Money Out Blogtag:www.thedeal.com,2007-08-28:/techconfidential/money-out/blog//222009-01-06T21:41:29ZMovable Type Pro 4.23-enDTS to pay up to $15M for Neural Audiotag:www.thedeal.com,2009:/techconfidential/money-out/blog//22.226562009-01-06T21:20:23Z2009-01-06T21:41:29ZSurround sound technology developer DTS Inc. [DTSI] has paid $7.5 million to acquire audio technology startup Neural Audio Corp.The price tag could double if Neural Audio hits certain performance milestones...Olaf de Senerpont Domishttp://techconfidential.com/money-out/blog/
DTSI] has paid $7.5 million to acquire audio technology startup Neural Audio Corp.
The price tag could double if Neural Audio hits certain performance milestones over the next five years, DTS said. The transaction closed Dec. 31 but was announced Tuesday.
Founded in 2000, Neural Audio will add to DTS' offerings in the broadcast, satellite radio, automotive and gaming markets, the company said. DTS also said it would open a research and development facility in Silicon Valley and announced the hiring of several audio engineers to help it develop new technologies for the online, PC and mobile markets. -- Olaf de Senerpont Domis
See Jan. 6 press release from DTS ]]>
CA provides exit for Benchmark tag:www.thedeal.com,2009:/techconfidential/money-out/blog//22.226222009-01-05T18:47:41Z2009-01-05T19:11:43ZBenchmark Capital and a handful of other venture capital firms enjoyed a rare exit Monday with CA Inc.'s [CA] announcement that it would acquire Orchestria Inc., a startup that provides...Olaf de Senerpont Domishttp://techconfidential.com/money-out/blog/
CA] announcement that it would acquire Orchestria Inc., a startup that provides data loss prevention technology.
Besides Benchmark, the eight-year old startup received backing from Doughty Hanson Technology Ventures, Constellation Ventures, Paladin Capital Group, RRE Ventures, Focus Ventures, Goldman Sachs, New York City Investment Fund and CrossBridge Venture Partners. Paladin led a $21 milion fourth round for Orchestria in 2005.
The startup, which employs 125 people, develops technology that ensures employees comply with regulatory and compnany policies associated with electronic communications.
CA didn't disclose a purchase price, but it's safe to assume the company got a good deal for the startup; we'd be surprised if Orchestria's investors saw much of a return on their investment, if the deal followed current trends. -- Olaf de Senerpont Domis
See Jan. 5 press release from CA ]]>
Google phones in bonusestag:www.thedeal.com,2008:/techconfidential/money-out/blog//22.225692008-12-23T15:32:16Z2008-12-23T21:21:25ZApparently, even Google is feeling the pain of the Great Recession and the pain is trickling down to their employees this holiday season. According to Gawker, the handsome cash bonuses...Brian Wardhttp://www.thedeal.com According to Gawker, the handsome cash bonuses the search giant has historically paid out to its employees will be replaced this year by a brand new mobile phone.
Gawker has the text of a company-wide e-mail, which paints a rosy picture of the bonus situation:
Some of you will of course be wondering why we decided to change from a cash bonus to the Dream phone. Here are the reasons. First, we've never developed anything like the Android software before and this represented a unique opportunity to celebrate that achievement. Googlers globally have been asking for the Dream phone and we're looking forward to seeing all the different things that you do with them. This is a chance for us to once again dogfood a product and make it even better! Second, as we discussed in our email this week, the current economic crisis requires us to be more conservative about how we spend our money. We felt that giving the Dream phone would be a great holiday present - something we could all celebrate.
Thank you for all that you do to make Google the company that it is. We hope that you will enjoy using your Dream phone in 2009 and have a very happy holiday!
What's next? No free snacks in the Googleplex? - Brian Ward. ]]>
Gupta puts infoGroup in playtag:www.thedeal.com,2008:/techconfidential/money-out/blog//22.225612008-12-22T17:02:52Z2008-12-22T19:45:58ZLet's say you wanted to acquire a public company. Would you announce to the world that you wanted to buy the company, most likely causing its shares to rise and...David ShabelmanLet's say you wanted to acquire a public company. Would you announce to the world that you wanted to buy the company, most likely causing its shares to rise and increase the amount you would probably have to pay? Or would you negotiate a deal behind closed doors and try to get the best possible price? We'll assume most of you would go with Option B.
