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Posts Tagged ‘Date certain mergers and aquisitions’

Article from Techcrunch.

Cisco has announced it plans to acquire Cloupia for $125 million. The software company helps customers automate their data centers.

Cisco sees Cloupia’s infrastructure management software enhancing its Unified Computing System (UCS) and Nexus switching portfolio. Cisco expects Cloupia will help better manage the automation of compute, network and storage as well as virtual machine and operating system resources.

Cisco UCS is a converged infrastructure play. Cisco has made a big bet on providing converged infrastructures that consolidates compute, storage and networking into one box. IT wants to decrease its data center dependency. Vendors like Cisco, EMC and IBM see converged infrastructures as a way to sell their hardware into the enterprise.

Investing in these systems has its costs for IT. The systems are pricey and create a lock-in with one vendor.

Cisco wrote a blog post about the acquisition today. Here’s a snippet:

Cisco’s acquisition of Cloupia benefits Cisco’s Data Center strategy by providing single “pane-of-glass” management across Cisco and partner solutions including FlexPod, VSPEX, and Vblock. Cloupia’s products will integrate into the Cisco data center portfolio through UCS Manager, UCS Central, and Nexus 1000V, strengthening Cisco’s overall ecosystem strategy by providing open APIs for integration with a broad community of developers and partners.

The post is a window into Cisco’s data center strategy. Like other big enterprise software companies, Cisco partners with companies such as NetApp and VMware to sell its solutions through its extensive sales channels.

Read more here.

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Apart from a formal bankruptcy (Chapter 7 or Chapter 11) there are two basic approaches to maximizing enterprise value for under-performing and/or under-capitalized technology, life science and medical device companies and their Intellectual Property: a “date-certain” M&A process and an assignment for the benefit of creditors (ABC).

Both of these processes have significant advantages over a formal bankruptcy in terms of speed, cost and flexibility. Gerbsman Partners’ experience in utilizing a “date certain” M&A process has resulted in numerous transactions that have maximized value anywhere from 2-4 times what a normal M&A process would have generated for distressed asset(s). With a date-certain M&A process, the company’s board of directors hires a crisis management/ private investment banking firm (“advisor”) to wind down business operations in an orderly fashion and maximize value of the IP and tangible assets.

The advisor works with the board and corporate management to:

  1. Focus on the control, preservation and forecasting of CASH.
  2. Develop a strategy/action plan and presentation to maximize value of the assets. Including drafting sales materials, preparing information “due diligence war-room”, assembling a list of all possible interested buyers for the IP and assets of the company and identifying and retaining key employees on a go-forward basis.
  3. Stabilize and provide leadership, motivation and morale to all employees,
  4. Communicate with the Board of Directors, senior management, senior lender, creditors, vendors and all stakeholders in interest.

The company’s attorney prepares very simple “as is, where is” asset-sale documents. (“as is, where is- no reps or warranties” agreements is very important as the board of directors, officers and investors typically do not want any additional exposure on the deal). The advisor then contacts and follows-up systematically with all potentially interested parties (to include customers, competitors, strategic partners, vendors and a proprietary distribution list of equity investors) and coordinates their interactions with company personnel, including arranging on-site visits.

Typical terms for a date certain M&A asset sale include no representations and warranties, a sales date typically three to four weeks from the point that sale materials are ready for distribution (based on available CASH), a significant cash deposit in the $100,000 range to bid and a strong preference for cash consideration and the ability to close the deal in 7 business days. Date certain M&A terms can be varied to suit needs unique to a given situation or corporation. For example, the board of directors may choose not to accept any bid or to allow parties to re-bid if there are multiple competitive bids and/or to accept an early bid.

The typical workflow timeline, from hiring an advisor to transaction close and receipt of consideration is four to six weeks, although such timing may be extended if circumstances warrant. Once the consideration is received, the restructuring/insolvency attorney then distributes the consideration to creditors and shareholders (if there is sufficient consideration to satisfy creditors) and takes all necessary steps to wind down the remaining corporate shell, typically with the CFO, including issuing W-2 and 1099 forms, filing final tax returns, shutting down a 401K program and dissolving the corporation etc.

The advantages of this approach include the following:

Speed – The entire process for a date certain M&A process can be concluded in 3 to 6 weeks. Creditors and investors receive their money quickly. The negative public relations impact on investors and board members of a drawn-out process is eliminated. If circumstances require, this timeline can be reduced to as little as two weeks, although a highly abbreviated response time will often impact the final value received during the asset auction.

Reduced Cash Requirements – Given the date certain M&A process compressed turnaround time, there is a significantly reduced requirement for investors to provide cash to support the company during such a process.

Value Maximized – A company in wind-down mode is a rapidly depreciating asset, with management, technical team, customer and creditor relations increasingly strained by fear, uncertainty and doubt. A quick process minimizes this strain and preserves enterprise value. In addition, the fact that an auction will occur on a specified date usually brings all truly interested and qualified parties to the table and quickly flushes out the tire-kickers. In our experience, this process tends to maximize the final value received.

