Deals

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Twitter Strikes Deal with NFL to Stream Thursday Night Football Games

BY: JOE FERRARI    April 5, 2016

Twitter and the NFL have reached a deal to allow Twitter to stream ten Thursday Night Football games during the 2016-2017 season. The deal was announced by Roger Goodell (on Twitter nonetheless):

Although the NFL did not confirm the terms of the deal, Peter Kafta of Re/code reported that Twitter paid less than $10 million, while rival bids from Amazon and Verizon came in as high as $15 million. Other bidders included Facebook and Yahoo!, the latter of which streamed a London-based October 2015 matchup between the Jacksonville Jaguars and Buffalo Bills. According to BusinessInsider, Facebook yanked its bid because it demanded commercial free streaming.

On its face, the deal is an absolute steal for Twitter when compared to the $450 million price tag CBS and NBC collectively paid for the rights to broadcast TNF games and the $20 million tag that Yahoo! paid for the rights to stream the Jags-Bills game last year. However, the deal contains an important caveat: Twitter will stream the TNF networks’ ads and only sell its own ads during the spots normally reserved for local affiliates, according to the NY Times.  This certainly explains the lower price tag.  Of course, there are intangible benefits to Twitter—such as associating itself with America’s favorite sport—but from a revenue standpoint, Twitter’s upside appears limited. 

Interestingly, Verizon already owns the mobile rights to NFL games. In essence, the NFL effectively resold the rights to games it had already sold to other media platforms. Although the NFL received higher bids, the deal makes sense for the NFL considering that Twitter’s platform is known for pairing well with live events. Though the NFL could have reached a wider audience with Facebook, it still reaches fans without televisions or viewers in countries where the NFL is not broadcasting. When you consider how active NFL analysts are on Twitter during games, the deal makes sense in terms of enhancing fan experience by allowing fans to watch the game and associated commentary on one platform. 

According to TechCrunch, the deal also allows for pre-game Periscope broadcasts from players and teams, as well as in-game highlights from TNF. Twitter’s stock rose as much as 4% on the news before settling back near its opening price. 

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Salesforce acquires A.I. startup MetaMind

BY: JOE FERRARI    April 5, 2016

On April 4, 2016 Salesforce announced it will acquire Palo Alto-based MetaMind for an undisclosed sum. MetaMind is an automated image recognition platform that utilizes “deep learning” techniques to help businesses crunch through data and make better decisions.   The company’s platform can reportedly do everything from answering questions about a snippet of text to analyzing the overall sentiment of that text.

MetaMind was founded in 2014 by Richard Socher, a PhD student from Stanford. According to Crunchbase, MetaMind took in $8m in venture capital from Khosal Ventures and (notably) Salesforce CEO Marc Benioff.

In its press release announcing the acquisition, MetaMind stated that Salesforce will provide it with the scale, resources and infrastructure needed to expand its AI capabilities:

“With MetaMind and Salesforce coming together, we’ll be able to offer customers real AI solutions with breakthrough capabilities that further automate and personalize customer support, marketing automation, and many other business processes. We’ll extend Salesforce’s data science capabilities by embedding deep learning within the Salesforce platform.”

No comment was provided by either company as to the law firm that represented Salesforce or MetaMind.

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Mobile Shopping App Shopular Acquired by Ebates

BY: JOE FERRARI    March 25, 2016

On March 25, 2016, San Francisco-based Ebates announced that it will acquire Redwood City-based Shopular for an undisclosed sum.  

Shopular, a mobile platform that pushes retail coupon offers to users’ mobile devices, was founded in 2012 by Navneet Loiwal and Tommy Tsai. Using geo-targeting technology, Shopular users receive relevant deals and coupons when they are near their favorite stores.

Ebates, founded in 1998 and later acquired by Rakuten, Inc. for $1 billion, provides access to thousands of coupons, discounts, promotions and special deals at over 2,000 retailers. Using Ebates, consumers can shop online at their favorite retailers while earning a percentage of every purchase they make. 

According to Venturebeat, both Loiwal and Tsai will continue employment at Ebates as general managers of Shopular business, mainly tasked with leading technology development and integrating Ebates’ cash back capabilities. 

Investors set to benefit from the acquisition include Sequoia Capital, ex-Facebook CTO Adam D’Angelo, and Y Combinator, all of whom participated in Shopular’s $6.4 million Series A round. 

Ebates did not disclose any terms to the transaction, but was kind enough to comment that Matt Stewart of King & Spalding represented Ebates. 

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GM Announces Acquisition of Cruise for $1 Billion

BY: JOE FERRARI    March 11, 2016

On March 11, 2016, General Motors announced that it will acquire Cruise for $1 billion.

The San Francisco-based startup, a graduate of Y Combinator, claims to have developed the first highway autopilot system that can be installed in existing vehicles.

