BLP’s Tech WiR September 16th

Earnings, IPO’s, M&A,

and Private Placements for the

Week of September 16th

Ottawa's Parliament Hill
Ottawa’s Parliament Hill

We leave for a week to wander the wilds of Canada and the tech world takes off, after languishing for the past month.  Earnings, IPO’s, mergers and private placements galore.  Summer officially ended this week, and we have the activity to confirm the change of the Season.  As an aside, anyone who hasn’t been charmed by Ottawa owes it to themselves to visit Canada’s capital city.  It’s a beautiful, lively and human-scaled city with splendid museums and cafes.  On our next visit we’ll book an apartment or townhouse via airbnb.com, though we did incredibly well with the hotel through Priceline.com and William Shatner.

Earnings Reports

Cvent (CVT:  NYSE) Cvent announced 36 percent growth in revenue to $26.9m, though sequentially turned a profit into a $2.3m loss. The stock had traded up to $46 per share on Monday, but closed on Friday at $38.95 per share.   The IPO had priced at $21 per share, so those who bought on the IPO are still looking at a health gain since early August.  Seems Cvent’s stock simply got ahead of itself.  The Company seems to have a lock on the event space—which just shows never confuse the stock with the Company.

Adobe (ADBE:  Nasdaq) announced revenue of $995m and non-GAAP earnings or $0.32.  Things are going well with the Creative Cloud, which is Adobe’s subscription service.  Revenue and earnings were down, as the Company has switched to the Creative Cloud subscription pricing from up front purchase.  $50 per month as opposed to a $600 software package.

Adobe announced over one million Creative Cloud subscribers.  If the subscribers are paying $50 per month, that’s $500m in revenues.  And the momentum is substantial.  Adobe’s stock is up handsomely this year, and increased about six percent on the earnings’ news.

Factset (FDS:  NYSE), an investment analytics company, announced revenues were up six percent to $282 million, the operating margin declined just over a point to 32.  Still the stock has performed strongly since the beginning of the year, advancing from $88 per share to closing at $112 per share this Friday.

Oracle (ORCL:  Nasdaq) revenues were down sequentially to $8.37b, but up 2.3 percent year over year.  Net was down, both year over year and sequentially to $2.19b.  Nice margins, but not the growth investors want, so the stock trades downwards.

TIBCO Software (TIBX:  Nasdaq) provides event driven middleware and infrastructure software for the enterprise.  Revenues came in at $238m and non-GAAP EPS was $0.18 vs. $20 a year ago.  The Company is active on the acquisitions front, and had close to $9m in write-downs this quarter.  The stock is down 14.5 percent year-over-year but up 17.9 percent YTD.  It’s been a rocky ride.

IPO’s of the Week[2]

 

red leaf tree
Welcoming the change in Seasons with red maple leaves

It was an incredibly active week on the IPO front:

Medical/Biotech related:

Benefitfocus (BNFT:  Nasdaq) priced at $26.50 per share, raising $131m, and traded up to $50.91, a 91 percent gain in less than a week.  BNFT provides a cloud-based platform for employee benefits, primarily healthcare, management.  While the Company has $91m in profitability, its losses are widening, not shrinking.   Though revenue is growing nicely.  Such is the power of the cloud.  The Company hails from Charleston, South Carolina.  Which just goes to show, not all of the cloud is based in Silicon Valley.

Oak Investment Partners invested $30m for 11.5% of the business in 2010, so they have a double.  Not great, but better than a black eye.

BIND Therapeutics (BIND:  Nasdaq) priced in the middle of the range at $15 per share and raised $70.5m at a valuation close to $236m.  The stock traded down to $14.09 to close on Friday.  BIND is developing targeted therapeutics composed of polymer nanoparticles.  Materials science in medicine.  Both the valuation and the percentage of the Company sold would indicate that private equity was an unattractive option.

Five Prime Therapeutics (FPRX:  Nasdaq)  priced at $13 per share, raising $62m at a $208m valuation.  The stock traded up slightly to $13.74 per share to close the week.  The Company is a clinical-stage, biotechnology company discovering and developing innovative antibody and protein therapeutics.

Technology Related:

FireEye (FEYE:  Nasdaq) went public at $20 per share raising almost $304m at a valuation of $2.35b.  FireEye has developed a virtual machine based platform that provides real-time protection to enterprises and governments against the next generation of cyber attacks.  While they have 1,100 customers, they failed to identify one, other than by industry.  For security reasons, of course.  The stock closed the week up 80 percent to $36 per share.

