Carbonite has made its second acquisition this year and struck a separate deal to siphon customers from a competitor in Minneapolis.
In an interview with BostInno, Norman Guadagno, Carbonite's senior vice president of marketing, said the Boston-based cloud backup company acquired Seattle-based Datacastle in August — which it wasn't planning to officially announce on Tuesday. Guadagno said the acquisition of Datacastle, which provides endpoint backup and analytics software, is meant to expand the company's endpoint business with larger companies.
In a follow-up email with a Carbonite spokeswoman, the company confirmed that it hasn't publicly announced the Datacastle acquisition and that it wouldn't be sharing any further details, including the financial terms, for now. Datacastle had raised $13.3 million from investors, including Talu Ventures, according to its Crunchbase profile.
Datacastle CEO Ron Faith told BostInno to direct inquiries to Carbonite.
Until Guadagno revealed Carbonite's acquisition of Datacastle to BostInno, the company's Tuesday announcement was originally focused on a separate strategic deal it has struck with Minneapolis-based Code42. For the deal, Carbonite said it has agreed to create a transition path for Code42 customers that have been using the Minneapolis company's CrashPlan for Home product, which is being discontinued in 2018.
"We’re really in a place where it has been transformational for the company."
“The needs of home consumers and business customers are rapidly diverging, and we made the strategic decision to focus exclusively on the business market due to the unique value we provide to businesses of all sizes and the hyper-growth we are experiencing in that segment,” Joe Payne, Code42's president and CEO, said in a statement.
CrashPlan for Home customers are under no obligation to transition to Carbonite's competing backup product, but if they do, they will receive an exclusive discount during the transition period. Financial terms of Carbonite's deal with Datacastle were not disclosed.
"[Code42] felt comfortable they were going to be able to refer those customers, and those customers will get a great experience," Guadagno said.
Carbonite acquired Double-Take Software for $65.25 million in January, a couple months before it raised $125 million in convertible senior notes to pay off debt and fund general business activities, including potential acquisitions. With Double-Take and Datacastle, the company has made a total of six acquisitions since 2011.
With Carbonite's most recent acquisition, two separate parts of a business called EVault are being reunited. Before Carbonite acquired Datacastle, both companies had acquired separate parts of EVault from Seagate Technology in 2016. Carbonite's EVault acquisition was focused on its cloud-based business continuity and disaster recovery assets while Datacastle had acquired EVault's endpoint data protection assets.
The company's stock price was slightly up to $19.28 per share Tuesday morning. For its second quarter, the company beat Wall Street's expectations on earnings but missed on quarterly revenue by just under $1 million. Its Q2 revenue was $59 million, up 8.8 percent from the same period last year. While Carbonite's stock price has dipped from its high point of $24.30 from June, it's still up 172 percent from a low point in February 2016.
Guadagno said the growing prevalence of ransomware has made data protection and backup services, like those provided by Carbonite, top of mind for both consumers and businesses. The executive credited Carbonite's successes over the past few years to the leadership of Mohamad Ali, who became its CEO and president in December 2014.
"We’re really in a place where it has been transformational for the company," he said.
Carbonite has over 3,000 employees, with around 300 of them based in Boston.
Editor's note: A previous version of this story included a customer number for CrashPlan for Home that was not verified by both parties in the Carbonite-Code42 deal.
