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March 28, 2022

Poly sold for $3.3 billion

HP Inc. to acquire Poly in all-cash transaction for $40 per share

HP Inc. (HPQ) announced a definitive agreement to acquire Poly (POLY), a global provider of workplace collaboration solutions, in an all-cash transaction for $40 per share, implying a total enterprise value of $3.3B, inclusive of Poly’s net debt.

The company said, “The acquisition accelerates HP’s strategy to create a more growth-oriented portfolio, further strengthens its industry opportunity in hybrid work solutions, and positions the company for long-term sustainable growth and value creation.

The rise of hybrid work is creating sustained demand for technology that enables seamless collaboration across home and office environments.

Approximately 75% of office workers are investing to improve their home setups to support new ways of working. Traditional office spaces are also being reconfigured to support hybrid work and collaboration, with a focus on meeting room solutions.

Currently, there are more than 90 million rooms, of which less than 10% have video capability. As a result, the office meeting room solutions segment is expected to triple by 2024.

Poly will help drive the growth and scale of HP’s peripherals and workforce solutions businesses.

Peripherals represent a $110B segment opportunity growing 9% annually, driven by the need for more immersive experiences.

Workforce solutions represent a $120B segment opportunity that is growing 8% annually, as companies invest in digital services to set up, manage, and secure more distributed IT ecosystems.

Poly’s devices, software and services, combined with HP’s strengths across compute, device management, and security, creates a robust portfolio of hybrid meeting solutions.

Poly, previously known as Plantronics, is a leader in video conferencing solutions, cameras, headsets, voice and software.

Together, HP and Poly will deliver a complete ecosystem of devices, software, and digital services to create premium employee experiences, improve workforce productivity, and provide enterprise customers with better visibility, insights, security, and manageability across their hybrid IT environments.”

HP expects the transaction to be immediately accretive to HP’s revenue growth, margins, and non-GAAP EPS at close.

With the expanded value proposition of a complete hybrid work solution, combined with HP’s scale and go-to-market capabilities, HP expects to realize substantial revenue synergies in peripherals as well as meeting room and workforce solutions.

HP will be able to cross-sell across its global commercial and consumer sales channels, while driving incremental sales from combining Poly’s products with HP’s PC portfolio.

As a result, HP expects to achieve $500 million of revenue synergies by FY25 and accelerate Poly’s revenue growth to an approximately 15% CAGR over the first three years after closing.

In addition, HP expects the transaction to improve Poly’s operating margins by approximately six percentage points from current levels by FY25, driven by scale efficiencies across supply chain, manufacturing and overhead. The transaction is expected to close by the end of calendar 2022, subject to Poly stockholder approval, required regulatory clearances, and the satisfaction of other customary closing conditions.

HP will finance the transaction through a combination of balance sheet cash and new debt. This transaction is consistent with HP’s capital returns program target.

HP remains committed to aggressively buying back shares of at least $4B in FY22, and to returning significant capital to shareholders while continuing to invest in growth.

POLY is up $13.14 to $39.34.

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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

December 1, 2020

Slack Technologies sold for $27.7 billion

Salesforce acquires Slack in cash and stock deal worth $27.7B

Salesforce (CRM) and Slack Technologies (WORK) have entered into a definitive agreement under which Salesforce will acquire Slack.

Under the terms of the agreement, Slack shareholders will receive $26.79 in cash and 0.0776 shares of Salesforce common stock for each Slack share, representing an enterprise value of approximately $27.7 billion based on the closing price of Salesforce’s common stock on November 30.

The boards of each of Salesforce and Slack have approved the transaction and the Slack board recommends that Slack stockholders approve the transaction and adopt the merger agreement.

The transaction is anticipated to close in the second quarter of Salesforce’s fiscal year 2022.

Salesforce has also entered into a voting agreement with certain stockholders of Slack common stock, under which each such stockholder has agreed to vote all of their Slack shares in favor of the transaction at the special meeting of Slack stockholders to be held in connection with the transaction, subject to certain terms and conditions.

The Slack shares subject to the agreement represent approximately 55% of the current outstanding voting power of the Slack common stock.

