chief Executive Officer and President/Executive Chairman of the Board of Carbonite. “The Board strongly believes that a transaction with OpenText delivers compelling, immediate and substantial cash value to shareholders.”

en flag
nl flag
fi flag
fr flag
de flag
pt flag
es flag

Extract from Press Announcement

Carbonite To Be Acquired by OpenText for $23.00 Per Share

+ Transaction Follows Comprehensive Process Run by Board to Maximize Value for Shareholders
+ Represents 78% Premium to Carbonite’s Unaffected Stock Price on September 5, 2019
+ Announces Third Quarter 2019 Financial Results

Carbonite, Inc. (NASDAQ: CARB), a global leader in data protection and cybersecurity, today announced that it has entered into a definitive agreement to be acquired by OpenTextTM (NASDAQ: OTEX, TSX:OTEX), a market leader in Enterprise Information Management software and solutions, for $23.00 per Carbonite share in cash. The transaction values Carbonite at an enterprise value of approximately $1.42 billion and represents a 78% premium to Carbonite’s unaffected closing stock price on September 5, 2019, the last trading day before a media report was published speculating about a potential sale process.

“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, Interim Chief Executive Officer and President/Executive Chairman of the Board of Carbonite. “The Board strongly believes that a transaction with OpenText delivers compelling, immediate and substantial cash value to shareholders.”

Munford continued, “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.”

OpenText is a leader in Enterprise Information Management (EIM), both on-premises and for cloud services, offering the only complete solution for EIM with a comprehensive view of all the information within an organization. OpenText operates in 40 countries, providing a tested platform for growth and new sales opportunities.

The transaction is subject to customary closing conditions, including the tender of a majority of the outstanding shares of Carbonite common stock and regulatory approvals.

J.P. Morgan Securities LLC acted as financial advisor to Carbonite, and Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor.

Third Quarter 2019 Results:

Carbonite also announced financial results for the third quarter ended September 30, 2019:

  • Revenue of $125.6 million increased 62% year-over-year.
  • Non-GAAP revenue of $135.0 million increased 71% year-over-year.1
  • Net loss was ($14.0) million, compared to net income of $0.6 million in 2018.
  • Net loss per share was ($0.40) (basic and diluted), as compared to net income per share of $0.02 (basic and diluted) in 2018.
  • Non-GAAP net income per share was $0.61 (basic) and $0.60 (diluted), as compared to $0.53 (basic) and $0.48 (diluted) in 2018.2
  • Adjusted EBITDA of $40.2 million, or 30% of non-GAAP revenue, compared to $23.0 million, or 29% of non-GAAP revenue in 2018.3

Conference Call

The public is invited to listen to the OpenText conference call today at 9:00 a.m. ET (6:00 a.m. PT) by dialing 1-800-319-4610 (toll-free) or +1-604-638-5340 (international). Please dial-in 15 minutes ahead of time to ensure proper connection. Alternatively, a live webcast of the conference call will be available on the Investor Relations section of the Company’s website at investors.opentext.com.

A replay of the call will be available beginning November 11, 2019 at 10:30 a.m. ET through 11:59 p.m. on November 25, 2019 and can be accessed by dialing 1-855-669-9658 (toll-free) or +1-604-674-8052 (international) and using passcode 3870 followed by the number sign.

In light of the transaction with OpenText announced today, Carbonite has cancelled its third quarter results conference call that had been scheduled for Tuesday, November 12, 2019 at 5:30 pm ET and will not be providing a business outlook for the fourth quarter of 2019.

Non-GAAP Financial Measures

To supplement our consolidated financial statements presented in accordance with GAAP, this press release contains non-GAAP financial measures, including non-GAAP revenue, non-GAAP net income and non-GAAP net income per share, and adjusted EBITDA.

The Company believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and ordinary results of operations. The Company’s management uses these non-GAAP measures to compare the Company’s performance to that of prior periods and uses these measures in financial reports prepared for management and the Company’s board of directors. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company’s financial measures with other software-as-a-service companies, many of which present similar non-GAAP financial measures to investors.

The Company does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant items that are required by GAAP to be recorded in the Company’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management. The Company urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures provided in the tables at the end of this press release, and not to rely on any single financial measure to evaluate the Company’s business.

