Progress, a provider of AI-powered infrastructure software, has announced a definitive agreement to acquire ShareFile, a business unit of Cloud Software Group.
ShareFile provides SaaS-native, AI-powered, document-centric collaboration services across various industry sectors such as business and professional services, financial services, healthcare, and construction.
According to the terms of the acquisition, Progress will pay $875 million to acquire ShareFile. The deal is expected to close by 30 November 2024, subject to the approval of regulators and the satisfaction of typical closing conditions.
Yogesh Gupta, CEO of Progress, remarked, "Businesses today need to enhance their effectiveness in serving customers while continuously streamlining their operations to drive efficiency, security, and compliance. ShareFile fits strategically with Progress' Digital Experience portfolio to enable organisations to deliver more effective client and team collaboration while simplifying the secure sharing of documents and other content. ShareFile customers will benefit from Progress' strong customer focus, expansive product portfolio, and expertise as well as an unparalleled track record of customer success."
Progress' suite of products assists organisations in developing, deploying, and managing AI-powered applications and experiences responsibly. Once the acquisition is finalised, ShareFile will add SaaS-native, AI-powered document-centric collaboration and workflow capabilities to Progress' product portfolio, including client portals, secure file sync and file-sharing, as well as eSignature functionalities.
In commenting on the transaction, Thomas Krause, CEO of Cloud Software Group, said, "ShareFile has a long track record of success within the secure content collaboration and client interaction space, and with this transaction, as part of Progress, will be better positioned to continue that record, long into the future. For ShareFile customers, we firmly believe they will benefit from Progress' deep customer commitment, extensive product portfolio, expertise, and its expansive user community."
This acquisition aligns with Progress' Total Growth Strategy, which aims to maintain financial discipline while acquiring businesses that complement its existing software portfolio. Progress seeks out companies with robust customer bases, strong retention rates, and solid recurring revenue. The acquisition of ShareFile is expected to add more than $240 million in annual revenue and over 86,000 customers to Progress.
Additionally, based on available information, Progress anticipates that its revenue and non-GAAP earnings per share for its fiscal third quarter will meet or surpass the high end of its previously issued guidance, released on 25 June 2024. The company plans to discuss its full financial results for the third quarter during a conference call scheduled for 24 September 2024.
Progress' Board of Directors has also approved the suspension of the company's quarterly dividend following the closing of the ShareFile acquisition. This capital will instead be redirected towards debt repayment, to increase liquidity for future mergers and acquisitions, and for share repurchases, which are prioritised in Progress' capital allocation policy.
Transaction details indicate that $875 million will be paid using a combination of cash and Progress' existing revolving credit facility. Citi is serving as the exclusive financial advisor for Progress, while DLA Piper LLP is the legal counsel for Progress. On the other side, Jefferies LLC and Barclays are serving as financial advisors to Cloud Software Group, with Kirkland & Ellis LLP representing them as legal counsel.