According to Re/code, the billion-dollar price tag makes Cruise the largest exit for a startup from the well-known Silicon Valley incubator. That award previously sat with Twitch, the video game live streaming company that sold to Amazon for just under $1 billion. While the two companies operate in separate spaces, they do have one thing in common: according to his LinkedIn profile, Cruise CEO Kyle Vogt also co-founded Twitch.

Fortune reported that talks between the two companies originally started as a strategic investment by GM, whom recently announced a $500 million investment in ride-sharing service LyftThe deal represents a significant push from GM to crack in to the autonomous vehicle market, joining many Silicon Valley tech giants that are already headed in that direction.

Investors, among others, include Felicis Ventures and Flight Ventures.  According to American Lawyer, Fenwick & West represented GM and Orrick represented Cruise. 

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GoPro Spends $105 Million to Acquire Two Video Editing Platforms

BY: JOE FERRARI    March 2, 2016

On March 1, 2016, GoPro announced that it will acquire Stupeflix and Vemory for $105 million. Stupeflix, based in Paris, is the company behind the mobile app Replay, which allows users to combine multiple video clips into a single film. Vemory, based in Austin, Texas, is the company behind the mobile app Splice, which allows uses to trim, crop, and add video effects to clips.

The deal has a strategic appeal to it given that both apps directly impact users’ ability to edit and share content. It could be a small step towards alleviating GoPro users’ frustration over the editing software that comes with a GoPro purchase. 

However, GoPro has seen its stock drop by more than 70% over the past 12 months, erasing billions in market cap and raising questions about the strategic future of the action camera company.  One would think that the targets would require a significant portion of the deal to be financed in cash given GoPro’s sinking stock price. According to GoPro’s recent 10-k, GoPro is sitting on approximately $474 million in cash, meaning that GoPro potentially dropped about 20% of its cash on hand.  

According to TechCrunch, employees from both of the target companies will join GoPro, though they will continue to work out of their current locations in Paris and Austin, Texas.

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Atmel Finds New Buyer, Terminates Previous Deal with Dialog Semiconductor 

BY: JOE FERRARI    January 22, 2016

Silicon Valley-based Atmel Corporation will be acquired by Arizona-based Microchip Technology for $3.56 billion, terminating a prior deal between Atmel and Dialog Semiconductor, in which Atmel agreed to a purchase price of $4.6 billion. The Dialog deal offered a sizable portion of Dialog stock, which, after spiraling downward 40% over the last four months, allowed Microchip to swoop in and make a “Superior Offer.”

Generally, when the board of directors of a public company agrees to sell the company in a cash deal, the board becomes subject to a heightened duty of care, sometimes referred to as a “Revlon duty” after a famous case from the Delaware Supreme Court. This duty requires the board to obtain the highest value reasonably available to the company’s stockholders. Even though the directors may negotiate several deal-protection mechanisms (such as a no-shop provision), the merger agreement usually contains a “fiduciary out” clause, which allows the board of directors to change its recommendation of the underlying merger in the event the company receives an unsolicited “Superior Offer” (i.e., a better deal for the stockholders).

Here, Atmel received an unsolicited offer from Microchip and subsequently declared that deal Superior because of the higher cash component built into the Microchip offer. Though Microchip’s deal has a lower total value than the $4.6 billion offered by Dialog, the Microchip offer included a cash component of $7 per share compared to Dialog’s $4.65/share offer.  That higher cash component, coupled with Dialog’s plummeting stock price, is likely what triggered the board’s Revlon Duty, leading to the termination of the Dialog deal. Dialog was offered the opportunity to raise its bid, but declined to do so. Atmel will pay $137.7 million as a breakup fee, according to Atmel’s Form 8-k

According to Dealbook, Wilson Sonsini represented Microchip and Jones Day represented Atmel. 

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Salesforce Announces $300 Million Acquisition of SteelBrick

BY: JOE FERRARI    December 24, 2015

Salesforce looked no further than its neighboring town for its recent acquisition. In an 8-k form filing, Salesforce announced that it has agreed to acquire silicon valley-based SteelBrick for $360 million, less the $60 million SteelBrick currently has in cash. Last week, Business Insider broke the news that Salesforce was in talks to acquire SteelBrick, but at a price tag of $600 million. According to BI, SteelBrick’s valuation came in at $250 million.

SteelBrick is based in San Mateo, CA and provides quote-to-cash apps that are designed to be compatible with Salesforce’s platforms. Techcrunch explains the business as follows:

Quote-to-cash, as the name implies, is the part of the sales cycle that takes over once you have an interested customer. While CRM tools like Salesforce.com and Microsoft Dynamics provide a way to maintain the basic customer record, a service like SteelBrick helps you put together a quote, sign a contract when the customer has decided to buy, and take care of billing once the deal is done.

