Progress, a software company based in Bedford, Mass., announced Monday that it plans to acquire ShareFile, a file management platform, for $875 million in cash and credit.
Progress CEO Yogesh Gupta said the deal, which is expected to close by November 30, will strengthen Progress’ portfolio by providing tools to help businesses share and collaborate on documents more efficiently.
“Today’s enterprises must continually streamline their operations to drive efficiency, security and compliance while also improving the effectiveness of how they serve their customers,” Gupta said in a statement. “ShareFile customers will benefit from Progress’ strong customer focus, broad product portfolio and expertise, and unparalleled track record of customer success.”
Raleigh-based ShareFile was founded in 2005 by self-taught programmer Jesse Lipson, who was then running a web design consulting business, and created ShareFile after several clients asked him to create a web-based tool that they could use to set up folders and exchange files with their clients.
Without external funding or a free tier, ShareFile grew to 3 million users by 2011. The service reached 40 million users after being acquired by Citrix in 2011. Citrix continued to offer ShareFile as a standalone service, but also integrated it into several of its enterprise-focused products.
Lipson, who joined Citrix's C-suite after the acquisition, left the company in 2017. Then in 2023, Cloud Software Group, a holding company owned by Citrix and data integration vendor Tibco, acquired ShareFile for an undisclosed sum.
Today, ShareFile offers a variety of business-oriented file sharing tools and services, including a service that allows customers to create branded, password-protected file portals (similar to Dropbox and Box). The company also offers e-signature services, a compliance cloud for medical and financial documents, and a service that allows customers to provide data from their on-premise data centers.
Thomas Krause, CEO of Cloud Software Group, said ShareFile would be significantly profitable for Progress, adding $240 million in annual recurring revenue and 86,000 customers to the company's customer base.
The enterprise file sharing services market is actually a lucrative one, with analyst firm Grand View Research estimating that the market size will reach $9.5 billion by 2023. ShareFile was not among the top services in terms of usage last year. According to Statista, Google Drive, Dropbox, Microsoft OneDrive, Box, and Jupyter were ahead of ShareFile, but given the sheer size of the sector, even a small share is enough to generate meaningful revenue.
“ShareFile has a long track record of success in secure content collaboration and client interaction, and this transaction will better position them to continue that track record as part of Progress,” Krause said in a press release. “We are confident that ShareFile customers will benefit from Progress’s deep customer commitment, broad product portfolio, expertise and extensive user community.”
Progress said it plans to suspend its quarterly dividend after the ShareFile acquisition, shifting capital to debt repayment. Gupta added that this will allow Progress to “increase liquidity for future M&A and share repurchases.”
ShareFile is Progress’ first acquisition this year. The 43-year-old publicly traded company, which has products that automate business processes and monitor IT infrastructure, reported fiscal second-quarter revenue down 2.3% year over year. However, Progress said it expects third-quarter revenue and adjusted earnings per share to be “in or above” the upper end of its forecast.
