M&A in tele: (see xo) what about us come on.."
WEBLOG UPDATE
17 November, 2005 3:29PM EST
More M&A to Round Up
Jay Pultz VP Distinguished Analyst
Nokia is acquiring Intellisync for about $430 million. Intellisync makes software for mobile e-mail and data services. Nokia, Motorola and others are seeking to establish stronger competitive positions relative to Research In Motion's highly popular BlackBerry e-mail devices and services.
Oracle is acquiring Thor Technologies and OctetString, two security software companies in identity management. The products will be incorporated into Oracle's Fusion Middleware suite. (Oracle also acquired identity manager Oblix several months ago.)
The Wall Street Journal reports that SES made an unsuccessful $1.1 billion bid for satellite operator New Skies several weeks ago. The saga continues here (see prior posts); this is at least the third company with a reported interest in acquiring New Skies. I do expect the company to get acquired, however, as this segment, like many others, is rapidly restructuring and consolidating.
PREVIOUS POSTS
15 November, 2005 5:38PM EST
An M&A Roundup
Jay Pultz VP Distinguished Analyst
Announced Deals
In a continuing trend, corporate networking company Enterasys has agreed to be acquired by certain private equity firms for $368 million. Enterasys has recovered from a 2002 financial scandal: In its most recent quarterly earnings report, Enterasys reported 5 percent revenue growth and positive cash flow. Enterasys continues to appeal to tech-savvy companies looking for a partner that will work closely with them at an engineering level. Backing from the equity firms should help resolve viability questions - but I expect the buyout companies will likely relaunch Enterasys as a publicly traded company once it has greater financial strength.
Juniper is buying Funk Software for $122 million - continuing Juniper's strategy of adding higher-value functions to its products (see prior posts). Funk addresses security in the mobile/remote access arena. Juniper's acquisition strategy is beginning to look like a scaled-down version of Cisco's approach - that is, acquire small companies as an adjunct to internal R&D, and integrate the acquired companies' networking intelligence into Juniper's products.
In an unusual move, XO's fixed-line assets are being sold to a buyout firm for $700 million. (XO had paid $656 million to buy Allegiance last year; hence, the overall company has a pretty low price tag.) XO will keep its LMDS wireless licenses to go after the hot wireless broadband market. Right market, wrong technology. (I had speculated several months back about an XO/Qwest combo - see my prior post; ownership by a buyout firm does not necessarily mean that's the last we will see of XO in the M&A space.)
More wireless consolidation: Telstra is merging its CSL operation with New World Mobile Holdings - creating Hong Kong's largest cellco.
Calix Networks is acquiring Optical Solutions to add GPONs (gigabit passive optical networks) to its portfolio of access technologies.
Deals We Are Tracking
Yahoo! says that it is no longer interested in AOL (see prior post).
The Wall Street Journal (WSJ) reports things are still moving along for Denmark's TDC to be acquired by a private equity group, but no "white smoke" yet (see prior posts).
WSJ also reports that a deal for CSC is stalled over issues concerning the future structure of the company if Lockheed Martin and buyout companies are successful in acquiring CSC (see prior post).
Sprint Nextel has hired Lazard to value Nextel Partners. Sprint and Nextel Partners are in strong disagreement here (see prior posts).
11 November, 2005 4:22PM EST
AT&T's CEO Dorman Will Soon Be Gone From the "New" AT&T
Jay Pultz VP Distinguished Analyst
As expected, SBC has announced that Dave Dorman will leave the combined SBC-AT&T after a short transition period. So will all of Dorman's direct reports - with the exception of AT&T's chief counsel, James Cicconi who is slated to take charge of legislative affairs for the merged companies. This announcement follows a similar announcement by Verizon concerning its acquisition of MCI (see my October post). If it wasn't clear before, it is clear now that these megadeals aren't "mergers of equals" but a purchase of one company by another. I believe the wholesale early loss of these executives is an error. AT&T and MCI executives have experienced the competitive realities of the corporate marketplace to a level that most SBC and Verizon executives have not. In the AT&T-SBC deal, I find the loss of AT&T's CTO and CIO Hossein Eslambolchi a particularly bad sign. Eslambolchi can be credited with a ! strong technology vision for AT&T; I wonder now about the future of AT&T Labs and how innovative the new company will be (see John Mazur's 4 November post). However, it's the folks at the next levels down who will have the biggest impact on Gartner clients. The news so far isn’t good news - but let's wait and see what happens with the next round of organizational announcements.
10 November, 2005 5:09PM EST
Microsoft Will Expand Its Telephony Capabilities by Acquiring media-streams.com
Bern Elliot Research VP
Microsoft's acquisition of media-streams.com is not significant in and of itself, but we see it as another indicator of Microsoft's advance into the enterprise telephony market. The acquired company offers a small-company desktop IP telephony solution with several interesting features, including:
Click-to-call from desktop names and directories
A full set of phone functions, including transfer, conferencing, music on hold, forwarding, callback and "absence indicator"
Application integration via TAPI (Telephony Application Programming Interface)
Though Microsoft has not disclosed its plans, Gartner believes that, through this acquisition, the company seeks to improve Communicator's desktop telephony capability, integrate it with future releases of Office and add to its consumer products. By doing so, Microsoft will be able to offer a more-complete telephone solution for small and midsize businesses. (see also "media-streams.com Buy Adds to Microsoft's Telephony Products").
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