Carbonite To Buy Endpoint Security Stalwart Webroot For $618.5M
Carbonite plans to purchase Webroot for $618.5 million, creating a company that can deliver both backup and recovery as well as cloud-based cybersecurity on the endpoint.
The Boston-based data protection provider said that it and Bloomfield, Colo.-based Webroot share a go-to-market focus and complementary ecosystem of channel partners. At the same time, Carbonite said that Webroot's leading MSP partners and remote monitoring and management (RMM) relationships provide the company with a new channel for increased scale and market expansion.
"Backup and recovery, combined with endpoint security and threat intelligence, is a differentiated solution that provides one, comprehensive data protection platform," Mohamad Ali, Carbonite's president and CEO, said in a statement.
Carbonite's stock fell $1.65 (5.63 percent) to $27.65 in after-hours trading Thursday. The company also announced full-year 2018 earnings of $0.22 per share on sales of $296.4 million, up 24 percent on a year-over-year basis.
Webroot was founded in 1997, delivered revenue of approximately $215 million in 2018, and employs more than 500 people, according to the company. Webroot's areas of expertise include endpoint and network security, security awareness training, and threat intelligence services.
With the evolution of threats like ransomware, Ali said Carbonite's customers and partners are increasingly seeking a more comprehensive offering that's both powerful and easy to use. The combined customer base will benefit from an easy-to-use, cloud-based, integrated offering, which includes unique ransomware prevention and recovery capabilities.
“Carbonite and Webroot have a common focus on making data protection and cybersecurity solutions accessible and easy to use, as well as a dedication to customer success, and we are thrilled to become part of their team,” Webroot CEO Mike Potts said in a statement.
Webroot CFO John Post will take general management responsibilities for the Webroot business following the close of the transaction. The company derives 60 percent of its revenue from consumer sales and the remaining 40 percent from sales to businesses, much of which flows through Webroot's base of more than 14,000 MSP partners.
Webroot primarily serves the SMB market with fewer than 1,000 seats, according to the company. The company's threat intelligence engine is powered by machine learning from millions of endpoints, the company said.
The deal is expected to deliver $20 million of cost synergies over the next three years, as well as $50 million of revenue synergies over the next five years, Carbonite said.
Carbonite was founded in 2005, went public in 2011, and employed 941 full-time employees as of the end of 2017, according to its most 10-K filing with the U.S. Securities and Exchange Commission. The company has made eight acquisitions since 2011, according to CrunchBase, with the most recent deal prior to the Webroot acquisition being its $145.8 million purchase of cloud backup vendor Mozy in February 2018.
For its part, Webroot has made five acquisitions since 2010, according to CrunchBase, with the most recent one being its purchase of security awareness platform Securecast in August 2017.
The transaction is expected to close this quarter, and will be financed by Carbonite's existing cash on hand as well as funds secured under a new credit facility. The acquisition has been unanimously approved by the boards of directors of both companies, as well as by the requisite percentage of stockholders of Webroot.