Dear Friends of GrowthPoint,
We hope you had a nice summer! After a difficult Q2, this quarter saw stocks recoup their losses despite sluggish growth in employment and business investment. The technology M&A market saw a surge in July, with over $20 billion in reported deal value, but activity is down from 2011 levels. We had a busy quarter at GrowthPoint, closing 2 transactions and strengthening our globalfootprint with 2 new offices. We have summarized these events as well as recapped a handful of the key deals from this quarter. Feel free to visit our website at www.GrowthPointPartners.com to learn more about our growing team, hear from our past clients, or reach out directly to us. Have a wonderful quarter!
GrowthPoint Opens New Offices in London & Tel Aviv
With the opening of new offices in Europe and Israel, GrowthPoint Technology Partners has expanded its physical presence to better interact with international enterpreneurs, partners, and acquirers. Over 40% of GrowthPoint’s clients have had international origins and these offices give the firm a local presence in key international technology centers.
The new offices complement GrowthPoint’s Silicon Valley headquarters, where the firm’s partners have executed hundreds of transactions and built longstanding relationships with the region’s top technology acquirers.
Markus Salolainen has joined GrowthPoint Technology Partners UK Limited as Managing Director to lead the new European operation and London office. Markus joins GrowthPoint from Arma Partners where he was Senior Managing Director focusing on mobility and communications companies.
Adoram Gaash will head up our new Israeli practice in Tel Aviv, leveraging his extensive operational and investing background in technology.
GrowthPoint advises Open Kernel Labs on its sale to General Dynamics
OK Labs is a leading supplier of virtualization software that is used in securing communications, applications and content in mobiledevices. Their software enables the secure separation of corporate data and applications from the user’s personal data that is stored on the same device. OK Labs’ software is deployed on more than 1.6 Billion government and commercial devices worldwide. It supports a bring-your-own-device, “BYOD”, environment, allowing smart phones and other portable computing devices to be used securely for both business and personal use. The software is also used for virtualization in automotive infotainment systems. The acquisition will enhance General Dynamics’ ability to meet the growing needs for secure computing and communications on commercial handheld devices, which are increasingly beingused by the military and government organizations.
Growthpoint advises Distra on its sale to ACI
The integration of ACI and Distra technologies will enable financial institutions, processors and retailers to enhance the flexibility and performance of their existing payments infrastructure to address market needs, such as mobile, social channels and payment services hubs. In addition, this acquisition will enable ACI’s payments products to integrate more tightly with customers’ enterprise architectures, reducing their total cost of ownership. The Distra Universal Payments Platform delivers a fault-tolerant, Service-Oriented Architecture (SOA)-based payments platform that helps to significantly reduce the risk and cost of payments transformation without compromising security, performance, scalability and reliability. Customers will benefit from the combination of ACI’s trusted, reliable and high-performance payments infrastructure with Distra’s Universal Payments Platform for added business agility and significant reduction in development time for new features.
VMWare makes play for next-gen networking technology, acquires Nicira for $1.26B
Nicira’s pioneering technology offers enhanced, programmable control over networks, alleviating bottlenecks and changing networking from the traditional mainframe model of expensive hardware to a software-defined environment. This acquisition validates the networking software space and opens up a large, long term market opportunity for VMWare.
Oracle acquires software defined networking company Xsigo for approximately $220M
SDN receives another endorsement with the lofty multiple paid for Xsigo. The company’s software connects any server to any network or storage device in real time, without the complexity of cards, cables and switch ports. The explosion of cloud-centric applications combined with the efficiency generated by virtualization has produced significant interest in this area.
Sony buys cloud gaming firm Gaikai for $380M
This acquisition represents Sony’s attempt to establish a footprint in streaming games and expand beyond console games. Gaikai’s platform enables users to run full videogames, such as The Sims, FIFA Soccer, and Mass Effect, without having to download large software packages. Sony may even potentially utilize Gaikai’s network platform to stream PS3 content to other devices, such as the XperiaPlay phone or Sony Smart TVs.
Google acquires social marketing firm Wildfire for rumored $250M
Wildfire gives Google a presence in social media advertising, which previously lost out on Wildfire’s competitor, Buddy Media. Wildfire, which focuses on Facebook marketing, has expanded to 400 staff and 16,000 clients in just 4 years, highlighting the increasing emphasis marketers place on social mediaadvertising. This acquisition enables Google to compete with Facebook for advertising revenue, as the trend towards social media advertising threatens to erode Google’s traditional business of search advertising.
Apple beefs up mobile security, pays $356M for AuthenTec
AuthenTec develops fingerprint sensor chips for mobile and computing devices that are used for security and identification. This technology has 2 major potential applications for Apple. First, it could enable IT managers to quickly secure and authenticate the iPads and iPhonesthat employees have using more and more frequently for work purposes. It is also likely to offer security for Passbook, Apple’s digital wallet expected to be a part of iOS 6. Fingerprint input would likely be required to verify payments, ensuring that a lost or stolen device could not be defrauded.
Dell moves to strengthen nascent software group, pays $2.4B for Quest Software
Quest complements Dell’s recent acquisitions of SonicWALL and Wyse, as the company seeks to expand its software offering amidst declining revenues from traditional hardware business. Quest specifically provides capabilities in systems management, security, data protection and workspace management.
IBM spends $1.3B on talent management and HR software maker Kenexa
This acquisition follows a trend of acquisitions in the talent management space; SAP and Salesforce made similar moves with additions of SuccessFactors and Rypple, respectively. These firms encourage clients to embrace social business initiatives by harnessing the massive quantity of information generated from social networks and making the most of their human capital.