Cost – Advisor fees consist of a retainer plus 10% or an agreed percentage of the sale proceeds. Legal fees are also minimized by the extremely simple deal terms. Fees, therefore, do not consume the entire value received for corporate assets.

Control – At all times, the board of directors retains complete control over the process. For example, the board of directors can modify the auction terms or even discontinue the auction at any point, thus preserving all options for as long as possible.

Public Relations – As the sale process is private, there is no public disclosure. Once closed, the transaction can be portrayed as a sale of the company with all sales terms kept confidential. Thus, for investors, the company can be listed in their portfolio as sold, not as having gone out of business.

Clean Exit – As the sale process is private, there is no public disclosure. Once closed, the transaction can be portrayed as a sale of the company with all sales terms kept confidential. Thus, for investors, the company can be listed in their portfolio as sold, not as having gone out of business.

To this end the insolvency counsel then takes the lead on all orderly shutdown items. In an assignment for the benefit of creditors (ABC), the company (assignor) enters into a contract whereby it transfers all rights, titles, interests, custody and control of all assets to an independent third-party trustee (assignee). The Assignee acts as a fiduciary for the creditors by liquidating all assets and then distributing the proceeds to the creditors. We feel that an ABC is most appropriate in a situation with one or more highly contentious creditors, as it tends to insulate a board of directors from the process. Nevertheless, we have found that most creditors are rational and will support a quick process designed to maximize the value that they receive. A good advisor will manage relationships with creditors and can often successfully convince them that a non-ABC process is more to their advantage. Apart from its one advantage of insulating the board of directors from the process, an ABC has a number of significant disadvantages, including:

Longer Time to Cash – Creditors and investors will not receive proceeds for at least 7 months (more quickly than in a bankruptcy but far slower than with a “date-certain” auction).

Higher Cost – Ultimately, ABCs tend to be more expensive than a date-certain© auction. It is not uncommon for the entire value received from the sale of company assets to be consumed by fees and/or a transaction for maximizing value may not be consummated in a timely fashion.

Loss of Control – Once the assets are assigned to the independent third-party trustee, the board of directors has no further control over the process. It cannot modify the process in any way or discontinue the process. Thus, it is not possible to explore multiple options in parallel.

Higher Public Relations Profile – The longer time frame for the ABC process and the more formal (and public) legal nature of an ABC make it more difficult to put a positive spin on the final outcome.

Messy Exit – Most independent third-party trustees do not perform the services of cleanly shutting down the remaining corporate shell. Thus, investors must either pay another party to do this job or leave it undone, resulting in increased liability.

About Gerbsman Partners

Gerbsman Partners focuses on maximizing enterprise value for stakeholders and shareholders in under-performing, under-capitalized and under-valued companies and their Intellectual Property. In the past 84 months, Gerbsman Partners has been involved in maximizing value for 62 technology, life science and medical device companies and their Intellectual Property and has restructured/terminated over $795 million of real estate executory contracts and equipment lease/sub-debt obligations. Since inception, Gerbsman Partners has been involved in over $2.3 billion of financings, restructurings and M&A transactions.

Gerbsman Partners has offices and strategic alliances in San Francisco, New York, Virginia/Washington DC, Boston, Europe and Israel.

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Sale of Teranode Corporation

Gerbsman Partners has been retained by Teranode Corporation to solicit interest for the acquisition of all, or substantially all, of Teranode’s assets, including its Intellectual Property (“IP”), in whole or in part (collectively, the “Teranode Assets”).

The sale is being conducted with cooperation of Teranode. Teranode and its employees will be available to assist the purchasers with due diligence and assist with a prompt and efficient transition.

IMPORTANT LEGAL NOTICE

The information in this memorandum does not constitute the whole or any part of an offer or a contract.

The information contained in this memorandum relating to Teranode’s Assets has been supplied by Teranode Corporation. It has not been independently investigated or verified by Gerbsman Partners or their respective agents.

Potential purchasers should not rely on any information contained in this memorandum or provided by Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact. Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit.

Gerbsman Partners, and their respective staff, agents, and attorneys, (i) disclaim any and all implied warranties concerning the truth, accuracy, and completeness of any information provided in connection herewith and (ii) do not accept liability for the information, including that contained in this memorandum, whether that liability arises by reasons of Teranode Corporation’s or Gerbsman Partners’ negligence or otherwise.

Any sale of the Teranode Corporation’s Assets will be made on an “as-is,” “where-is,” and “with all faults” basis, without any warranties, representations, or guarantees, either express or implied, of any kind, nature, or type whatsoever from, or on or behalf of Teranode Corporation and Gerbsman Partners. Without limiting the generality of the foregoing, Teranode Corporation and Gerbsman Partners and their respective staff, agents, and attorneys, hereby expressly disclaim any and all implied warranties concerning the condition of the Teranode Corporation Assets and any portions thereof, including, but not limited to, environmental conditions, compliance with any government regulations or requirements, the implied warranties of habitability, merchantability, or fitness for a particular purpose.