To date, SteelBrick has raised $77.7 million, $48 million of which came through an October 2015 Series C financing led by Institutional Venture Partners. Other investors include Emergence Capital Partners, Godard Abel, Lighter Capital, Matt Gorniak, Salesforce Ventures, and Shasta Ventures, according to Crunchbase

In My Opinion, this deal makes a lot of sense of Salesforce because SteelBrick’s platform is centered on compatibility with Salesforce products. Considering that compatibility and Salesforce’s $15 million investment in SteelBrick, it appears Salesforce was keeping an eye on the success of SteelBrick for the purpose of a future acquisition.

Last year, Salesforce bought RelateIQ for $390 million and, the year before that, it acquired ExactTarget for $2.5 billion. This deal represents the largest acquisition for Salesforce in 2015, a year that has been oddly quiet for Salesforce M&A despite the booming global M&A market.

No word yet on who represented Salesforce or SteelBrick, but I’ve reached out for comment. Historically, Wilson Sonsini reps Salesforce in M&A transactions, so they are a safe bet to be involved in this deal. I will update this post if I hear back from either party.

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NetApp to Acquire SolidFire for $870 Million

BY: JOE FERRARI    December 22, 2015

On December 21, 2015, Silicon Valley-based NetApp (NASDAQ: NTAP) announced that it entered into a deal to acquire SolidFire for $870 million, amidst rumors that NetApp was set to pay $1.2 billion. SolidFire, founded in 2010 by Dave Wright, is based in Boulder, Colorado.

Cisco, EMC and Samsung were also circling SolidFire, according to CRNNetApp announced that it plans to pay for the deal in cash and that it expects the deal to close in April 2016. In its announcement of the deal, NetApp commented that: “SolidFire products will be incorporated into NetApp’s data fabric strategy, delivering seamless data management across flash, disk and cloud resources.” NetApp also indicated that SolidFire CEO Dave Wright will join the NetApp team and will continue to lead the SolidFire product line within NetApp’s product operations. Shares of NetApp were down 3 percent in premarket trading following the announcement.

To date, SolidFire has raised approximately $150 million in funding, $82 million of which was raised in October 2014 through a Series D offering led by Greenspring Associates and Silicon Valley Bank, according to Crunchbase. Other investors include New Enterprise Associates, Novak Biddle Venture Partners, Samsung Ventures and Valhalla Partners.

In an exclusive email to In My Opinion, a source close to the deal confirmed that Noah Pittard and Laura Medina of Cooley LLP represented SolidFire and DLA Piper represented NetApp.

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Pandora to Acquire Key Assets from Rdio Bankruptcy Proceeding

BY: JOE FERRARI    November 19, 2015

On Tuesday November 17, 2015 Pandora announced its plan to acquire key assets from San Francisco-based Rdio for $75 million in cash. These assets include technology, intellectual property, and key employees from Rdio, to the extent said employees accept employment at Pandora. According to The Verge, Rdio CEO Anthony Bay will not join Pandora. The deal is expected to close in the first quarter of 2016.

Rdio raised $125 million and was once valued around $500 million. Thus, the sale presents a disappointing return for Rdio investors, which included: Atomico; Mangrove Capital Partners (which eventually sold its stake); Janus Friis of Skype/Kazaa, who co-founded Rdio with Niklas Zennstrom and Cater Adamson; and Skype. News of the deal did not move the needle in terms of Pandora’s share price: after hours trading on Tuesday put Pandora at $13.45, only 3 cents, or 0.22% higher than its closing price Monday of $13.42.

Rdio announced that it will shut down in the coming weeks. The deal with Pandora is contingent upon Rdio successfully seeking Chapter 11 bankruptcy protection from the United States Bankruptcy Court for the Northern District of California. Interestingly, by law, Rdio is required to remain open to competitive offers when it files for bankruptcy, so although both sides have announced the deal, Rdio must remain open to a more competitive offer.

According to Pandora, the move signals “the next chapter of Pandora’s growth story,” which is to compete with Spotify and YouTube in the on-demand music space. The deal should help Pandora expand its presence, considering it only operates in the U.S., New Zealand, and Australia compared to Rdio, which operated in 100 countries. The Rdio deal comes on the heals of Pandora’s $450 million acquisition of Ticketfly—a Ticketmaster-type site for live music events—a move which Pandora described as aligned with “its mission to help artists find their audience and help listeners find the music they love—whether it’s coming through their earbuds or live on stage.”

In My Opinion, the two acquisitions indicate that Pandora wants to break away from its radio-streaming niche and into the space of connecting music fans with on-demand music, both online and through live performances. Pandora’s chief executive, Brian McAndrews, commented: “Whether streaming through radio, on-demand or in-person at live events, Pandora is building the definitive source for fans to discover and celebrate music. Wherever and however fans want to hear music, we intend to be their go-to destination.”