That's why we're suspicious of the motives behind a press release issued by former infoGroup Inc. [IUSA] chairman and CEO Vinod Gupta, who said on Monday he believes the data marketing company should explore a sale and that he would consider selling his shares, but also that he was exploring a proposal to acquire the 60% stake in the company he currently does not own.
Gupta was stripped of both of his positions in the company over the past year following a review of the company's spending practices that was triggered by a shareholder lawsuit. The committee determined that Gupta spent millions of dollars in company money on private jets, real estate, a yacht, country club memberships and luxury cars.
It's unclear whether Gupta is even in a position to acquire the company. As part of the terms of a settlement agreement with the shareholders, Gupta signed a standstill agreement that does not allow him to acquire stock in the company until July 2009.
Assuming, for the moment, that Gupta really isn't interested in acquiring the company, does he have other motives for putting the company in play? According to regulatory documents, Gupta pledged a total of 9.3 million shares of stock, or roughly 41% of his 22.8 million share stake, to secure repayment of a loan. It's possible that the lenders want payment and are asking for the shares, or that Gupta needs to sell some shares to raise money to pay back the loans. Those loans, undoubtedly, were made when infoGroup shares were much higher than where they are trading today. Gupta also has to repay the company $2.2 million in January as part of a $9 million settlement agreement reached with the shareholders. Gupta has been paid $5 million of a $10 million severance agreement negotiated with the company, but won't get the other $5 million until after the company's 2009 annual meeting.
In response to Gupta's press release, infoGroup issued its own statement, saying the current economic environment and state of the capital markets "suggests that this would be a challenging time to try to maximize shareholder value by selling the company." Nevertheless, it said it would review with its financial adviser, Evercore Partners, whether a sale would be in the best interests of the company. It also said that if Gupta does wish to sell some or all of his shares, the company "will do what is practical to cooperate with those efforts."
Shares of infoGroup were trading at $4.37 mid-day Monday, up 10%. -- David Shabelman
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Palm gets a lifeline from Elevation Partnerstag:www.thedeal.com,2008:/techconfidential/money-out/blog//22.225562008-12-22T15:08:07Z2008-12-22T15:27:45ZElevation Partners has been insistent that it would not sell its 25% stake in struggling smartphone maker Palm Inc. [PALM], and on Monday it put its money where its mouth...Olaf de Senerpont Domishttp://techconfidential.com/money-out/blog/Elevation Partners has been insistent that it would not sell its 25% stake in struggling smartphone maker Palm Inc. [PALM], and on Monday it put its money where its mouth is. Silicon Valley's Palm announced that the private equity firm has invested an additional $100 million.
Palm said it issued Series C preferred stock that converts to common stock at a price of $3.25 per share. Elevation also gets warrants to acquire 7 million common shares at the same price. Palm could require Elevation to sell up to $49 million of this new investment to other investors at the same or better terms, the company said.
Palm didn't say exactly how large a stake Elevation now has in the company, but the move certainly puts a damper on rumors that the firm was planning to sell its previous investment, which it acquired in 2007 for $325 million. Shares of Palm climbed about 10%, to $2.73, in morning trading. -- Olaf de Senerpont Domis
See Dec. 22 press release from Palm See Nov. 25 post from Tech Confidential ]]>
Solera acquires HPItag:www.thedeal.com,2008:/techconfidential/money-out/blog//22.225472008-12-19T17:17:23Z2008-12-19T17:49:33ZShares of Solera Holdings Inc. [SLH] climbed 13%, to $22.55, in early afternoon trading on news that the provider of software to the auto insurance industry would pay $117.4 million...Olaf de Senerpont Domishttp://techconfidential.com/money-out/blog/
SLH] climbed 13%, to $22.55, in early afternoon trading on news that the provider of software to the auto insurance industry would pay $117.4 million to acquire used car validation services firm HPI Ltd. from British insurer Aviva plc.
