Software

UK M&A machine lifts veil on dealmaking’s dangers

4 Feb 2020

Micro Focus released a brutal assessment of its disastrous $9 bln purchase of HP’s old software business, once called Autonomy. The lesson is that back office IT transitions can be decisive. That’s worrying for investors, who typically have no way to assess such humdrum details.

Elliott’s friendly tech bet faces tough second act

28 Jan 2020

Shares in SAP are up 19% since the activist unveiled a stake. Investors seem to believe the $160 billion company will hit ambitious targets endorsed by Paul Singer’s fund. But tough competition and increasingly muddy governance mean there is limited scope for further quick wins.

U.S.-France digital tax truce could easily unravel

23 Jan 2020

Treasury Secretary Steven Mnuchin is no longer demanding that any global Big Tech levy be optional, while Paris will delay collecting payments from groups like Google. That was the easy part. Even basics, such as how much to charge such companies, will be harder to hammer out.

UK’s $13 bln tech scene may already have peaked

15 Jan 2020

Startups in Britain raised 44% more money last year than in 2018. Relative to the size of its economy, UK technology investment now matches the U.S. A Brexit-induced talent squeeze, and Prime Minister Boris Johnson’s strategic pivot away from London, will cap future growth.

Visa learns sellers have upper hand in fintech M&A

14 Jan 2020

The $421 bln group is shelling out $5.3 bln for Plaid, which enables payments that bypass the card network. For a rich acquisition multiple, it gets a hedge against a potential threat. The U.S. startup’s owners can cash out and let others worry about challenges such as Big Tech.

Finablr faces tricky reboot after Travelex hack

14 Jan 2020

Shares in the London-listed fintech group have fallen 23% after a cyberattack on its bureau de change unit. The $350 mln decline probably overstates the immediate damage. The bigger risk is whether the mess deters corporate clients from Finablr’s faster-growing payments business.

Big Tech will be both friend and foe to Big Pharma

3 Jan 2020

A programme developed by Google has beaten doctors in detecting malignant tumours. Artificial intelligence could save patients’ lives and help drugmakers develop more sophisticated treatments. Yet better screening could also help governments and insurers rein in drug spending.

Xerox buying HP is upside-down

6 Nov 2019

The $8 bln digital printer may make an offer for the $27 bln PC maker. That would require a takeover premium about equal to Xerox’s whole market value and would only make sense with massive cost cuts. If the savings are that big, though, HP should be on the case already.

U.S. tech implosion is opportunity for European VC

21 Oct 2019

WeWork and Uber were hugely overvalued in private markets. In Europe, funding is scarcer and startup valuations seem less extreme. If the bloc’s venture capitalists can defy stagnant, fragmented economies, returns may beat U.S. peers, finally earning them serious money to manage.

Review: Salesforce’s activist CEO has solid pitch

18 Oct 2019

Doing good is a business imperative, Marc Benioff argues in “Trailblazer”. He has put his money where his mouth is on issues like homelessness. His call to action at times reads like a corporate ad. But he makes a persuasive case that helping society can boost the bottom line.

UK’s $4 bln cyber buyout is pricey but defensible

14 Oct 2019

Thoma Bravo is paying a hefty 37% premium for Sophos, which has battled volatile software renewals. The offer is a high multiple of EBITDA. Yet the cybersecurity firm’s network of distributors should keep rivals out, and give the private equity barons room to grow through M&A.

Wirecard’s 2025 crystal ball smacks of complacency

8 Oct 2019

The $19 bln German payments group reckons transaction volumes, revenue and EBITDA will rise more than sixfold compared with 2018. Such forecasts ignore the risk of big tech groups like Facebook muscling in. Accusations of accounting impropriety still weigh on its valuation.

Vision Fund will struggle to shrug off WeWork flop

7 Oct 2019

One bad bet shouldn’t jeopardise SoftBank’s $100 bln vehicle. Yet the office sublessor’s failed float undermines the thesis that copious capital brings success and raises doubts about other punchy valuations. Future IPOs which the fund needs to repay investors look a lot harder.

Irish bookie’s $6 bln deal is worth a flutter

2 Oct 2019

Paying a 38% premium usually raises eyebrows. Not so with Paddy Power parent Flutter Entertainment’s all-share acquisition of Toronto-based Stars Group. Cost savings alone almost justify the price. Meanwhile a revenue boost looks credible as legal U.S. sports betting opens up.

Third China Biologic buyout bid holds little charm

19 Sep 2019

CITIC is back with a new group trying again to take the plasma product maker private. The latest $4.6 bln offer is only 2% sweeter than a rival one from about a year ago, even though business has significantly improved. There are plenty of reasons for shareholders to be wary.

Sony’s activist defence is only semi-convincing

17 Sep 2019

The $75 bln Japanese entertainment conglomerate rejected a call from Dan Loeb’s Third Point to spin off its chips business. The long-term case for keeping it is fuzzy but this may not be the best time for separation. It’s harder to support Sony holding onto its finance unit.

Yahoo Japan pushes Zozo investors into new orbit

12 Sep 2019

The SoftBank-backed web portal offered $3.7 bln for control of the ailing fashion site. Zozo’s boss, who bought SpaceX’s first ticket to the moon, is tendering most of his stake. Other owners may want to sell too: Yahoo Japan recently trampled on minority shareholders elsewhere.

Slack channels its way into unenviable company

4 Sep 2019

Like Snap and Blue Apron before it, the workplace-messaging service disappointed investors in its debut quarter as a public company. Revenue is still growing at a decent clip. But growing trade and recession fears are making once-giddy shareholders focus more on the bottom line.

Micro Focus’s woes show downside of being listed

29 Aug 2019

Kevin Loosemore’s UK-quoted tech group made a hash of its $8.8 bln acquisition of HP’s old Autonomy business. Still, frequent double-digit share price swings distract management from a much-needed turnaround. The company, now worth $5 bln, may welcome a buyout group’s privacy.

Permira plans $5 bln test of EU software appetite

28 Aug 2019

The buyout shop may list Germany’s TeamViewer, which sells technology for remote computer access. It’s part of a trend for enterprise-software groups offering just one service. U.S. peers have bumper valuations. The risk is that Europe’s sickly IPO market dents Permira’s returns.