Rocket Fuel (FUEL:  Nasdaq) is a tech analytics company with a “platform” that addresses the digital advertising market.  They raised $116m at a $942m valuation.  The stock almost doubled to close the week at $56.10 per share.

Other IPO’s:

ClubCorp, (MYCC:  NYSE)a roll up of country clubs, athletic clubs and university clubs, raised $252m at approximately a $1.3b valuation.  Golf courses may be out of season, as the IPO priced two points below the range of $16 to 18 per share.

Volaris Aviation (VLRS:  NYSE), an ultra-low-cost Mexican airlines that flies between various cities in Mexico and to certain United States cities, raised $346m at a $1.14b valuation.

M&A of Interest[2]

The Locks of the Ottawa River
The Locks of the Ottawa River

Prairie Technologies, of Middleton, Wisconson, a provider of life science fluorescence microscopy products, was acquired by Bruker, out of Bedford, Massachusetts, for $150m

Atlus, a gaming company, was acquired by Sega for $140m.

For my Canadian cousin, Tom:  United States based superstore chain Golfsmith, was acquired by Golf Town Canada for $96m.

Indisys—a Spanish natural language virtual assistant– acquired by Intel for $26m

For Brendan, my TopCoder Masters Swimming Teammate:  TopCoder, headquartered near Hartford, Connecticut, a programming community where coders bid to win projects, was acquired by Appirio, “a cloud services consultancy.”  No terms were disclosed, though Appirio raised $60m last year, and TopCoder has raised $15m.

Google acquired Bump Technologies for an undisclosed price.  Another cute url:  https://bu.mp/.  I’m always astonished by the number of people unfamiliar with this card/file sharing app.  Typically, I wouldn’t mention a transaction that did not disclose pricing information, but Bump is so well known, that I couldn’t not talk about it.

Private Placements of Interest[3]

Automattic, the WordPress developer, raised $75m from Tiger Global Management (Julian Robertson).  Automattic is my personal favorite, as I am a huge fan of WordPress.  Automattic has managed to build a substantial business out of providing a free content management system, making money by selling the tools that go with it.  These guys have done it right . . . so far.

Dafiti, a Brazilian-based fashion portal targeting Latin America, raised $70m

Blue Jeans Network, a cloud-based video conferencing service, raised $50m in a Series D round.

Apttus, a SaaS-based contract management suite, raised $37m.

UK-based NewVoiceMedia, which seems to be a cloud-based/VOIP telephony system, raised $35m.  They appear to be targeting smaller sized enterprises

Octa, an enterprise cloud-based  identity management and policing-   – service for IT departments, raised $27m

App Annie , an app ranking data and mobile analytics service out of San Francisco and Beijing, raised $15m.

Bright Media Corporation, an online job search tool that utilizes your social network to make connections, raised $14m in a Series B.

Yesware, a tool that helps you manage the sales process, down to identifying who opens your emails, raised $14m in a Series B.

FuzeBox, a “GoTo Meeting” type company, raised $26m

Gigya, targeting large consumer companies who want to exploit social, raised $25m.

PubNub is an interesting company that enables you to add real-time capabilities to the apps that you build.  The Company raised $11m

Restalo, an online service for booking restaurants online in Barcelona, Madrid, London and throughout Europe, raised $10m in a Series B.

Simplilearn, a professional certification company, raised $10m.  First came MOOCs, then came Certification.  Simplilearn also offers courses and other services.

Stackdriver, an infrastructure monitoring system for infrastructure, systems and apps, raised $10m in a series B.

Etc.

Another acquisition, not mentioned, was by Hightail, formerly You Send It, which purchased Adept Cloud.  What is most interesting is not the acquisition, but the CEO’s take on the implications of the NSA activity on US commerce.  Garlinghouse, in this CIO Journal interview, claims that US companies will literally lose billions of dollars in business because of the NSA snooping.  Companies outside the U.S. don’t have to do business with U.S. based companies . . .

Margaret S.C. Johns

Founder, BlueLake

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*This newsletter does not purport, in any sense, to be comprehensive.  Rather, it contains news that we, at BLP, find of interest.



[1] Certain information sourced from Renaissance Capital, the SEC, Nasdaq.com.

[2] Certain information sourced from TechCrunch, as well as multiple other sources.