This memorandum contains confidential information and is not to be supplied to any person without Gerbsman Partners’ prior consent. This memorandum and the information contained herein are subject to the non disclosure agreement attached hereto as Exhibit A.

Background

Teranode Corporation (“Teranode” or the “Company”) is an innovative provider of business intelligence and lab automation solutions for the Life Science markets. Founded in 2002, the Company evolved from a team of scientists and professors from the University of Washington. Teranode has produced two award winning software platforms, Fuel and XDA. The Teranode proprietary technology can also be applied to any R&D business intelligence market, including agribusiness, healthcare research, legal research, market research, etc.

Teranode is a privately held, venture capital backed company. Over $12 million has been invested to date from Ignition Partners, Trident Capital, Black-River Asset Management and WRF Capital.

Teranode presently employs 10 full-time employees and its product development is based in Seattle, WA with field consultants in the Boston, MA area.

Teranode’s Fuel platform supports next-generation, distributed business intelligence optimized for life sciences R&D pipeline management.

Teranode’s XDA platform has automated chemistry and biology labs at some of the world’s largest research companies and institutes.

Teranode Corporation’s assets are attractive for a number of reasons:

• Teranode has over $12M invested in product and business development, from major venture investors Ignition Partners, Trident Capital, Black-River Asset Management, and WRF Capital.

• Teranode revenue

Year Revenue
2007 $1.7M
2008 $1.8M
2009 $1.9M
2010 (est) $2.3M

• 20-year, transferrable technology copyright agreement with University of Washington, from 2003-2023

• US patent 7,010,760 awarded in 2006: Batch-based method and tool for graphical manipulation of workflows; Trademarks for XDA, Fuel, Teranode.

• Teranode XDA includes a blue-chip customer base of leading pharmaceutical, biotechnology, research, and academic organizations, including Pfizer, GSK, AstraZeneca, MIT, St. Jude, Fred Hutchinson CRC, Calibrant, Tethys, Nastech, Novartis, CSBI

• Teranode’s new Fuel platform has a growing customer base as opportunities are mined within the pharmaceutical and biotechnology industry in partnership with Oracle, Spotfire and Microsoft, along with a pipeline of additional opportunities :

Business Area Engagement
Target Validation – Monsanto, Genstruct
Biologics Development – Boehringer Ingelhiem, Biogen-Idec
Small Molecule Development – Boehringer Ingelhiem, Novartis
Pipeline Decision Support – Monsanto, Pfizer
Clinical Trials Management – BMS
Adverse Event Reporting & Surveillance- Pfizer

• Together Fuel and XDA provide a complete R&D automation and business intelligence platform, optimized for easy customer installation onsite, or hosted as a SaaS offering by a major vendor seeking to expand and accelerate its solutions and solutions-building capabilities in the life sciences and related R&D markets

• The Company is a leading innovator in the emerging semantic technology field: – “Teranode is at the forefront of bringing semantics-based business intelligence solutions to R&D organizations.” – VP, Biotherapeutics Division, Large Multinational Pharmaceutical

Teranode Software and Intellectual Property Assets

Teranode has developed a portfolio of assets critical to Product and Process Development, including:

· Patents
· Platform and Application Software Products
· Product and solution designs and prototypes
· Software and control algorithms
· Automated software configuration & testing process & framework
· A closed loop development, documentation, QA process management system for global software development
· Intellectual capital and expertise
· Trademarks
· Domain names

A summary of the Fuel and XDA product technology development to date is as follows

· >1500 business requirements and automated test cases
· >1 Million lines of Java, C#, Javascript, and PL/SQL code, SOA Architecture
· >75 person-years of development (currently 5 person team)
· 3 full releases of XDA, 3 full releases of Fuel Platform and Applications Modules
· 5 Complete XDA Application Modules (XDA Protocol Modeler, Protocol Player, Biological Modeler, TMS Server, SDK)
· 7 Complete Fuel Application Modules (Ontology Browser, Document Autotagger, Dataset Definition tool, View Definition tool, Fuel Application Server, Fuel Sharepoint Template Library, Fuel SDK)
· 4 XDA and 2 Fuel Application Suites Configured – XDA Chemistry Synthesis, Chemistry Purification, High-Content Screening, RNAi Automation; Fuel Antibody Biologics Research, Genetics Trait Analysis
· > 50 Integrations (including MS Sharepoint, Oracle 10 and 11G, MS SQLServer, Spotfire tools and analytic wofklow server, various laboratory instrument and robotic platforms, chemistry structure visualization, chemistry and biologics registries, ontologies including NCI, GO, MeSH, SNOMED; pathway model formats including SBML, KEGG, MATLAB; etc.)
· Thousands of tasks completed in the development project plans
· Completely traceable documented development methodology

Patent

• United States Patent 7,010,760 – Arnstein , et al. March 7, 2006
Batch-based method and tool for graphical manipulation of workflows: An autofill algorithm provides tools for defining and automatically executing batch based procedures in an adaptive hierarchical workflow environment, and may be suitable for a large variety of applications including laboratory procedure planning, execution, documentation, as wells ad driving robotic apparatus.

