BLP’s WiR: The Week of the App

Source:  Kalexanderson / Foter / CC BY-NC-SA
Source: Kalexanderson / Foter / CC BY-NC-SA

We are calling this week, the Week of Apps.  The private placement and M&A activity had an abundance of deals in that area:  fingerprint identification, BYOD, App discovery platforms, games.

Apps aside, October is one of my favorite months:  a combination of the onset of Fall, the rich, breath taking Fall colors, Halloween and my birthday.

Though I would like to talk the Penguins [Masters Swim Team] out of putting up a birthday set.  Eric turned 35 on Saturday, so we did 3x[distance/stroke] plus 5x[distance/stroke] repeat and repeat and repeat, inserting different distances and strokes each time, as in 100 Free, 200 IM, 125 Stroke, until it totals 3,000 yards.

For those looking to experience New England Fall colors, book your trip.  The first tranche of colors has passed, and we have only a one or two more weeks to go.

Earnings

The Earnings Calendar this week was lacking in our names.  One name, the Mistras Group  (MG:  NYSE), attracted my curiosity, as it was labeled as a NDT (non-destructive testing) company.  Which harkened back to my days in the Materials Science Department at Columbia.  Upon further digging, I discovered  that my former colleague,  Sotirios Vahaviolos, who was a PhD student when I was an undergrad, is the CEO.

This quarter Mistras blew away their numbers, coming in at revenue of $135.8m versus the estimate of $130.1m, and earnings of $0.15 per share versus the analysts estimates of $0.12.   The stock reacted in kind, starting the week at $17 per share and closing the week at  $18.56.

Sotirios took his original 1995 $12m revenue business that was focused solely on selling acoustic emissions instrumentation (predicts cracking in bridges, buildings and tunnels), combined it with other more traditional NDT techniques and added services.   Great strategy, with truly impressive execution and growth over the last 18 years.

IPO’s[1] 

SFX Entertainment (SFXE:  Nasdaq), a promoter of concerts and live events and festivals such as Tomorrowland, Sensation and Mysteryland, raised $260m by selling 20m shares at $13 per share, a 1.05b valuation.  SFX closed at $11.90 per share, a 8.5 percent loss for the week.

MacroGenics (MGNX:  Nasdaq), a leader in the discovery and development of innovative medicines that utilize our next generation antibody-based technologies sold 5m shares at $16 per share for a $384m valuation.  MicroGenics closed Friday at $26.10, a 63 percent increase for the week.

Mergers & Acquisitions 

DukeNet Communications, a leading regional telco, was acquired by Time Warner Cable for $600m

Validity Sensors, which makes fingerprint recognition software or “Natural ID ™” for smart phones, was acquired by Synaptics for $255m.

Juicy Couture was acquired by Authentic Brands Group for $195m.  ABG owns some of my favorite clothing lines, and includes Adrienne Vittadini, Spyder, Judith Lieber, Misook, Prince, Hart Shaffner Marx and Hickey Freeman, among others.

Vocalocity, a provider of business VOIP, was acquired by Vonage for $130m.  Blast from the past.  We used Vocalocity in our Burlington offices several years ago.

Confio Software, which sells the Ignite product that improves performance and helps manage several leading databases, was acquired by SolarWinds, which manages network performance, for $103m.

Com2uS Corp., a developer of iPhone and iPad games, was acquired by GAMEVIL for $65m.

Pacsgear, a connectivity solution for the hospital and healthcare industry, was acquired by Lexmark for $54m.

IT services provider, MSN Communications, was acquired by Telephone and Data Systems, which provides wireless, Internet, long-distance and TV services, and hosted and managed services for businesses, for $40m.

Hubbl, an app discovery platform, was acquired by Airpush, a mobile ad network, for $15m

ProOnGo, “QuickBooks (QB) expense tracking made easy” was acquired by The Neat Company.  BLP uses both QB and Neat, so we have a strong interest in this transaction.

Dispatch, an “action based email” app, was acquired by Meetup.  Both companies are based in New York City.  Dispatch’s business description is mostly meaningless jargon.  I suspect that one must use Dispatch to understand Dispatch.

And I had to mention the acquisition of Global X-Ray & Testing, based in Morgan City, Louisiana by Intertek, based in Boxborough, Massachusetts.  Did I mention that my senior thesis was on fracture mechanics?

Private Placements

Flipkart, an Indian online shopping portal raised an additional $160m to round it’s Series E raise up to $200m.

Lookout, a company looking to secure your devices and networks in a BYOD world, raised $55m from Deutsche Telekom, Qualcomm Ventures, and several venture capitalist groups.

Smartling, a website translation and localization service, raised $24m, bringing the total raised to $38m.

DogVacay, a service that provides pet owners with available in-home pet sitters through a community of 10,000, raised $15m.

Dollar Shave Club raised a $12m Series B round.  The Dollar Shave Club serves over 330,000 subscribers.  The Company’s sell is compelling.  In fact, I intend to become a subscriber when I need a new supply.

Divide, a platform that enables and accelerates BYOD mobility, raised a $12m Series B round.

Basis, a company that sells a wrist based health tracker combined with an online personal dashboard, raised $11.75m

Refresh.io , an app that claims to be a digital briefing document service, raised $10m.

We hope you’re enjoying the crisp Fall weather, and long Columbus Day Weekend.


[1] Certain information from Renaissance Capital the SEC, and numerous business publications