Cohesity To Acquire Veritas Unit, Forming $7B Data Security And Management Giant
Sanjay Poonen, Cohesity’s CEO and a former VMware veteran, will head the organization formed through the merger of Cohesity and Veritas’ data protection business.
Data security vendor Cohesity announced an agreement Thursday to acquire Veritas’ data protection business, which will create a combined organization valued at about $7 billion.
Cohesity CEO Sanjay Poonen, a former top VMware executive, will head the combined organization following the closure of the deal, which the companies expect by the end of 2024.
The merger will create a giant in the fast-growing market for data security and management technologies, Cohesity said in a news release.
The combined company aims to “lead the next era of AI-powered data security and management by bringing together the best of both product portfolios – Cohesity’s scale-out architecture ideally suited for modern workloads and strong Generative AI and security capabilities and Veritas’ broad workload support and significant global footprint,” Poonen said in the release.
The merger should ultimately be “a win-win for our collective 10,000 customers and 3,000 partners,” he said.
The company would have combined annual recurring revenue of $1.3 billion, as of the close of the fiscal year ended in July 2023, Cohesity said.
Founded in 2013, Cohesity was initially known for its offerings in the storage and data management space. After Poonen, the former COO of VMware, joined Cohesity as CEO in August 2022, the company turned its focus toward the faster-growing area of data security technologies.
‘Not A Startup’
In an interview in October, Poonen told CRN that among data security vendors, “we've got the reputation of being the most modern.”
“Our customer base is the high end of the space — the Fortune 500, Fortune 1000. Lots of big banks, big tech companies, big healthcare. So we have a very good profile of customers,” he said. “Our growth is strong. We’re not a startup anymore.”
And in terms of Cohesity’s sales strategy, “we are 100 percent through the channel,” he noted.
Ultimately, “we're trying to build a multibillion dollar revenue company, and we feel we're well on our way,” Poonen told CRN at the time.
Cohesity said it plans to finance the Veritas deal with equity and debt. Specific terms of the acquisition weren’t disclosed, but a Reuters report pegged the valuation of the Veritas business in the deal at $3 billion. Cohesity had been valued at $3.7 billion as of early 2021.
Current investors that will support the combined organization include Softbank Vision Fund, Sequoia Capital and Wing Venture Capital, the company said.
Veritas majority owner Carlyle and other existing shareholders in the company, meanwhile, are slated to become shareholders in Cohesity once the merger closes, Cohesity said.
Veritas’ remaining assets will be transitioned into a separate company, known for now as “DataCo,” according to the Cohesity release. The “DataCo” organization “will comprise Veritas’ InfoScale, Data Compliance, and Backup Exec businesses, and will function autonomously, enhancing agility and adaptability,” the release said.
One executive at a partner of Cohesity and Veritas, Kapil Bansal of SHI, told CRN Thursday that his “initial reaction is positive” after learning about the merger deal.
“Cohesity is an incredibly channel-friendly company. And so we are looking forward to how they take that same dynamic into the new company,” said Bansal, senior vice president for partner management and solutions at SHI, No. 14 on CRN’s Solution Provider 500. “We do expect they're going to embrace the channel-friendly approach. And that will be good for all of us.”