Softbank-Backed Cohesity To Acquire Veritas Data Security Unit For $3B: Report
SoftBank Group Corp (OTC:SFTBY) (OTC:SFTBF) backed Cohesity has agreed to the acquisition of the data protection business of Veritas Technologies LLC. The deal is valued at $3 billion, creating a combined entity worth $7 billion.
What Happened: Cohesity, a U.S.-based data security software company, is set to acquire the data protection business of Veritas, a subsidiary of Carlyle Group Inc (NASDAQ:CG). The deal, comprising cash and stock, is expected to be finalized by the end of the year, as per source-based report by Reuters.
The acquisition is anticipated to bolster Cohesity’s growth margins and facilitate its expansion into international markets. The combined annual revenue of the two firms is estimated at $1.6 billion.
CEO of Cohesity, Sanjay Poonen, highlighted the potential of the merged entity, and said, “You’ve got the fastest growth on our side and the best profitability on their side, combined together to be a profitable growth machine that’s innovating with AI.”
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Notably, Cohesity’s AI-powered software is designed to help organizations safeguard and manage their data against cyber threats. The company has secured approximately $1 billion in equity and $2 billion in debt from investors, including Haveli Investments, Premji Invest, and Madrona, to finance the deal.
Cohesity and Veritas did not immediately respond to Benzinga's request for comment.
Why It Matters: The acquisition of Veritas’ data protection business is a significant move for Cohesity, especially in the context of its industry competition. The company’s biggest rival, Rubrik, is reportedly preparing for a stock market flotation in the near future.
This development also comes at a time when another SoftBank-backed company, Invitae Corporation, is facing financial challenges. Invitae, a medical genetics company, is reportedly considering filing for bankruptcy due to a substantial $1.5 billion debt burden.
On the other hand, SoftBank has been actively involved in the tech industry, with its founder discussing the future of AI at ARM Holdings PLC‘s historic IPO in 2023.
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