Carbonite, Inc., a cloud-based data protection provider, and Webroot Inc., a cybersecurity company, announced that they have entered into a definitive agreement under which Carbonite will acquire Webroot for approximately $618.5 million in cash. Carbonite will fund the transaction with existing cash on hand and funds secured under a new credit facility. The combined business will address a top vulnerability of businesses - the endpoint - with a comprehensive approach to protection through cloud-based cybersecurity, paired with cloud-based backup and recovery. The transaction is expected to be immediately accretive on an earnings and cash flow basis, following the close of the transaction.
Concurrently with the execution of the Merger Agreement, the Company entered into a financing commitment letter with Barclays Bank PLC, Citizens Bank, N.A. and Royal Bank of Canada for a seven-year senior secured term loan facility of $550 million, and a five-year senior secured revolving credit facility Revolving Facility. The Company will fund the transaction with existing cash and the Term Loan Facility, according to a regulatory filing.
Founded in 1997, Webroot is a private company that secures endpoints and provides network protection, security awareness training and threat intelligence services. With its best-in-class technology, experienced team, and extensive go-to-market capabilities, including a powerful network of Managed Service Providers (“MSP”) and Remote Monitoring and Management (“RMM”) relationships, Webroot has established itself as a leader in the cybersecurity space. Webroot's fiscal year 2018 revenue was approximately $215.0 million.
“The acquisition of Webroot dramatically accelerates our progress towards becoming the leading data protection company,” said Mohamad Ali, President and Chief Executive Officer of Carbonite. “With threats like ransomware evolving daily, our customers and partners are increasingly seeking a more comprehensive solution that is both powerful and easy to use. Backup and recovery, combined with endpoint security and threat intelligence, is a differentiated solution that provides one, comprehensive data protection platform."
Ali continued, “The Webroot team has a passion for building technology to simplify the way customers protect their important data, and we are excited to welcome them.”
“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,” said Mike Potts, Webroot CEO. “Together we can deliver tremendous value to our customers and partners.”
The transaction is expected to close in the first quarter of 2019, subject to the receipt of regulatory clearance and other customary closing conditions. The transaction has been unanimously approved by the Boards of Directors of both companies and by the requisite percentage of stockholders of Webroot.