Key Personnel

Joseph Duncan, Chairman and CEO
Mr. Duncan is a co-founder of Teranode. Prior to Teranode, he was CIO and VP Technology at Critical Path, a SaaS email provider to corporations and internet services companies. In 1999, Critical Path was voted the fastest growing, best managed technology company in the world by Forbes.com, a year in which Critical Path grew from 700,000 to over 33,000,000 active hosted email accounts. From 1993-1997, Joseph Duncan was Sr. Vice President at Oracle Corporation, where he was instrumental in engineering a turnaround of Oracle’s enterprise developer tools, and introduced the JDeveloper Suite to Oracle, which has become its primary database tools offering. Before Oracle, he ran the Paradox product development organization at Borland International. In 1993, Paradox for Windows achieved 40% share of the global PC database market, and won 20 product-of-the-year awards from industry publications. Prior to that, Mr. Duncan was a Director in the Advanced Products Division of Lotus Corporation, when Lotus was the world’s largest software company.

Neil Fanger, Ph.D., Chief Business Officer
As a Teranode co-founder, Dr. Fanger brings valuable leadership, management and partnering experience. Dr. Fanger has over 15 years experience in the life science industry, both in R&D and business development. He was most recently Professional Staff at the University of Washington, where he bridged biological research with computer science and mathematics. His previous industry experience includes developing new technologies, identifying drug targets, and designing therapeutics for clinical trial evaluation at Corixa and Immunex.

Chris McClure, Vice President – Professional Services
Mr. McClure works directly with customers to ensure Teranode products are aligned with the needs of the life sciences industry. He is responsible for managing a team of engineers and project managers to expand business and drive successful projects to completion. His previous experience includes Consulting Services Manager for IDBS leading the New England Region, and Drug Discovery as a Biochemist at AstraZeneca, Enanta and Mitotix. Mr. McClure has been a member of the Teranode team for more than 5 years.
Michael Kellen, Ph.D., Director of Product Development
Mr. Kellen is responsible for directing Teranode’s enterprise software development team. He has over 10 years experience developing software for both corporate and academic organizations in the life sciences. Mr. Kellen has been with Teranode since its inception in 2002 and played a vital role in building Teranode’s award winning Protocol and Biological Modeler applications. He holds a doctorate in computational biology from the University of Washington.

The Bidding Process for Interested Buyers

The Bidding Process for interested buyers Interested and qualified parties will be required to sign a nondisclosure agreement (attached hereto as Exhibit A) to have access to key members of the management and intellectual capital teams and the due diligence “war room” documentation (the “Due Diligence Access”). Each interested party, as a consequence of the Due Diligence Access granted to it, shall be deemed to acknowledge and represent (i) that it is bound by the bidding procedures described herein; (ii) that it has an opportunity to inspect and examine the Teranode Corporation’s Assets and to review all pertinent documents and information with respect thereto; (iii) that it is not relying upon any written or oral statements, representations, or warranties of Gerbsman Partners, or their respective staff, agents, or attorneys; and (iv) all such documents and reports have been provided solely for the convenience of the interested party, and Gerbsman Partners (and their respective, staff, agents, or attorneys) do not make any representations as to the accuracy or completeness of the same.

Following an initial round of due diligence, interested parties will be invited to participate with a sealed bid, for the acquisition of the Teranode Corporation’s Assets. A sealed bid must be submitted so that it is actually received by Gerbsman Partners no later than Wednesday June 23, 2010 at 3 p.m. Pacific Daylight Time (the “Bid Deadline”) at Teranode Corporation’s office, located at 411 First Avenue S, Suite 700, Seattle WA 98104 . Please also send an email to steve@gerbsmanpartner.com with your bid.

Bids should identify those assets being tendered for in a specific and identifiable way. The attached fixed asset list may not be complete and Bidders interested in any fixed assets must submit a separate bid for such assets, be specific as to the assets and any sale of the fixed assets or Intellectual Property of Teranode Corporation.

Any person or other entity making a bid must be prepared to provide independent confirmation that they possess the financial resources to complete the purchase where applicable. All bids must be accompanied by a refundable deposit check in the amount of $200,000 (payable to Teranode Corporation). The deposit should be wired to Teranode’s attorneys Murray & Murray, A Professional Corporation. The winning bidder will be notified within 3 business days of the Bid Deadline. The deposit will be held in trust by Company’s counsel. Unsuccessful bidders will have their deposit returned to them within three business days of notification that they are an unsuccessful bidder . Teranode Corporation reserves the right to, in its sole discretion, accept or reject any bid, or withdraw any or all assets from sale. Interested parties should understand that it is expected that the highest and best bid submitted will be chosen as the winning bidder and bidders may not have the opportunity to improve their bids after submission.

