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January 13, 2022January 13, 2022

Mimecast receives take over offer

Mimecast discloses ‘non-binding expression of interest’ at $92.50 in go-shop

In a regulatory filing earlier, Mimecast (MIME) disclosed that it received, and rejected, a $92.50 per share proposal from a group identified in its proxy materials as “Portfolio Company A.”

The filing states: “On December 31, 2021, Portfolio Company A submitted to the Special Committee a non-binding expression of interest to acquire all outstanding ordinary shares of Mimecast at a price of $92.50 per share in cash, subject to completion of customary due diligence.

This expression of interest did not include the proposed quantum of debt and equity financing or copies of debt commitment letters or whether offers for debt commitments had been secured.

Portfolio Company A indicated that it was likely Portfolio Company A could pay a higher price following access to due diligence information… Immediately following the special joint meeting of the Special Committee and the Company Board held on January 6, 2022, representatives of Goodwin advised outside counsel to Portfolio Company A that the Company Board had determined that priority financial, legal and customer due diligence information would not be provided at such time and that consistent with the Special Committee’s position that had been conveyed on multiple occasions since November 2, 2021, Financial Sponsor A and Portfolio Company A needed to satisfy the Special Committee and its antitrust advisors that the antitrust risks for such a transaction would not subject Mimecast shareholders to substantial timing and execution risk due to expected scrutiny from antitrust regulators.

Counsel for Portfolio Company A did not share any additional information or analyses regarding the antitrust process for a transaction between Mimecast and Portfolio Company A or the timing and execution risk due to expected scrutiny from antitrust regulators.

Portfolio Company A also did not elect to submit any further or updated indication of interest or provide a markup of the antitrust-related provisions in the Permira Transaction Agreement (or clarify its position with respect thereto).

At 11:59 P.M. Eastern Time on January 6, 2021, the go-shop period set forth in the Transaction Agreement expired.”

Mimecast jumped 6% on December 7th after the cybersecurity company announced it was being acquired by private-equity firm Permira for $80 a share in cash or $5.8 billion.

That bidder, according to a report Bloomberg’s Ed Hammond, is Proofpoint, which was taken private last year by Thoma Bravo.

Mimecast Limited, a British company, provides cloud security and risk management services for corporate information and email.

This is how ProofPoint describes itself “Email, social media, and mobile devices are the tools of your trade—and for cyber criminals, the tools of attack. Proofpoint protects your people, data and brand against advanced threats and compliance risks.”

MIME is up $1.29 to $80.49.

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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.

February 17, 2021

Palantir’s Bulls and Bears

Goldman Sachs upgrades the recent IPO while Citi says Sell

Palantir Technologies Inc. (PLTR) builds and deploys software platforms for the intelligence community in the United States to assist in counterterrorism investigations and operations.

It offers Palantir Gotham, a software platform for government operatives in the defense and intelligence sectors, which enables users to identify patterns hidden deep within datasets, ranging from signals intelligence sources to reports from confidential informants, as well as facilitates the handoff between analysts and operational users, helping operators plan and execute real-world responses to threats that have been identified within the platform.

The company also provides Palantir Foundry, a platform that transforms the ways organizations operate by creating a central operating system for their data; and allows individual users to integrate and analyze the data they need in one place.

The company took the unusual route of becoming a public company by directly listing it’s shares and bypassing the brokers. Shares came public around $9 and shot up to $45 a share before pulling back. There were a number of brokers who made comments about the shares today following the company’s earnings.

Earnings

Palantir Technologies reported 4th Quarter December 2020 earnings of $0.07 per share on revenue of $322.1 million yesterday morning. The consensus earnings estimate was $0.02 per share on revenue of $300.4 million.

The company said it expects 2021 revenue of $1.42 billion or more. The current consensus revenue estimate is $1.41 billion for the year ending December 31, 2021.

Goldman Sachs

Goldman Sachs analyst Christopher #Merwin upgraded Palantir Technologies to Buy from Neutral with a price target of $34, up from $13. Palantir reported “strong” Q4 results and its Q1 guidance called for revenue growth of 45%, while fiscal 2021 revenue guidance was for 30%-plus, Merwin tells investors in a research note. The analyst is “encouraged” to see management guide to $4B of revenue in fiscal 2025, implying a 30% annual growth from fiscal 2020. With a growing backlog of $2.8B in deal value, there is increasing visibility into the achievability of that long-term target, says Merwin.