Salesforce expects to fund the cash portion of the transaction consideration with a combination of new debt and cash on Salesforce’s balance sheet.

One year chart of Slack Tech. stock price

Salesforce has obtained a commitment from Citigroup, Bank of America, and JPMorgan Chase for a $10B senior unsecured 364-day bridge loan facility.

Salesforce said, “Slack will be deeply integrated into every Salesforce Cloud.

Five year chart of Salesforce stock price

As the new interface for Salesforce Customer 360, Slack will transform how people communicate, collaborate and take action on customer information across Salesforce as well as information from all of their other business apps and systems to be more productive, make smarter, faster decisions and create connected customer experiences.”

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April 15, 2020

Department of Defense back’s Microsoft cloud contract

DOD issues report on JEDI contract, sees award to Microsoft as proper

The Department of Defense Office of Inspector General has issued a report on the Joint Enterprise Defense Infrastructure Cloud Procurement.

“On June 11, 2019, the Department of Defense Office of Inspector General initiated a review of the DoD Joint Enterprise Defense Infrastructure Cloud procurement, and an investigation into allegations that former DoD officials engaged in ethical misconduct related to the JEDI Cloud procurement,” the Department of Defense Office of Inspector General said in a statement.

DOD OIG says JEDI contract was handled correctly

According to the report, the DoD OIG concluded that “the DoD’s decision to award the JEDI Cloud contract to a single contractor was consistent with applicable law and acquisition standards. […] We concluded that the procuring contracting officer’s determination to use a single-award contract was in accordance with the Federal Acquisition Regulation and was reasonable.

Amazon sued to overturn the contract , Stockwinners

We also concluded that the Undersecretary of Defense for Acquisition and Sustainment’s authorization for a single-award contract was consistent with applicable law.

DOD awarded the contract to Microsoft, Stockwinners

In addition, we concluded that the JEDI Cloud requirements in the Request for Proposal were reasonable and based on approved requirements, essential cloud capabilities, DoD cloud security policy, and the Federal Risk and Authorization Management Program guidance.

In addition, we concluded that the DoD’s inclusion of gate requirements was reasonable and did not overly restrict competition. We also concluded that the DoD conducted the JEDI Cloud source selection in compliance with the FAR, the DoD Source Selection Procedures, the JEDI Cloud Source Selection Plan, and the Request for Proposals, Sections M1 – Basis for Award and M2 – Evaluation Process.

We concluded that the source selection team’s evaluation of the contractors’ proposals was consistent with established DoD and Federal source selection standards. We also note that on February 13, 2020, the U.S. Court of Federal Claims issued an opinion and order which granted Amazon’s request for a preliminary injunction and stopped the DoD from proceeding with JEDI Cloud contract activities until further order of the court.

The court concluded that Amazon is likely to demonstrate in the course of their bid protest that the DoD erred in its evaluation of a discrete portion of Microsoft’s proposal for the JEDI Cloud contract. The court’s decision was not inconsistent with our conclusion that the source selection process used by the DoD was in compliance with the FAR, the DoD Source Selection Procedures, the JEDI Cloud Source Selection Plan, and the Request for Proposals, Sections M1 – Basis for Award and M2 – Evaluation Process.

In this report, we do not draw a conclusion regarding whether the DoD appropriately awarded the JEDI Cloud contract to Microsoft rather than Amazon Web Services.

We did not assess the merits of the contractors’ proposals or DoD’s technical or price evaluations; rather we reviewed the source selection process and determined that it was in compliance with applicable statutes, policies, and the evaluation process described in the Request for Proposals. In addition, however, we concluded that after the JEDI Cloud Contract award, the DoD improperly disclosed source selection and proprietary Microsoft information to Amazon.

In addition, the DoD failed to properly redact names of DoD source selection team members in the source selection reports that were disclosed to Amazon and Microsoft. […] we believe the evidence we received showed that the DoD personnel who evaluated the contract proposals and awarded Microsoft the JEDI Cloud contract were not pressured regarding their decision on the award of the contract by any DoD leaders more senior to them, who may have communicated with the White House.”

AMZN last traded at $2308. MSFT last changed hands at $172.44.