Teranode Corporation will require the successful bidder to close within a 7 day period. Any or all of the assets of Teranode Corporation will be sold on an “as is, where is” basis, with no representation or warranties whatsoever. All sales, transfer, and recording taxes, stamp taxes, or similar taxes, if any, relating to the sale of the Teranode Corporation’s Assets shall be the sole responsibility of the successful bidder and shall be paid to Teranode Corporation at the closing of each transaction.

For additional information, please do not contact the company directly, please contact:

Steven R. Gerbsman
415 456-0628
steve@gerbsmanpartners.com

Kenneth Hardesty
408 591-7528
ken@gerbsmanpartners.com

Merle McCreery
303 929-7628
mmgolf100@msn.com

Dennis Sholl
415 457-9596
dennis@gerbsmanpartners.com

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Sale of Teranode Corporation

Gerbsman Partners (www.gerbsmanpartners.com) has been retained by Teranode Corporation (www.teranode.com) to solicit interest for the acquisition of all, or substantially all, of Teranode’s assets, including its Intellectual Property (“IP”), in whole or in part (collectively, the “Teranode Assets”).

The sale is being conducted with cooperation of Teranode. Teranode and its employees will be available to assist the purchasers with due diligence and assist with a prompt and efficient transition.

IMPORTANT LEGAL NOTICE

The information in this memorandum does not constitute the whole or any part of an offer or a contract.

The information contained in this memorandum relating to Teranode’s Assets has been supplied by Teranode Corporation. It has not been independently investigated or verified by Gerbsman Partners or their respective agents.

Potential purchasers should not rely on any information contained in this memorandum or provided by Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact. Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit.

Gerbsman Partners, and their respective staff, agents, and attorneys, (i) disclaim any and all implied warranties concerning the truth, accuracy, and completeness of any information provided in connection herewith and (ii) do not accept liability for the information, including that contained in this memorandum, whether that liability arises by reasons of Teranode Corporation’s or Gerbsman Partners’ negligence or otherwise.

Any sale of the Teranode Corporation’s Assets will be made on an “as-is,” “where-is,” and “with all faults” basis, without any warranties, representations, or guarantees, either express or implied, of any kind, nature, or type whatsoever from, or on or behalf of Teranode Corporation and Gerbsman Partners. Without limiting the generality of the foregoing, Teranode Corporation and Gerbsman Partners and their respective staff, agents, and attorneys, hereby expressly disclaim any and all implied warranties concerning the condition of the Teranode Corporation Assets and any portions thereof, including, but not limited to, environmental conditions, compliance with any government regulations or requirements, the implied warranties of habitability, merchantability, or fitness for a particular purpose.

This memorandum contains confidential information and is not to be supplied to any person without Gerbsman Partners’ prior consent. This memorandum and the information contained herein are subject to the non disclosure agreement attached hereto as Exhibit A.

Background

Teranode Corporation (“Teranode” or the “Company”) is an innovative provider of business intelligence and lab automation solutions for the Life Science markets. Founded in 2002, the Company evolved from a team of scientists and professors from the University of Washington. Teranode has produced two award winning software platforms, Fuel and XDA. The Teranode proprietary technology can also be applied to any R&D business intelligence market, including agribusiness, healthcare research, legal research, market research, etc.

Teranode is a privately held, venture capital backed company. Over $12 million has been invested to date from Ignition Partners, Trident Capital, Black-River Asset Management and WRF Capital.

Teranode presently employs 10 full-time employees and its product development is based in Seattle, WA with field consultants in the Boston, MA area.

Teranode’s Fuel platform supports next-generation, distributed business intelligence optimized for life sciences R&D pipeline management.

Teranode’s XDA platform has automated chemistry and biology labs at some of the world’s largest research companies and institutes.

Teranode Corporation’s assets are attractive for a number of reasons:

• Teranode has over $12M invested in product and business development, from major venture investors Ignition Partners, Trident Capital, Black-River Asset Management, and WRF Capital.

• Teranode revenue

Year Revenue
2007 $1.7M
2008 $1.8M
2009 $1.9M
2010 (est) $2.3M

• 20-year, transferrable technology copyright agreement with University of Washington, from 2003-2023

• US patent 7,010,760 awarded in 2006: Batch-based method and tool for graphical manipulation of workflows; Trademarks for XDA, Fuel, Teranode.