Recode speculates that Pandora will differentiate itself from Spotify and Youtube, which allow users to listen to as much music as they want for free and on-demand. Instead, Recode expects Pandora to position itself to the likes of Apple Music: it will offer some music and radio stations for free, but if users want unlimited access to on-demand music, they will have to pay up, most likely in the $10 per month range that Spotify offers.

In My Opinion reached out to Rdio, who provided no comment at this time. In an email to In My Opinion, Pandora confirmed that Wilson Sonsini represented Pandora.

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Intel to Acquire Saffron AI 

BY: JOE FERRARI    November 1, 2015

Santa Clara based Intel announced a deal to acquire Saffron AI, an artificial intelligence startup based in Cary, North Carolina. The price of the deal was not disclosed.

Saffron describes its AI platform as the first artificially intelligent cognitive computer that learns, reasons, and anticipates like humans. One obvious purpose of the deal is to allow Intel to compete with IBM’s Watson technology. More specifically, as the computer industry evolves, Intel will aim to convert general-purpose chips (the chips that power our laptops, watches, cell phones) into chips that execute client-specific jobs. With its $16.7 billion acquisition of Altera, Intel moved one step forward towards developing a programmable chip that allows a company to change its software to optimize hardware for a specific code.

With Saffron’s technology, Intel now has access to technology that analyzes data from clients to come up with similarities and relationships. Saffron purports to have developed technology that is similar to human reasoning and memory with a natural language processor that understands vocabulary or language submitted by the user.

InMyOpinion, this deal not only symbolizes Intel’s push towards artificial intelligence, but also reflects the continued arms race between Silicon Valley tech companies to develop artificial intelligence platforms. Below is a snapshot of AI-related moved by key players in the battle for AI:

This year marked a very AI-intensive year for Apple: it made two AI-based acquisitions, acquiring VocalIQ, a speech tech firm based in London (Sept. 2015) and Perceptio, a machine learning firm (Sept. 2015). Apple also hired Jonathan Cohen, ex-AI leader at NVIDIA and reported that it plans to hire at least 86 full-time AI experts.

2014 marked a big year for artificial intelligence development at Google: it acquired Deep Mind Technologies (January 2014); Jetpac (August 2014); Dark Blue Labs (October 2014); and Vision Factor (October 2014). Recently, Google’s AI-development is focused on self-driving cars, for which machine learning is being developed to detect pedestrians.

Though Facebook has not disclosed any AI-based acquisitions, it opened an AI-based research lab in Paris. Research at the lab covers the full spectrum of topics related to AI and to deriving knowledge from data: theory, algorithms, applications, software infrastructure and hardware infrastructure.

In total, 16 AI companies were funded for the first time in 2014, up from two in 2010, according to data compiled by researcher CB Insights for Bloomberg News. The amount invested in the startups—some of which describe themselves as doing machine learning or deep learning—soared to $309.2 million last year, up more than 20-fold from $14.9 million in 2010.

It appears AI development is no longer a theoretical possibility, but a reality in the Silicon Valley.

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LinkedIn Acquires Lynda.com for $1.5 Billion

BY: JOE FERRARI    April 9, 2015

April appears to be Acquisition Month for LinkedIn, as they announce an agreement to buy Lynda.com in a stock and cash deal valued at $1.5 billion, LinkedIn’s largest deal to date. This acquisition comes on the heels of a separate acquisition of Refresh.io, announced on April 2, 2015 and reported by TechCrunch. Term deals of that acquisition were not disclosed.

Lynda.com is a leading online learning company that helps anyone learn software, technology, creative, or business skills. With subscriptions starting at $25 per month, Lynda.com offers access to over 2900 courses, including web design, digital photograph, programming, and a range of business software training from companies such as Microsoft, Adobe, Apple, and Google.

WSJ reported that most members of the Lynda.com team are expected to join LinkedIn. DealBook reports that under the terms of the deal, about 52 percent of LinkedIn’s offer will be in cash and the remainder in newly issued stock. The transaction is expected to close by the end of the second quarter.

In a blog post, LinkedIn CEO Jeff Weiner wrote that LinkedIn has “followed Lynda.com for a long time, rooted in the conviction that access to high-quality, skills-based learning and development content should be available to every LinkedIn member and a fundamental part of our platform.”

A source close to the deal confirmed to In My Opinion that Wilson Sonsini Goodrich & Rosati provided legal counsel to LinkedIn and Goodwin Procter provided legal counsel to Lynda.com.

