Business News Holding

Tag: acquisition

  • Microsoft to Acquire Skype for $8.5 Billion

    Microsoft and Skype have just announced that they have entered into a definitive agreement under which Microsoft will acquire Skype for $8.5 billion in cash from the investor group led by Silver Lake.

    With 170 million connected users and over 207 billion minutes of voice and video conversations in 2010, Skype has been a pioneer in creating connections among friends, families and business colleagues globally. Microsoft has a long-standing focus and investment in real-time communications across its various platforms, including Lync (which saw 30 percent revenue growth in Q3), Outlook, Messenger, Hotmail and Xbox LIVE.

    The companies informed that Skype will support Microsoft devices like Xbox and Kinect, Windows Phone and a wide array of Windows devices, and Microsoft will connect Skype users with Lync, Outlook, Xbox Live and other communities. Microsoft will continue to invest in and support Skype clients on non-Microsoft platforms.

    "Skype is a phenomenal service that is loved by millions of people around the world," said Microsoft CEO Steve Ballmer. "Together we will create the future of real-time communications so people can easily stay connected to family, friends, clients and colleagues anywhere in the world."

    Skype will become a new business division within Microsoft, and Skype CEO Tony Bates will assume the title of president of the Microsoft Skype Division, reporting directly to Ballmer.

    "Microsoft and Skype share the vision of bringing software innovation and products to our customers," said Tony Bates. "Together, we will be able to accelerate Skype’s plans to extend our global community and introduce new ways for everyone to communicate and collaborate," Bates said.

    According to the companies, the acquisition will increase the accessibility of real-time video and voice communications, bringing benefits to both consumers and enterprise users and "generating significant new business and revenue opportunities." The combination will extend Skype’s world-class brand and the reach of its networked platform, while enhancing Microsoft’s existing portfolio of real-time communications products and services.

    "Tony Bates has a great track record as a leader and will strengthen the Microsoft management team. I’m looking forward to Skype’s talented global workforce bringing its insights, ideas and experience to Microsoft," Ballmer said.

    Founded in 2003, Skype was acquired by eBay in September 2005, and then acquired by an investment group led by Silver Lake in November 2009. Skype has made impressive progress over the past 18 months under Silver Lake’s leadership, increasing monthly calling minutes by 150 percent, developing new revenue streams and strategic partnerships, acquiring the intellectual property powering its peer-to-peer network, and recruiting an outstanding senior management team.

    Other members of the selling investor group led by Silver Lake include eBay International AG, CPP Investment Board, Joltid Limited in partnership with Europlay Capital Advisors; and Andreessen Horowitz.

  • Sprint Opposes Proposed AT&T Acquisition of T-Mobile USA

    Sprint has announced its opposition to AT&T’s proposed $39 billion takeover of T-Mobile USA. According to Sprint, the transaction, which requires the approval of the Department of Justice and the Federal Communications Commission, and will likely spark a host of hearings in the U.S. Congress, "would reverse nearly three decades of actions by the U.S. government and the courts that modernized and opened U.S. communications markets to competition."

    "The wireless industry has sparked unprecedented levels of competition, innovation, job creation and investment for the American economy, all of which could be undone by this transaction," as the company claims.

    AT&T and Verizon are already by far the largest wireless providers. If approved, the proposed acquisition would create a combined company that would be almost three times the size of Sprint in terms of wireless revenue and would entrench AT&T’s and Verizon’s duopoly control over the wireless market. According to Sprint, the wireless industry moving forward would be dominated overwhelmingly by two vertically integrated companies with unprecedented control over the U.S. wireless post-paid market, as well as the availability and price of key inputs, such as backhaul and access needed by other wireless companies to compete.

    “Sprint urges the United States government to block this anti-competitive acquisition,” said Vonya McCann, senior vice president, Government Affairs at Sprint.

    “This transaction will harm consumers and harm competition at a time when this country can least afford it. As the first national carrier to roll out 4G services and handsets and the carrier that brought simple unlimited pricing to the marketplace, Sprint stands ready to compete in a truly dynamic marketplace. So on behalf of our customers, our industry and our country, Sprint will fight this attempt by AT&T to undo the progress of the past 25 years and create a new Ma Bell duopoly.”

  • AT&T to Acquire T-Mobile USA from Deutsche Telekom

    AT&T and Deutsche Telekom announced that they have entered into a definitive agreement under which AT&T will acquire T-Mobile USA  in a cash-and-stock transaction currently valued at approximately $39 billion. The agreement has been approved by the Boards of Directors of both companies.

