Cloud Based Data Protection and End-Point Security Solutions to
Expand OpenText's EIM Leadership
WATERLOO, Ontario, Nov. 11, 2019 /PRNewswire/
-- OpenText™ (NASDAQ: OTEX) (TSX: OTEX), "The Information
Company," announced today that it has entered into a definitive
agreement to acquire Carbonite, Inc. (NASDAQ: CARB) ("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.
Additional Information
The tender offer described in this communication has not
yet commenced. This communication is provided for informational
purposes only and does not constitute an offer to purchase or the
solicitation of an offer to sell any securities. At the time the
tender offer is commenced, OpenText and a wholly owned subsidiary
intend to file with the Securities and Exchange Commission (the
"SEC") a Tender Offer Statement on Schedule TO containing an offer
to purchase, a form of letter of transmittal and other documents
relating to the tender offer, and Carbonite intends to file with
the SEC a Solicitation/Recommendation Statement on Schedule 14D-9
with respect to the tender offer. OpenText and Carbonite
intend to mail these documents to the Carbonite
stockholders. Investors and security holders are urged to read
those documents and other relevant documents filed or to be filed
with the SEC carefully when they become available as they will
contain important information about OpenText, Carbonite, the tender
offer and related matters. Those documents as well as
OpenText's and Carbonite's other public filings with the SEC may be
obtained without charge at the SEC's website at www.sec.gov.
OpenText's public filings with the SEC may be obtained at
OpenText's website at http://investors.opentext.com/ and
Carbonite's public filings with the SEC may be obtained at
Carbonite's website at https://investor.carbonite.com/. The offer
to purchase and related materials may also be obtained (when
available) for free by contacting the information agent for the
tender offer.
Lazard Frères & Co. LLC has acted as sole investment banker
to OpenText in connection with the transaction.
Conference Call Information
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.
About OpenText
OpenText, The Information Company™, a market leader in
Enterprise Information Management software and solutions, enabling
companies to manage, leverage, secure and gain insight into their
enterprise information, on premises or in the cloud. For more
information about OpenText (NASDAQ/TSX: OTEX) visit
www.opentext.com.
Cautionary Statement Regarding Forward-Looking
Statements
Certain statements in this press release, including statements
regarding OpenText's plans, objectives, expectations and intentions
relating to the acquisition, the acquisition's expected
contribution to OpenText's results, financing and closing of the
acquisition, as well as the expected timing and benefits of the
acquisition, impact on future financial performance including in
respect of annual recurring revenues, cloud growth, adjusted
EBITDA, cash flows, earnings and dividends and preservation of
credit ratings, may contain words considered forward-looking
statements or information under applicable securities laws. These
statements are based on OpenText's current expectations, estimates,
forecasts and projections about the operating environment,
economies and markets in which the company operates. These
statements are subject to important assumptions, risks and
uncertainties that are difficult to predict, and the actual outcome
may be materially different. OpenText's assumptions, although
considered reasonable by the company at the date of this press
release, may prove to be inaccurate and consequently its actual
results could differ materially from the expectations set out
herein. For additional information with respect to risks and other
factors, which could occur, see OpenText's Annual Report on Form
10-K, Quarterly Reports on Form 10-Q and other securities filings
with the SEC and other securities regulators. Unless otherwise
required by applicable securities laws, OpenText disclaims any
intention or obligations to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
Copyright ©2019 Open Text. OpenText is a trademark or registered
trademark of Open Text. The list of trademarks is not exhaustive of
other trademarks. Registered trademarks, product names, company
names, brands and service names mentioned herein are property of
Open Text. All rights reserved. For more information, visit:
http://www.opentext.com/who-we-are/copyright-information.
Notes: (1) All dollar amounts in
this press release are in US dollars unless otherwise
indicated.
OTEX-MNA
For more information, please contact:
Harry E. Blount
Senior
Vice President, Investor Relations
Open Text Corporation
415-963-0825
investors@opentext.com
Chris Plunkett
Vice President, Corporate Communications
Open Text Corporation
519-497-0742
publicrelations@opentext.com
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SOURCE Open Text Corporation