Solera paid with $100.5 million in cash and a $16.9 million note. HPI could be awarded an earnout of up to $7.2 million over the next three calendar years should it clear certain financial performance hurdles, Solera said.
The announcement follows Solera's deal last month to acquire Inpart Servicos Ltda., a Brazilian electronic exchange for auto replacement parts. -- Olaf de Senerpont Domis
See Dec. 19 press release from Solera ]]>
Brocade-Foundry marriage survivestag:www.thedeal.com,2008:/techconfidential/money-out/blog//22.225402008-12-19T16:11:54Z2008-12-19T16:56:03ZIn a time when so many tech mergers fall apart before they even reach the definitive agreement stage, it's worth noting that network equipment maker Brocade Communications Systems Inc. [BRCD]...Olaf de Senerpont Domishttp://techconfidential.com/money-out/blog/In a time when so many tech mergers fall apart before they even reach the definitive agreement stage, it's worth noting that network equipment maker Brocade Communications Systems Inc. [BRCD] on Friday closed its $2.6 billion acquisition of Foundry Networks Inc. [FDRY].
It was a rocky road to closing. The transaction was announced way back in July, well before everything hit the fan. As a testament to how much both companies wanted the deal to close, in October they renegotiated deal terms, shaving $400 million off of the original $3 billion price tag.
Despite the lowered deal value, it remains to be seen whether Brocade will be justified in paying what many considered a high price for Foundry. Back in August we talked with Brocade's head of corporate development T.J. Grewal, who told us that acquiring Foundry would make the enlarged company a viable option for enterprises' end-to-end networking equipment needs. He didn't utter the name Cisco Systems Inc. [CSCO], but that's who Brocade is gunning for.
The deal is also about accelerating revenue growth by joining Brocade's data storage expertise with Foundry's Ethernet technology, and offering a solution at a lower price-point, as CEO Mike Klayko (pictured) lays out in a YouTube video released today.
If the integration is handled as carefully as Grewal said it will be, Brocade could be well-armed to do battle for enterprises' data centers once companies start spending again. -- Olaf de Senerpont Domis
The deal, announced in July, escaped DOJ's notice because Microsemi wasn't required to report it under the Hart-Scott-Rodino Antitrust Improvements Act. But the agency said the deal has reduced competition in the market for so-called small signal transistors that meet stringent U.S. Department of Defense standards by reducing the number of companies supplying these components from three to two. The complaint alleges that Microsemi significantly raised prices on these transistors after acquiring Semicoa. The DOJ said it will ask the court to make Microsemi sell off the Semicoa assets.
Microsemi responded Thursday evening by saying it will "aggresively defend its position." -- Olaf de Senerpont Domis
See Dec. 18 press release from Justice Department See Dec. 18 press release from Microsemi See July 15 post on Microsemi's Semicoa acquisition from Tech Confidential ]]>
Apple invests in U.K. chip firmtag:www.thedeal.com,2008:/techconfidential/money-out/blog//22.225232008-12-18T21:34:18Z2008-12-19T15:31:38ZApple Inc. [AAPL] has spent about $5 million to buy a 3.6% in U.K. chip company Imagination Technologies Ltd., which, among other things, designs graphics components for mobile phones. The...Olaf de Senerpont Domishttp://techconfidential.com/money-out/blog/Apple Inc. [AAPL] has spent about $5 million to buy a 3.6% in U.K. chip company Imagination Technologies Ltd., which, among other things, designs graphics components for mobile phones.
The technology provided by Imagination is expected to complement the processor technology provided by PA Semi, which Apple acquired earlier this year, and could be used in iPhones. Apple also said it has licensed Imagination's graphics technology. -- Olaf de Senerpont Domis
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PLX's Oxford Semi acquisition: All in the familytag:www.thedeal.com,2008:/techconfidential/money-out/blog//22.225032008-12-18T19:46:00Z2008-12-18T20:58:04ZThere's been a lot of head scratching lately over the low prices that some acquired companies are settling for these days. But storage chip designer Oxford Semiconductor Inc.'s agreement this...Olaf de Senerpont Domishttp://techconfidential.com/money-out/blog/There's been a lot of head scratching lately over the low prices that some acquired companies are settling for these days. But storage chip designer Oxford Semiconductor Inc.'s agreement this week to sell out to PLX Technology Inc. [PLXT] for roughly $29 million is raising different questions centering on the web of interpersonal connections between the companies.