Further, the analyst believes Palantir’s recent efforts to modularize Foundry and add channel partners like IBM “should improve product market fit” for the commercial business in the coming quarters.

Morgan Stanley

Morgan Stanley analyst Keith #Weiss raised the firm’s price target on Palantir to $19 from $17, telling investors after the company’s Q4 report that Palantir’s results in FY20 showed a big expansion of existing customers, “huge leverage” in operating margins and the seeds for future distribution capability.

However, he keeps an Underweight rating on the shares as he would like to see evidence of effective investment behind the company’s opportunity to support growth and what he views as a “lofty valuation.”

Jefferies

Jefferies analyst Brent #Thill noted that Palantir reported a top and bottom line beat in Q4 along with “robust” large deal metrics and said it is targeting $4B or more in 2025 revenues, but that the stock remains under pressure due to Thursday’s lock-up expiry and the recent run-up that saw the stock up 35% year-to-date ahead of the report.

However, he views Palantir as “a highly unique story for long-term investors” given that he thinks its growth sustainability at significant scale, and “aggressive profitability ramp,” puts the stock “in rarified air” among software companies. Thill maintains a Buy rating on the stock, which he expects to “trend to $40,” his price target on Palantir shares.

RBC Capital

RBC Capital analyst Matthew #Hedberg raised the firm’s price target on Palantir to $27 from $15 and keeps a Sector Perform rating on the shares.

The company ended 2020 with a “solid” set of Q4 results while forecasting acceleration and margin improvement in Q1, the analyst tells investors in a research note. Hedberg adds however that while he is positive on Palantir’s catalysts, he remains on the sidelines due to the stock’s “full valuation”.

Citi

Citi analyst Tyler #Radke keeps a Sell rating on Palantir Technologies with a $15 price target following the company’s Q4 results.

The results featured “solid” reported revenue upside, but came with “signs of growth drivers narrowing with new customers growth still lacking and Commercial revenue missing expectations,” Radke tells investors in a research note.

The new five-year revenue target of $4B “looks high,” but ultimately may be a non-event for the stock, says the analyst. He thinks the stock is overvalued and “could be particularly volatile” into the upcoming lockup on February 18.

Insiders

Peter Thiel, Chairman, and well connected Washington insider

Several insiders have sold shares into the lockup expiry on Thursday but Peter Thiel, Chairman of the Board, reported a 5% ownership of the stock.

PLTR last traded at $28.50.

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January 19, 2021

Wrike sold for $2.25B cash

Citrix to acquire Wrike for $2.25B in cash

Citrix Systems (CTXS) announced that it has entered into a definitive agreement to acquire Wrike, a rapidly growing, recognized leader in the SaaS collaborative work management space, for $2.25B in cash.

Wrike ended calendar year 2020 with more than $140 million in unaudited SaaS ARR, reflecting more than 30 percent CAGR in SaaS ARR over the prior two years.

Citrix spends $2.55B to expand its offerings

The company is expected to have approximately 30 percent stand-alone growth to between $180M-$190M in SaaS ARR1 in 2021, with the opportunity to accelerate growth over time under Citrix’s ownership.

The addition of Wrike is highly complementary to Citrix’s existing customer base and is expected to accelerate Citrix’s SaaS ARR growth.

Financing and purchase accounting impacts to deferred revenue will affect 2021 non-GAAP earnings per share. Integration and other costs related to the acquisition are expected to be modestly dilutive to non-GAAP earnings per share in 2021.

The transaction is expected to be neutral to Citrix’s fiscal year 2022 non-GAAP earnings per share and free cash flow, and accretive thereafter.

Citrix expects to fund the transaction with a combination of new debt and existing cash and investments.

Citrix is committed to its investment grade credit ratings and plans to return to historical leverage levels within 24 months.

Citrix has obtained a commitment from JPMorgan Chase Bank, N.A. for a $1.45B senior unsecured 364-day bridge loan facility.

The transaction, which has been unanimously approved by the board of directors of both Citrix and Wrike, is expected to close in the first half of 2021, subject to regulatory approvals and other customary closing conditions.

Until close, the companies will continue to operate independently.

Upon closing, Andrew Filev, Wrike CEO will continue to lead the Wrike team and report to Arlen Shenkman, EVP and CFO, Citrix.

CTXS closed at $132.00.

