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After rebuffing PE firm, Captaris finds a buyer

Posted Sep 4th 2008 11:00AM by Tech Confidential (RSS feed)
Filed under: Deals

Under pressure from some of its largest shareholders to pursue a deal, document management firm Captaris Inc. on Thursday said it would be acquired by Open Text Corp. for $131 million.

At $4.80 a share, the purchase price is only slightly better than the $4.75 a share offer made by private equity firm Vector Capital on March 17, the same day Captaris announced it was exploring strategic alternatives. But Vector, which owns a 10.2% stake in Captaris, withdrew its offer on March 28, a week after the company said it would not preempt its review process to limit talks with the firm. Captaris also was under pressure from activist shareholder Emancipation Capital LP, which holds a 6.7% stake, to strike a deal.

Continue reading at TechConfidential.com.

What's going on with the Corel buyout?

Posted Jul 9th 2008 11:00AM by Tom Taulli (RSS feed)
Filed under: Deals

Back in late March, Corel Corporation (NASDAQ: CREL), a provider of productivity software, received a buyout offer from its largest investor, Vector Capital, which owns 69%.

What has happened since then? Well, on Corel's Q2 conference call, the company talked about the outstanding offer. The board has formed a special committee and is evaluating matters. Unfortunately, there was no more information on the matter (and no indication when there might be some more details).

Yet, in the meantime, Corel continues to focus on the business. Revenues in the quarter increased from $65 million to $67 million. Net income was $930,000, or $0.04 per share. What's more, adjusted EBITDA was $14.9 million.

Corel has been successful with a variety of drivers. For example, the company has been savvy with its M&A, such as with its deals for JASC, WinZip and InterVideo. What's more, Corel is getting lots of traction in emerging markets. There is also growth in the company's new Blu-Ray graphics offerings.

As for fiscal 2008, Corel expects revenues of $263-$275 million, with net income of $8.5-$13.5 million.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Another private equity bid gets snubbed (CAPA)

Posted Mar 28th 2008 9:29AM by Jon Ogg (RSS feed)
Filed under: Management, Shareholders, Value and lack thereof, Public or private?

After the Captaris Inc. (Nasdaq: CAPA) rejection of a $4.75 per share buyout offer from private-equity firm Vector Capital, the deal has been killed and has been responded to in a formal letter. This merger was noted as having represented a 36% premium.

Vector Capital sent a letter to the Captaris Board of Directors emphasizing their disappointment and surprise at the rejection despite the approval by major shareholders for the transaction. The letter also made very clear that Vector's $4.75 offer and other terms have since expired and should not be considered in Captaris' search for superior offers.

By now we have gotten used to deals blowing up on the larger companies. But the market cap on this deal is only $110 million. The problem is that Captaris has recently traded over $6.00.

The Board of Directors would have potentially faced a shareholder revolt or suit had they approved this deal. That doesn't mean anything is going to be that much better, but sometimes companies can't fold just because they have an offer.

Club deals get a boost in federal court

Posted Feb 26th 2008 12:00PM by Zac Bissonnette (RSS feed)
Filed under: Taxes and regulations

In private equity circles, a club deal is a situation where two or more buyout shops pool their resources to acquire a company. But these deals do not come without controversy.

Vector Capital and Francisco Partners were sued after they agreed to do a buyout together -- after the two had been bidding against each other for the target company. The lawsuit alleged antitrust violations but a federal court in Seattle tossed out the suit, saying that two firms bidding together did not constitute unfair competition because the field of companies that buy other companies is so broad.

In the decision, Judge Richard Jones wrote that their offer was accepted not because of collusion but because of "lack of market interest in WatchGuard," the company that was acquired.

According (subscription required) to The Wall Street Journal, "the decision will likely be cheered by the buyout industry, which has been under antitrust scrutiny regarding joint bids and club deals. In 2006, the Department of Justice opened an inquiry into possible anti-competitive behavior related to club deals that were all the rage at the peak of the buyout boom."

Regulatory openness to club deals could give a boost to the weakened buyout market.

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