Cohesity Inc. is acquiring Veritas Technologies LLC’s data protection unit in a deal that is set to expand its customer base and product portfolio significantly.

The transaction was announced today. According to the companies, the combined entity is expected to have a valuation of $7 billion and pro forma annual revenue of $1.6 billion. It will be led by Cohesity Chief Executive Officer Sanjay Poonen (pictured).

“Sanjay Poonen, a veteran in leading successful company acquisitions, is at the helm of the new entity,” said SiliconANGLE co-founder, CEO and Executive Editor John Furrier. “Under his leadership, the combined strengths of Cohesity’s AI-driven technology and Veritas’ extensive IP and customer base are expected to make the new company a formidable player in the evolving data security and AI platform market.”

San Jose, California-based Cohesity provides software that enterprises use to back up their data and restore it in the event of outages. The company also sells tools for fending off ransomware attacks. One of Cohesity’s newest products, a cloud service called FortKnox that launched in 2022, creates an immutable copy of backup files which can’t be edited or encrypted by hackers.

The company has raised more than $650 million from investors since launching in 2013. Cohesity received a $2.5 billion valuation after its most recent funding round, a $250 million Series D investment that closed in April 2020. The company disclosed at the time that its annual recurring revenue had increased by 150% over the preceding year.

Veritas, meanwhile, is a competing data protection provider founded 30 years before Cohesity. The planned sale of the company’s core data protection business is the latest in a series of reorganizations it has undergone over the past few decades.

In 2004, Veritas merged with cybersecurity provider Symantec Corp. through a deal valued at $13.5 billion. About a decade later, it spun out of Symantec and once again began operating as an independent company. It was acquired by private equity firm The Carlyle Group a few months after the spinout.

The acquisition of Veritas’ data protection business will buy Cohesity several backup and recovery applications. It’s also set to gain the NetBackup series of hardware appliances, which organizations use to keep standby copies of their information on-premises. Between them, the Cohesity and Veritas product lineups have more than 10,000 customers worldwide. 

“We are deeply committed to our mission to protect the world’s data,” said Poonen. “This deal will combine Cohesity’s speed and innovation with Veritas’ global presence and installed base.”

The combined entity will continue investing in both companies’ product portfolios after the deal closes. Additionally, Cohesity said that it will “work towards the delivery of an integrated solution combining the best technology across the two companies.” It expects that the merger will make more resources available for product development.

“This merger is more than just a combination of two companies; it represents a strategic unique alignment of strengths to address the growing needs of the market,” Furrier said. “According to insiders, the deal is expected to increase the opportunity for the new entity to make a significant leap in their market positioning.”

Besides data protection software, Veritas also sells a number of other products designed for tasks such as reducing downtime in storage environments. Those products and the associated assets will be spun off into a separate company. The new entity will be led by CEO Lawrence Wong, who is currently Veritas’ senior vice president of strategy and products.

Cohesity plans to finance the acquisition of Veritas’ data protection business with a combination of equity and debt. Carlyle, Veritas’ majority stakeholder, will participate as an investor in the transaction along with Madrona Venture Group and Haveli Investments. Existing Cohesity backer Premji Invest, in turn, intends to increase its stake.

The acquisition is expected to close by year’s end pending regulatory approval. 

Photo: SiliconANGLE