Undeterred by Carbonite Inc.'s CARB dismissal of its $415 million takeover offer, internet software and services firm j2 Global, Inc. JCOM announced that it is extending its tender offer by another month.
An aggregate of 5,602,174 shares were validly tendered and not withdrawn under the offer, which was set to expire on Feb 26. j2 Global is extending its offer to Mar 30, hoping to complete the acquisition of all tendered shares. j2 Global is also in discussion with Carbonite for permission to participate in the latter’s previously announced potential sale process.
In December, j2 Global offered to buy Carbonite for $15 per share. However, Carbonite rejected the unsolicited offer, asserting that the offer price considerably undervalued the company. j2 Global had then extended the tender offer from Jan 26 to Feb 26.
This marks j2 Global’s third shot at buying Carbonite. In 2012, j2 Global had offered to acquire Carbonite for $10.50 a share. Back then, Carbonite had spurned the offer, confident that its own strategies would prove more productive and better enhance shareholder wealth.
However, in the last couple of years, the provider of online backup and recovery solutions has seen increasing commoditization of cloud-based storage services as tech giants Google Inc. GOOGL, Amazon.com Inc. AMZN and Microsoft MSFT, which have established a foothold in the segment. On the other hand, the low-cost data-storage services market continues to be dominated by smaller, venture-backed competitors such as Dropbox and Box.
As such, it has not been able to translate its strategies into solid, profitable actions as well and as consistently as it would have hoped. Additionally, Carbonite has been grappling with execution issues, intense competition and business challenges of late. The company recently reported fourth-quarter results, where adjusted loss per share came in at 9 cents, wider than the Zacks Consensus Estimate of a loss of 8 cents.
The buyout makes sense for the firm as j2 Global’s scale will assist it in becoming more competitive and gaining traction in the online backup segment. Further, the deal promises immense cross-selling opportunities for Carbonite in the coming years.
Carbonite’s board has hinted at the possibility of a sale, but whether j2 Global’s takeover offer will materialize into a deal this time remains to be seen.
Carbonite currently holds a Zacks Rank #2 (Buy), while j2 Global sports a Zacks Rank #1 (Strong Buy).
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