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Twitter Buys San Francisco-Based Periscope for Rumored $100 Million

BY: JOE FERRARI    March 13, 2015

On March 13, 2015, TechCrunch reported that Twitter has confirmed its acquisition of San Francisco-based Periscope for a rumored price of $100 million. The kicker: Periscope has not even launched yet. However, this isn’t the first time Twitter rolled the dice on a company that hasn’t launched a product: it bought Vine while it was being used in closed beta as well.

Periscope allows users to view both live and previously broadcasted mobile video streams. Streams can be blasted publicly through your twitter account, or, you can invite select friends to view whatever it is you’re broadcasting. Interesting issues related to copyright arise, if, for example, I’m publicly broadcasting a sporting event and inviting my friends to watch.

While viewing the content, users can drop comments that display directly on top of the streamed content. TechCrunch speculates that mainstream celebrities could become a major beneficiary of such a system, using it to intimately reach many fans at once.

Periscope’s launch date has yet to be determined or announced. TechCrunch first reported the talk of an acquisition between Periscope and Twitter on March 4th. The deal was later confirmed as closed by Business Insider.

I’ve reached out to a couple of law firms to see if they were involved in the deal, and will update this article if I find out which firms acted as legal counsel.

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AbbVie to Acquire San Jose Based Pharmacyclics for $21 Billion

BY: JOE FERRARI    March 4, 2015

On March 4, 2015, CNN Money announced that pharmaceutical giant AbbVie will acquire San Jose-based Pharmacyclics for $21 billion. The deal comes after reports surfaced earlier today that Johnson & Johnson was interested in acquiring Pharmacyclics for $17 billion.

Pharmacyclics’ flagship asset is its Imbruvica, a highly effective treatment for hematologic malignancies (cancer).

AbbVie will pay $261.25 per share comprised of a mix of cash and AbbVie equity. The transaction values Pharmacyclics at approximately $21 billion and was approved by the Boards of Directors of both companies. 

Wachtell, Lipton, Rosen & Katz acted as legal counsel to AbbVie and Wilson Sonsini Goodrich & Rosati, acted as legal counsel to Pharmacyclic.

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Yelp Scoops Up Eat24 for $134 Million

BY: JOE FERRARI    February 13, 2015

On February 10, 2015 San Francisco-based Yelp announced its acquisition of another San Francisco-based company, Eat24, for $134 million.

Eat24 was founded in March 2008 and is headquartered just south of San Francisco in San Bruno, California. Eat24 operates as a web-based food and delivery service, partnering up with over 25,000+ local restaurants. 

Similar to the Under Armor and MyFitnessPal deal, Eat24 and Yelp partnered up in 2013 to compete with Grubhub. In My Opinion, these types of partnerships make a lot of sense in the context of a subsequent acquisition because the larger, well established company (Yelp) has the opportunity to test drive the smaller, less known company (Eat24) instead of committing to an acquisition. In return, the smaller, less known company receives the benefits of associating with a well known brand. For example, as soon as Eat24 announced its Yelp partnership, nearly 1,000 new restaurants signed up, many of which were previously on the fence. Had Eat24 sold to Yelp back in 2013 (assuming such an offer was made), they would have likely enjoyed only a fraction of the $134 million they are due to receive from the current acquisition. 

Yelp will pay $75 million in cash and issue 1.4 million shares of Class A common stock to Eat24. Yelp’s official announcement can be viewed here.

According to Law360, Yelp received legal advice from Cooley LLP led by David Peinsipp and Jennifer Fitchen (who has since left the firm to join Sidley Austin). Eat24 was represented by Wilson Sonsini, led by partners Denny Kwon, and Elton Satusky.

Under Armour Acquires Two Digital Health Apps for $560 Million

BY: JOE FERRARI    February 6, 2015

On February 4, 2015, Under Armour announced the acquisitions of two fitness-tracking apps, San Francisco-based MyFitnessPal and Copenhagen-based Endomondo, reported first by Dealbook. Under Armour paid approximately $460 million for MyFitnessPal and $80 million for Endomondo. 

MyFitnessPal was founded in 2005 and offers a mobile app and website for people to track, learn, communicate, and improve their health and wellness. Its founders are Albert Lee and Mike Lee, and its investor roster includes Accel Partners and Kleiner Perkins Caufield & Byers. Prior to the acquisition, MyFitnessPal raised approximately $18 million. 

In My Opinion, the acquisition makes sense for Under Armour considering its efforts at building an athletically tailored online network began in 2004 with the acquisition of MapMyFitness for $150 million. In January 2014, MyFitnessPal announced a partnership with MapMyFitness, making it a prime target for an Under Armour acquisition.

Here’s how the two platforms work: MapMyFitness uses GPS technology that allows users to map, record, and share exercise routes and workouts while MyFitnessPal tracks calories burned and other workout details pertaining to said routes and workouts. This information is stored in an online database, allowing users to discover new exercise routes and tailor their exercises based on various workout goals. MyFitnessPal’s announcement of the acquisition can be found here.

