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OpenText Signs Definitive Agreementto Acquire Carbonite, Inc.November 11, 2019
Cautionary Statement Regarding Forward-LookingStatementsCertain statements in this presentation, including statements regarding OpenText’s plans, objectives,expectations and intentions relating to the acquisition, the acquisition’s expected contribution to OpenText’sresults, financing and closing of the acquisition, as well as the expected timing and benefits of theacquisition, impact on future financial performance including in respect of annual recurring revenues, cloudrevenues, cloud margins, adjusted EBITDA, cash flows, earnings and dividends, may contain wordsconsidered forward-looking statements or information under applicable securities laws. These statementsare based on OpenText's current expectations, estimates, forecasts and projections about the transaction,including the expected closing, timing and benefits thereof, and the operating environment, economies andmarkets in which the company operates. These statements are subject to important assumptions, risks anduncertainties that are difficult to predict, and the actual outcome may be materially different. OpenText’sassumptions, although considered reasonable by the company at the date of this press release, may proveto be inaccurate and consequently its actual results could differ materially from the expectations set outherein. For additional information with respect to risks and other factors which could occur, see OpenText’sAnnual Report on Form 10-K, Quarterly Reports on Form 10-Q and other securities filings with the SECand other securities regulators. Unless otherwise required by applicable securities laws, OpenTextdisclaims any intention or obligations to update or revise any forward-looking statements, whether as aresult of new information, future events or otherwise.OpenText Confidential. 2019 All Rights Reserved.2
Call ParticipantsMark J. BarrenecheaOpenText, CEO and CTOMadhu RanganathanOpenText, EVP and CFOOpenText Confidential. 2019 All Rights Reserved.3
Continued Execution of OpenText’s Strategic Vision Carbonite is a continuation of our Total Growth Strategy, both through acquisitions and organic growth We are leading the market as a Cloud Consolidator – Carbonite represents OpenText’s 9th cloud acquisition(EasyLink, GXS, ANX, Covisint, Recommind, Hightail, Catalyst, Liaison, and now Carbonite) Market leader in end-point protection. Carbonite was founded in 2005, the first vendor to combine data protection andend-point security, strengthens and broadens OpenText’s information security offerings in digital forensics, end-pointdetection and response Carbonite brings a leading SMB(1) and prosumer channel with 14,000 MSPs(1), 300,000 SMB customers, 50 millionend-point points and 7 million prosumers Current Annual Recurring Revenues (ARR) of 90%, expect significant expansion of cloud revenues, cloud margins,Adj. EBITDA and cash flows in FY’21 High teens ROIC (Return on Invested Capital) Complements our Enterprise G10K(2) customer base The OpenText Business System to benefit Carbonite in operational execution, growth, margin and cash flowexpansion1. SMB: Small, Medium-sized Businesses, MSP: Managed Service Provider2. G10K: The Global 10K represents the 10,000 largest companies and organizations in the world.OpenText Confidential. 2019 All Rights Reserved.4
Transaction OverviewAnnouncement Transaction andPurchasePriceProjectedFinancial ImpactExpected Closing On November 11, 2019, OpenText signed a definitive agreement to acquire all of theoutstanding shares of Carbonite for 23.00 per share Carbonite has over 300,000 SMB customers, 14,000 MSPs, 7 million prosumers, and1,500 employees Purchase price of approx. 1.42 billion, inclusive of Carbonite’s cash and debt(1) Total purchase price is approximately 2.8x TTM (Trailing Twelve Months) CarboniteGAAP revenues (as of September 30, 2019), inclusive of annualized full year reportedWebroot GAAP revenues, a significant acquisition which closed in March 2019 Funded with OpenText’s existing cash on hand and revolver Current Carbonite Annual Recurring Revenues (ARR) of 90% Expect significant expansion of cloud revenues, A-EBITDA margin, cloud margin, andcash flows in FY’21 Accretive, and targeting to be on the OpenText operating model by end of Fiscal 2021 Estimated OpenText net leverage ratio at closing of approximately 2.5x, with a target toreturn to less than 2x net leverage during the 4-6 quarters post close of transaction Financial projections and target models to be provided upon closing Expect to close within 90 days of this announcement Subject to regulatory approvals and customary closing conditions1. Purchase price subject to certain adjustments; all dollar amounts in this presentation are in US dollars unless otherwise indicated.OpenText Confidential. 2019 All Rights Reserved.5
OpenText: A Durable Business Driven by the OpenText Business SystemAnnual RecurringRevenue (ARR) (US M)A-EBITDA & Margin(1),(2)Operating Cash Flows(2)(US M)(US M) 2,156 1,100104%100% 1,080 876110% 538 41738.4%33.1%FY'14FY'19Renewal Rates:Cloud: mid 90%’sOff Cloud CS: low 90%’sFY'14FY'19A-EBITDA Margin(1) 530 bps since FY’141. Please see reconciliation of GAAP to Non-GAAP measures in our historical filings.2. Refer to note 1 of our Fiscal 2019 10-K for details on the impact of recently adopted accounting standards on prior period results.FY'14FY'19Strong Annual OperatingCash FlowsOpenText Confidential. 2019 All Rights Reserved.6