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November 5, 2018November 5, 2018

Datawatch sold for $176 million

Altair to acquire Datawatch for $13.10 per share

Altair (ALTR) and Datawatch (DWCH) announced the signing of a definitive merger agreement under which Altair has agreed to acquire Datawatch. Under the terms of the agreement, Altair will pay $13.10 per share in cash, representing a fully diluted equity value of approximately $176M.

The transaction was unanimously approved by the boards of both companies.

Under the terms of the definitive merger agreement, Altair will commence a tender offer within ten business days to acquire all of the outstanding shares of common stock of Datawatch for $13.10 per share in cash.

This represents a 35% percent premium to the closing price of Datawatch’s common stock on November 2.

The tender offer is subject to customary closing conditions, including the tender of at least a majority of the outstanding shares of Datawatch common stock and the expiration or early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

Following the closing of the tender offer, a wholly-owned subsidiary of Altair will merge with and into Datawatch, with each share of Datawatch common stock that has not been tendered being converted into the right to receive the same $13.10 per share in cash offered in the tender offer.

The transaction is anticipated to close in Q4.

Datawatch Corporation designs, develops, markets, and distributes business computer software products to self-service data preparation and visual data discovery markets in the United States and internationally.

Altair Engineering Inc. provides enterprise-class engineering software worldwide. The company operates through two segments, Software and Client Engineering Services. Its integrated suite of multi-disciplinary computer aided engineering software optimizes design performance across various disciplines, including structures, motion, fluids, thermal management, electromagnetics, system modeling and embedded systems, as well as provides data analytics and true-to-life visualization and rendering.

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January 16, 2018

Worldwide IT spending to reach $3.7T in 2018

Gartner says worldwide IT spending to reach $3.7T in 2018

Worldwide IT spending is projected to total $3.7 trillion in 2018, an increase of 4.5 percent from 2017, according to the latest forecast by Gartner, Inc. (IT)

“Global IT spending growth began to turn around in 2017, with continued growth expected over the next few years. However, uncertainty looms as organizations consider the potential impacts of Brexit, currency fluctuations, and a possible global recession,” said John-David Lovelock, research vice president at Gartner.

“Despite this uncertainty, businesses will continue to invest in IT as they anticipate revenue growth, but their spending patterns will shift.

Projects in digital business, blockchain, Internet of Things, and progression from big data to algorithms to machine learning to artificial intelligence (AI) will continue to be main drivers of growth.”

The devices segment is expected to grow 5.6 percent in 2018. In 2017, the devices segment experienced growth for the first time in two years with an increase of 5.7 percent.

End-user spending on mobile phones is expected to increase marginally as average selling prices continue to creep upward even as unit sales are forecast to be lower.

PC growth is expected to be flat in 2018 even as continued Windows 10 migration is expected to drive positive growth in the business market in China, Latin America and Eastern Europe.

The impact of the iPhone 8 and iPhone X was minimal in 2017, as expected. However, iOS shipments are expected to grow 9.1 percent in 2018.

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January 10, 2018

Nvidia launches ‘functionally safe’ AI self-driving platform NVIDIA DRIVE

Nvidia announces ‘functionally safe’ AI self-driving platform NVIDIA DRIVE

NVIDIA (NVDA) unveiled details of its functional safety architecture for NVIDIA DRIVE, its AI autonomous vehicle platform, which uses redundant and diverse functions to enable vehicles to operate safely, even in the event of faults related to the operator, environment or systems.

The NVIDIA DRIVE architecture enables automakers to build and deploy self-driving cars and trucks that are functionally safe and can be certified to international safety standards, such as ISO 26262.

The NVIDIA DRIVE AV autonomous vehicle software stack performs functions like ego-motion, perception, localization and path planning. To realize fail operation capability, each functionality includes a redundancy and diversity strategy.

For example, perception redundancy is achieved by fusing lidar, camera and radar.

Deep learning and computer vision algorithms running on CPU, CUDA GPU, DLA and PVA enhance redundancy and diversity.

The NVIDIA DRIVE AV stack is a full backup system to the self-driving stack developed by the automaker, enabling Level 5 autonomous vehicles to achieve the highest level of functional safety. Included are lockstep processing and error-correcting code on memory and buses, with built-in testing capabilities.

The ASIL-C NVIDIA DRIVE Xavier processor and ASIL-D rated safety microcontroller with appropriate safety logic can achieve the highest system ASIL-D rating.

NVDA closed at $219.59.

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