Carbonite Inc. (NASDAQ:CARB) has acquired Double-Take Software from Vision Solutions Inc. and Clearlake Capital for $65.25 million in cash and stock. The Double-Take acquisition expands Carbonite's portfolio of data Windows- and Linux-focused data protection solutions for small and midsize business customers -- particularly in the midmarket.
Double-Take's portfolio includes:
- Double-Take High Availability – Replication of applications and data, in real time, from physical, virtual and cloud servers.
- Double-Take Disaster Recovery – Failover between a primary and secondary or cloud location in an emergency.
- Double-Take Move – Scheduled move of systems from one location to another.
- Double-Take Cloud Migration – Planned migration from Microsoft Windows to Amazon Web Services, Microsoft Azure or Google Cloud Platform.
- Double-Take SQL Migration – Migrating and upgrading Microsoft SQL Server.
The Double-Take deal is part of a larger Carbonite expansion strategy -- particularly in the midmarket. CEO Mohamad Ali has spent more than a year expanding the company beyond consumer-oriented backup services. Organic R&D coupled with acquisitions have paved the way for backup appliances and cloud services specifically designed for midmarket and small business channel partners. The result: Revenue from SMB customers has leapfrogged Carbonite's consumer business.
Carbonite Finds Undervalued Assets
Carbonite has a knack for spotting and acquiring solid data protection technologies without paying a premium for the assets. Consider this math: Vision Software acquired Double-Take for $242 million in 2010. Fast forward seven years, and Carbonite is now paying less than one-third that price. (Though I concede: I don't know if it's an apples-to-apples comparison in terms of the assets within Double-Take's product portfolio.)
The current Carbonite/Double-Take deal somewhat resembles Carbonite's 2015 buyout of EVault. The EVault business underperformed under Seagate's former ownership. Carbonite scooped the business up at a low valuation and quickly turned the asset into a winner.
The latest evidence: Carbonite's preliminary revenues were $53 million to $53.5 million for Q4 2016, well above guidance of $46.6 million to $51.6 million, the company said yesterday. Carbonite will announce finalized results on February 9.
Business Continuity Market Evolution
Despite Carbonite's momentum, the company can't afford to rest on its laurels. Multiple rivals have made acquisitions or launched new products to push beyond traditional backup services.
Datto, for instance, yesterday unveiled a Datto Networking division -- which includes home-grown products and acquired products from Open Mesh. We'll share additional examples of market shifts later today.
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