Open Text Corporation (NasdaqGS:OTEX) entered into a definitive agreement to acquire Carbonite, Inc. (NasdaqGM:CARB) from Pender Growth Fund Inc. (TSXV:PTF) managed by PenderFund Capital Management Ltd. and others for approximately $840 million on November 10, 2019. Open Text Corporation will make a tender offer to acquire all shares of Carbonite at $23 per share in cash. Total enterprise value of the transaction is approximately $1.4 billion, inclusive of Carbonite's cash and debt. Total purchase price is approximately 2.8x TTM (Trailing Twelve Months) Carbonite GAAP revenues. The transaction will be funded with OpenText's existing cash on hand and revolver. Carbonite, Inc. will pay a termination fee of $28.9 million in case the transaction is terminated.

The tender offer is subject to the tender of a majority of Carbonite's shares and certain other regulatory approvals and customary closing conditions. The transaction is also subject to Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the tender by Carbonite stockholders of at least one share more than 50% of the issued and outstanding shares of Carbonite. The Board of Directors of Carbonite and Open Text has unanimously approved the transaction. The tender offer will commence within 10 business days. As of December 3, 2019, FTC granted early termination of the waiting period applicable to the offer under the HSR Act. The transaction is expected to close within 90 days of this announcement. As of November 25, 2019, the transaction is expected to close on December 23, 2019. The transaction is expected to have significant expansion of cloud revenues, A-EBITDA margin, cloud margin, and cash flows in 2021; be accretive, and targeting to be on the OpenText operating model by end of 2021; have estimated OpenText net leverage ratio at closing of approximately 2.5x, with a target to return to less than 2x net leverage during the 4-6 quarters post close of transaction.

Michael Murray, Brian Hanson and Patrick Mastan of Lazard Frères & Co. LLC acted as financial advisors for Open Text Corporation. Brian Truesdale, Jay Hoffman and Tim Carpenter of J.P. Morgan Securities LLC acted as financial advisors and Graham Robinson, Faiz Ahmad, Ken Kumayama, Timothy F. Nelson, Shalom Huber, David Schwartz, Moshe Spinowitz and Maria Raptis of Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisors for Carbonite, Inc. Neil Q. Whoriskey of Cleary Gottlieb Steen & Hamilton LLP acted as legal advisor to Open Text Corporation. Marni Lerner of Simpson Thacher & Bartlett LLP is advising J.P. Morgan Securities as financial advisor to Carbonite, Inc.


Open Text Corporation (NasdaqGS:OTEX) completed the acquisition of Carbonite, Inc. (NasdaqGM:CARB) from Pender Growth Fund Inc. (TSXV:PTF) managed by PenderFund Capital Management Ltd. and others on December 24, 2019. Carbonite, Inc. will be removed from Tortoise Global Cloud Infrastructure IndexSM effective December 26, 2019. Proceeds of a $750 million revolver were used for financing the transaction.