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March 23, 2020

Microsoft acknowledges security flaw in its new Windows operating system

Microsoft says aware of new security flaw found in Microsoft Windows

Microsoft (MSFT) said it is aware of limited targeted attacks that could leverage un-patched vulnerabilities in the Adobe Type Manager Library, and is providing the following guidance to help reduce customer risk until the security update is released.

A security flaw is discovered in Windows, Stockwinners

Two remote code execution vulnerabilities exist in Microsoft Windows when the Windows Adobe Type Manager Library improperly handles a specially-crafted multi-master font – Adobe Type 1 PostScript format.

There are multiple ways an attacker could exploit the vulnerability, such as convincing a user to open a specially crafted document or viewing it in the Windows Preview pane.

Vulnerability exists on Adobe Type Manager, Stockwinners

Microsoft is aware of this vulnerability and working on a fix.

Updates that address security vulnerabilities in Microsoft software are typically released on Update Tuesday, the second Tuesday of each month.

This predictable schedule allows for partner quality assurance and IT planning, which helps maintain the Windows ecosystem as a reliable, secure choice for our customers.

The operating system versions that are affected by this vulnerability are listed below. Please see the mitigation and workarounds for guidance on how to reduce the risk.

The security flaw, which Microsoft deems “critical” — its highest severity rating — is found in how Windows handles and renders fonts, according to the advisory posted.

Although Windows 7 is also affected, only enterprise users with extended security support will receive patches. In the meantime, the advisory offered a temporary workaround for affected Windows users to mitigate the flaw until a fix is available.

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February 6, 2020February 6, 2020

Unisys Federal sold for $1.2 billion

SAIC to acquire Unisys Federal for $1.2B in cash

Science Applications International Corp. (SAIC) announced that it has entered into a definitive agreement to acquire Unisys Federal (UIS), in an all-cash transaction valued at $1.2B, in a highly strategic and value creating transaction, the company said.

This represents a transaction multiple of approximately 10.5x CY2020 adjusted EBITDA, adjusted for the net present value of tax assets.

Unisys Federal, an operating unit of Unisys (UIS), is a provider of infrastructure modernization, cloud migration, managed services, and enterprise IT-as-a-service through scalable and repeatable solutions to U.S. federal civilian agencies and the Department of Defense.

SAIC expects to fund the $1.2B cash transaction through a combination of cash on hand and incremental debt.

The transaction is expected to close by the end of SAIC’s first quarter of fiscal year 2021, ending May 1, 2020, following customary closing conditions, including HSR regulatory clearance.

Unisys Federal sold to SAIC, Stockwinners

The transaction has been unanimously approved by SAIC’s Board of Directors. The businesses will continue to operate independently until the transaction closes.

“With the addition of Unisys Federal, SAIC will be a leading provider of digital transformation services and solutions to the federal government.

This exciting opportunity advances our strategy by building on our modernization capabilities, increasing customer access, accelerating growth and enhancing shareholder value,” said SAIC CEO Nazzic Keene.

“The financial benefits of acquiring Unisys Federal are compelling, including accretion of adjusted EBITDA margins, non-GAAP earnings per share, and cash generation.”

The transaction multiple of approximately 13x LTM 9/30/19 Adjusted EBITDA represents a significant premium to Unisys’ trading multiple.

Net proceeds are largely expected to be used to pay down debt and reduce pension obligations, thereby significantly improving Unisys’ balance sheet, its U.S. pension funded status and overall financial flexibility.

The transaction was unanimously approved by the Unisys board and is expected to close in the first half of 2020, subject to customary closing conditions. Unisys’ U.S. Federal business represents more than 1,900 associates, with approximately $689 million in revenue for the LTM period ended September 30, 2019.

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May 8, 2019

Zayo Group sold for $35 per share

Zayo Group to be acquired by Digital Colony, EQT in deal valued at $14.3B

Zayo Group Holdings (ZAYO) announced that it has signed a definitive merger agreement to be acquired by affiliates of Digital Colony Partners and the EQT Infrastructure IV fund.

Zayo sold for $14.3 billion, Stockwinners

The transaction would result in Zayo transitioning from a public company to a private company.

