BakBone Acquired by Quest
For $55 million
This is a Press Release edited by StorageNewsletter.com on November 10, 2010 at 3:12 pmQuest Software, Inc. and BakBone Software Incorporated have signed a definitive agreement for Quest to acquire BakBone.
BakBone delivers real-time continuous data protection, deduplication, replication, disk-based and tape backup and recovery. With BakBone, Quest will acquire heterogeneous data protection technologies that complement its portfolio of solutions for virtual, database and application-level data protection including vRanger Pro; LiteSpeed for Microsoft SQL Server and Oracle; Recovery Manager for Microsoft Exchange; SharePoint; Active Directory; and SharePlex for Oracle.
Quest expects to pay approximately $55 million, including the payment of certain debt obligations and net of anticipated cash on hand. BakBone shareholders will receive $0.33 per common share and $1.29 per preferred share following the closing of the acquisition.
"Quest continues to innovate by delivering data protection solutions to address one of the key pain points facing every organization – the ever-expanding amount of data being created," said Doug Garn, CEO and president of Quest Software. "Quest has a long and successful history of acquiring and building out technically strong products and development teams. BakBone meets these criteria. Our respective products are highly complementary, with minimal overlap. The value received from BakBone’s employees, technologies, partners and customers is expected to be a key benefit as we seek to expand our market share in the data protection market by building upon our core portfolio."
Under the terms of the agreement, which has been approved by the boards of directors of both BakBone and Quest, the acquisition will be conducted by way of a statutory plan of arrangement under the Canada Business Corporations Act and will require approval of the BakBone security holders and the Court of Queen’s Bench of Alberta. The closing of the acquisition, which is subject to customary closing conditions, is expected to occur in the first quarter of 2011.
"We are pleased that we have been able to enter into this definitive agreement on behalf of BakBone’s shareholders," said Steve Martin, interim CEO and CFO of BakBone. "Quest has a rich history of recognizing new technologies in emerging markets and bringing them to a wider audience through its network of worldwide customers. We are confident that we will see even greater success for our solutions as part of the Quest family, and pleased that Quest saw value in adding us as an integral part of its data protection portfolio."
Comments
That's the end for middle-rank but well-known backup company BakBone, headquartered in San Diego, CA, after several years of financial problems.
It was originally, in 1993, a Canadian company, built by former employees of AT&T. Since an IPO and the inception of operations as BakBone Software Inc. in March 2000, it has incurred operating and net losses with an accumulated deficit of $242.4 million. Net losses were $9.8 million and $5.5 million for the fiscal years ended March 31, 2010 and 2009, respectively.
The price of the acquisition, $55 million, can be compared to its annual revenues, $61.9 million in FY10 (+11% compared to FY09).
Fort 1Q11 ended June 30, 2010, the company recorded sales of $14 million (-16% from 1Q10) with an insignificant loss, total cash being only $4.9 million.
Currently it has around 600 VARs and system integrators as well as OEM and strategic partners which include Teradata, Apple, Fujitsu and Hitachi? No customers comprised 10% or more of its revenues.
As of June 2010, the firm had 241 employees, including 58 in R&D, 108 in sales and marketing, 45 in customer support, and 30 in general administration.
BakBone encountered a lot of difficulties with the stock exchange. Following its IPO, it was traded on the Toronto Stock Exchange since 2000 but was delisted. From February 2005 until May 2009, trading of common shares was conducted on the Pink Sheets due to failure to keep current in filing periodic reports with the SEC.
In May 2009, the software company decides to acquire for $16 million ColdSpark, in enterprise email archiving business, apparently a good idea to diversify. But it was a complete failure and this activity was stopped in May 2010. At the same time storage veteran Kenneth Horner, senior VP, corporate development and strategy, was fired. One month before, president and CEO Jim Johnson resigned and was replaced by CFO Steve Martin as interim CEO. At this time we wrote:" By stopping this activity, the company will probably offer a better short-term value. With the idea to find rapidly a buyer rather than to insure a better long-term life?" Then BakBone decided to partner with Waterford to get email and file archiving.
For bigger company Quest Software based in Aliso Viejo, CA, it's a cheap acquisition to add NetVault backup and data protection to many of its current IT management software (application performance monitoring, database, Windows, virtualization). It has already some storage software including Archive Manager, Backup Reporter for Oracle, Recovery Manager for SharePoint, Exchange and Active Directory, Storage Consolidator and Manager for Windows.
That's the 25th acquisition in twelve years (see below) by Quest that reported revenues of $193 million in 3Q10 (+13% from 3Q09) and $550 million (+10%) for nine months with $237 million in cash and cash equivalents.
Other acquisitions of Quest Software
1998
- TOAD
- Neptune Software
- Client/Server Solutions
- FastLane Technologies
- Foglight
- Provision Networks
- Qmaster
- BB4 Technologies
- Sitraka
- Aelita
- Imceda Software (for $61 million, in backup and recovery for Microsoft SQL Server)
- Vintela
- Wingra
- AfterMail (for $14.7 million, with archive solution)
- Magnum Technologies
- ScriptLogic
- Vizioncore
- NetPro
- PassGo
- MessageWise
- MonoSphere
- PacketTrap
- Surgient
- Völcker Informatik
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