• Teranode XDA includes a blue-chip customer base of leading pharmaceutical, biotechnology, research, and academic organizations, including Pfizer, GSK, AstraZeneca, MIT, St. Jude, Fred Hutchinson CRC, Calibrant, Tethys, Nastech, Novartis, CSBI

• Teranode’s new Fuel platform has a growing customer base as opportunities are mined within the pharmaceutical and biotechnology industry in partnership with Oracle, Spotfire and Microsoft, along with a pipeline of additional opportunities :

Business Area Engagement
Target Validation – Monsanto, Genstruct
Biologics Development – Boehringer Ingelhiem, Biogen-Idec
Small Molecule Development – Boehringer Ingelhiem, Novartis
Pipeline Decision Support – Monsanto, Pfizer
Clinical Trials Management – BMS
Adverse Event Reporting & Surveillance- Pfizer

• Together Fuel and XDA provide a complete R&D automation and business intelligence platform, optimized for easy customer installation onsite, or hosted as a SaaS offering by a major vendor seeking to expand and accelerate its solutions and solutions-building capabilities in the life sciences and related R&D markets

• The Company is a leading innovator in the emerging semantic technology field: – “Teranode is at the forefront of bringing semantics-based business intelligence solutions to R&D organizations.” – VP, Biotherapeutics Division, Large Multinational Pharmaceutical

Teranode Software and Intellectual Property Assets

Teranode has developed a portfolio of assets critical to Product and Process Development, including:

· Patents
· Platform and Application Software Products
· Product and solution designs and prototypes
· Software and control algorithms
· Automated software configuration & testing process & framework
· A closed loop development, documentation, QA process management system for global software development
· Intellectual capital and expertise
· Trademarks
· Domain names

A summary of the Fuel and XDA product technology development to date is as follows

· >1500 business requirements and automated test cases
· >1 Million lines of Java, C#, Javascript, and PL/SQL code, SOA Architecture
· >75 person-years of development (currently 5 person team)
· 3 full releases of XDA, 3 full releases of Fuel Platform and Applications Modules
· 5 Complete XDA Application Modules (XDA Protocol Modeler, Protocol Player, Biological Modeler, TMS Server, SDK)
· 7 Complete Fuel Application Modules (Ontology Browser, Document Autotagger, Dataset Definition tool, View Definition tool, Fuel Application Server, Fuel Sharepoint Template Library, Fuel SDK)
· 4 XDA and 2 Fuel Application Suites Configured – XDA Chemistry Synthesis, Chemistry Purification, High-Content Screening, RNAi Automation; Fuel Antibody Biologics Research, Genetics Trait Analysis
· > 50 Integrations (including MS Sharepoint, Oracle 10 and 11G, MS SQLServer, Spotfire tools and analytic wofklow server, various laboratory instrument and robotic platforms, chemistry structure visualization, chemistry and biologics registries, ontologies including NCI, GO, MeSH, SNOMED; pathway model formats including SBML, KEGG, MATLAB; etc.)
· Thousands of tasks completed in the development project plans
· Completely traceable documented development methodology

Patent

• United States Patent 7,010,760 – Arnstein , et al. March 7, 2006
Batch-based method and tool for graphical manipulation of workflows: An autofill algorithm provides tools for defining and automatically executing batch based procedures in an adaptive hierarchical workflow environment, and may be suitable for a large variety of applications including laboratory procedure planning, execution, documentation, as wells ad driving robotic apparatus.

Key Personnel

Joseph Duncan, Chairman and CEO
Mr. Duncan is a co-founder of Teranode. Prior to Teranode, he was CIO and VP Technology at Critical Path, a SaaS email provider to corporations and internet services companies. In 1999, Critical Path was voted the fastest growing, best managed technology company in the world by Forbes.com, a year in which Critical Path grew from 700,000 to over 33,000,000 active hosted email accounts. From 1993-1997, Joseph Duncan was Sr. Vice President at Oracle Corporation, where he was instrumental in engineering a turnaround of Oracle’s enterprise developer tools, and introduced the JDeveloper Suite to Oracle, which has become its primary database tools offering. Before Oracle, he ran the Paradox product development organization at Borland International. In 1993, Paradox for Windows achieved 40% share of the global PC database market, and won 20 product-of-the-year awards from industry publications. Prior to that, Mr. Duncan was a Director in the Advanced Products Division of Lotus Corporation, when Lotus was the world’s largest software company.

Neil Fanger, Ph.D., Chief Business Officer
As a Teranode co-founder, Dr. Fanger brings valuable leadership, management and partnering experience. Dr. Fanger has over 15 years experience in the life science industry, both in R&D and business development. He was most recently Professional Staff at the University of Washington, where he bridged biological research with computer science and mathematics. His previous industry experience includes developing new technologies, identifying drug targets, and designing therapeutics for clinical trial evaluation at Corixa and Immunex.

Chris McClure, Vice President – Professional Services
Mr. McClure works directly with customers to ensure Teranode products are aligned with the needs of the life sciences industry. He is responsible for managing a team of engineers and project managers to expand business and drive successful projects to completion. His previous experience includes Consulting Services Manager for IDBS leading the New England Region, and Drug Discovery as a Biochemist at AstraZeneca, Enanta and Mitotix. Mr. McClure has been a member of the Teranode team for more than 5 years.
Michael Kellen, Ph.D., Director of Product Development
Mr. Kellen is responsible for directing Teranode’s enterprise software development team. He has over 10 years experience developing software for both corporate and academic organizations in the life sciences. Mr. Kellen has been with Teranode since its inception in 2002 and played a vital role in building Teranode’s award winning Protocol and Biological Modeler applications. He holds a doctorate in computational biology from the University of Washington.