D. James Guzy is the long-time chairman of PLX's board of directors and is a director for several other chipmakers. His daughter-in-law is Melissa Guzy, who is a managing director at VantagePoint Venture Partners and who also sits on Oxford's board. We don't know whether Melissa was involved in the negotiations with PLX or whether she recused herself, or even whether such a move was necessary. Calls to a VantagePoint media relations representative and to PLX chief financial officer Art Whipple were not immediately returned. But connections between the boards of acquirers and targets can represent a conflict of interest in M&A.
In 2004, for example, PLX acquired NetChip Technology Inc. for up to $30 million. One technology banker noted that James Guzy sat on both PLX's and NetChip's board. We're unaware if he recused himself from those discussions, but that's standard practice in such cases. When Electronic Arts Inc. [ERTS] bought Bioware Corp. and Pandemic Studios for $850 million a few years ago, for example, EA chief John Riccitiello did not participate in the deal negotiations because of his former job at Elevation Partners, an investor in the Bioware.
We'll update this post if we hear back from Whipple or Melissa Guzy. -- Olaf de Senerpont Domis UPDATE 3:48 P.M. ET: We just got off the phone with Whipple, and from the looks of it, PLX was careful to remove all potential conflicts from the deal. He told us that Melissa Guzy left Oxford's board months ago, before negotiations got to the term sheet stage. Having not gotten any calls back before we published the original post above, we had relied on Oxford's website to confirm that Guzy was on the company's board. Whipple said the website needed updating, which is in process right now. PLX also formed a special committee to make decisions on the deal negotiations, he added. That panel excluded James Guzy. "We knew this was going to be an issue," Whipple said. We'd ax the above post because of this new information, but it's all over the Web by now , so we opted for an update. -- O.D.
See Dec. 16 post on PLX-Oxford deal from Tech Confidential ]]>
Virage drops LogicVision offertag:www.thedeal.com,2008:/techconfidential/money-out/blog//22.224932008-12-18T16:11:05Z2008-12-18T16:14:08ZVirage Logic Corp. [VIRL] has joined the ranks of frustrated hostile acquirers. The chipmaker late Wednesday said it has dropped its unsolicited $1.05 per share, or $10 million, offer for...Olaf de Senerpont Domishttp://techconfidential.com/money-out/blog/Virage Logic Corp. [VIRL] has joined the ranks of frustrated hostile acquirers. The chipmaker late Wednesday said it has dropped its unsolicited $1.05 per share, or $10 million, offer for rival LogicVision Inc. [LGVN]
As far as offer withdrawal letters go, the note from Virage executive chairman J. Daniel McCranie was rather tame. No "your future as a standalone company is doubtful," although Virage did say as much when it made its offer public earlier this month. Just a simple: "We continue to believe that our offer provided your
stockholders with full and fair value for their shares, and you have
unfortunately foreclosed the ability of your stockholders to realize
this value."
The withdrawal follows LogicVision's rejection earlier this week of Virage's offer, which was unveiled Dec. 3. LogicVision also announced that it has instituted a shareholder rights plan. We're guessing that Virage hasn't given up completely on LogicVision. It could consider a run at the chipmaker's board.
Shares of Virage were down 4.4% in morning trading, while LogicVision shares tumbled 11%, to 72 cents each. -- Olaf de Senerpont Domis
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IT security sector a bright spottag:www.thedeal.com,2008:/techconfidential/money-out/blog//22.224702008-12-17T19:46:45Z2008-12-17T19:46:33ZAmerica's Growth Capital Wednesday issued an extensive sum-up of something we've noticed on a more anecdotal level -- the information security sector keeps chugging along despite the economy, especially when...Olaf de Senerpont Domishttp://techconfidential.com/money-out/blog/America's Growth Capital Wednesday issued an extensive sum-up of something we've noticed on a more anecdotal level -- the information security sector keeps chugging along despite the economy, especially when it comes to M&A.
