Progress, a Bedford, Massachusetts-based software firm, on Monday announced that it intends to acquire file management platform ShareFile for $875 million in cash and credit.
Progress CEO Yogesh Gupta said that the deal, which is expected to close by November 30, will bolster Progress’ portfolio with tools to help businesses more efficiently share — and collaborate on — documents.
“Businesses today need to enhance their effectiveness in serving customers, while continuously streamlining their operations to drive efficiency, security and compliance,” Gupta said in a statement. “ShareFile customers will benefit from Progress’ strong customer focus, expansive product portfolio and expertise as well as an unparalleled track record of customer success.”
Headquartered in Raleigh, ShareFile was founded in 2005 by Jesse Lipson, a self-taught programmer. Lipson — who at the time was running a web design consulting business — created ShareFile after several clients asked him to build a web-based tool they could use to set up folders and exchange files with their customers.
Without outside funding or a free tier, ShareFile grew to 3 million users by 2011. The service would go on to reach 40 million users after its acquisition by Citrix in 2011; Citrix continued to offer ShareFile as a standalone service as well as an integration for several of its enterprise-oriented products.
Lipson, who’d joined Citrix’s C-suite following the acquisition, left in 2017. And in 2023, Cloud Software Group, a holding company owned by Citrix and data integration provider Tibco, bought ShareFile for an undisclosed amount.
Today, ShareFile offers a range of business-oriented file sharing tools and services, including a service that allows customers to create branded, password-protected portals for files (similar to functionality from Dropbox and Box). The company also provides e-signing services, regulation-compliant clouds for health care and financial document and a service that lets customers serve data from their on-premises data centers.
Cloud Software Group CEO Thomas Krause sees ShareFile being quite profitable for Progress, adding as much as $240 million in annual recurring revenue to its balance sheet and 86,000 clients to its customer base.
The market for enterprise file sharing services is indeed a lucrative one, with analytics firm Grand View Research estimating that it was worth $9.5 billion in 2023. ShareFile wasn’t among the top services in terms of usage last year — Google Drive, Dropbox, Microsoft OneDrive, Box and Jupyter beat it out, per Statista — but given the sector’s massive size, cornering even a small slice is enough to realize meaningful revenue.
“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,” Krause said in a press release. “For ShareFile customers, we firmly believe they will benefit from Progress’ deep customer commitment, extensive product portfolio, expertise and its expansive user community.”
Progress said it plans to suspend its quarterly dividend after the ShareFile purchase to redirect capital toward repaying debt. Doing so, Gupta added, will allow Progress to “increase liquidity for future M&A and for share repurchases.”
ShareFile is Progress’ first acquisition this year. The 43-year-old publicly-traded company, whose products automate business processes and monitor IT infrastructure, posted a 2.3% year-over-year decline in revenue for its Q2 fiscal year. But Progress said it expects revenue and adjusted earnings per share for Q3 to be “within or above” the high end of its forecast.
