Enterprise information management (EIM) company OpenText is acquiring cloud data backup and protection service Carbonite in a deal worth $1.42 billion.

Carbonite, which offers a number of data backup and protection services for consumers and businesses, had become the subject of significant takeover rumors over the past few months after its revenue dropped. CEO Mohamad Ali stepped down in July and was replaced on an interim basis by board chair Steve Munford.

Boston-based Carbonite had raised nearly $200 million from big-name investors ahead of its 2011 IPO, and its shares soared well above its $10 IPO price to hit an all-time high of more than $40 last year, before falling to around $12 in August. Private equity firms, including Evergreen Coast Capital, KKR, and Vector Capital, were among the companies rumored to be circling Carbonite, but OpenText has now swooped in with an offer of $23 per share — a 78% premium on Carbonite’s September 5 closing price, before the media first reported that a sale could be in the cards.

“Following expressions of interest from multiple parties, the Carbonite board conducted a thorough and comprehensive process, which included contact with a number of strategic and financial parties, to identify the best way to maximize shareholder value,” Munford said in a press release. “The board strongly believes that a transaction with OpenText delivers compelling, immediate, and substantial cash value to shareholders.”

Carbonite’s announcement was timed to coincide with its Q3 2019 financials, which revealed a net loss of $14 million, compared to a small net income of $600,000 during the same period last year.

Cloud giant

Founded in 1991, OpenText is among Canada’s biggest software companies, specializing in helping enterprises manage all their content and unstructured data in the cloud or on-premises. The company has made a number of other notable acquisitions in the recent past, including Dell EMC’s enterprise content division, which it bought for $1.6 billion in 2017, and file-sharing service Hightail, formerly YouSendIt, which it bought for an undisclosed amount last year.

Carbonite itself made one particularly notable acquisition earlier this year, when it bolstered its cybersecurity credentials with the acquisition of Webroot for $618 million. This deal may have enhanced Carbonite’s prospects for future suitors, given that it promised to bring data protection and cybersecurity into a single platform.

OpenText hasn’t offered any specifics around how it will leverage Carbonite’s technology post-acquisition. But the latter’s focus on backing up and protecting data stored in the cloud makes it easy to imagine the two platforms complementing each other as a growing number of businesses migrate to the cloud.

“Cloud platforms and secured, smart end-points are essential Information Management technologies as businesses transform into Industry 4.0,” added OpenText CEO and CTO Mark J. Barrenechea in a separate press release. “This acquisition will further strengthen OpenText as a leader in cloud platforms, complete end-point security, and protection and will open a new route to connect with customers.”

The deal has not yet been finalized, as it’s still subject to shareholder approval and the usual regulatory processes.