What really happened with Box and the Intralinks/docTrackr deal

Intralinks doctracr

While last week’s acquisition of Boston-based content security company docTrackr by enterprise content sharing platform Intralinks sent some ripples through the cloud sharing space, the behind-the-scenes action of the deal gives some insight into what may be going on at both companies as well as Silicon Valley-based Box, a company that has filed paperwork to go public.

As of the beginning of April, Box was generating good buzz for its impending initial public offering. However, since the early excitement, things have gone south for the company, including what has been reported as a possible failed acquisition of docTrackr last week.

While a fair amount has been written about Box trying to get into the action on docTrackr, a company it relies on for its digital rights management (DRM) services, multiple sources say that when Box found out that the company was working on a deal with Intralinks, it quickly tried to outbid the the New York-based publicly traded company.

It’s when you try to dig into the reasons docTrackr accepted the Intralinks offer that things start to get murky.

According to sources close to the deal who wish to remain anonymous, Box may have offered potentially more to docTrackr, but only in the form of equity/stock options in the company. Additionally, Box supposedly wanted docTrackr to relocate to Silicon Valley. docTrackr, which has its roots in France, wasn’t interested in moving to the West Coast.

As Clement Cazalot said when we spoke, the docTrackr founder and chief executive had high opinions of Intralinks’ content sharing services even before bringing his cloud security company to the United States for Techstars Boston. At one point, he mentioned that he had always believed that docTrackr was destined to partner with Intralinks at some point.

Intralinks and docTrackr were said to have been in talks for more than three months on a deal and were looking at last Friday afternoon as a deadline to get something done. On Wednesday of last week, Box jumped into the fray with their own offer, but by that point the Intralinks deal was pretty much complete and talks between Box and docTrackr were not extensive.

One version of the events has it that docTrackr went with the $10 million in guaranteed cash offered by Intralinks, due to advisors and investors supposed skepticism of Box’s impending IPO.  (At least one source claimed that the Box offer was mostly equity but more than double the cash value, but that has not been confirmed.)

However, there are other murmurings that the only issue that led to the Intralinks acquisition of docTrackr was the timing of Box’s interest in the company. Basically, Box got interested in docTrackr way too late in the game, to the point that Box never actually made an official offer for the Boston company.

Box co-founder and chief executive Aaron Levie even issued an official statement on the deal, saying:

“There are thousands of applications that integrate with Box, and we regularly talk with them about better ways to work together. We’re happy for doctrackr — DRM is an interesting technology, and we’ll continue to partner on this front as well as explore building native capabilities.” 

At the end of the day, docTrackr and its investors are the big winners of the acquisition. With minimal backing — $2M from Polaris, Atlas Venture, Lead Dog Ventures, Common Angels and others — docTrackr’s $10 million return is a major success for Clement Cazalot.

Which brings us to Box and Intralinks.

While Box lost out on bringing aboard a company that has become vital in the cloud sharing space, they have other, bigger issues to deal with, including how to hit the IPO market just right as critics point with skepticism to the company’s report that it had $170 million of net losses with just $142 million in revenue in 2013.

Then there is Intralinks.

The company, based out of New York but with much of its leadership in Charlestown, will be moving into a new space in Waltham soon. That may signify a greater shift of the company’s management to the Boston area. A lot of the attention from last week’s deal centered on the victory of Intralinks over Box. While part of that storyline may be true, there may be a twinge of schaudenfraude coming from the Intralinks camp over what may be more a result of circumstance than anything else. No doubt, a lot of the background that hit the wires on Box’s failed bid for docTrackr came from sources close to Intralinks.

It will be interesting to see how the continued battle for the cloud continues.

Dennis Keohane was a Senior Staff Writer for BetaBoston.
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