Cohesity Is Set to Acquire Veritas' Data Protection BusinessThe Combined Company Will Be Worth $7B, Firms Say
Data security vendor Cohesity will acquire the data protection business of Veritas in a stock and debt transaction resulting in a combined firm by the end of this year, the companies announced Thursday.
The deal values the combined company at approximately $7 billion. Cohesity CEO Sanjay Poonen will stay on as chief executive, the companies said. Reuters reported the takeover values the Veritas unit at more than $3 billion. Regulators must sign off on the purchase before it can proceed.
San Jose-based Cohesity touted the deal as creating "the most comprehensive data protection solution" with functionality ranging from backup on third-party storage to security for cloud environments in AWS and Azure.
The two companies would have combined annual recurring revenue of $1.3 billion in a fiscal year starting last July and total revenue of $1.6 billion.
The deal brings together "the best of both product portfolios - Cohesity's scale-out architecture ideally suited for modern workloads and strong generative AI and security capabilities and Veritas' broad workload support and significant global footprint," said Poonen.
Softbank-backed Cohesity will continue to invest in Veritas backup products such as NetBackup and Alta, Poonen wrote in an open letter. Clients include Salesforce, Nasdaq and Delta Air Lines.
Major Cohesity competitors include Rubrik, which reportedly is preparing for an initial public offering this year. Cohesity in late 2021 took steps toward an initial public offering but hasn't appeared to pursue it further. In March 2021, Cohesity said it was worth $3.7 billion.
Poonen left VMware to head the company in August 2022. A Cohesity representative did not immediately return a request for comment.
The CEO's tenure has been marked by a turn in the decade-old company to data security - especially FortKnox, a cloud-based vault for data (see: Commvault, Rubrik, Cohesity Lead Data Resilience: Forrester).
The combined company will compete in a total addressable market of $30 billion that it predicts will grow to $40 billion when factoring in new functionality such as data analysis and securing secondary data. Secondary data such as files and emails add up to about 10 times the amount of primary data, whether structured or unstructured, the company said.
"We will help customers deliver AI-driven insights from their data, driving improved return on investment by faster decision-making," Poonen said in a video announcing the transaction.
The deal received unanimous approval from Cohesity's board of directors and partners of the Carlyle Group, the majority owner of Veritas since Symantec spun it off for $7.4 billion in early 2016. Carlyle will roll over its stake to become Cohesity shareholders, and Patrick McCarter, managing director and co-head of global technology at Carlyle, will join the Cohesity board of directors.