BLPA Rearview Mirror: The Market, IPO’s & M&A for the Week Ending June 8th, 2014

BLPA’s Rearview Mirror: Week Ending June 9, 2014

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Eric Dexheimer, GFA Salutatorian
Eric Dexheimer, Green Farms Academy Salutatorian

It’s been two weeks on the road, and I literally feel punch drunk from all the driving I’ve been doing. No rest for the weary.  Down to Philadelphia on Monday, back to New Hampshire that evening, and back down to Westport on Thursday. Along the way, I was fortunate enough to hear Jim Ziolkowski, founder of buildOn, deliver the commencement address at Green Farms Academy. What is buildOn? It’s an organization whose mission to break the cycle of poverty, illiteracy and low expectations through service and education. What makes this nonprofit different is the founder, who lives, breathes and talks the mission. Between college and going to work at GE in finance, he traveled through India, Nepal and Thailand and was struck by the poverty in those countries. Unlike you and me, decided to do something about it.

Ziolkowlski and his brother traveled to Milawi to build a school. In doing so, both he and his brother nearly died of malaria. But that school is still standing, and twenty years later has been joined by four additional school buildings in that village. Not only that, but the child of one of the village volunteers who help build the school, who was born when the school was just completed, is now a teacher at that school. While buildOn may organize and partially supervise the activities, it is primarily people and youth in those communities,along with other volunteers, who actually deliver the service.

Ziolkowski made everyone in the GFA audience understand that, indeed, one person can make a huge difference, and made me reflect about my own life, and question what I may or may not have accomplished in that vein.

Earnings and the Market[1]

(Please click on company name for the earnings announcement and the company’s symbol for the stock chart.)

In the month of May, the total number of jobs increased by 217,000—but the increase was primarily low wage jobs. Year-to-date, the monthly average increase in jobs is 197,000.

Vail Resorts Inc. (MTN: NYSE) had 11 percent revenue growth to $543m in a zero growth industry. I think that’s called raising the ticket prices. Revenue was $543m and profit was $117.9m or $3.18 per share, up from $2.66 per share. And I had thought that skiing was a dying sport. Wrong!

Ciena Corp. (CIEN: NYSE) reported revenues of $560m vs. $503m a year ago, and earnings of $19.4m or $0.17 vs. earnings of $2.2m or $0.02 a year ago. The company benefited from higher demand for its optical networking equipment.

MaryJo White, Chairman of the SEC unveiled a sweeping set of initiatives to address concerns about dark pools and computer-driven trading. It’s time. My reading sees many new proposals, but no actual new rules. Making the high frequency traders register as broker dealers—which is one of the proposals—is a move in the right direction. The SEC is launching a committee to study the topic and propose new rules. Will be an interesting, spirited and entertaining jousting match between the traders and the regulators.

Meanwhile, Goldman Sachs and the Credit Suisse Group published papers on how their dark pools operate.

Did you know that Bill Gross, the manager of PIMCO the world’s largest bond fund, doesn’t own a cell phone, admitting to be a tech laggard.  Do you really want the man managing your money?

IPOs

(2 IPOs)

Arista Networks (ANET: NYSE) sold 5.3m shares at $43 per share, raising $227.9m at a valuation of $2.75b. Arista Networks is a:

leading supplier of cloud networking solutions that use software innovations to address the needs of large-scale Internet companies, cloud service providers and next-generation data centers for enterprises, based on market share. Our cloud networking solutions consist of our Extensible Operating System, or EOS, a set of network applications and our 10/40/100 Gigabit Ethernet switches. Our cloud networking solutions deliver industry-leading performance, scalability, availability, programmability, automation and visibility. Since we began shipping our products, we have grown rapidly, and, according to Crehan Research, we have achieved the second largest market share in data center 10/40/100 Gigabit Ethernet switch ports, excluding blade switching, sold in 2013.[2]

The Company’s stock closed at $55 per share.

Radius Health Inc. (RDUS: Nasdaq) out of Cambridge, Massachusetts sold 6.5m shares at $8.00 per share, raising $52m at a valuation of $240m. The Company’s stock closed the week at $8.01 per share.

