Veritas Software Corp, the Mountain View, California-based storage management company, said Tuesday that it had agreed to pay $85m in stock for a tiny Canadian developer of remote backup software which last quarter produced revenues of just $1.2m and profits of $23,000. Telebackup Systems Inc, which is based in Calgary, has developed a remote backup and restore product called TSInfoPRO which allows company employees who are out on the road to ‘inject’ backup files from their lap-top’s hard drive directly into their employers main enterprise storage management system. The software only updates existing backup files, dependent upon new content, and hence Veritas says it’s well suited to the low bandwidth connections available to most mobile employees. At the end of June this year, Telebackup announced a marketing and sales agreement with Veritas, whereby Veritas would re-brand and sell Telebackup’s TSInfoPRO software. But having dipped its toe in the water, Veritas’ Group Marketing Manager, Dave Ballard, said the response from clients was so positive that Veritas upgraded the relationship into a fully fledged offer to buy. The huge price tag for a company which only employs 33 staff reflects what Veritas believes is the potential for the TSInfoPRO product. Veritas said it was aware of, or had looked into, at least two other competing technologies. Telebackup is currently listed on the Alberta Stock Exchange, and Veritas will issue 1.7 million of its own Nasdaq listed shares in exchange for Telebackup’s entire issued share capital. The deal was announced after the close of markets on Tuesday, with Telebackup shares closing at C$7.15, valuing the company at approximately US$54m. Pooling of interests will be used to account for the deal which is expected to close by the end of the calendar year, Veritas said.
