Filed under: Deals

Yahoo! Inc.’s (NASDAQ: YHOO) search deal with Google Inc. (NASDAQ: GOOG) is playing to blended reviews on Wall Street. Yahoo! shares were trading down 6.5% at $22 a share early in Friday’s session after tumbling 10% on news that the company had broken off all talks with Microsoft Corp. (NASDAQ: MSFT).

Market analysts saw good and bad in Yahoo!’s new search deal with Google, which will place Google’s paid search results next to Yahoo!’s in the U.S. and Canada. Yahoo! said it anticipates the new revenue-sharing agreement to generate earnings of $250 million to $450 million during the first 12 months of the deal.

Though the two companies have structured the deal in an effort to appease antitrust regulators, a business agreement between the top two leaders in search advertising will undoubtedly draw scrutiny. Cowen & Co. analyst Jim Friedland anticipates Microsoft to immediately begin lobbying against the deal in Washington, although he expects that the transaction will pass muster with regulators “since the market — not Google — determines keyword pricing.”

Continue reading at TechConfidential.com.

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Filed under: Raising money, Engagements, Private equity industry, Investments

Back in May, there was word that a new commercial finance company called Tygris Commercial Finance Group was going to set a record with a $1.75 billion capital raise.

This morning, I received an email from a PR firm and then saw the press release. On June 6, Tygris closed with more than a $2 billion raise, setting an even higher record than expected.

Tygris is a commercial finance company that provides liquidity and growth capital to middle market companies throughout North America. Tygris has three commercial finance businesses: corporate finance, equipment leasing and asset finance, and small ticket leasing. Tygris has offices in Chicago, Stamford, CT and Parsippany, NJ.

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Filed under: Deals

Perhaps on-demand customer relationship management software company NetSuite Inc. (NYSE: N) is taking a page from its majority owner’s strategic playbook.

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 buy 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.

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Filed under: Deals, Shareholders, Value and lack thereof, Public or private?

Invitrogen Corp. (NASDAQ: IVGN) has announced a $6.7 billion cash and stock acquisition for Applera’s Applied Biosystems Group (NYSE: ABI). The breakdown is 45% percent in cash and 55% in stock.

Invitrogen Corp. will pay $38.00 per share between the cash and stock, compared to yesterday’s close of $32.44 and compared to the $37.67 52-week high. After the deal closes, it sees fiscal and calendar year 2009 organic revenue growth in the mid-single digits.

The company says that the combined operations will have annual sales of $3.5 billion and is expected to be neutral to slightly accretive to Invitrogen’s earnings per share the first year after close and significantly accretive in year two.

Continue reading the terms and condition implications at BioHealthInvestor.com.

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Filed under: Deals, KKR

The disk drive business isn’t exciting. But it does generate nice cash flows.

Over the weekend, KKR announced that it is buying Unisteel, which is a disk drive component developer in Singapore. There were other bidders at the table, such as the Carlyle Group, TPG, and Bain Capital.

The price tag: $578 million.

Unisteel is listed on the Singapore exchange. Because of low trading volume, there are several bargains to pick from, which should be attractive to private equity players.

From a strategic standpoint, the Unisteel deal is another sign of the consolidation in the global disk drive market, in which scale is incredibly important.

Interestingly enough, KKR purchased another disk drive operator, MMI Holdings, about a year ago. So, by combining MMI and Unisteel, there should be some juicy cost savings.

Moreover, it looks like KKR will continue to focus on Asia. After all, the firm recently raised a $4 billion fund that is focused on the region.

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

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Filed under: Deals

Microsoft Corp. (NASDAQ: MSFT) CEO Steve Ballmer Tuesday evening didn’t say a whole lot about his company’s pursuit of Yahoo! Inc. (NASDAQ: YHOO), but he did reemphasize the critical role on the web advertising played in the attempted takeover.

Ballmer, talking at the AeA Technology for Government dinner in Washington Tuesday, said the “fundamental driver” behind the company’s pursuit of the search giant was the need to “accelerate our moves to get scale in online advertising.” In a speech geared toward the 700 or so government contractors, representatives and IT professionals in the audience, Ballmer more broadly laid out how far technology has come and where he sees it going. The online advertising market, he said, will likely get “turned on its head” in the next 10 years.