Zayo Group Holdings, Inc. provides bandwidth infrastructure solutions for the communications industry in the United States, Canada, and Europe.

Under the new ownership, the Zayo team would continue to execute the Company’s strategy and remain headquartered in Boulder, Colorado.

Under the terms of the agreement, which was unanimously approved by Zayo’s Board of Directors, shareholders will receive $35.00 in cash per share of Zayo’s common stock in a transaction valued at $14.3 billion, including the assumption of $5.9 billion of Zayo’s net debt obligations.

The offer price represents a 32% premium to the volume-weighted price average of the last six months of $26.44. Dan Caruso, Zayo’s Chairman and CEO, said, “Digital Colony and EQT share our vision that Zayo’s Fiber Fuels Global Innovation.

Both are experienced global investors in the communications infrastructure space, and they appreciate our extraordinary fiber infrastructure assets, our highly talented team and our strong customer base. I am confident this partnership with EQT and Digital Colony will empower Zayo to accelerate its growth and strengthen its industry leadership.”

“Following a comprehensive review of strategic alternatives, the Zayo Board of Directors concluded that the sale of Zayo to Digital Colony and EQT Infrastructure is in the best interest of Zayo and all its stakeholders,” said Yancey Spruill, Zayo’s Lead Independent Director. “

The transaction delivers immediate and substantial value to shareholders and will strengthen Zayo’s financial flexibility, enabling the company to increase investments and better position itself for long-term growth and profitability.”

The closing of the deal is subject to customary conditions, including regulatory clearance and Zayo shareholder approvals.

The transaction is expected to close in the first half of calendar 2020.

Goldman Sachs and J.P. Morgan are serving as financial advisors to Zayo Group in connection with the transaction and Skadden Arps is serving as legal counsel.

Morgan Stanley and Deutsche Bank are acting as financial advisors to Digital Colony and EQT Infrastructure, and Simpson Thacher is serving as legal advisor.

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November 12, 2018

Apptio sold for $1.94 billion

Apptio to be acquired by Vista Equity Partners for $38 per share

Apptio (APTI) announced that it has entered into a definitive agreement to be acquired by an affiliate of Vista Equity Partners.

Apptio, Inc. provides cloud-based technology business management (TBM) solutions to enterprises. Its cloud-based platform and SaaS applications enable IT leaders to analyze, optimize, and plan technology investments, as well as to benchmark financial and operational performance against peers.

Under the terms of the agreement, Vista will acquire all outstanding shares of Apptio common stock for a total value of approximately $1.94B.

Apptio shareholders will receive $38.00 in cash per share, representing a 53% premium to the unaffected closing price as of November 9, 2018.

Apptio’s board unanimously approved the deal and recommended that stockholders vote their shares in favor of the transaction.

Apptio’s headquarters will remain in Bellevue, with regional offices across the U.S., EMEA and APAC.

Closing of the deal is subject to customary closing conditions, including the approval of Apptio shareholders and antitrust approval in the United States.

The transaction is expected to close in Q1 2019 and is not subject to a financing condition.

The merger agreement includes a 30 day “go-shop” period, which permits Apptio’s Board and advisors to actively initiate, solicit, encourage, and potentially enter negotiations with parties that make alternative acquisition proposals.

Apptio will have the right to terminate the merger agreement to enter into a superior proposal subject to the terms and conditions of the merger agreement.

There can be no assurance that this 30 day “go-shop” will result in a superior proposal, and Apptio does not intend to disclose developments with respect to the solicitation process unless and until the Board makes a determination requiring further disclosure.

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November 6, 2018

ConvergeOne sold for $1.8 billion

ConvergeOne to be acquired by CVC for $12.50 per share

ConvergeOne Holdings (CVON) announced that it has entered into a definitive agreement to be acquired by affiliates of CVC Fund VII in an all-cash transaction valued at approximately $1.8B.

ConvergeOne Holdings, Inc. provides collaboration and technology solutions for large and medium enterprises in the United States. The company offers unified communications solutions, including communications applications, such as voice, email, presence, chat/text, and video technologies; voice and text messaging solutions; mobility and bring your own device solutions for business continuity with the seamless connection of mobile, landline, cellular, and Wi-Fi enabled devices.