Business Networks and OtherContent ManagementBuilding on OpenText’s History of Innovation 4.8bn capital deployedsince FY’1418.7% ROIC in FY ’19(2)Enterprise Content Division1991Foundedout ofUniversityof WaterlooHP CEM & CCM Software(1)1996JoinedTSX60OpenText IPO onNASDAQ2012201420152016201720182019Approx. 1.42B purchase price1. CEM – Customer Experience and Content Management. CCM – Customer Communications Management.2. See page 20 on OpenText’s Investor Presentation dated August 1, 2019.Note: Timeline based on calendar year, including select transactions.OpenText Confidential. 2019 All Rights Reserved.7
Carbonite at a Glance: A Leader in Cyber ResiliencyA vision to protect 1 million small and medium businesses by 2023 by providingthe first fully integrated cyber resiliency solution via a worldwide network of MSPs and channel partners. 405m90%29%1,500300kTTM Revenue(1)Recurring revenueA-EBITDA Margin(1)EmployeesSMB Businesses7M50M250 petabytes 20014,000Prosumersend-points protectedData under managementPatents issued/pendingpetabytes(as of September 30, 2019) Compelling vision couples Data Protection and Securitycreates platform for Total Protection Proprietary Cloud native architecture; secure encryption Strong prosumer brandsMSP’s, Online, VARs,Retail, RMM, OEMPositioned to leverage key trends: Back-up moving to the cloud Increased data regulation Ever increasing data sprawl Growing attacks from ransomware1. TTM metrics as of September 30, 2019, based on Carbonite’s historical filings. Please refer to Carbonite’s historical financial filings for additionalinformation on their calculation of A-EBITDA (a Non-GAAP measure)2. VAR: Value Added Resellers, RRM: Remote Monitoring and Management, OEM: Original Equipment ManufacturerOpenText Confidential. 2019 All Rights Reserved.8
Market Leadership Across End-point Security and ProtectionEnd-point Protection (EPP)End-point Detection andResponse (EDR)Data ProtectionSoftware Market Forecast: 7.6B2018-2023: 9.6% CAGRSoftware Market Forecast: 3.1B2018-2023: 25% CAGRSoftware Market Forecast: 8.5B2018-2023: 5.8% CAGRAwards and Recognition10 years running10 years runningOpenText Confidential. 2019 All Rights Reserved.9
Carbonite Strengthens Our Leadership in Cloud, Security, SMBMarket Area5 Key Vectors(1)Customer Value ApproachOpenText Key ProductFamiliesECM, Business Collaboration, FileSync and Share, ExperienceSupporting new ways to workContent Suite, Documentum,Capture, Exstreme, ExtendedECMBusiness Network, Supply Chain,IoT, ODMDigital Supply Chains, ApplicationIntegrationGXS, Liaison, EasyLink,CovisintAI/ML/Advanced TechnologyInsight-driven decision makingMagellanSecurityInformation Security, Governance,Compliance, Privacy, End-pointsCarbonite, Guidance, EnCaseVertical ApplicationsBuilding next generation content-basedapplications (Contracts, Cases, Quality,Invoicing, Supply Chain, LegalTech)Active Applications, CoreApplications, Quality Center1. Total Addressable Market data is expected to be updated after the closing of the Carbonite acquisitionOpenText Confidential. 2019 All Rights Reserved.10
Complete The NeedEnterpriseSMBProsumerCarbonite SolutionsOpenText SolutionsExpanding EIM Into Three Markets: Enterprise, SMB, ProsumerOpenText Confidential. 2019 All Rights Reserved.11
Carbonite Meets our Key Acquisition CriteriaLeadership PositionValue for OpenText’s CustomersMission CriticalRecognized leader in key marketsegments.EIM Total end-point protectionEnterprise, SMB and ProsumersLarger Customer BaseLong Operating History & IPFinancially Compelling 300,000 SMBsEstablished over 10 years ago,running in the cloudTargeting to be on the OpenTextoperating model by end of FY’21200 issued/pending patentsHigh Teens ROIC 14,000 MSPsSolid Track Record of High-Teens ROIC and Operating Cash FlowsOpenText Confidential. 2019 All Rights Reserved.12
Continued Execution of OpenText’s Strategic Vision Carbonite is a continuation of our Total Growth Strategy, both through acquisitions and organic growth We are leading the market as a Cloud Consolidator – Carbonite represents OpenText’s 9th cloud acquisition(EasyLink, GXS, ANX, Covisint, Recommind, Hightail, Catalyst, Liaison, and now Carbonite) Market leader in end-point protection. Carbonite was founded in 2005, the first vendor to combine data protection andend-point security, strengthens and broadens OpenText’s information security offerings in digital forensics, end-pointdetection and response Carbonite brings a leading SMB(1) and prosumer channel with 14,000 MSPs(1), 300,000 SMB customers, 50 millionend-point points and 7 million prosumers Current Annual Recurring Revenues (ARR) of 90%, expect significant expansion of cloud revenues, cloud margins,Adj. EBITDA and cash flows in FY’21 High teens ROIC (Return on Invested Capital) Complements our Enterprise G10K(2) customer base The OpenText Business System to benefit Carbonite in operational execution, growth, margin and cash flowexpansion1. SMB: Small, Medium-sized Businesses, MSP: Managed Service Provider2. G10K: The Global 10K represents the 10,000 largest companies and organizations in the world.OpenText Confidential. 2019 All Rights Reserved.13
