Strategic acquisitions in the data protection and backup space push valuations higher

Over the last twelve months, strategic acquisitions have pushed up valuations in the data protection and backup software and services space. While data storage was a popular feeding ground among private equity firms earlier in the decade, strategics in the broader data storage and management space have begun reinforcing their offering suite by locking up these smaller data protection and backup SaaS and services targets.

In November, Enterprise Information Management SaaS & software provider, OpenText, acquired Carbonite, a provider of backup & recovery software & services, for $1.4 billion, marking the largest acquisition of the last 12 months in the data protection space. This represents a healthy 3.2x LTM revenue multiple and 12.6x EBITDA. The deal strengthens OpenText’s could platform offering by adding end-point security and protection.

Earlier this year, in February, Carbonite announced its acquisition of endpoint security and threat intelligence provider, Webroot, for $618.5 million. Through its largest ever acquisition, Carbonite was able to combine its data backup and recovery solutions with Webroot’s endpoint security products and services to target smaller and midsized customers. The transaction value was 2.9x LTM revenue and 12.4x LTM EBITDA.

Carbonite had a busy couple years. In February 2018, the company acquired Mozy, an online data storage SaaS provider, for $145.8 million. This transaction, like the Webroot acquisition one year later, was a part of Carbonite’s consolidation strategy in the online backup market, which is eventually what made it such an attractive target for OpenText last month.

In May, NetApp a provider of data storage and management systems provider acquired Israeli-based Cognigo, an AI data security software solutions company for $58 million. The acquisition gives NetApp the tools to address privacy challenges emerging in our era of mass cloud-adoption. This deal yielded a whopping 29x revenue multiple.