Eden Prairie-based Arcserve buys Silicon Valley cloud company

Arcserve, the fast-growing Eden Prairie-based data-security firm, has acquired Zetta of Silicon Valley in a transaction that Arcserve's CEO said enhances its cloud-based offerings.

"This is our second and largest acquisition," said Arcserve CEO Mike Crest. "It allows us to extend our capabilities into the 'cloud.' "

Terms of the transaction were not released.

Privately held Arcserve, which says it is growing about 15 percent annually, had revenue in excess of $100 million last year, according to analysts. The company employs about 500, including 100-plus at its Eden Prairie headquarters.

"The addition of Zetta is clearly a good fit for [Arcserve's] midmarket customer needs today," Jason Buffington, an analyst at research firm ESG, said in a statement. "The addition of Zetta's leading cloud technologies, combined with Arcserve's rich data protection solutions, provide a compelling breadth of capabilities …"

Jeff Whitehead, the chief technology officer and co-founder of the 40-employee Zetta, will become the top technology executive at the combined firm.

Crest, a Minnesota native and longtime Arcserve executive, moved the company from New York to Eden Prairie in 2015 after convincing the management of its former parent company, CA Technologies, to spin off the firm as an independent company.

Crest said late Monday that the firm has moved its headquarters into roomier space in Eden Prairie in anticipation of more growth. The Twin Cities is a technology hub, but also a less-expensive locale in which to build business than either coast.

"The lion's share of our hiring will be from the Minneapolis area," Crest said. "The opportunity now is really organic. We already have a broad-reaching distribution network with over 7,500 channel partners, people who resell our technology."