Under Armour was advised by the law firm King & Spalding. MyFitnessPal received legal advice from Ted Wang, Andrew Luh, Vishal Dave and Nam Kim of Fenwick & West. 

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PetSmart Heads Private After $8.7 Billion Takeover

By: JOE FERRARI    December 19, 2014 

PetSmart agreed on December 14 to sell itself to a group of investors led by investment firm BC Partners for approximately $8.7 billion. The deal will close at $83/share in cash, which is 6.8% higher than PetSmart’s closing price of $77.67 recorded the previous Friday.

The timing of the takeover is ideal for PetSmart considering its recent struggles. Earlier this year, its stock dropped 18%, and it arguably only recovered due to activist shareholder Jana Partners urging PetSmart to consider a potential sale. PetSmarts’ financial statements also show a troubling company: revenue dipped 6.7% between January and April 2014, and remained at that lower level through the end of Q4. Net income also dipped 21.1% during that same time period, and continued to drop quarter to quarter through FY2014. In PetSmart’s defense, its facing increased competition from Wal-Mart, Target, and now Amazon – but it ultimately needs to search for ways to push down its massive $1.23 billion in cost of goods sold and $360 million in expenses.

However, In My Opinion, BC Partners should remain optimistic about this deal. Pet-food sales have nearly doubled since 2000 to $22 billion this year, mainly as a result in the spike of a niche market of pricey “premium” dog and cat food, which Americans spent $10 billion on this year. Consumer surveys indicate that 72% of U.S. pet owners consider their pets “part of the family” and 79% said the quality of their pets’ food is as important as their own.

According to Reuters, J.P. Morgan Securities LLC and Wachtell, Lipton, Rosen & Katz advised PetSmart. BC Partners and its partners were advised by Simpson Thacher & Bartlett LLP and Ernst & Young. Citigroup, Nomura, Jefferies, Barclays and Deutsche Bank have committed to finance the acquisition with debt.

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Adobe Acquires Fotolia from KKR Partners for $800 Million 

By: JOE FERRARI    December 11, 2014 

Fotolia, a popular marketplace for stock photography and video, was acquired today by Adobe for $800 million in cash.

Adobe is home to Adobe Creative Cloud, which houses popular creative software including Photoshop, Illustrator, and Premiere. According to Adobe, Fotolia – with over 34 million images and videos in its portfolio – will integrate smoothly with the Creative Cloud platform and cement Creative Cloud’s role as a vibrant marketplace for individuals to showcase their talent.

Adobe also stated that Fotolia will operate as its own standalone service that will remain open to anyone irrespective of whether the user has a Creative Cloud subscription.

Fotolia was founded in 2004 and was owned primarily by Kohlberg Kravis Roberts & Co. KKR made an initial investment in the company in 2012, buying a 50% stake alongside Oleg Tscheltzoff and TA Associates.

The deal will close in Q1 2015.

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Yahoo! Acquires BrightRoll for $640 Million

By: JOE FERRARI    November 15, 2014 

On November 11, 2014 Yahoo CEO Marissa Mayer announced that it has acquired BrightRoll for $640 million in cash.

BrightRoll is the only independent and unified programmative video advertising platform capable of reaching audiences across web, mobile, and connected TV.

Mayer believes that the acquisition “will accelerate the growth of both companies – we can help BrightRoll scale to even more advertisers globally and they can bring their tremendous platform offering to Yahoo’s advertisers. The combination builds positive momentum for Yahoo’s broader display advertising business in 2015.”

Pursuant to the acquisition, BrightRoll will operate independently from Yahoo but will be backed with Yahoo’s investment and global support. BrightRoll also comes with solid financials: the company is growing, profitable, and expects net revenue of $100 million this year.

CNBC posits that BrightRoll accepted Yahoo’s offer instead of rolling the dice in what they deem would have been a risky IPO based on IPO flops Tremor Video and YuMe, companies that operate in the same space as BrightRoll.

With this acquisition, Yahoo positions itself to compete in online advertisement revenue with Google and Facebook, whom collectively account for 38% of online ad revenue.

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Yahoo! Acquires MessageMe for Rumored $30-40 Million

By: JOE FERRARI    October 7, 2014 

On October 3, 2014 MessageMe posted on its website that it will be shutting down its service as a result of being acquired by Yahoo.

MessageMe is a Whatsapp-like instant messaging service. TechCrunch reports that MessageMe raised $10 million in Series A funding in early 2013 after reaching 1 million users. The round was led by Greylock Partners and included True Ventures, First Round Capital, Google Ventures, SVAngel, Resolut.vc, Andreessen Horowitz, and Social+Capital Partnership, and other angels. Despite its quick growth to 1 million users, MessageMe’s user base increased to only 5 million in the months following its first funding.