Subject to customary closing conditions and regulatory approvals, ConvergeOne expects the transaction to close in the fourth quarter of 2018 or the first quarter of 2019.

ConvergeOne will maintain its corporate headquarters in Eagan, MN and continue to be led by its current executive team.

Pursuant to the terms of the merger agreement, affiliates of CVC will commence a tender offer for all of the outstanding shares of the company in an all-cash transaction valued at $12.50 per share of common stock of the company, representing a 35% premium to the thirty-day VWAP prior to October 25, 2018 and representing over a 56% premium to the closing price on ConvergeOne’s debut date on the Nasdaq on February 23.

John McKenna Jr., Chairman and CEO of ConvergeOne commented, “Today’s announcement is a tremendous accomplishment for ConvergeOne and highlights the continued success of the Company. We are extremely proud of the ConvergeOne team, and we truly appreciate our phenomenal partnership with Clearlake and our other shareholders that has resulted in significant value creation. Our team is thrilled to partner with CVC to execute on the compelling growth opportunities in the rapidly evolving collaboration and technology services market.”

CVON closed at $9.43.

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July 12, 2018

CA Technologies sold for $18.9 billion

Broadcom to acquire CA Technologies for $44.50 per share in cash

Stockwinners, Winning stock research since 1998 — CA Technologies sold for $18.9 billion, Stockwinners

Broadcom (AVGO) and CA Technologies (CA) announced that the companies have entered into a definitive agreement under which Broadcom has agreed to acquire CA to build one of the world’s leading infrastructure technology companies.

Under the terms of the agreement, which has been approved by the boards of directors of both companies, CA’s shareholders will receive $44.50 per share in cash. This represents a premium of approximately 20% to the closing price of CA common stock on July 11, 2018, the last trading day prior to the transaction announcement, and a premium of approximately 23% to CA’s volume-weighted average price for the last 30 trading days.

The all-cash transaction represents an equity value of approximately $18.9B, and an enterprise value of approximately $18.4B.

The transaction is expected to drive Broadcom’s long-term Adjusted EBITDA margins above 55% and be immediately accretive to Broadcom’s non-GAAP EPS.

On a combined basis, Broadcom expects to have last twelve months non-GAAP revenues of approximately $23.9B and last twelve months non-GAAP Adjusted EBITDA of approximately $11.6B.

Broadcom intends to fund the transaction with cash on hand and $18B in new, fully-committed debt financing.

Broadcom expects to maintain an investment grade rating, given its strong cash flow generation and intention to rapidly de-leverage.

The transaction is subject to customary closing conditions, including the approval of CA shareholders and antitrust approvals in the U.S., the EU and Japan.

Careal Property Group AG and affiliates, who collectively own approximately 25% of the outstanding shares of CA common stock, have entered into a voting agreement to vote in favor of the transaction.

The closing of the transaction is expected to occur in the fourth calendar quarter of 2018.

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July 2, 2018

Dell to become a Public company again

Dell Technologies concludes strategic review

Dell Technologies (DVMT) announced that it has reached an agreement with its Special Committee of independent directors to exchange the outstanding Class V tracking stock for Class C common stock of Dell Technologies or an optional cash election.

Dell Technologies Class C common stock will become publicly listed on the New York Stock Exchange.

Dell Technologies will propose to exchange each share of Dell Technologies Class V tracking stock for 1.3665 shares of Dell Technologies Class C common stock, or at the holder’s election, $109 in cash, subject to the aggregate amount of cash consideration not exceeding $9B.

All of the shares of Class V tracking stock of holders who do not opt to receive cash will be converted into Class C common stock, and the Class V tracking stock will be eliminated.

The offer of $109 in cash consideration per share represents a 29% premium to the Class V share closing price prior to announcement and gives holders of Class C common stock the opportunity to participate in Dell Technologies’ future value creation.

Following the close, current Class V stockholders will own 20.8%-31.0% of Dell Technologies, depending on cash election amounts. Based on an implied value of $109 per share, Dell Technologies, excluding the Class V common stock, had a pre-transaction equity value of $48.4 billion and a pro forma fully diluted equity value of $61.1 – 70.1 billion.

