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Progress, the trusted provider of AI-powered infrastructure software, today announced it has entered into a definitive agreement to acquire ShareFile, a business unit of Cloud Software Group, Inc., providing SaaS-native, AI-powered, document-centric collaboration, focusing on industry segments including business and professional services, financial services, healthcare and construction.

“Businesses today need to enhance their effectiveness in serving customers, while continuously streamlining their operations to drive efficiency, security and compliance,” said Yogesh Gupta, CEO of Progress. “ShareFile fits strategically with Progress’ Digital Experience portfolio to enable organizations to deliver more effective client and team collaboration while simplifying the secure sharing of documents and other content. ShareFile customers will benefit from Progress’ strong customer focus, expansive product portfolio and expertise as well as an unparalleled track record of customer success.”

Progress products help organizations to develop, deploy and manage responsible AI-powered applications and experiences. Upon closing of the transaction, ShareFile will add to these capabilities with SaaS-native, AI-powered document-centric collaboration and workflows, client portal, secure file sync and share and eSignature.

“ShareFile has a long track record of success within the secure content collaboration and client interaction space and with this transaction, as part of Progress, will be better positioned to continue that record, long into the future,” said Thomas Krause, CEO of Cloud Software Group. “For ShareFile customers, we firmly believe they will benefit from Progress’ deep customer commitment, extensive product portfolio, expertise and its expansive user community.”

The proposed acquisition of ShareFile is another example of the continued execution of Progress’ Total Growth Strategy. Progress continues to maintain financial discipline while seeking to acquire strong businesses with products that complement its existing software portfolio, include a robust customer base with strong retention rates and solid recurring revenue, and align with its company culture. ShareFile is expected to add more than $240M in annual revenue and more than 86,000 customers to Progress.

Reiterating Guidance
Based on currently available information, Progress anticipates revenue and non-GAAP earnings per share for its fiscal third quarter will be within or above the high end of previously issued guidance provided on June 25, 2024. The company will discuss full financial results of its third quarter on a conference call on September 24, 2024.

Dividend Policy
Progress’ Board of Directors has approved the suspension of Progress’ quarterly dividend as of the closing of the ShareFile acquisition and plans to redirect such capital toward 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.

Transaction Details

Subject to the satisfaction of the terms and conditions set forth in the definitive agreement, Progress is expected to acquire ShareFile for $875 million, paid for with a combination of cash and Progress’ existing revolving credit facility. The acquisition is currently expected to close 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. Citi is serving as the exclusive financial advisor for Progress on this transaction, and DLA Piper LLP (US) is serving as Progress’ legal counsel. Jefferies LLC and Barclays are serving as financial advisors to Cloud Software Group, and Kirkland & Ellis LLP is serving as legal counsel.

Progress hosted a conference call to review details of the acquisition on Monday, September 9, 2024. The webcast can be accessed at: https://edge.media-server.com/mmc/p/o8nk7hby/. Attendees must register for the webcast and an archived version of the conference call and supporting materials will be available on the Progress Investor Relations webpage.