Automation and IT monitoring company Progress announced on Monday its intention to acquire file management platform ShareFile for $875 million in cash and credit.
Progress CEO Yogesh Gupta said the deal, expected to close by Nov. 30, will add tools to Progress' portfolio to help companies share documents and collaborate more efficiently.
“Today's businesses must continuously streamline operations to drive efficiency, security and compliance while improving the effectiveness of how they serve their customers,” Gupta said in a statement. “ShareFile's customers will benefit from Progress' strong customer focus, broad product portfolio and expertise, and unmatched track record of customer success.”
Raleigh-based ShareFile was founded in 2005 by self-taught programmer Jesse Lipson, who was running a web design consulting business at the time and started ShareFile after several clients asked him to create a web-based tool that would let them set up folders and exchange files with their customers.
With no outside funding or free tier, ShareFile gained 3 million users by 2011. The service grew to 40 million users after it was acquired by Citrix in 2011. Citrix continued to offer ShareFile as a standalone service and as an integration with some of its enterprise products.
Lipson, who joined Citrix's executive team after the acquisition, left the company in 2017. Then in 2023, Cloud Software Group, a holding company owned by Citrix and data integration provider Tibco, acquired ShareFile for an undisclosed amount.
Today, ShareFile offers a range of business-focused file-sharing tools and services, including one that lets customers create branded, password-protected file portals (similar to what Dropbox and Box do). The company also offers e-signature services, a compliant cloud for medical and financial documents, and a service that lets customers serve data from on-premise data centres.
Cloud Software Group CEO Thomas Krause sees ShareFile as being extremely beneficial for Progress, adding $240 million in annual recurring revenue to the company's balance sheet and 86,000 clients to its customer base.
The market for enterprise file-sharing services is certainly lucrative, with analytics firm Grand View Research estimating it will be worth $9.5 billion in 2023. ShareFile wasn't the top service in terms of usage last year (it was surpassed by Google Drive, Dropbox, Microsoft OneDrive, Box, and Jupyter, according to Statista), but given the sheer size of the space, capturing even a small share would be enough to realize meaningful revenue.
“ShareFile has a long history of success in secure content collaboration and client interaction, and this acquisition positions us well to continue that legacy as part of Progress,” Krause said in a press release. “We are confident ShareFile customers will benefit from Progress' deep customer commitment, broad product portfolio, expertise and vast user community.”
Burlington, Massachusetts-based Progress said it plans to suspend its quarterly dividend after acquiring Sharefile to free up cash to pay down debt. This will allow Progress to “increase liquidity for future M&A and share repurchases,” Gupta added.
ShareFile marks Progress' first acquisition of the year. The 43-year-old, publicly traded company reported second-quarter revenue fell 2.3% year over year. (The company is still recovering from a massive data breach last year caused by its data-transfer tool MOVEit.) But Progress expects third-quarter revenue and adjusted earnings per share to be “within or above” the high end of its forecast.