Canadian enterprise computing company OpenText has agreed to purchase Boston’s Carbonite, a pioneering provider of cloud-based data backup services for homes and businesses, in a deal worth $1.42 billion. The acquisition comes just months after the resignation of Carbonite chief executive Mohamad Ali.
Founded in 2005, Carbonite was among the first companies to offer consumers an easy way to back up their personal computers by storing the data in the Internet cloud.
Ali took the reins from Carbonite founder David Friend in 2014. At the time, Friend was under pressure to put Carbonite on the auction block, but under Ali’s leadership, the company shifted its strategy, to focus primarily on data backups for small- and medium-sized businesses. In addition, Carbonite branched into the data security business, with its $618.5 million acquisition in March of Webroot, a Colorado maker of antimalware products. Webroot was the biggest of several acquisitions by Carbonite as the company sought to become a full-service provider of data protection. These included rival backup companies MailStore, Data Castle, eVault, and Mozy.
In July, Ali quit the company to take over as chief of tech media and research firm IDG in Framingham. At about the same time, Carbonite predicted that 2019 revenues would come in about 5 percent lower than previously estimated, leading to a steep fall in the company’s share price. On Monday — following news of the deal — Carbonite shares rose by about 25 percent, ending the trading day at $22.92, up 24.73 percent.
Jason Ader, a tech industry analyst for William Blair & Co. in Boston, said the takeover will resolve the hefty debt burden caused by the Webroot acquisition, and Carbonite’s sluggish growth. “The challenge over the last year has been their core data protection business has really slowed down,” Ader said.
In recent years, companies have turned to managed service providers such as Verizon and AT&T, which provide cloud-based backup as part of a comprehensive suite of business services. “A lot of small companies don’t want to deal with 10 different vendors,” Ader said. As a result, fewer companies are choosing Carbonite as a stand-alone backup solution.
OpenText, based in Waterloo, Ontario, makes software and services to help large companies analyze their data, and derive insights that help them run their businesses better. The company’s chief executive Mark Barrenechea said the acquisition of Carbonite will help OpenText begin offering its services to smaller companies.
Barrenechea said he didn’t expect any significant disruption to the Carbonite workforce, which numbers about 1,500.
“We’re impressed with the talent and employees,” Barrenechea said. “There’s obviously some balancing when two companies come together, but Boston is a talent center and we like that talent center, and we want to participate in it. . . . We think it’s a great place to lead a company from.”