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The
cash and stock acquisition is expected to help Cohesity, which
is backed by Japan's SoftBank Group, achieve positive growth
margins and expand into international markets, Cohesity CEO
Sanjay Poonen said in an interview, adding that the firms
together have $1.6 billion in annual revenue.
"You've got the fastest growth on our side and the best
profitably on their side, combined together to be a profitable
growth machine that's innovating with AI," he said.
The deal comes at a time when Cohesity's biggest competitor
Rubrik is, according to sources, planning to launch a stock
market flotation in the coming weeks.
San Jose, California-based Cohesity's artificial
intelligence-powered software helps organizations protect and
manage their data against cybersecurity threats. It is also
working with Big Tech in the adoption of generative AI to search
and retrieve large amounts of data.
It raised about $1 billion in equity and $2 billion in debt from
investors including Haveli Investments, Premji Invest and
Madrona to help fund the deal, according to people familiar with
the matter.
Cohesity's takeover of the Veritas unit values the business at
over $3 billion including debt, one of the sources said,
requesting anonymity.
Veritas is majority-owned by private equity firm Carlyle Group,
which acquired the company from Symantec in 2016. Carlyle has
rolled over its stake in the unit and will join the board of the
newly merged company. Veritas CEO Greg Hughes will also join the
board.
The deal is expected to close by the end of the year.
Veritas will form a separate company that will comprise its
remaining businesses, including data compliance and backup
services.
Cohesity's customers include Salesforce, Delta Air Lines, Nasdaq
and Broadcom.
In late 2021, Cohesity tapped JPMorgan Chase and other banks to
prepare for an initial public offering but chose not to proceed
after the market for listings soured due to macroeconomic
volatility.
JPMorgan Chase, Simpson Thacher and Bartlett, and Gunderson
Dettmer advised Cohesity on the deal. JPMorgan also provided
committed financing for the deal, while PJT Partners served as
debt capital markets advisor to Cohesity. Guggenheim Securities,
Morgan Stanley and Latham & Watkins advised Veritas.
(Reporting by Krystal Hu in San Francisco and Anirban Sen in New
York; Editing by Edwina Gibbs)
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