Carbonite Acquires Datacastle For Enterprise Endpoint Software

Aug. 22, 2017 1:39 PM ETCarbonite, Inc. (CARB)1 Comment


  • Carbonite has acquired Datacastle for an undisclosed sum, according to a confirmed report.
  • Datacastle has developed enterprise mobility endpoint backup, recovery and analytics solutions.
  • The deal represents a move by Carbonite to broaden its offerings into the larger enterprise market.

Quick Take

Storage software company Carbonite (NASDAQ:CARB) has acquired Datacastle for an undisclosed amount, according to a report in BostInno.

Datacastle has created enterprise-grade backup, recovery and analytics technologies for endpoint data sources such as smart phones, tablets and laptop computers.

Carbonite wants to expand its offerings into the enterprise, to take further advantage of the forecasted tremendous growth in cloud-based storage and recovery market over the next five years.

Target Company

Seattle, Washington-based Datacastle was founded in 2005 to develop backup, recovery, encryption and data shredding solutions for businesses.

Management is headed by CEO Ron Faith, who was previously founder and COO of Clonefone, a mobile web services company. The company was founded by CTO Gary Sumner.

Below is a brief overview video about Datacastle’s RED product on the Microsoft (MSFT) Azure platform:

(Source: DatacastleRED)

Datacastle’s main offerings include,

  • RED - Endpoint backup and archiving solution
  • Analytics - Data discovery for forensics and compliance
  • QuickCache - Off-peak, ultra high-speed backup and recovery

The company launched its Analytics system in November, 2016, possibly in connection with its earlier acquisition of Seagate Technology’s endpoint data protection assets.

Datacastle had developed a robust partner program composed of OEMs, telecoms, ISPs and MSPs, as well as value-added resellers.

The firm raised at least $13 million in separate rounds of equity financing from Talu Ventures, an Australia-based venture capital firm, and debt funding from an undisclosed investor.

Acquisition Terms and Rationale

Neither company disclosed the acquisition price or terms and Carbonite didn’t file an 8-K, which would have been required had the deal materially changed its financial condition.

The deal was confirmed by Carbonite’s SVP Marketing, Norman Guadagno, but Carbonite has been otherwise tight-lipped about it.

That posture is not surprising, given CARB’s past focus on small and medium sized businesses, since the current deal represents the beginnings of a move into providing larger enterprises with mobile endpoint backup and recovery offerings.

According to a 2016 Markets and Markets Research Report on cloud storage, it forecasted the overall market to grow from $24 billion in 2016 to $75 billion in 2021, a tremendous CAGR of nearly 26% for the six-year period.

One of the drivers for this demand growth was cited as the ‘growing need for enterprise mobility.’

So, the deal for Datacastle appears to be a smart move by management intent on acquiring and developing an enterprise-grade mobility backup and recovery offering to take advantage of that growth opportunity.

Earlier in 2017, CARB acquired Double-Take Software for $65.25 million in cash and stock. Double-Take had developed migration and disaster recovery software for small- and medium-sized businesses.

With the Datacastle deal, CARB will have significant new opportunities ahead of it, as it seeks to offer backup, recovery and analytics solutions to businesses of all sizes.

It’s an ambitious undertaking, so integration and execution will be key in the quarters ahead.

I write about M&A deals, public company investments in technology startups, and IPOs. Click the Follow button next to my name at the top or bottom of this article if you want to receive future articles automatically.

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