The Bidding Process for Interested Buyers

The Bidding Process for interested buyers Interested and qualified parties will be required to sign a nondisclosure agreement (attached hereto as Exhibit A) to have access to key members of the management and intellectual capital teams and the due diligence “war room” documentation (the “Due Diligence Access”). Each interested party, as a consequence of the Due Diligence Access granted to it, shall be deemed to acknowledge and represent (i) that it is bound by the bidding procedures described herein; (ii) that it has an opportunity to inspect and examine the Teranode Corporation’s Assets and to review all pertinent documents and information with respect thereto; (iii) that it is not relying upon any written or oral statements, representations, or warranties of Gerbsman Partners, or their respective staff, agents, or attorneys; and (iv) all such documents and reports have been provided solely for the convenience of the interested party, and Gerbsman Partners (and their respective, staff, agents, or attorneys) do not make any representations as to the accuracy or completeness of the same.

Following an initial round of due diligence, interested parties will be invited to participate with a sealed bid, for the acquisition of the Teranode Corporation’s Assets. A sealed bid must be submitted so that it is actually received by Gerbsman Partners no later than Wednesday June 23, 2010 at 3 p.m. Pacific Daylight Time (the “Bid Deadline”) at Teranode Corporation’s office, located at 411 First Avenue S, Suite 700, Seattle WA 98104 . Please also send an email to steve@gerbsmanpartner.com with your bid.

Bids should identify those assets being tendered for in a specific and identifiable way. The attached fixed asset list may not be complete and Bidders interested in any fixed assets must submit a separate bid for such assets, be specific as to the assets and any sale of the fixed assets or Intellectual Property of Teranode Corporation.

Any person or other entity making a bid must be prepared to provide independent confirmation that they possess the financial resources to complete the purchase where applicable. All bids must be accompanied by a refundable deposit check in the amount of $200,000 (payable to Teranode Corporation). The deposit should be wired to Teranode’s attorneys Murray & Murray, A Professional Corporation. The winning bidder will be notified within 3 business days of the Bid Deadline. The deposit will be held in trust by Company’s counsel. Unsuccessful bidders will have their deposit returned to them within three business days of notification that they are an unsuccessful bidder . Teranode Corporation reserves the right to, in its sole discretion, accept or reject any bid, or withdraw any or all assets from sale. Interested parties should understand that it is expected that the highest and best bid submitted will be chosen as the winning bidder and bidders may not have the opportunity to improve their bids after submission.

Teranode Corporation will require the successful bidder to close within a 7 day period. Any or all of the assets of Teranode Corporation will be sold on an “as is, where is” basis, with no representation or warranties whatsoever. All sales, transfer, and recording taxes, stamp taxes, or similar taxes, if any, relating to the sale of the Teranode Corporation’s Assets shall be the sole responsibility of the successful bidder and shall be paid to Teranode Corporation at the closing of each transaction.

For additional information, please do not contact the company directly, please contact:

Steven R. Gerbsman
415 456-0628
steve@gerbsmanpartners.com

Kenneth Hardesty
408 591-7528
ken@gerbsmanpartners.com

Merle McCreery
303 929-7628
mmgolf100@msn.com

Dennis Sholl
415 457-9596
dennis@gerbsmanpartners.com

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Here is an interresting article from SF Chronicle.

“Regulators have cleared the way for the landmark search partnership between Microsoft Corp. and Yahoo Inc., creating a unified front in the battle to crack the dominance of Google Inc.

Seven months after announcing the agreement and following several years of merger flirtations, the U.S. Department of Justice and European Commission approved a deal that tightly allies the No. 2 and No. 3 players in the search space. It also marks a pivotal moment in the history of Yahoo, as it cedes territory where it was once a pioneer.

Under the terms of the pact, Microsoft’s Bing search tool will become the exclusive platform on Yahoo’s sites, funneling queries through the Redmond, Wash., software titan’s increasingly popular algorithm. The Sunnyvale Web portal will sell advertising tied to online search for both companies, and Microsoft will pay Yahoo for the traffic it generates.

The deal promises to give the companies control over nearly 30 percent of U.S. online searches, based on the current market share reported by comScore Inc. The combination will deliver improved results for consumers and better returns for advertisers and publishers, the companies said.

“Together, Microsoft and Yahoo will promote more choice, better value and greater innovation,” Microsoft chief executive Steve Ballmer said in a statement.

But analysts are skeptical about how much the deal will really reshape the search industry. Google holds a commanding lead of more than 65 percent of searches, and Yahoo has been bleeding market share for years.

“I don’t think there’s a big shift in power here,” said Carl Howe, analyst with Yankee Group Research Inc.

Rather, he said the agreement provides incremental benefits, opening up a bigger channel of advertisers for Microsoft and lowering research and development costs for Yahoo.

Yahoo previously estimated the agreement would add $500 million to its annual operating income and save $200 million in capital expenditures, though not until two years after the deal was approved.