  1. Non-GAAP revenue excludes the impact of purchase accounting adjustments for acquisitions.
  2. Non-GAAP net income and non-GAAP net income per share excludes the impact of purchase accounting adjustments on acquired deferred revenue, amortization expense on intangible assets, stock-based compensation expense, litigation-related expense, restructuring-related expense, acquisition-related expense, non-cash debt interest expense, intangible asset impairment charges, CEO recruitment expense, and the income tax effect of non-GAAP adjustments.
  3. Adjusted EBITDA is calculated by excluding the impact of interest expense, net, income taxes, depreciation, amortization, purchase accounting adjustments on acquired deferred revenue, stock-based compensation expense, litigation-related expense, restructuring-related expense, intangible asset impairment charges, acquisition-related expense, and CEO recruitment expense from net (loss) income.

Notice to Investors and Security Holders

The offer referred to in this press release has not yet commenced. The description contained in this press release is neither an offer to purchase nor a solicitation of an offer to sell any securities, nor is it a substitute for the tender offer materials that OpenText and Merger Sub will file with the SEC. The solicitation and offer to buy Shares will only be made pursuant to an offer to purchase and related tender offer materials. At the time the Offer is commenced, OpenText and Merger Sub will file a tender offer statement on Schedule TO and thereafter Carbonite will file a solicitation/recommendation statement on Schedule 14D-9 with the SEC with respect to the Offer. THE TENDER OFFER MATERIALS (INCLUDING AN OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER OFFER DOCUMENTS) AND THE SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 WILL CONTAIN IMPORTANT INFORMATION. ANY HOLDERS OF SHARES ARE URGED TO READ THESE DOCUMENTS CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION THAT HOLDERS SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDING TENDERING THEIR SHARES. The offer to purchase, the related letter of transmittal and the solicitation/recommendation statement will be made available for free at the SEC’s website at www.sec.gov. Additional copies may be obtained for free by contacting OpenText or Carbonite. Copies of the documents filed with the SEC by Carbonite will be available free of charge on Carbonite’s internet website at https://investor.carbonite.com or by contacting Carbonite’s Investor Relations Department at (617) 587-1102. Copies of the documents filed with the SEC by OpenText will be available free of charge on OpenText’s internet website at https://investors.opentext.com or by contacting OpenText’s Investor Relations Department at (415) 963-0825.

In addition to the offer to purchase, the related letter of transmittal and certain other tender offer documents, as well as the solicitation/recommendation statement, Carbonite and OpenText will each file annual, quarterly and current reports with the SEC. You may read and copy any reports or other information filed by OpenText or Carbonite at the SEC public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Carbonite’s and OpenText’s filings with the SEC are also available to the public from commercial document-retrieval services and at the website maintained by the SEC at http://www.sec.gov.

Forward Looking Statements

The information contained in this press release is as of November 11, 2019. Carbonite assumes no obligation to update forward-looking statements contained in this press release as the result of new information or future events or developments.

This press release contains forward-looking information related to Carbonite, OpenText and the proposed acquisition of Carbonite by OpenText that involves substantial risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Forward-looking statements in this document and the accompanying exhibits include, among other things, statements about the potential benefits of the proposed acquisition, Carbonite’s and OpenText’s plans, objectives, expectations and intentions, the anticipated timing of closing of the proposed acquisition and expected plans for financing the proposed acquisition. Risks and uncertainties include, among other things, risks related to the satisfaction or waiver of the conditions to closing the proposed acquisition (including the failure to obtain necessary regulatory approvals) in the anticipated timeframe or at all, including uncertainties as to how many of Carbonite’s stockholders will tender their shares in the tender offer and the possibility that the acquisition does not close; the possibility that competing offers may be made; risks related to obtaining the requisite consents to the acquisition, including, without limitation, the timing (including possible delays) and receipt of regulatory approvals from various governmental entities (including any conditions, limitations or restrictions placed on these approvals and the risk that one or more governmental entities may deny approval); risks related to the ability to realize the anticipated benefits of the proposed acquisition, including the possibility that the expected benefits and accretion from the proposed acquisition will not be realized or will not be realized within the expected time period; the risk that the businesses will not be integrated successfully; Carbonite’s ability to integrate the Webroot acquisition and achieve the expected benefits of such acquisition; Carbonite’s ability to profitably attract new customers and retain existing customers; Carbonite’s dependence on the market for cloud backup services, and its ability to manage growth, changes in economic or regulatory conditions or other trends affecting the Internet and the information technology industry; disruption from the transaction making it more difficult to maintain business and operational relationships; significant transaction costs; unknown liabilities; the risk of litigation and/or regulatory actions related to the proposed acquisition; other business effects, including the effects of industry, market, economic, political or regulatory conditions; future exchange and interest rates; and changes in tax and other laws, regulations, rates and policies.

