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US IT company Progress has announced its intention to acquire ShareFile, a document management platform, for $875 million in cash and credit. The acquisition is expected to close
US IT company Progress has announced its intention to acquire ShareFile, a document management platform, for $875 million in cash and credit.
The acquisition is expected to close before November 30 and will strengthen Progress’ portfolio with tools that help companies collaborate more efficiently and share documents securely.
“Companies need to improve their effectiveness in serving customers while streamlining their processes to ensure efficiency, security and compliance,” said Yogesh Gupta, CEO of Progress. He added that ShareFile customers will benefit from Progress’ extensive product portfolio and strong customer focus.
Founded in 2005 by Jesse Lipson, ShareFile started out as a simple platform for sharing files through web-based folders. Lipson, a self-taught programmer, developed ShareFile after some of his web design clients requested a file sharing tool. Without external funding, the platform grew to three million users in 2011. That same year, ShareFile was acquired by Citrix, after which the platform grew to 40 million users. Citrix integrated ShareFile into several products for the business market, but also continued to offer it as a standalone service.
In 2023, ShareFile became part of Cloud Software Group, a holding company of Citrix and data provider Tibco. Today, ShareFile offers a wide range of business tools, including secure file sharing portals, electronic signatures, and regulatory compliance solutions for healthcare and financial services. ShareFile also enables on-premises data usage from local data centers.
According to Thomas Krause, CEO of Cloud Software Group, ShareFile for Progress is expected to generate annual revenue of $240 million from a customer base of 86,000 companies. The enterprise file sharing market is lucrative and will be worth $9.5 billion by 2023, according to TechCrunch. Although ShareFile is not one of the biggest players – Google Drive, Dropbox and Microsoft OneDrive have larger market shares – the revenue potential in this sector is significant.
Progress continues to focus on growth through targeted acquisitions, such as that of ShareFile. The company announced it would suspend its quarterly dividend to free up capital for debt repayment, which Gupta said will increase liquidity for future acquisitions and share buybacks.
This is Progress’ first acquisition in 2024. However, the Burlington, Massachusetts-based company, founded in 1981, has struggled with declining revenue, including a 2.3 percent decline in the fiscal second quarter. Nevertheless, Progress expects third-quarter revenue and earnings per share to beat expectations.
The acquisition of ShareFile provides Progress with an opportunity to strengthen its offering in a competitive market as the company continues to work to repair the damage caused by a data breach in its MOVEit tool last year.
Source: IT Daily
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