This would be shown as greater operational efficiency. In addition, I want to see if Carbonite achieves synergistic cost reductions from integrating the two companies. It is quite possible that the Double-Take solution may allow the company to exceed its own expectations for growth. This is much less than the 128% SMB bookings growth the company experienced in 2016 after it bought EVault and as a result we cannot expect the same type of increase in the stock's price that occurred last year.ĭata source: Carbonite. The bookings guidance is even more revealing as it shows the target SMB market only growing at 12% YOY without Double-Take and 32% including Double-Take. This tells us the growth from buying EVault is not going to repeat itself and its addition to Carbonite made for easy comparisons on a YOY basis in 2016. When the growth attributed to the Double-Take acquisition is removed from the guidance, it is worth noting that the company is guiding to 10% adjusted earnings growth.

The chart below shows management's earnings guidance for 2017 along with the contribution from the Double-Take acquisition.ĭata source: Carbonite full-year 2016 presentation. In 2016 the company grew its total bookings by 45% which is a big factor in why the stock went up 70% last year.Īlthough the acquisition of Double-Take looks like a good strategic fit, it cost the company $65.5 million, a lot more than EVault, and does not appear to have a similarly immediate impact on growth in 2017. 16, 2015, announcement of the purchase, Carbonite's stock has risen roughly 120%. Carbonite then went on to have a banner year in 2016, growing its SMB business bookings by 128%, as is shown in the table below.ĭata source: Carbonite 2016 10K. The company paid $14 million in cash and said the deal would be accretive in one year and double the addressable SMB market for the company. In December 2015, Carbonite announced it was buying a product line called EVault from Seagate Technology PLC to help the company expand its hybrid backup business in the SMB market.

It also provides it with a much larger selection of products customers can use for system migration and real-time application and data replication. This should expand Carbonite's business beyond businesses that were not interested in a hybrid solution, or customers who may want to upgrade to a completely cloud-based backup solution and ditch the hardware associated with the hybrid product. To solve this problem of near-time recovery, Carbonite offers a hybrid solution that consists of a hardware backup product for the more urgently needed files, and cloud backup for files that would not need instant recovery if data was temporarily disrupted.īy buying Double-Take, Carbonite acquires a fully cloud-based near-time backup solution.

Carbonite buys doubletake