A further description of risks and uncertainties relating to Carbonite can be found in Carbonite Annual Report on Form 10-K for the fiscal year ended December 31, 2018, and in its subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, all of which are filed with the SEC and available at www.sec.gov and www.carbonite.com.

About Carbonite

Carbonite provides a robust Data Protection Platform for businesses, including backup, disaster recovery, high availability and workload migration technology. The Carbonite Data Protection Platform supports businesses on a global scale with secure cloud infrastructure. To learn more, visit www.carbonite.com and follow us on Twitter at @Carbonite.

Carbonite, Inc. serves customers through three brands: Carbonite data protection, Webroot cybersecurity, and MailStore email archiving.

Read the complete announcement at Carbonite To Be Acquire by OpenText for $23.00 Per Share

Additional Reading

Source: ComplexDiscovery

Interested in Contributing?

ComplexDiscovery regularly reports on key cyber, data, and legal discovery business spheres of interest ranging from market size and mergers to business confidence and vendor developments.

We do not offer ads on the website but like to support our work with voluntary contributions from those who enjoy and benefit from the research, news, and articles shared. Your support is greatly appreciated and will be directly used to support our publishing efforts for our dynamic community of cyber, data, and legal discovery professionals.

Have a Request?

If you have information or offering requests that you would like to ask us about, please let us know and we will make our response to you a priority.

ComplexDiscovery is an online publication that highlights cyber, data and legal discovery insight and intelligence ranging from original research to aggregated news for use by business, information technology, and legal professionals. The highly targeted publication seeks to increase the collective understanding of readers regarding cyber, data and legal discovery information and issues and to provide an objective resource for considering trends, technologies, and services related to electronically stored information.

ComplexDiscovery OÜ is a technology marketing firm providing strategic planning and tactical execution expertise in support of cyber, data and legal discovery organizations. Registered as a private limited company in the European Union country of Estonia, one of the most digitally advanced countries in the world, ComplexDiscovery OÜ operates virtually worldwide to deliver marketing consulting and services.

Embracing Differences? Interplay of Digital Forensics in eDiscovery
Incidental Growth? Cost of a Data Breach Hits Record High According to New Report
Keeping Cyber Threats At Bay? Cyber Insurance Start Up At-Bay Closes Series D Financing
An Economical Impact? How Cyber Insurance Shapes Incident Response
Cobra Legal Solutions Acquires Digital Discovery

According to Candice Corby, Chief Executive Officer for Cobra Legal Solutions,...

TransPerfect and Semantix Merge

According to TransPerfect President and CEO Phil Shawe, “We have competed...

Braintrace Acquired by Sophos

According to Bret Laughlin, CEO and co-founder of Braintrace, “NDR is...

DISCO Announces IPO Pricing

A registration statement relating to the initial public offering by DISCO...

A New Era in eDiscovery? Framing Market Growth Through the Lens of Six Eras

There are many excellent resources for considering chronological and historiographical approaches...

An eDiscovery Market Size Mashup: 2020-2025 Worldwide Software and Services Overview

While the Compound Annual Growth Rate (CAGR) for worldwide eDiscovery software...

Resetting the Baseline? eDiscovery Market Size Adjustments for 2020

An unanticipated pandemeconomic-driven retraction in eDiscovery spending during 2020 has resulted...

Home or Away? New eDiscovery Collection Market Sizing and Pricing Considerations

One of the key home (onsite) or away (remote) decisions that...

Five Great Reads on Cyber, Data, and Legal Discovery for July 2021

From considerations for cyber insurance and malware to eDiscovery business confidence...

Five Great Reads on eDiscovery for June 2021

From remediating cyberattacks to eDiscovery pricing, the June 2021 edition of...

Five Great Reads on eDiscovery for May 2021

From cyber discovery and data breaches to business of law and...

Five Great Reads on eDiscovery for April 2021

From X-Road® and risk management to business confidence and cybersecurity, the...

Glowing Expectations? Eighteen Observations on eDiscovery Business Confidence in the Summer of 2021

In the summer of 2021, 63.3% of survey respondents felt that...

Issues Impacting eDiscovery Business Performance: A Summer 2021 Overview

In the summer of 2021, 24.4% of respondents viewed increasing types...

Looking Up? eDiscovery Operational Metrics in the Summer of 2021

In the summer of 2021, 80 eDiscovery Business Confidence Survey participants...

Extreme Heat? Summer 2021 eDiscovery Business Confidence Survey Results

Since January 2016, 2,522 individual responses to twenty-three quarterly eDiscovery Business...