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Posts Tagged ‘mergers’

Salesforce.com Joins In Tech Buying Binge

Posted in Board Of Intellectual Capital, tagged , , , , , , , on April 22, 2010| Leave a Comment »

Here is a piece from the Digits blog at wsj.com.

“Salesforce.com said Wednesday that it would pay at least $142 million to acquire lead-generation startup Jigsaw, the biggest acquisition to date for the online software company.

The move comes as companies throughout the industry gear up for a period of consolidation. Salesforce.com, which has made relatively few deals in its history, recently hired several mergers and acquisition specialists and in January raised $575 million in debt.

(The debt—and the notion that Salesforce was gearing up to make acquisitions—was the subject of a story in Tuesday’s Wall Street Journal.)

Salesforce has had its eye on Jigsaw for several years, but only got serious about a possible deal a few months ago, says Kendall Collins, Salesforce’s chief marketing officer. Jigsaw is basically a big database filled with contact information for potential customers. It’s “crowd sourced,” meaning users submit, update and fact check the information themselves. There’s already a version of Jigsaw that’s built on Salesforce’s systems and allows for contacts from Jigsaw to be easily copied into Salesforce’s sales-automation software.

Salesforce.com has been marketing itself as a “platform” that other companies can build applications on. Does buying one of these companies send a bad message that it will play favorites?”

Read the full article here.

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Microsoft, Yahoo deal gets regulators’ OK

Posted in Board Of Intellectual Capital, Business models, Gerbsman Partners, internet, Microsoft, tagged , , , , , , , on February 19, 2010| Leave a Comment »

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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Software Vendors: Tech M&A Activity Poised for Rebound

Posted in Board Of Intellectual Capital, tagged , , , , , , , on February 18, 2010| Leave a Comment »

Here is some good news from CIO update.

“After what can only be described as a desolate merger and acquisition landscape throughout most of 2009, a new study conducted by PricewaterhouseCoopers predicts an upswing in both the volume and value of deals this year. And mergers and acquisitions in the high-tech sector will be leading the charge.

According to the US technology M&A insights 2010 study, total closed deals in 2009 fell 53 percent and were valued at just under $36 billion, way down from 2008 when companies completed purchases valued at $77 billion. However, a nice little surge in technology deals in the latter portion of 2009 appears to have given the market some momentum with 85 percent of the value of the $36 billion in mergers and acquisitions last year coming in the final six months.

“Driven by the surge of technology deals completed in the latter half of 2009, PwC expects deal activity to continue apace in 2010, albeit still below the levels seen in 2006-07,” the report said.

Anyone lamenting the moribund state of the technology M&A market can’t blame Oracle (NASDAQ: ORCL). The software giant continues to continues to make purchase after purchase in its ambitious quest to unseat SAP (NYSE: SAP) as the world’s largest business application maker and take on rivals IBM (NYSE: IBM), Microsoft (NASDAQ: MSFT) and HP (NYSE: HPQ) as it looks to become the world’s leading systems provider. Oracle has already made a pair of acquisitions early in 2010 after closing its blockbuster purchase of Sun Microsystems.

IBM also loosened its purse strings in effort to keep pace with Oracle and other cloud-computing providers. It’s a trend that PWC expect will continue throughout 2010. “There is much enthusiasm that the IPO market will make a big comeback in 2010,” the report’s authors wrote. “Add to this the potential return of private equity investors to the negotiating table and the result is improving exit multiples and more satisfied sellers.”

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A decade of ups and downs on the M&A carousel

Posted in Board Of Intellectual Capital, boic, Economy, Gerbsman Partners, Investments, Market research, Marketing, Strategy, Technology, Venture Capital, tagged , , , on December 28, 2009| Leave a Comment »

Here is a good article from Financial Times.

In January 2000, as Steve Case unveiled the all-stock $164bn merger between AOL and Time Warner, the AOL chief executive declared it an historic moment that would transform the competitive landscape of the media business and the way people used the internet forever.

A decade later, the “deal of the century” is not only being unwound but is widely castigated as an example of the chief executive hubris that characterised a period when the worldwide value of deals exceeded $3,500bn and bankers briefly gained celebrity status but ended with their reputation in tatters.

Daniel Stillit , mergers and acquisitions analyst at UBSsays: “The decade opened at the high point of a merger wave. It’s ending at the low point”.

The new millennium began just as the US stock market was wrapping up its fifth consecutive year of double-digit gains and the rapid growth of the technology industry had started to ebb.

The urge to merge was driven by globalisation, deregulation, the need to reduce costs and the desire to gain critical mass – not to mention chief executives’ penchant for empire-building. Bigger was not only better, boards felt, but was necessary if companies were to compete and survive on the global stage.”

Read the full article here.

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M&A: Hot Spots in 2010

Posted in Board Of Intellectual Capital, boic, Business models, BusinessWeek, Distressed IP, Economy, Gerbsman Partners, Intellectual capital, Investments, Market research, Sun Microsystems, Technology, Venture Capital, tagged , , , , , , , , , , , , on December 8, 2009| Leave a Comment »

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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