Progress at Progress: Expansion through ShareFile Acquisition

Progress Software Corporation's shares traded lower at the beginning of the week after the company announced a definitive agreement to acquire ShareFile for $875 million. The acquisition will be financed through a combination of cash and an existing revolving credit line.

ShareFile offers SaaS-native, AI-driven document collaboration solutions, targeting industries such as business services, financial services, healthcare, and construction.

ShareFile is expected to contribute over $240 million in annual revenue and increase Progress’s customer base by more than 86,000.

The acquisition is anticipated to close within Progress's current fiscal year, by November 30, 2024, subject to regulatory approvals and other customary closing conditions.

According to CEO Yogesh Gupta, ShareFile strategically fits well into Progress’s Digital Experience portfolio, enabling companies to collaborate more effectively within teams and with clients, while simplifying the secure sharing of documents and other content.

Furthermore, Progress’s board has decided to suspend the quarterly dividend following the ShareFile acquisition’s completion.

Instead, the capital will be utilized for debt repayment, enhancing liquidity for future mergers and acquisitions as well as share repurchases.

For the third quarter, Progress expects to meet or exceed the upper end of its previous guidance for revenue and adjusted earnings per share (EPS). This forecast includes revenues between $174 million and $178 million and an adjusted EPS between $1.11 and $1.15. The consensus estimate among analysts is $175.9 million in revenue and an adjusted EPS of $1.14.

Progress plans to announce its third-quarter results after the market closes on Tuesday, September 24, 2024.