Behind the deal: How Carbonite is acquiring Webroot

BROOMFIELD — Two major tech companies are coming together in an effort to protect technology users from both security breaches and the aftermath of losing data.

Carbonite Inc. (Nasdaq: CARB) announced on Thursday it was acquiring Broomfield-based Webroot Inc. for $618.5 million.

That decision stemmed from Boston-based Carbonite’s desire to further protect its customers at the endpoint — what Carbonite calls any laptop, mobile device or tablet in the hands of an individual. Carbonite specializes in data backup and recovery. The company also operates primarily in the cloud — it was an early adopter of the technology.

“The endpoint is an area of really high vulnerability for threats against data,” Norman Guadagno, senior vice president of Carbonite, told BizWest. “Vulnerability is something we attempt to address and we address it through backup and recovery. Webroot addresses it through security and protecting the endpoint from any breach. We thought wouldn’t it be awesome to combine their ability to protect that perimeter, but if something did come in and potentially damage a machine, the data would be backed up and we would recover it.”

While there are many cybersecurity companies out there, Guadagno said Webroot seemed like a company that was already in-sync with Carbonite. Both companies are cloud-based. They both target small- and medium-sized business, although they work with customers from individuals to enterprise level businesses. Both have robust partner channels for getting out its capabilities. And both had similar cultures.

“When we looked across the spectrum of opportunities and got to know Webroot, there were a lot of similarities in how we serve, how we go to market, the cultures we have,” Guadagno said. “It seemed like an absolute perfect fit.”

Mike Potts, CEO of Webroot, said the fact that both companies were providing services to small- and medium-sized businesses was a major reason why the two companies had synergy.

“The small- and medium-business market needs the same level of enterprise-grade technology major companies have, but they need it in a comprehensive, effective, simplified and deliverable manner,” Potts told BizWest. “The fact that we are both cloud-based and how we are deployed gives us tremendous benefits to offer.”

Guadagno added that not only would there be a benefit to customers, but to the partners who help distribute their products.

“We’re excited about the deep relationship they have with their partners, and we can now equip those partners with the products Carbonite offers,” Guadagno said. “And they’re deeply excited about the partners we have. There’s not a lot of overlap. It’s a win when we can bring complimentary tech to our partner base that might not have had access to that in the past.”

The time was also right for Webroot to be acquired: Potts said the company was considering a variety of options for liquidity for their shareholders, and that after a competitive process, Carbonite was seen as the best option for shareholders, customers and employees.

Potts said the two companies are still working on their high-level integration plans, and the intention is to continue running Webroot as a separate company until the deal is closed, which is expected to take place by the end of March if all goes according to plan. Potts said Webroot is still hiring in key roles to expand its footprint. But he added that both its employee base and its name hold strong value for Carbonite.

“Cybersecurity talent is an important and scarce resource,” Potts said. “Carbonite doesn’t want to do anything to disrupt the talent stream so we’ll continue with business as usual. As for the brand, it’s also important to Carbonite. We’re working through the integration planning piece as we use our brand in tandem with Carbonite.”

Because Carbonite is a public company, Guadagno wasn’t able to specify how the two companies plan to integrate, as the deal is still pending regulatory review. But he did specify that the acquisition was happening because Webroot was seen as a value-add to Carbonite.

“We’re excited about what Webroot brings to the table, its people and its expertise, its go-to-market forces and the tech overall,” Guadagno said. “It’s a deal where we are adding something very significant to our portfolio.”

The Webroot acquisition is not the first time Carbonite has forayed into the Front Range. In 2015, Carbonite acquired Longmont-based Rebit, an automated computer backup company, before selling them to Broomfield-based Betsol LLC in 2017.

Guadagno said there was something to technology that comes out of Colorado.

“We’ve been really impressed with the level of expertise we’ve seen working with the Webroot team and there is  a certain mindset in that area in general that balances hard work with living a good life,” Guadagno said. “We as a company have always believed you should build a great business on the back of people willing to take risks and think big, and there’s no way to think bigger than to open a window and look out at the Rockies. That mindset jives well with what we do and we’re excited to establish and grow a presence there as part of Webroot.”

Potts agreed.

“It’s a testimony to what we have built here in Colorado. The public-private cooperation, the university relationships, the other thriving technology companies here, the affordable housing that’s bringing in folks from the West Coast. I foresee this area as continuing to expand with the vibrance of the tech community here.”

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