Implementation will begin in the coming days and could be complete in the United States by the end of the year. The goal is to transition U.S. advertisers and publishers to the new platform before the holiday season, but the companies acknowledged it may take until 2011.

“This breakthrough search alliance means Yahoo can focus even more on our own innovative search experience,” Yahoo CEO Carol Bartz said in a statement. “Yahoo gets to do what we do best: combine our science and technology with compelling content to build personally relevant online experiences for our users and customers.”

Read the whole article here.

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Here is an interresting read from BusinessWeek.

For the mergers-and-acquisitions market, there is no doubt 2009 is ending better than it began. The year is winding up with a “sigh of relief,” says Morton Pierce, chairman of the M&A practice at law firm Dewey & LeBoeuf.

In the past month the M&A market has built up some momentum. According to Bloomberg, deals in North America were valued at $115.6 billion in November, the most since September 2008. Compare that with late 2008 and early 2009, when dealmaking either wasn’t happening at all or was centered in areas where deals absolutely needed to happen, such as failing financial institutions that needed buyers at any price. Deal volume in November was five times February’s volume of $22.5 billion.

Investors looking ahead to 2010 are wondering if this uptick in M&A can continue and where it will occur. Acquirers almost always buy at a premium, so traders can profit from correctly betting which industries will attract the most bidding activity.

Small Tech Deals

In 2009, Internet stocks, the investment and financial services industries, software, and oil and gas production were among the most active, according to Bloomberg data. Expect more dealmaking among technology stocks, say M&A experts. Oracle Corp. (ORCL) is battling European regulators to finish its $7.4 billion acquisition of Sun Microsystems (JAVA).

Such acquisitions, and especially much smaller deals, are a way of life for tech firms, says Daniel Mitz, a partner at law firm Jones Day who specializes in tech deals. “A lot of the innovation comes from smaller companies,” Mitz says. Dealmaking in tech slowed but didn’t stop during the downturn. There could be significant pent-up demand, Mitz says. “This is an industry that is ripe for M&A.”

One driver of a rebound for M&A in tech will be the strong financial positions of many tech firms, says Nadia Damouni, editor of dealReporter Americas, which tracks the M&A market. Another “cash rich” sector is health care, she says, but here the prospects for an M&A rebound are harder to read. The reason: Uncertainty surrounding the federal overhaul of the U.S.health-care system proposed by President Barack Obama and under discussion in Congress. “They’re at the whim of health-care reform,” Damouni says of the many insurers and health-care services companies that could be M&A targets at some point.

In health care, the key ingredient for dealmaking is “stability,” says Bob Filek, a partner at PricewaterhouseCoopers Transaction Services. If health-care reform passes—or even if it doesn’t—acquirers will want some certainty about what federal policy will mean for health care before making bids. Filek envisions “a couple of scenarios where [the result could be] a lot of M&A activity.”

Read the full article here.

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Here are some interesting stats on IPO´s from Forbes.

“More technology companies went public this year despite a world economy still trying to find its footing, and that is a good sign the pace of tech initial public offerings might accelerate in 2010.

Ten tech companies have gone public so far this year, raising $3.8 billion. In 2008, there were three offerings that raised $749.2 million, according to Thomson Reuters data.

Tech deals account for the biggest number of IPOs so far this year and are second only to finance deals in value.

‘We’ve been expecting an uptick in technology because it has really been underrepresented in the market over the last few years,’ said Paul Bard, a research analyst at Connecticut-based Renaissance Capital.

There could be 40 to 50 tech IPOs next year, raising $4 or $5 billion, Bard said.

Tech IPOs did well in 2007, but nearly shut down when financial markets collapsed last year. Getting more small, high-growth tech companies into the IPO mix would be a major engine for jobs and a boon for investors, analysts said.

‘If they’re done right, tech IPOs historically have had the greatest increase in revenues and profits of all IPOs,’ said Scott Sweet, senior managing partner at IPO Boutique.

Three technology companies filed for IPOs this week.

Netherlands-based Sensata Technologies Holding B.V. on Wednesday filed an offering worth up to $500 million. The firm, whose customers include BMW, Huawei Technologies Co Ltd and Samsung, makes sensors and other industrial technology.

Chipmaker Telegent Systems Inc filed for a deal worth as much as $250 million, and software maker RedPrairie Holding Inc said it would try to raise $172.5 million in its IPO.

‘There is an enormous amount of capital on the sidelines right now, in mutual funds and hedge funds, looking to make high-return investments as they would find in technology IPOs,’ said America’s Growth Capital Chief Executive Ben Howe.

Howe warned that investors have become more cautious and companies without strong balance sheets could meet a lukewarm response. A good idea used to be enough for a tech company to go public, he said, but the financial crisis has changed that.

Sensata, which filed for the largest IPO this week, posted revenues of $796.9 million in the nine months ended Sept. 30, down 31 percent from $1.2 billion a year ago. In the same period it narrowed its net loss to $41.6 million from $82.3 million.”

Read the full article here.

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