ACG found that the fundamentals of the IT security industry are still strong, and that the number of acquisitions in the sector so far this year is already 77% higher than 2007 (122 YTD versus 69 in all of last year).
Part of this is driven by the constantly growing list of security threats to a rapidly increasing universe of exploitable areas, including hosted software, digital media, virtualized environments and a host of mobile technologies. But the M&A activity is also powered by the fact that small IT security companies can't hack it anymore in a world where customers want a broad solution provided by a big player, as we pointed out here.
ACG also notes that some of the most active acquirers in the space -- Syamntec Corp. [SYMC], McAfee Inc. [MFE] , CA Inc. [CA] and Perimeter eSecurity -- have remained so this year, but a few formerly acquisitive companies, like Cisco Systems Inc. [CSCO] and Oracle Corp. [ORCL], have quit security M&A, at least in 2008.
Another interesting data point: The most active investor in IT security startups in 2007 and 2008 combined has been Intel Capital, which has backed 16 deals. Accel Partners followed with 11 deals. - Olaf de Senerpont Domis
See IT security report from ACG See Nov. 3 post from Tech Confidential ]]>
Tekelec acquires mBalance for up to $60Mtag:www.thedeal.com,2008:/techconfidential/money-out/blog//22.224542008-12-17T16:55:22Z2008-12-17T19:38:44ZIt took a long time, but telecom equipment vendor Tekelec [TKLC] has finally spent some cash on an acquisition.The company said Wednesday it has acquired mBalance, a Netherlands-based mobile messaging...Olaf de Senerpont Domishttp://techconfidential.com/money-out/blog/It took a long time, but telecom equipment vendor Tekelec [TKLC] has finally spent some cash on an acquisition.
The company said Wednesday it has acquired mBalance, a Netherlands-based mobile messaging software startup, for roughly $40 million in cash plus a potential cash earnout of up to about $20 million.
It's been a long hunt for Tekelec. The company back in 2006 said it wanted to open its wallet and do some M&A. We checked in a year later, and it had still not struck any deals. It subsequently announced a stock repurchase program last summer.
MBalance, which employs 82 people and was founded in 2001, develops software that supports text messaging services for mobile operators. Morrisville, N.C.-based Tekelec said it acquired the company through a Belgian subsidiary. It also said mBalance has been cash-flow positive since 2005 and that the deal would add to Tekelec's earnings in 2009 on a non-GAAP basis.
Tekelec shares climbed 2.2%, to $12.76, in early afternoon trading. -- Olaf de Senerpont Domis
See Dec. 17 press release from Tekelec ]]>
LogicVision's afterthoughttag:www.thedeal.com,2008:/techconfidential/money-out/blog//22.224492008-12-17T16:15:22Z2008-12-17T16:16:27ZWe remember that most of the times when a shareholder rights plan was announced, the company in question would offer the canned phrase: "This announcement was not made in connection...Olaf de Senerpont Domishttp://techconfidential.com/money-out/blog/We remember that most of the times when a shareholder rights plan was announced, the company in question would offer the canned phrase: "This announcement was not made in connection with any offer" or something like that.
Chipmaker LogicVision Inc. [LGVN] made no so such pretension after rejecting a $1.05 per share offer from rival Virage Logic Corp. [VIRL].
Two weeks after it received an unsolicited takeover approach from Virage, LogicVision Tuesday said the offer was "inadequate" and not in the best interest of shareholders. The company said it would keep working with its banker Needham & Co. to look at strategic alternatives.
It issued a second press release at about the same time, announcing that it had adopted a shareholder rights plan intended to "guard against abusive takeover tactics."
Other than the adoption of the poison pill, the script reads like most other hostile tech takeover attempts in the past several months. Would-be buyer issues letter publicly saying how unwilling its target was to enter discussions (in Virage's case, adding a bit about how doubtful LogicVision's long-term future as a standalone chip company is), target says its board will consider offer, target rejects offer.
Getting deals done in this environment is not easy, but Virage might not be done with LogicVision. It could increase its offer above the 114% premium it represented on the day it was made public. Or it could follow the route of fellow semiconductor maker Microchip Technology Inc. [MCHP], which earlier this week said it would nominate an alternate slate of directors to Atmel Corp.'s [ATML] board following its failed $2.3 billion hostile bid for the company.