TechCrunch also reports that Yahoo was not the only tech company hoping to scoop up MessageMe: SnapChat, WhatsApp, and Europe-based Truecaller were also in the mix. TechCrunch speculates that MessageMe chose Yahoo because Yahoo plans to hire eight MessageMe employees.

In My Opinion, Yahoo’s acquisition reflects a heated competition in the Silicon Valley over Instant Messaging services. Instant Messaging, viewed by some as an outdated platform, seems to be making a strong comeback: recall that Facebook acquired WhatsApp, Google is rumored to be building another IM platform, and Yahoo has now picked up MessageMe.

Word is mixed on whether this acquisition is a signal that Yahoo is ready to start a tech-startup acquisition spree as a result of it its Alibaba fortune.

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Amazon Acquires Live Video Game Streaming Company Twitch for $970 Million

By: JOE FERRARI    AUGUST 26, 2014 

Any gamer knows what Twitch is. It is in the business of creating live videos of people playing video games. Twitch users come to its site to watch live broadcasting of a user’s game and to interact with the user during play. Twitch pitches itself as both social and educational – it fosters a community of video gamers while allowing each player to learn from other’s live play. According to the NY Times, the site has attracted enough viewers to put it among the 15 most-trafficked websites around the world.

Amazon’s acquisition is its largest to date. Its largest acquisition prior to this was shoe company Zappos for $850 million.  

The NY Times speculates that the acquisition could help accelerate Amazon’s advertising ambitions by giving it a huge video network to pump commercials through. Forbes pitched an alternative motive beyond the gaming vertical – an opportunity to create a video community around any activity, not just video games.  

Forbes reports that Google was originally in talks to acquire the video game streaming company for more than $1 billion, but walked away because of antitrust concerns. This isn’t the first time Google got cold feet – it also pursued WhatsApp for $19 billion in February before Facebook acquired it, and pulled away from the $5 billion Spotify negotiations.

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Zillow to buy Trulia for $3.5 Billion

By: JOE FERRARI    July 29, 2014 

Zillow agreed on Monday to buy Trulia for $3.5 billion in stock. Last month, Zilow and Trulia reported user bases of 83 million and 54 million, respectively – a combined 61 percent of total Internet users for the category. Together, the two will dominate the online real estate listings market they helped to create.

Zillow will pay 0.444 of one of its share for each share of Trulia. Based on Friday’s closing prices, the takeover bid is worth $70.53 per Trulia share, a 25% premium.

According to DealBook, Trulia requested the stock-deal because it wanted to give its shareholders a chance to benefit from the merger. DealBook reports that the merger will result in about $100 million in cost savings by 2016.

Zillow was advised by Goldman Sachs and the law firms Sherman & Sterling and Perkins Coie.

San Francisco-based Trulia was advised by JP Morgan Chase and Qatalyst Partners and the law firms of Goodwin Procter and Wilson Sonsini.

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LinkedIn Acquires Bizo

By: JOE FERRARI    July 29, 2014 

On July 22, 2014 LinkedIn announced it acquired Bizo for $175 million.

Bizo launched in 2008 and developed its own technology that lets marketers identify new prospects and target them with relevant content. Prior to the acquisition, Bizo raised approximately $28 million in funding led by investors Venrock and Bessemer Venture Partners, according to CrunchBase.

LinkedIn will finance the deal with 90% cash and 10% stock. 

Ad-Exchanger explains the significance of the Bizo acquisition by pointing out two strategic advantages for LinkedIn. First, Bizo runs a viable media business and partners with a number of large ad networks, DSPs and trading desks, as well as the Google and Adobe stacks, to identify and enrich business data targets through its pixel-based network. Second, a number of Bizo’s publisher clients rely on Bizo data to target their own media. This essentially gives LinkedIn the basis of an end-to-end platform to identify in-market prospects, research and track those leads through to the buying process and ultimately close that loop with analytics.

Twitter Goes On Shopping Spree, Acquires TapCommerce, CardSpring  

By: JOE FERRARI    July 20, 2014 

Within 18 days, Twitter acquired mobile ad startup TapCommerce and payment infrastructure startup CardSpring. The TapCommerce deal was reported at $100 million, while the CardSpring deal terms were not disclosed.tumblr_inline_n7zywy0pd61sj9q8j

TapCommerce is NY-based ad-tech platform that helps mobile businesses retarget their ads based on, for example, previous user activity. In the past, after you have downloaded a particular app you may have experienced various alerts and notifications urging you to come back. These alerts and notifications are what TapCommerce specializes in. This is especially popular with travel, retail, and mobile gaming apps.

