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Open Text to buy data security firm Carbonite for $23 a share

(Bloomberg) --Open Text Corp. announced a deal to acquire Carbonite Inc., a provider of data-protection services, for about $800 million in cash, according to a statement.

The transaction of $23 per share for the Boston-based Carbonite is a 25% premium to the close of trading Friday. Bloomberg first reported the deal earlier Monday, and that Carbonite was mulling a sale in early September.

When restricted share units and other stock interests are taken into account, the equity value of the deal rises to about $884 million, according to a representative for Open Text. Including debt, the enterprise value of the deal is about $1.4 billion.

Before Monday, Carbonite’s shares were down about 38% in the past year, after a sharp fall in July when it cut its annual revenue forecast and announced Chief Executive Officer Mohamad Ali had decided to step down. That followed another sell-off in February amid investor concerns about the debt it was taking on to fund its $618 million all-cash takeover of Webroot Inc. in February.

Carbonite rose 25% to $22.95 a share in New York trading Monday. Open Text rose 2.4% in Toronto.

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The company -- named after the fictional substance used to freeze Han Solo in Star Wars -- offers data backup, disaster recovery and other services to people and businesses, deriving most of its revenue from subscription fees, according to its website.

Canada’s Open Text Corp was also weighing a takeover bid for rival software firm Micro Focus International Plc, according to people familiar with the matter. Open Text makes software used for searching corporate intranets and managing documents. In 2017, it acquired Dell Technologies Inc.’s enterprise content division for $1.6 billion.

J.P. Morgan Chase & Co. acted as financial adviser to Carbonite.

--With assistance from Scott Deveau

Bloomberg News