AppendixOpenText Confidential. 2019 All Rights Reserved.14
Ransomware – A Pervasive ThreatState of The Market Movement to the cloud has eroded network borders data isthe target Malicious actors succeed by attacking the most vulnerablepoint-user at the end-point Large organizations have teams and resources to preparefor and mitigate cyber threats – SMBs do not If an end-point becomes compromised (due to user error,etc.) security measures alone are ineffectual at stopping theattack User must pay the ransom or leverage data backupsOnly a coordinated approach which integrates endpoint security with data protection can effectivelymitigate the ransomware threatUnified Data Protection Platform Carbonite’s Unified Data Protection Platform – The onlyreliable means of protecting and recovering data – end-pointsecurity reduces the chances of a successful attack and dataprotection enables data recovery in the event of a successfulransomware attack Decreases cost and complexity for customers – SMBs,MSPs, and prosumers can secure and recover their datafrom a single unified console with lower total cost ofownership Security Awareness Training offering – Helps reduce usererrors that result in a ransomware attack13,000 Carbonite customers have been targets ofransomware attacks. Carbonite has delivered 100%successful remediationOpenText Confidential. 2019 All Rights Reserved.15
Carbonite Security Product rotectionBrightCloud Threat IntelligenceProsumer EPP (WSAC)SMB EPP (WSAB)Server ProtectionMobile ProtectionDNS ProtectionWiFi SecuritySecurity AwarenessTrainingWeb Classification ReputationIP and File ReputationStreaming Malware DetectionReal-Time Anti-PhishingUnity APIWebroot PlatformSingle, fully integrated platform, providing contextto threats and enhancing efficacyMulti-tenant solution with centralized managementin the cloud, enhancing ease of useLightweight agent delivers rapid scanning andminimal impact on system performanceOpenText Confidential. 2019 All Rights Reserved.16
Carbonite Data Protection Product OfferingsEnd-point Backup Secures data locatedwithin devicesFile level backupRobust encryption &deduplicationData loss mitigationFlexible deploymentCloud Apps Comprehensiveprotection for allGranular RestoreVisibility and Controlover protected contentServer Backup Rapid recover of singledata file or entire serverSupports physical andvirtual machinesProtects againstransomware, accidentaldeletions, systemfailures and naturaldisastersDRaaS Based on proprietaryreplication technologyCustomers can fail-overnear instantaneously tothe cloudEliminates need forsecondary data centerfor disaster recoveryMigration Powered by proprietaryreplication technologyOrchestrates migrationsregardless of source ortargetEmail Archiving 2014 acquisitions ofMailStoreEnables both SMBsand prosumers toarchive emailsHelps customers meetdata retentionregulatory requirementsCloud PlatformModern architecture with seamless,intuitive user interfaceComprehensive data protectionplatformHighly efficient, scalable and low-costcloud infrastructureOpenText Confidential. 2019 All Rights Reserved.17
Additional InformationThe tender offer described in this communication has not yet commenced. This communication isprovided for informational purposes only and does not constitute an offer to purchase or the solicitationof an offer to sell any securities. At the time the tender offer is commenced, OpenText and a whollyowned subsidiary intend to file with the Securities and Exchange Commission (the “SEC”) a TenderOffer Statement on Schedule TO containing an offer to purchase, a form of letter of transmittal andother documents relating to the tender offer, and Carbonite intends to file with the SEC aSolicitation/Recommendation Statement on Schedule 14D-9 with respect to the tender offer.OpenText and Carbonite intend to mail these documents to the Carbonite stockholders. Investors andsecurity holders are urged to read those documents and other relevant documents filed or to be filedwith the SEC carefully when they become available as they will contain important information aboutOpenText, Carbonite, the tender offer and related matters. Those documents as well as OpenText’sand Carbonite’s other public filings with the SEC may be obtained without charge at the SEC’s websiteat www.sec.gov. OpenText’s public filings with the SEC may be obtained at OpenText’s website athttp://investors.opentext.com/ and Carbonite’s public filings with the SEC may be obtained atCarbonite’s website at https://investor.carbonite.com/. The offer to purchase and related materials mayalso be obtained (when available) for free by contacting the information agent for the tender offer.OpenText Confidential. 2019 All Rights Reserved.18
OpenText Confidential. 2019 All Rights Reserved.19
Carbonite is a continuation of our Total Growth Strategy, both through acquisitions and organic growth We are leading the market as a Cloud Consolidator -Carbonite represents OpenText's 9th cloud acquisition (EasyLink, GXS, ANX, Covisint, Recommind, Hightail, Catalyst, Liaison, and now Carbonite) Market leader in end-point protection.