VMware’s board of directors, on the recommendation of a special committee of its directors, has voted to declare an $11 billion cash dividend pro rata to all VMware stockholders contingent on satisfaction of the other conditions to the completion of the transaction. Dell Technologies’ share of such dividend will be approximately $9 billion.

Dell Technologies intends to use the dividend proceeds to finance the cash consideration paid to Class V stockholders, with remaining cash proceeds, if any, being used to fund future share repurchases or debt pay-down.

In the most recent quarter, the company generated revenue of $21.4 billion, a 19% increase year-over-year, net loss decreased 55% to $0.5 billion and the company generated $2.4 billion of adjusted EBITDA, a 33% increase year-over-year.

Over the trailing twelve-month period Dell Technologies generated $82.4 billion of revenue with a net loss of $2.3 billion and cash flow from operations of $7.7 billion.

Over the same period, Dell generated $83.5 billion of non-GAAP revenue, $4.8 billion of non-GAAP net income and $9.7 billion of adjusted EBITDA.

Dell Technologies has maintained a disciplined pace of deleveraging, having paid down $13 billion of gross debt since its merger with EMC in September 2016.

A special committee of independent members of VMware’s board of directors recommended that the VMware board declare the contingent cash dividend to support the transaction.

Dell Technologies believes the elimination of the Class V tracking stock and simplification of the VMware ownership structure is beneficial to VMware Class A public stockholders. VMware Class A public stockholders will also participate pro rata in the significant return of capital.

VMware will remain an independent publicly traded company. VMware has benefited from substantial synergies as part of the Dell Technologies family. VMware generated approximately $400 million in growth synergies in FY18 related to its affiliation with Dell Technologies, and in FY19 is on track to achieve $700 million faster than initially expected.

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March 20, 2018

MuleSoft sold for $6.5 billion

MuleSoft to be acquired by Salesforce for $6.5B in cash and stock

Salesforce (CRM) and MuleSoft (MULE) have entered into a definitive agreement under which Salesforce will acquire MuleSoft for an enterprise value of approximately $6.5 billion.

Under the terms of the transaction, the MuleSoft acquisition consideration will be composed of $36.00 in cash and 0.0711 shares of Salesforce common stock per MuleSoft Class A and Class B common share, which represents a per share price for MuleSoft common shares of $44.89 based on the closing price of Salesforce common stock on March 19, 2018.

The per share price represents a 36% premium over MuleSoft’s closing share price on March 19, 2018.

Under the terms of the transaction, Salesforce will commence an exchange offer to acquire all of the outstanding shares of MuleSoft.

The transaction is expected to close in the second quarter of Salesforce’s fiscal year 2019, ending July 31, 2018, subject to the satisfaction of customary closing conditions, including the tender by MuleSoft stockholders of shares representing a majority of the MuleSoft common stock voting power, on a one-vote per share basis, and the expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

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January 30, 2018

Callidus Software sold for $2.4 billion

SAP to acquire Callidus Software for $36 per share

SAP SE (SAP) and Callidus Software (CALD) announced that SAP America, Inc. has entered into an agreement to acquire CallidusCloud.

The CallidusCloud board of directors has unanimously approved the transaction. The per share purchase price of $36.00 represents a 21% premium over the 30-day volume weighted average price per share and a 28% premium over CallidusCloud’s 90-day volume weighted average price per share.

The per share price represents an enterprise value of approximately $2.4B. SAP has elected to fund the transaction with existing cash balances and an acquisition term loan.

The transaction is expected to close in Q2, subject to approval from CallidusCloud stockholders, clearances by the relevant regulatory authorities, and other customary closing conditions.

The transaction is expected to be essentially neutral to SAP’s non-IFRS EPS for FY18 and accretive to SAP’s non-IFRS EPS for FY19.

Upon completion of the transaction, SAP expects to consolidate all CallidusCloud product assets within SAP Hybris solutions as part of SAP’s Cloud Business Group.

The existing management team will continue to lead CallidusCloud. The SAP Cloud Platform is to be used for the technical integration of CallidusCloud solutions.

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