Canada’s OpenText Corp. shares surged Monday after the company announced a $1.42-billion US deal to acquire Carbonite Inc. to strengthen its offerings in the highly competitive cloud-based software sector.
The acquisition will be the ninth cloud-focused acquisition for Waterloo, Ont.-based OpenText, said company CEO Mark Barrenechea on a conference call Monday.
“This places OpenText as a leading cloud consolidator. All assets combined, we will be approaching two exabytes 1/81 billion gigabytes 3/8 under management, 100 million end points, millions of subscribers, and cloud operations at hyper scale. Scale matters in the cloud.”
OpenText shares were up $2.04, or 3.71 per cent, to $57.01 on the Toronto Stock Exchange in midmorning trading.
Boston-based Carbonite brings a focus of cloud-based subscription data protection, backup, disaster recovery, and end-point security for a variety of customers. The acquisition will strengthen Open Text’s security offerings for its cloud platforms, said Barrenechea.
Cloud computing has become a trial focus for many of the world’s largest technology companies including Amazon, Google, IBM, Microsoft and Alibaba.
“We put security front and centre only about two years ago when we acquired Guidance, so it’s a low penetration rate for us, it’s still early days.”
He said that with Carbonite focused largely on the U.S. market, OpenText can leverage its network of clients globally in places like the U.K., France, Germany, Japan, Singapore and Australia to expand demand.
Under the deal, OpenText will pay $23 per share in cash for about $800 million in total, while debt obligations bring the total deal value to about $1.42 billion.
The company says it expects to close the deal within 90 days.
OpenText, which has a market capitalization of $15 billion, provides enterprise information management software, helping companies digitize processes and supply chains for more efficient operations among other services.