Big News, Cohesity will acquire Veritas NetBackup

It's a tsunami in the the storage industry and it will redistribute cards as Cohesity announced its intent to acquire the NetBackup business of Veritas Technologies in a very clever deal.

Cohesity will be the new entity led by its current CEO Sanjay Poonen, Greg Hughes, CEO of Veritas will join the board. Cohesity will swallow only the NeytBackup asset and the remaining part named DataCo today will keep InfoScale, clsuter and even Backup Exec which is not included in the deal even if it's a backup solution.

The transaction reaches $3B financed based on $2B of debt and $1B of equity.

But was was the motivation behind this deal?

First, Cohesity tried to do an IPO announced confidentially in December 2021 with the filing of its S-1. But nothing happened on this since that moment.

Second, Cohesity has raised more than $800M at a high valuation and had difficulties to continue to raise private money. So that idea of IPO has made sense again. High valuation is also a way to prevent acquisition as the ambition of Mohit Aron, the founder was to build a software giant beyond Nutanix and above ThoughtSpot, initially launched as Scaligent.

So Cohesity has to do something as the trajectory was a bit problematic.

Third, Carlyle who acquired Veritas from Symantec in 2015 for $8B must monetize this and it will be 10 years next year.

Fourth, Veritas didn't project any real attractive future that will help Carlyle to sell portion of it or re-introduce to company to the market. But the installed base of NetBackup is a real gem.

Fifth, Rubrik has announced its IPO plan and I can even think that this deal could have been done with Rubrik as Carlyle really wished an exit.

In the deal, Carlyle will receive a huge amount far from the $8B paid for Veritas but the investment firm will join the capital and board of the new Cohesity.

I anticipate an IPO in 2025 that will feed Carlyle objective in a second phase. With that story, Veritas finally will pick a positive end at least for it shareholders. And Cohesity projects a positive trajectory that was not obvious a few months ago. Cohesity will move clearly in the #1 position in Entreprise data protection. Congratulations to all parties, it is a master move.