Back in early 2007, KKR Private Equity Investors -- along with Citigroup (NYSE: C) -- invested $700 million in Sun Microsystems (NASDAQ: JAVA). The investment structure was a convertible senior note (both firms split the investment).

And, just like many other private equity deals, KKR wrote down the investment -- by about $167 million. This was as of last year.

With billions in the bank and a broad technology platform, Cisco (NASDAQ: CSCO) has been fairly clear that a big priority is M&A. And this week, we got another deal: the $105 million purchase of Tidal Software.

Tidal develops sophisticated data center software solutions -- helping to manage diverse applications, such as from Oracle (NASDAQ: ORCL), SAP (NYSE: SAP) and Microsoft (NASDAQ: MSFT).

Of course, Tidal's business is a nice complement for Cisco, which is getting aggressive in the server market.

The Silicon Valley startup, formerly known as Acsera Corp., raised a $14.2 million Series B round in 2006, bringing its total at that point to $20.2 million. The company's investors include Sierra Ventures, 3i Group plc and Partech International. The six-year-old startup's technology helps manage and monitor Java- and service-oriented architecture-based enterprise applications that run customer portals, back-office systems and finances.

The company, which is 54%-owned by Oracle Corp. (NASDAQ: ORCL) CEO Larry Ellison, on Monday took a tentative step in that direction, announcing that it would pay $26 million in cash to acquire OpenAir Inc., a provider of automated professional services software. The purchase price is net of the 56-person startup's cash, NetSuite said.

OpenAir's on-demand software suite offers applications ranging from expense reports to work flow and resource management tools. Founded in 1999, the company has raised over $16 million from investors including Fidelity Capital, 3i Group plc, i-Hatch Ventures LLC and Rex Capital.

Continue reading at TechConfidential.com.

Oracle (NASDAQ: ORCL) had threatened to walk away from its $17 offer for BEA Systems (NASDAQ: BEAS) and it did. The larger company had set a 5 PM deadline yesterday for a response. "BEA shareholders should not assume that Oracle will renew its $17 per share offer in the future," Oracle said in a statement picked up by Reuters.

Adding to the pressure, BEA shareholder Carl Icahn has threatened a proxy fight if the company is not auctioned off. The company has lost most of its alternatives because no other firm would match the Oracle offer.

It appears that BEA gambled and lost. It must have believed that Oracle would raise it bid to lock in a deal for the company. The BEA board issued a statement saying that the company was worth $21. But no one seemed to buy that. The stock had not traded above $17 for about four years.

BEA is now left with few if any alternatives. Icahn may be able to force a sale of the company, but the only buyer would appear to be Oracle. In the meantime BEA shares are likely to take a sharp fall.

BEA Systems (NASDAQ: BEAS) was able to get Goldman Sachs (NYSE: GS) to suggest that the company is worth $21 a share. The stock has not traded that high in over four years. But, Oracle (NASDAQ: ORCL) has made a bid of $17, and the BEAS board wants to see if it can get more.

The plan does not appear to be working out. Oracle said that it would not pay extra money for the smaller company and will simply take its case to shareholders.

Reuters writes that "Oracle said BEA's price represented an 80 percent premium to its shares before activist shareholders started pushing for a sale of the company, and nearly 11 times BEA's revenue from software maintenance services in the last 12 months." If the BEAS shareholders do not push its board to take the offer, Oracle has threatened to move on.

BEA Systems has a problem. The number it has picked for valuing the company is arbitrary. The company's stock price before the Oracle offer does not support it. Shares changed hands in the $13 to $14 range. And, no other company has come along to even match? Oracle's $17 offer.

The BEAS board may be dooming a buyout and that would probably send shares back to their pre-offer lows. That kind of behavior often brings shareholder lawsuits and trouble that the company's management does not need.

BEA Systems ought to wise up and take the money on the table.

Douglas A. McIntyre is an editor at 247wallst.com.

BEA Systems (NASDAQ: BEAS), received a proposal on 10/12/07 from Oracle (NASDAQ: ORCL) to be acquired for $17 a share in cash. ORCL announced on 10/23 "ORCL has no interest in a long, drawn-out process to acquire BEAS. If the BEAS board refuses to execute an acquisition agreement and refuses to let their shareholders vote, then our $17 per share proposal to acquire BEAS will expire at 5 p.m. on Sunday, October 28, 2007." BEAS overall option implied volatility of 23 is below its 26-week average of 39 according to Track Data, suggesting decreasing risk.

Daily M&A Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

BEA Systems(NASDAQ:BEAS), a leading supplier of service-oriented architecture (SOA) and middle-ware software, received a proposal on 10/12/07 from Oracle(NASDAQ:ORCL) to be acquired for $17 a share in cash. BEAS closed at $18.20. BEAS shareholder, Carl Icahn, wants BEAS wants to be auctioned off. BEAS over all option implied volatility of 26 is below its 26-week average of 39 according to Track Data, suggesting decreasing risk.

Biogen(NASDAQ:BIIB) announced on 10/12/07 "that its Board of Directors has authorized management to evaluate whether third parties would have an interest in acquiring the company at a price and on terms that would represent a better value for stockholders." BIBB will report EPS on 10/23. BIIB November option implied volatility of 37 is above its 26-week average of 32 according to Track Data, suggesting larger risk.

Daily M&A Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Intercontinental Exchange(NYSE:ICE) closed at $157.76. ICE has been frequently mentioned as a potential consolidation candidate over the last 16-months. On 10/2/07 ICE reported September 2007 contract volume rose 33.7% compared to September 2006. ICE is expected to report EPS in October. ICE over all option implied volatility of 44 is below its 26-week average of 48 according to Track Data, suggesting decreasing price movement.

SAP AG(NYSE:SAP), a German software company, announced its $6.8 billion takeover of Business Objects(NYSE:BOBJ), a global provider of business intelligence software solutions BOBJ. Cowen says: "1) What other dilutive deals the company is considering further reducing ROIC? 2) Why SAP paid so much (relatively) for a company that announced 3Q earnings shortfall the same day it got bought, and 3) can the company integrate such a large acquisitions?"

Daily M&A Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Squeezing more decision-making power out of the data companies collect in the ordinary course of business is the most fertile ground for innovation in the information technology market today. Software and services companies have only scratched the surface. At the top of the software market Oracle acquired Hyperion and SAP acquired Outlooksoft, as market leaders see the need to have those arrows in the quiver. Services companies are hungry for consulting firms that focus on Business Intelligence because BI can rapidly grow the share of IT received from existing customers. BI is harder to offshore, requires substantial business acumen, and can drive major improvements in profitability and efficiencies. The M&A interest in BI-related software and services companies is hot first because the underlying commercial market for BI is strong today and will grow faster than the broader tech market. Given this strong commercial market environment, the backdrop of healthy public market valuations for tech, larger players and financial buyers such as private equity funds can and are being aggressive.

Do you also expect more VC activity? What about private equity?

You won't see any more investment in general BI software platform businesses. However, large opportunities remain for software companies that focus on vertical market solutions where analytics can yield hard dollar revenue increases or cost decreases. VCs are hungry for those types of businesses.

One company I like is Riverglass.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.