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Carbonite to Acquire EVault From Seagate

For only $14 million, after being acquired for $185 million by Seagate in 2007

Carbonite, Inc. has entered into an agreement to acquire the BC and DR business of EVault, Inc., a division of Seagate Technology plc.

EVault is a provider of BC and DR solutions designed for SMBs and small enterprises. Together with Carbonite’s line of data protection and recovery products for small businesses and individuals, the company will now provide a suite of solutions that are cost-effective, easy to use and meet the needs of all SMBs, a market estimated by Carbonite at $13 billion in the U.S. and over $40 billion worldwide.

With this acquisition, Carbonite is taking a big step forward in meeting the data protection and BC needs of the entire SMB market from home offices to medium-sized businesses,” said Mohamad Ali, president and CEO, Carbonite. “EVault’s proven technology, which includes a line of highly scalable appliances and advanced DR as a service (DRaaS) capabilities, enables us to round out our portfolio and immediately provide the features and functionality larger businesses require to support their complex environments.”

As part of the acquisition, EVault, recently named a Major Player in the DRaaS market
by industry analyst firm IDC, adds the following products to the Carbonite solution suite:

  • EVault Cloud Backup and Recovery – software-only solution for server backup
  • EVault Backup and Recovery Appliance – all the benefits of EVault Cloud Backup and Recovery with an appliance form factor for local backup and restore
  • EVault Cloud Resiliency Services – DRaaS services providing failover in the cloud

We are excited to combine two powerful, best-of-breed product portfolios to meet the needs of all SMBs,” said Anthony Folger, CFO, Carbonite. “We expect the acquisition will be accretive to non-GAAP net income per share in year one and will result in more than 50% of Carbonite’s total bookings coming from the sale of SMB products in 2016.”

He added: “Our strong cash position and ability to efficiently deploy capital was extremely advantageous in our ability to make this opportunistic and strategic acquisition.

Transaction Details
Carbonite has entered into an agreement to acquire substantially all of the assets of EVault’s operations for a purchase price of $14 million in cash. The company expects to complete the acquisition of the North American assets of EVault in January of 2016, subject to customary closing conditions, and expects to complete the acquisition of the European Union assets of EVault in the first quarter of 2016, subject to applicable laws, compliance requirements and customary closing conditions.

Foley & Lardner LLP and Eversheds LLP acted as legal advisors, William Blair & company, LLC, acted as lead financial advisor to Carbonite. Wilson Sonsini Goodrich & Rosati and Baker & Mackenzie LLP acted as legal advisors for Seagate.

Carbonite,EVault,Seagate,melllingerCarbonite also announced that Paul Mellinger, 54, has been appointed as SVP of the company’s EVault business, effective January 4, 2016. Since January 2013, he has served as the VP of software sales at IBM, where he was primarily responsible for leading IBMs worldwide team of software client leaders. During his time at IBM, he served as VP sales and integration for Cognos, a software division of IBM, from June 2008 to December 2012, VP of software sales, AsiaPac from June 2006 to June 2008 and as VP, software sales, North America from January 2003 to June 2006.

On December 15, 2015, the company entered into an offer letter agreement with Mellinger setting forth the terms of his employment as SVP of EVault. The offer letter agreement provides for an annual base salary of $300,000, subject to increases and modifications as determined by board of directors or its compensation committee. The offer letter agreement also provides for a sign-on bonus of $60,000 payable after ninety days of employment, of which Mellinger is obligated to repay a prorated amount in the event that he voluntarily terminates his employment within one year from its commencement. Mellinger will be eligible to participate in the company’s executive incentive bonus plan and in other benefit programs that the company establishes and makes available to its employees from time to time, to the same extent available to similarly situated employees.

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