The speech was closed to press questions, but the latest reports have Microsoft and Yahoo! back in negotiations on a deal after Microsoft yanked its $44.6 billion bid in May, and the two are talking about some sort of combination short of an outright acquisition.

Continue reading at TechConfidential.com.

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Filed under: Deals, Value and lack thereof

Sopra Group has reached an agreement to acquire Tumbleweed Communications Co. (NASDAQ: TMWD) via its subsidiary Axway. Sopra’s Axway will acquire all the outstanding Tumbleweed stock in a cash transaction valued at $2.70 per share.

The acquisition is subject to regulatory approval and subject to Tumbleweed stockholder approvals, and is expected to close in the third calendar quarter of 2008.

Tumbleweed provides Secure Content Delivery Solutions to more than 3,300 customers in various industries including financial services, healthcare and government. Together, Axway and Tumbleweed will offer integrated collaborative business solutions to more than 11,000 customers globally. Sopra Group intends to merge the businesses of Tumbleweed with those of its subsidiary, Axway, a leading global provider of collaborative business solutions which reported fiscal 2007 revenue of €145 million ($218 million) and a 10% EBIT margin.

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Filed under: Deals, GS Capital Partners, Private equity industry

As usual, private equity funds are getting creative in dealing with the challenging times. In fact, there are signs of a pick-up in the space, according to an in-depth piece in TheDeal.

Let’s face it, private equity was a massive engine of fees for Wall Street. For example, last year Goldman Sachs (NYSE: GS) snagged $1.5 billion in advisory fees for such deals.

But, as of now, the fee machine has come to a near halt. In fact, investment banking fees from private equity sponsors have plunged a staggering 77% in the first quarter of this year.

So, what to do? Well, interestingly enough, private equity firms are thinking small. That is, the deal size is apt to range from $1 billion to $2 billion. Such deals are much easier to pull off when there is a credit squeeze.

What’s more, Wall Street will look at advisory assignments for sovereign wealth funds, which are starting to take on private-equity style of deals. Oh, and we’ll see lots of growth in dealmaking in Asia and the Middle East.

All in all, these are positives. However, it really doesn’t replace the highly lucrative fees for private equity transactions.

Basically, to see larger buyout activity, there will need to be a return of collateralized loan obligations (CLOs). Unfortunately, it’s something that hasn’t happened so far — and is not likely to return until banks repair their balance sheets and get more comfortable taking on increased risk.

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

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Filed under: Deals, Engagements, Value and lack thereof

Bristol-Myers Squibb (NYSE: BMY) has entered a definitive merger pact where it will acquire Kosan Biosciences Inc. (NASDAQ: KOSN). Bristol-Myers Squibb will pay $5.50 per share in cash for each share of Kosan. The biotech’s stock was only at $1.65 yesterday and its 52-week trading range is $1.28 to $6.49.

This will translate to a purchase price of approximately $190 million after deducting Kosan’s projected net cash balance at June 30, 2008. The deal has also been unanimously approved by the boards of directors of both Bristol-Myers and Kosan.

The acquisition of Kosan will enhance Bristol-Myers Squibb’s pipeline will get to enhance its pipeline with compounds in two important classes of anticancer agents, called novel Hsp90 (heat shock protein 90) inhibitors and epothilones.

You can read more about the full terms and more importantly what the real acquisition is about in the full story at BioHealthInvestor.com. This is an important deal despite the small size of Kosan as it could create a game changer in smaller biotech premium mergers.

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Filed under: Deals

Microsoft Corp. (NASDAQ: MSFT) CEO Steve Ballmer isn’t providing much in the way of new information behind the high stakes game of Deal or No Deal being played with Yahoo! Inc. (NASDAQ: YHOO).

Appearing at The Wall Street Journal’s D: All Things Digital conference on Tuesday, Ballmer said the company was in talks “about other things with Yahoo!” after its efforts to acquire the company failed. He also stated the software maker is not “re-bidding” for the company, while noting that “we reserve the right to do so.” In other words, everything is still on the table.

Ballmer can afford to play coy as the pressure remains on Yahoo! to come up with alternative to an outright buy of the company and to pacify angry shareholders. Yahoo! CEO Jerry Yang and president Susan Decker are scheduled to appear at the conference this day and will have to defend their actions throughout the Microsoft saga. But anticipate them to be just as coy about the status of negotiations with Microsoft.

Continue reading at TechConfidential.com.

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