Progress (NASDAQ: PRGS) has announced its definitive agreement to acquire ShareFile, a business unit of Cloud Software Group, Inc. ShareFile is known for providing SaaS-native, AI-powered, document-centric collaboration, focusing on industry segments including business and professional services, financial services, healthcare, and construction. The acquisition is expected to add more than $240 million in annual revenue and over 86,000 customers to Progress.
The proposed acquisition is in line with Progress' total growth strategy, which aims to acquire strong businesses with products that complement its existing software portfolio, have a robust customer base with strong retention rates and solid recurring revenue, and align with its company culture.
In terms of financial performance, Progress anticipates revenue and non-GAAP earnings per share for its fiscal third quarter to be within or above the high end of previously issued guidance provided on June 25, 2024. The company is set to discuss the full financial results of its third quarter on a conference call on September 24, 2024.
However, as a part of the acquisition, Progress' board of directors has approved the suspension of the company's quarterly dividend. The company plans to redirect the capital towards the repayment of debt to increase liquidity for future M&A and for share repurchases, both of which are prioritized in its capital allocation policy.
The acquisition of ShareFile is expected to be completed within Progress' fiscal year, ending November 30, 2024, subject to obtaining regulatory approvals and satisfaction of other customary closing conditions set forth in the definitive agreement. The acquisition is expected to be for $875 million, paid for with a combination of cash and Progress’ existing revolving credit facility.
Today the company's shares have moved -0.1% to a price of $57.65. If you want to know more, read the company's complete 8-K report here.
