Skip to main content

OpenText CEO Mark Barrenechea speaks at the Open Government Partnership Global Summit in Ottawa on May 29, 2019.Justin Tang/The Canadian Press

Open Text Corp. will spend as much as US$34-million on restructuring as it integrates recently acquired U.S. security-software firm Carbonite Inc., but the Waterloo, Ont.-based company will not reveal how many employees will be affected.

Open Text revealed the restructuring Thursday when it reported results from its fiscal 2020 second quarter ended Dec. 31. In an interview, chief executive Mark Barrenechea said that some employees would be affected, but that there would be a “net increase” of jobs to Canada as it moved certain operations into the country, including Carbonite’s outsourcing activities.

“We like to plan thoughtfully, and integrate quickly, with companies we acquire,” he said by phone. The restructuring will cost between US$26-million and US$34-million, with anticipated annual savings of US$37-million to US$41-million after fiscal 2021, the company said.

Open Text sells software to a variety of large businesses and government organizations. It reported revenue of US$781.8-million for the quarter, a 6-per-cent rise over the same period last year. Of that, 73 per cent came from annual recurring revenues as the company pushes further into cloud-based software and services. The company had no cloud services just seven years ago, and has long hoped its cloud strategy would make revenues more predictable quarter-to-quarter.

The company posted a profit of US$107.5-million, up 2.9 per cent from the same period a year ago, translating to 40 US cents a diluted share.

Open Text is one of Canada’s largest software companies, with a market capitalization of more than $16-billion, and has largely grown through acquisitions such as Carbonite. That company, named after the fictional impenetrable substance used to trap the character Han Solo in the Star Wars film The Empire Strikes Back, claims to make its clients’ data similarly impenetrable with secure backups. While Open Text mostly serves larger businesses, Carbonite brought with it 300,000 small- and-medium-sized clients, extending the potential market for Open Text services.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.