    According to the companies, the acquisition provides "an optimal combination of network assets to add capacity sooner than any alternative, and it provides an opportunity to improve network quality in the near term for both companies’ customers." The companies also said that the acquisition provides "a fast, efficient and certain" solution to the impending exhaustion of wireless spectrum in some markets, which limits both companies’ ability to "meet the ongoing explosive demand for mobile broadband."

    With this transaction, AT&T commits to a significant expansion of robust 4G LTE deployment to 95 percent of the U.S. population to reach an additional 46.5 million Americans beyond current plans – including rural communities and small towns. In terms of area covered, the transaction enables 4G LTE deployment to an additional 1.2 million square miles, equivalent to 4.5 times the size of the state of Texas. T-Mobile USA does not have a clear path to delivering LTE.

    According to AT&T and T-Mobile, their customers will see service improvements – including improved voice quality – as a result of additional spectrum, increased cell tower density and broader network infrastructure.

    The acquisition will increase AT&T’s infrastructure investment in the U.S. by more than $8 billion over seven years.

    "This transaction represents a major commitment to strengthen and expand critical infrastructure for our nation’s future," said Randall Stephenson, AT&T Chairman and CEO. "It will improve network quality, and it will bring advanced LTE capabilities to more than 294 million people. Mobile broadband networks drive economic opportunity everywhere, and they enable the expanding high-tech ecosystem that includes device makers, cloud and content providers, app developers, customers, and more. During the past few years, America’s high-tech industry has delivered innovation at unprecedented speed, and this combination will accelerate its continued growth."

    Stephenson continued, "This transaction delivers significant customer, shareowner and public benefits that are available at this level only from the combination of these two companies with complementary network technologies, spectrum positions and operations. We are confident in our ability to execute a seamless integration, and with additional spectrum and network capabilities, we can better meet our customers’ current demands, build for the future and help achieve the President’s goals for a high-speed, wirelessly connected America."

    Deutsche Telekom Chairman and CEO René Obermann said, "After evaluating strategic options for T-Mobile USA, I am confident that AT&T is the best partner for our customers, shareholders and the mobile broadband ecosystem. Our common network technology makes this a logical combination and provides an efficient path to gaining the spectrum and network assets needed to provide T-Mobile customers with 4G LTE and the best devices. Also, the transaction returns significant value to Deutsche Telekom shareholders and allows us to retain exposure to the U.S. market."

    As part of the transaction, Deutsche Telekom will receive an equity stake in AT&T that, based on the terms of the agreement, would give Deutsche Telekom an ownership interest in AT&T of approximately 8 percent. A Deutsche Telekom representative will join the AT&T Board of Directors.

    The combined company will continue to have a strong employee and operations base in the Seattle area.

    The $39 billion purchase price will include a cash payment of $25 billion with the balance to be paid using AT&T common stock, subject to adjustment. AT&T has the right to increase the cash portion of the purchase price by up to $4.2 billion with a corresponding reduction in the stock component, so long as Deutsche Telekom receives at least a 5 percent equity ownership interest in AT&T.

  • Skype to Acquire Qik

    Skype has announced it has entered into a definitive agreement to acquire Qik, a provider of mobile video software and services. Qik has 60 employees, and is headquartered in Redwood City, California and has an office in Moscow, Russia. The transaction is expected to close in January 2011. The companies informed that terms of the acquisition will not be disclosed.

    Qik was founded in 2006 and offers solutions to capture and share video with anyone across mobile devices, the web, and desktop platforms. Videos can be shared in real time or stored so moments can be viewed later, allowing for video messaging, sharing and archiving. The Qik service is available on over 200 mobile phones across the Android, iPhone, Symbian, Blackberry and Windows Mobile platforms, and comes pre-loaded on a wide variety of mobile handsets.

    Both Skype and Qik have a common purpose of enriching communications and sharing with video, across any device. According to Skype, the acquisition of Qik "helps accelerate Skype’s leadership in video by adding recording, sharing and storing capabilities to Skype’s product portfolio. Through this acquisition, Skype will also be able to leverage the engineering expertise that is behind Qik’s Smart Streaming technology, which optimizes video transmission over wireless networks."

    "The Qik team has delivered exceptional video experiences for its mobile partners and millions of end users across a range of devices," said Tony Bates, Skype’s Chief Executive Officer.

    "Skype’s software enables an estimated 25 percent of the world’s international long distance voice calling minutes*, and approximately 40 percent of those Skype-to-Skype calls are happening over video. Qik’s deep engineering capabilities and strong mobile relationships will be an impressive complementary fit with Skype," he added.