Or Virage could just wait. According to some of our sources, 2009 could be the year when hostile deals see more success, in large part because the patience shareholders at potential targets might finally have run out. - Olaf de Senerpont Domis
See Dec. 16 press release rejecting Virage's offer from LogicVision See Dec. 16 press release announcing a shareholder rights plan from LogicVision See Dec. 16 post on Microchip and Atmel from Tech Confidential See Dec. 12 post on hostile deals from Tech Confidential ]]>
Online video ads still growing strongtag:www.thedeal.com,2008:/techconfidential/money-out/blog//22.224472008-12-17T14:47:01Z2008-12-17T15:48:32ZAlthough some media companies forecast minimal growth in online advertising, research firm eMarketer predicts the business will remain relatively strong. Spending on text ads, which appear next to search results,...Alain Sherterhttp://techconfidential.com
Although some media companies forecast minimal growth in online advertising, research firm eMarketer predicts the business will remain relatively strong. Spending on text ads, which appear next to search results, is expected to rise nearly 15% in 2009. Growth in traditional display ads is pegged at only 3.9%, a sign of the economic crunch hitting retailers. Overall, however, total growth in online ads in 2009 is expected to remain a fairly robust 9%, even amid a deepening recession.
Where's the most heat in advertising? Video (surprise!). eMarketter projects 45% growth in the market for online video ads, to $850 million, soaring to an estimated $4.6 billion in 2013. Two major factors are driving that trend, the firm says. "First, the sharp escalation of professional video content on
the Web--coming mainly from TV networks--is creating a viable base for
brand marketers. Second, even though most advertisers are increasingly
cautious with their budgets, they still need to reach online audiences,
and woo their shrinking wallets, with messages that reach their hearts
and minds--hence, more video."
Despite such opportunities, as usual media companies will live or die on their ability to execute. -- Alain Sherter
Let's say you wanted to acquire a public company. Would you announce to the world that you wanted to buy the company, most likely causing its shares to rise and increase the amount you would probably have to pay? Or would you negotiate a deal behind closed doors and try to get the best possible price? We'll assume most of you would go with Option B. 
Elevation Partners has been insistent that it would not sell its 25% stake in struggling smartphone maker Palm Inc. [PALM], and on Monday it put its money where its mouth is. Silicon Valley's Palm announced that the private equity firm has invested an additional $100 million.
In a time when so many tech mergers fall apart before they even reach the definitive agreement stage, it's worth noting that network equipment maker Brocade Communications Systems Inc. [BRCD] on Friday closed its $2.6 billion acquisition of Foundry Networks Inc. [FDRY].
The U.S. Justice Department late Thursday said it has sued Microsemi Corp. to reverse its $25 million acquisition of certain assets of Semicoa Inc., a maker of high-performance analog and mixed-signal semiconductors used in military and aerospace applications. 
Apple Inc. [AAPL] has spent about $5 million to buy a 3.6% in U.K. chip company Imagination Technologies Ltd., which, among other things, designs graphics components for mobile phones. 
There's been a lot of head scratching lately over the low prices that some acquired companies are settling for these days. But storage chip designer Oxford Semiconductor Inc.'s agreement this week to sell out to PLX Technology Inc. [PLXT] for roughly $29 million is raising different questions centering on the web of interpersonal connections between the companies.
Virage Logic Corp. [VIRL] has joined the ranks of frustrated hostile acquirers. The chipmaker late Wednesday said it has dropped its unsolicited $1.05 per share, or $10 million, offer for rival LogicVision Inc. [LGVN]
America's Growth Capital Wednesday issued an extensive sum-up of something we've noticed on a more anecdotal level -- the information security sector keeps chugging along despite the economy, especially when it comes to M&A.
It took a long time, but telecom equipment vendor Tekelec [TKLC] has finally spent some cash on an acquisition.
We remember that most of the times when a shareholder rights plan was announced, the company in question would offer the canned phrase: "This announcement was not made in connection with any offer" or something like that.
