Carbonite: Staying Independent, Expecting Strong Financials

Cloud storage provider Carbonite on Thursday said it is no longer seeking "strategic alternatives," in effect ending speculation about plans to sell part or all of the company to an investment firm.

Carbonite also said it expects its first financial quarter and full financial year 2015 performance to be better than its previous guidance.

Carbonite, in a statement issued Thursday, said that since it first authorized in January the exploration of strategic alternatives including a possible sale of the company, it had received confidentiality agreements from and went through due diligence with "a significant number of potential strategic and financial acquirers."

[Related: J2 Global Drops $400M+ Carbonite Bid, Now Bids For Three Board Seats]

However, in the end, the board of directors "determined that it is in the best interest of Carbonite and its shareholders to continue its present strategic course."

Carbonite in December received an offer from Los Angeles, Calif.-based cloud services firm J2 Global to purchase Carbonite for $15 per share, or a total of about $404 million, in a follow-up to an offer it made for the company two years before. J2 Global in March dropped its acquisition bid, but said it wanted three seats on the Carbonite board of directors.

J2 Global in April modified its plans to purchase only the endpoint business, the Boston Business Journal reported.

J2 Global, which has a 9.4 percent equity stake in Carbonite, and its affiliates provide Internet services through its Business Cloud Services and Digital Media divisions. The Business Cloud Services division includes the eFax Internet fax service, eVoice virtual phone service, FuseMail hosted email service, Campaigner email marketing service, KeepItSafe online backup service, and Onebox unified communications and CRM service.

Carbonite was unavailable Thursday to respond to a CRN request for more information, including whether its Thursday statement meant the company would not be entertaining other acquisition offers.

Investors were apparently disappointed by the news, driving the company's share prices down more than 5 percent Thursday.

Carbonite's decision to end speculation on a deal to sell the company was no surprise to Ed Tatsch, president of ETS Networks, an Arden, N.C.-based solution provider and Carbonite channel partner.

"Carbonite kept rebuffing efforts to acquire it," Tatsch told CRN. "Either the company wanted to increase its share prices, or it did not want to be bought. And its share prices have not gone up."

Tatsch said he is indifferent to the prospect of Carbonite's being acquired, in part because many of the acquisitions of vendors his company has partnered with have had little or no impact.

"One of my vendors, (IT management developer) SolarWinds, bought two companies and did a great job with them," he said. "If Carbonite is acquired, no one is going to strip it apart. So in any case, it's business as usual."

Carbonite on Thursday also said it expects its first quarter revenue to exceed the high end of its previous guidance range of $31.9 million to $32.1 million, and that it expects a smaller non-GAAP net loss per share than its previously guidance.

Carbonite also said it expects total 2015 revenue to be within or above the range of $137 million to $138 million, with non-GAAP gross margins to be higher than previous guidance and non-GAAP earnings to be within or above the range of 8 cents to 10 cents per share.

PUBLISHED APRIL 16, 2015