Sector-specific
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I found Prism Corporate Broking a great help in making this first acquisition. Prism identified a number of suitable acquisition targets, qualified them and then made the first critical approach. This, coming from a third party, made it feel less threatening to the vendors and gave greater flexibility to our negotiating position throughout the transaction. We received no nonsense advice and are now working together on the next one!
Ian Hickson – Abbey Liftcare
We are still seeing particular interest in certain areas of the market – security being one of them. Perhaps the most notable transaction was TA Associates acquisition of 25% of AVG Technologies for $200m. The past month also saw ScanSafe go to Cisco Systems for $183m.
There has been a number of interesting transactions much closer to home also. For example, in the health care arena Advanced Computer Software has acquired Healthy Software who specialise in software for healthcare management. Also, Civica has acquired In4tek, a software developer to the health and social care sectors.
Interestingly, 3i, which has a controlling stake in Civica, also owned a stake in In4tek, where it backed a management buyout in March 2000.
A number of cross boarder transactions of note include Ultra Electronics Holdings plc’s acquisition of the US communications security software developer, Scytale Inc, for up to $7.3m. Distribution group Premier Farnell plc acquired German engineering software company CadSoft Computer GmbH and First Derivatives plc acquired a US data management systems company, Reference Data Factory, for up to $10m.
In the telecoms arena the most notable player must be SpririTel plc who acquired Edge Solutions for up to £4.8m and ADK Communications for £1m. Both of these voice and data services acquisitions were announced in early November. The month also saw Opal Telecom (the business division of Carphone Warehouse) acquiring fixed line and broadband services company, UK Telco.
Clearly the high profile deal in this area was Google’s acquisition of VoIP start-up Gizmo5 for around $30m. Gizmo5 were until very recently in talks with Skype but the settlement of Skype’s IP litigation would have significantly diminished Gizmo5’s value to them.