Carbonite, Webroot Parent OpenText explores acquisitions, but …

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Mark Barrenechea, CEO, OpenText

OpenText – parent company of Carbonite and Webroot – continues to scour the market for potential technology company acquisitions. But the valuations of target acquisitions are too high, OpenText CEO Mark Barrenechea told Bloomberg.

Indeed, microcap software companies are now valued at 19.1 times annual EBITDA for 2021, compared to 15.8 times annual EBITDA for 2019, according to Microcap.co.

OpenText is generating a lot of money for potential M&A deals – and more money is on the way. Indeed, the company expects to generate $ 6 billion in free cash flow over the next five years, Bloomberg mentions.

Carbonite, Webroot and Cyber ​​Resilience for MSPs

Still, Barrenechea prefers to focus on organic growth. Key measures include continued investments in Carbonite and Webroot, which develop backup, disaster recovery (BDR), data protection and cybersecurity software that MSPs use and VARs resell to small businesses.

OpenText acquired Carbonite and Webroot for $ 1.45 billion in 2019. Fast forward to the present day, and the combined business now offers cyber resilience to MSPs and VARs in the enterprise market, and to company IT managers. In addition, OpenText now offers its own managed security services to corporate clients.

Certainly, several MSP-focused backup and security companies are entering the cyber resilience market. And Webroot faces increased competition from endpoint detection and response (EDR) software vendors such as SentinelOne and CrowdStrike.

Competition is particularly intense in the MSSP industry, where 28% of the top 250 MSSPs for 2021 now name SentinelOne or CrowdStrike as a key partner.

Prepared for a correction of the technology assessment

Yet Carbonite maintains a large footprint in the backup market. And thousands of MSPs continue to run Webroot for antivirus, network, and web security. For now, parent OpenText seems focused on organic growth. But if tech industry valuations correct, watch Barrenechea for acquisitions.


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