Cohesity strikes deal to buy Veritas data security arm - report

The acquisition will create a $7bn firm

SoftBank-backed data security vendor Cohesity has struck a deal to acquire Veritas' data security business in a move that will value the combined duo at $7bn.

According to reports from Reuters who spoke with Cohesity CEO Sanjay Poonen, the cash and stock acquisition is expected to help Cohesity achieve positive growth margins and expand into international markets.

Poonen added the duo have $1.6bn in annual revenue together.

"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," Pooned told Reuters.

Cohesity's acquisition of Veritas' data protection unit values the business at over $3bn including debt, according to Reuters citing an anonymous source.

The news comes hot on the heels of Rubrik, one of Cohesity's biggest competitors, revealing its own major growth plans to float on the stock market.

Veritas has been majority-owned by private equity firm Carlyle Group since 2016 following a change of ownership from Symantec.

Reuters reports that Carlyle has rolled over its stake in the data security unit and will join the board of the newly merged company along with Veritas CEO Greg Hughes.

Moreover, Veritas will form a separate company made up of its remaining businesses, including data compliance and backup services.

The deal is expected to close by the end of the year.

Sarv Saravanan, chief customer officer at Commvault gave CRN his two cents on the acquisition.

"This deal between Cohesity and Veritas could create complete chaos for customers," he said.

"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. Customers need to know if they're hit, they can recover fast. In today's world, cyber resilience equals business resilience."

Blockbuster vendor deals

Cohesity adds itself to the list of major vendor acquisitions with its takeover of Veritas.

The latter portion of 2023 saw two paramount deals with Broadcom's $61bn buy of VMware and Cisco's $28bn acquisition of observability platform developer Splunk.