We are a science-driven biopharmaceutical company focused on developing novel differentiated therapeutics for patients with osteoporosis as well as other serious endocrine-mediated diseases. Our lead product candidate is abaloparatide (BA058), a bone anabolic for the treatment of osteoporosis delivered via subcutaneous injection, which we refer to as Abaloparatide-SC. We are currently in Phase 3 development of Abaloparatide-SC and expect to announce top-line data from this study in late 2014.[3]

 

Mergers & Acquisitions

[11 deals]

Medical/Pharmaceutical

Genia Technologies, Inc. is being acquired by the Roche Group for $350m. Genia is developing a single-molecule, semiconductor based, DNA sequencing platform using nano pore technology.[4] Roche also owns Genentech.

Education

Online tutoring network, InstaEDU, is being acquired by Chegg, “the student hub,”[5] for $30m.

Cloud

iParadigms is being acquired by Insight Venture Partners for $752m. “iParadigms is a leading provider of cloud-based educational technologies to prevent plagiarism, verify content, and evaluate student learning.[6]

Australian research body NICTA spin-off, Yuruware is being acquired by Unitrends Software for $10m.

Sydney outfit Yuruware sparked international interest for automating a method for businesses to bridge workloads across different cloud platforms, such as Amazon Web Systems, OpenStack and Windows Azure.[7]

 

Gazzang is being acquired by Cloudera. “Cloudera and Gazzang are partnering to ensure our customers’sensitive data is protected from unauthorized access or attack and meets strict compliance requirements for HIPAA, PCI-DSS, DOX, FERPA, and European Data Privacy regulations.”[8]

Social

Dragonplay, the leading social casino company, is being acquired by Bally Technologies for $100m.

NanoMedia is being acquired by Twitter for $50m, and will be part of MoPub.

PowerReviews, which helps brands and retailers deliver on the promise of customer reviews, is being acquired by Viewpoints for $30m.

Social retargeting company, Perfect Audience is being acquired by Marin Software for $23m.

Family organizer app, Cozi, is being acquired by Time Inc.

Stealth messaging startup, Droptalk, is being acquired by Dropbox.  “Droptalk services, which include a tool allowing you to share links privately via a Chrome extension and future plans for an Android and iOS app, were not yet publicly available, having only been launched in a limited beta version.[9]

Media/Advertising

Six person Shelby.tv, a video discovery service, is being acquired by Samsung Electronics.

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That’s it for now. Later with the Private Placements.

 

All the best,

 

Margaret Johns

Founder, BlueLake Partners, LLC

 

SiVal_LogoJan Robertson

SiVal Advisors, LLC

 

 

 

 

Bic Stevens

Stevens Capital Advisors

 

Chartworth2Susan Woods and Vlad Harris

Chartworth, LLC

Margaret Johns is the Founder and Chairman of BlueLake Partners, a boutique M&A investment bank based in the Greater Boston Area.  Prior to founding BlueLake she was an employee founder and Managing Director at Needham & Company where she worked in Corporate Finance in New York City and headed up its Boston office.  She now lives in Londonderry, New Hampshire with her husband, 16 year old step-daughter and three pugs.  When she’s not working with clients, FINRA or writing blogs she competes on the Granite State Penguins Masters Swim Team, skis, rides her bike or is out walking her pugs.

Content researched, edited and reviewed on a best efforts basis.

This newsletter is currently being proofed by Dave Henshaw, which is much appreciated. Dave is my USMS swimming lane mate, and Granite State Penguin team-mate.  He is retired from MIT, where he used to produce and proof their annual financial report.  Exactly what we need.

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We make no claim to being comprehensive in our review, as the contents are companies and topics we, ourselves, find of interest.

 

[1] WSJ Moneybeat June 3 – 6, 2014

[2] Company S-1

[3] Company S-1

[4] Roche website news release: http://www.roche.com/media/media_releases/med-cor-2014-06-02.htm

[5] Chegg website: http://investor.chegg.com/press-releases/press-release-details/2014/Chegg-Agrees-to-Acquire-a-Leading-Online-Tutoring-Network-InstaEDU/default.aspx

[6] Insight Venture Partners website: http://www.insightpartners.com/about/insight-press-releases/#acquisition-of-iparadigms-for-752-million-led-by-insight-venture-partners

[7] itnews website: http://www.itnews.com.au/News/387102,unitrends-acquires-nicta-spin-off-yuruware.aspx

[8] Cloudera website: http://www.cloudera.com/content/dam/cloudera/Resources/PDF/partner/Cloudera_Gazzang_SolutionBrief.pdf

[9] IT ProPortal:: http://www.itproportal.com/2014/06/06/dropbox-swallowing-more-startups-with-droptalk-acquisition/#ixzz34B3HS99o