    Vijay Tella, Chief Executive Officer of Qik, said: "Qik has worked very hard to solve complex problems that allow millions of people everyday to take advantage of sharing their lives with those people who are most important to them. Joining Skype allows Qik’s team to unite with Skype’s talented team to develop new and innovative products for our customers and partners."

    Related news
    Fring Launches Dynamic Video Quality Mobile Calling
    Pinger Aims to Bring Free Voip to iPod Touch and iPhone
    Skype Now Available for Android Phones

  • HP to Acquire Palm for $1.2 Billion

    Although a week ago Palm’s CEO Jon Rubinstein still believed that “Palm can survive as an independent company” (FT), Palm was already up for sale and it was pretty obvious they would quickly find a buyer.

    And they did. The company announced that it has entered into a definitive agreement with HP, under which HP will purchase Palm at an enterprise value of approximately $1.2 billion.

    The transaction has been approved by the HP and Palm boards of directors.

    “The combination of HP’s global scale and financial strength with Palm’s unparalleled webOS platform will enhance HP’s ability to participate more aggressively in the fast-growing, highly profitable smartphone and connected mobile device markets,” according to the press release.

    The companies claim that Palm’s webOS will allow HP to take advantage of features such as “true multitasking” and “always up-to-date information sharing across applications.”

    Under the terms of the merger agreement, Palm stockholders will receive $5.70 in cash for each share of Palm common stock that they hold at the closing of the merger.

    The acquisition is subject to customary closing conditions, including the receipt of domestic and foreign regulatory approvals and the approval of Palm’s stockholders. The companies informed that the transaction is expected to close during HP’s third fiscal quarter ending July 31, 2010.

    Palm’s current chairman and CEO, Jon Rubinstein, is expected to remain with the company.

    According to HP’s executive vice president Todd Bradley, Palm’s OS provides an ideal platform to expand HP’s mobility strategy and create a “unique” HP experience spanning multiple mobile connected devices.”

    “And, Palm possesses significant IP assets and has a highly skilled team. The smartphone market is large, profitable and rapidly growing, and companies that can provide an integrated device and experience command a higher share. Advances in mobility are offering significant opportunities, and HP intends to be a leader in this market,” he said.

    Jon Rubinstein said: “We’re thrilled by HP’s vote of confidence in Palm’s technological leadership, which delivered Palm webOS and iconic products such as the Palm Pre. HP’s longstanding culture of innovation, scale and global operating resources make it the perfect partner to rapidly accelerate the growth of webOS.”

  • Compuware Expands SaaS Portfolio With Gomez Acquisition

    Compuware, software and consulting provider, announced it has completed its acquisition of Gomez, one of the two major forces in web application monitoring services that has a leading SaaS solution for desktop/laptop web application monitoring.

    “This is a very interesting and potentially game changing move in both the end user experience monitoring and the application performance management (APM) markets,” Jean-Pierre Garbani wrote on the Forrester Blog for Vendor Strategy Professionals.

    The closure of the $295 million cash transaction brings about 270 new employees to Compuware, including the complete Gomez leadership team. Jaime Ellertson will remain with the organization and serve as President of Gomez, the Web Performance Division of Compuware.

    "IDC believes the Gomez/Compuware marriage is a good match with little overlap and lots of upside," wrote Mary Johnston Turner, Tim Grieser and Melinda-Carol Ballou of IDC in a report titled Compuware Expands SaaS Portfolio With Gomez Acquisition.

    "With the completion of the acquisition, Compuware will be able to address a customer’s full range of in-house and internet-based application performance management requirements on an end-to-end basis," the report says.

    Compuware will retain the Gomez brand, technology portfolio and business model while moving purposefully to achieve additional technical, sales and marketing synergies. The firm says they expect the acquisition to be operationally accretive this fiscal year.

    The combination of the companies’ significant SaaS revenues makes Compuware the world’s leading SaaS infrastructure management provider, as the company claims.

    "We’re thrilled to welcome the Gomez team to Compuware," said Compuware President and Chief Operating Officer Bob Paul.

    "Together, Compuware and Gomez will-through a solution that features rapid time-to-value, ease of use and real-time answers-give IT and business executives the optimal application performance they need to drive brand image, customer loyalty and revenue."

    Gomez, the Web performance division of Compuware, provides the platform of Web application experience management solutions used by organizations to optimize the performance, availability and quality of their Web and mobile applications, and proactively identify business-impacting issues.