Twitter reported that it recently experimented with TapCommerce by, for example, sending users suggestions to download Spotify or to try out games like “Heroes of Dragon Age.” When a user clicks on this suggested app/game and the app is opened via Twitter, Twitter makes money. Twitter’s revenue, most of which comes from advertising, more than doubled in the first quarter to $250.5 million.

The acquisition brings to Twitter TapCommerce clients such as eBay Inc. and Zulily Inc.

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CardSpring allows developers to build Web and mobile apps that work with credit cards, such as electronic coupons, loyalty programs, and virtual currencies. From a data perspective, the purchase of CardSpring will allow Twitter to track users’ redemptions of offers that are delivered via Twitter Cards.

An example brings to light the significance of the CardSpring acquisition: There already exists a “tweet-for-coffee” function which connects your Twitter and Starbucks accounts. This allows you to virtually tweet a cup of coffee to a friend, who will receive a $5 e-gift card. With the acquisition of CardSpring, Twitter may soon become a platform for users to send an array of virtual gifts to users (think restaurants, gas, and shopping). In My Opinion, Twitter’s end game is to send currency, which will destroy Venmo.

Building off the Starbucks hypothetical, imagine you receive a notification that your friend sent you a $5 gift card for Starbucks (powered by CardSpring). Upon opening the Starbucks App (through a Twitter notification powered by TapCommerce), Twitter would receive a fee from Starbucks, and the end user would spend money at the Starbucks. Then, days later, you would be sent a notification (via TapCommerce) reminding you to “pay it forward” by sending a cup of coffee back to your friend (via CardSpring).

A win-win for all involved.nest-dropcam

Google Nest Labs Expands Home Presence with Acquisition of DropCam

By: JOE FERRARI    July 15, 2014 

In late June, Google Nest Labs (Nest Labs was acquired by Google) acquired startup Dropcam for $555 million in a cash deal. 

Dropcam is a webcam-based video monitoring system used for checking in on your house while you’re away.  Dropcam operates using an easy-to-use and configure Wi-Fi webcam, which users can access virtually anywhere. The feed is saved via cloud-based storage.

With this acquisition, Google now not only has access to users’ searches and computer data, but it now has the ability to access home data. This includes raw home footage and sound recordings of users’ home activities. Users can only hope that Google’s “do no evil mantra” will be strictly enforced.

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Facebook Strikes $2 Billion Deal with Virtual Reality Company

By: JOE FERRARI    March 25, 2014 

Facebook just announced that it will acquire Oculus VR, a startup that makes virtual reality headsets, in a $2 billion deal.

Business Insider describes the headset as “nearly impossible to describe.  It makes you feel like you’re truly immersed in a virtual environment.”

However, Zuckerberg’s vision for Oculus touches more than video games:

“After games, we’re going to make Oculus a platform for many other experiences. Imagine enjoying a courtside seat at a game, studying in a classroom of students and teachers all over the world or consulting with a doctor face-to-face- just by putting on goggles in your home.”

If Zuckerberg’s $19 billion purchase of WhatsApp did not send a clear enough message that Zuckerberg will stop at nothing to acquire technology that is shaping the future, his acquisition and vision for Oculus should leave no doubt.

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Google Acquires Nest Labs for $3.2 Billion

By: JOE FERRARI    July 13, 2014 

Google’s recent acquisition of Nests Labs for $3.2 billion (cash) illustrates Google’s clear intention to begin making home products. The deal is Google’s second largest acquisition and represents yet another iconic play in Google’s attempt to broaden itself from the search advertising business.

In My Opinion, this acquisition is Google’s attempt to get ahead in the smart-home industry. It’s just a matter of time before door locks, windows, lights, and other home appliances become “smart” devices. The only question is who will get there first – Google, Apple, Amazon, etc..

Venturebeat reported just last January that Nest Labs raised $80 million dollars in funding and was valued at $800 million dollars. The company was rumored to be pumping out nearly 1 million products a month in sales, which clearly led to a skyrocketing valuation.

If the $3.2 billion sticker didn’t blow your mind, then the ROI for venture capitalists Kleiner Perkins Caufield Byers and Shasta Ventures will.

Techcrunch reports that KPCB was Nest’s biggest investor, and was able to invest $20 million across Series A and B rounds. As for a return on that investment? The $3.2 billion cash price Google paid for Nest will generate a 20X return for KPCB, nearly $400 million.

As for Shasta, Techcrunch reports that a source familiar with Google’s deal to acquire Nest said the acquisition should pull in $200 million or more. 

The articles on this blog are those of the author individually. Nothing on this blog is to be construed as legal advice and is not meant to be so. If you have legal problems, please hire an attorney and consult with him/her. Do not rely on anything written in this blog for legal advice. Everything written here is my own opinion. 

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