OpenText buys Carbonite for $1.42 billion, builds out portfolio

OpenText is aiming to grow organically and via acquisition as a "cloud consolidator" as it preps a broad cloud platform.

OpenText will buy Carbonite for $1.42 billion, or $23 a share in cash, in a deal that represents the company's 9th cloud related acquisition. OpenText has been expanding beyond content management into security and business software.

Carbonite, a data protection and end-point security company, has primarily focused on small and medium sized businesses. Carbonite will bring 300,000 SMB customers and 7 million prosumers to OpenText.

For its part, OpenText is looking to grow via acquisition and organically. OpenText has acquired EasyLink, GXS, ANX, Covisint, Recommind, Hightail, Catalyst and Liaison before buying Carbonite. OpenText bills itself as a "cloud consolidator." OpenText looks for high-teens returns on invested capital for its acquisitions.

On the security front, OpenText current offers digital forensics, end-point detection and response software. Carbonite reported third quarter revenue of $125.6 million and a net loss of $14 million.

Here's a look at where Carbonite fits in with OpenText's portfolio, which revolves around content management and collaboration, business networks, advanced technologies, security and vertical applications.

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OpenText recently reported first quarter net income of $74.4 million, or 27 cents a share, on revenue of $696.9 million. Of that revenue ally, cloud sales were $237.3 million. Mark  Barrenechea, OpenText CEO and CTO, said the company is looking to gain share with recurring revenue over time. OpenText ended the first quarter with about $1 billion in cash.

The plan for OpenText is to take its various parts and create a broad cloud platform that can solve multiple business problems starting with content management and managing information sprawl.  

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