    The on-demand Gomez platform integrates solutions for Web load testing, Web performance management, cross-browser testing and Web performance business analysis that test and measure Web and mobile applications from the "outside-in" – across all users, browsers, devices, and geographies – using a global network of over 100,000 locations.

    According to the company, over 2,500 customers worldwide, ranging from small companies to large enterprises – including 12 of the top 20 most visited US Web sites – use Gomez solutions to “increase revenue, build brand loyalty, and decrease costs.”

  • EMC Q2 Results Better Than Expected, Completes Data Domain Acquisition


    EMC has reported a slight increase in revenue last quarter and provided an optimistic forecast for the second half of the year.

    The announcement came as it completed the USD $2.1 billion acquisition of data deduplication specialist Data Domain.

    The company said that IT budgets have stabilized and customers are more confident about their visibility.

    It reported net income of USD $205.2 million on revenue of USD $3.26 billion, down 11 per cent from a year ago.

    On the revenue front, EMC now projects 2009 sales of USD $13.8 billion compared with previous estimates of $13.5 billion.

    Data Domain, whose acquisition closed today, will contribute USD $200 million in revenue for 2009 and will be neutral to non-GAAP earnings.

    Meanwhile, third quarter revenue is expected to rise 2 to 3 per cent sequentially excluding Data Domain results. Data Domain’s inclusion results in sequential growth of four to five per cent.

    EMC CEO, Joe Tucci, said that EMC expects the company to generate double-digit revenue growth rates.

    "when IT markets resume to a more normal spending rate," he added.

    Meanwhile, the fate of EMC’s current data deduplication partner, Quantum Corp., remains unclear after EMC executives avoided mentioning the firm during the earnings call.

    To most industry watchers, the writing seems to be on the wall for Quantum.

  • EMC Completes Acquisition of Data Domain


    EMC Corporation has finally overcome rival NetApp and succeeded with its bid to buy data deduplication leader Data Domain at a price of USD $2.1 billion.

    The acceptance of the final offer comes after a six-week bidding war and will raise questions about whether EMC overpaid for Data Domain – and what NetApp will do now.

    EMC’s final offer of USD $33.50 per share for Data Domain is a lofty figure compared to the $18 its stock was trading for before NetApp’s first bid May 20.

    NetApp went on to offer of USD $25 per share before increasing that to USD $30 after EMC joined the fray.

    While EMC could be accused of overpaying, deduplication is viewed as a growing segment of the storage market and Data Domain offers some very good technology.

    For NetApp there do appear to be other potential acquisition targets to bring it into the data deduplication/backup space, including CommVault, FalconStor, Quantum and Sepaton.

    The challenge facing EMC now is to decide how to bring Data Domain to market.

    With businesses storing 50 per cent more data each year, according to some market research estimates, EMC is betting the acquisition will pay off.

    Joe Tucci, EMC chairman, president and CEO, said: "This is a compelling acquisition from both a strategic and financial standpoint.

    "We look forward to bringing Data Domain together with EMC to form a powerful force in next-generation disk-based backup and archive."

  • NetApp Awaits EMC Response to Data Domain Bid


    The bidding war for Data Domain stepped up this week after NetApp raised the stakes with rival EMC by making a new cash and stock offer of USD $1.9 billion.

    It came two days after EMC’s offer of USD $30 per share in a deal worth about USD $1.8 billion – around 20 per cent over the original USD $1.5 billion offered LINK last month by NetApp.

    Data Domain, a market leader in data deduplication technology, manufactures a series of storage appliances that tightly integrates its dedupe technology with dedicated storage capacity.

    It also offers software for data replication and virtual tape libraries.

    Both EMC and NetApp currently offer data dedupe technology.

    The increased offer from NetApp means that, if accepted, its offer would use up almost all it’s US cash balance of USD $1.26 billion.

    However, EMC is widely expected to counter with an all-cash offer.

  • Fine Point Acquires VoIP Gateway Seller Sonic


    Fine Point Technologies has agreed to buy the German software and systems integration service provider Sonic Telecom.

    Sonic has been an authorized reseller of Fine Point’s device management technologies since 2005 – but also selling VoIP gateway systems and services.

    Fine Point says the deal will broaden its reach in European markets and offers it the potential to sell its software solutions to more communications providers.

    The NYC-based company will retain Sonic’s engineering and sales staff who are already knowledgeable in selling and supporting Fine Point’s products.

    Fine Point will also maintain Sonic’s existing facility in Germany, and rename the entity Fine Point Technologies, Inc.

    Financial terms for the transaction were not disclosed.