Cohesity Acquires Veritas, Rival Commvault Predicts 'Chaos'

Data security firm Cohesity has agreed to acquire Veritas’ data protection business in a deal that values the combined company at $7 billion.

Reuters reports Cohesity CEO Sanjay Poonen as saying that the cash and stock acquisition will help the firm achieve positive growth margins and expand into international markets. He added that the two will have $1.6 billion in annual revenue.

Cohesity's Sanjay Poonen

“You’ve got the fastest growth on our side and the best profitably on their side, combined together to be a profitable growth machine that’s innovating with AI,” Poonen said in an interview.

“Veritas and Cohesity share a common vision of empowering businesses to protect their critical data assets in the face of evolving cyber threats and complex hybrid cloud environments," said Greg Hughes, CEO of Veritas, in a joint news release announcing the acquisition Thursday. "Bringing Veritas’ differentiated cloud-native architecture to Cohesity’s strong innovation engine will ideally position us to offer our customers transformative solutions against cyber attacks while delivering the flexibility and scalability required to thrive in the multicloud era.”

The combined Cohesity-Veritas will continue to invest in all of Cohesity's products and services, as well as Veritas' NetBackup and appliances, and its Alta data protection products and services. The two companies say they will work toward an integrated solution that combines the best technology from both.

Related:The 12 Biggest Channel-Impacting Mergers & Acquisitions of 2023

Cohesity expects the deal, pending regulatory approval, will close by the end of 2024.

Commvault: Deal Will Create Chaos For Customers

But rival Commvault has said the acquisition will “create chaos.”

Commvault's Sarv Saravanan

“This deal between Cohesity and Veritas could create complete chaos for customers, “ said Commvault’s chief customer officer, Sarv Saravanan. “Platform integration challenges and redundant product portfolios could take years to address. With cyberattacks increasing in severity and frequency, there’s no time for that.”

Veritas to Form Separate Company to Cohesity

Veritas is majority-owned by private equity firm Carlyle Group, which acquired the company from Symantec in 2016. Carlyle has rolled over its stake in the unit and will join the board of the newly merged company. Veritas CEO Greg Hughes will also join the board, according to reports.

Veritas will form a separate company that will comprise its remaining businesses, including data compliance and backup services.

The companies expect the deal to close by the end of the year.

Elsewhere, it is rumored that Cohesity competitor Rubrik is planning to go public in the coming weeks. It has already registered its IPO with the SEC, CNBC reports.