Business software maker Informatica has just sold itself for $5.3 billion to private equity firms Permira Funds and Canada Pension Plan Investment Board (CPPIB).
This means that Informatica shareholders will get $48.75 per share in cash. But the sale does represent a failure by Infomatica to see off a buy out.
Activist hedge fund Elliott Management has an 8 percent stake in Informatica in January and said it was speaking to the company about ways to maximize shareholder value. In fact word on the street was it was thinking of buying it.
Informatica has been looking to hire financial advisers to help it defend itself from Elliott, after failing to sell itself in January.
Jesse Cohn, head of U.S. equity activism at Elliott said that the hedge fund supported the new deal.
Informatica helps companies integrate and analyse data. It counts Western Union, Citrix Systems, American Airlines Group and Bank of New York Mellon among its customers.
The outfit competes with Tibco, which was taken private for $4.3 billion in December by private equity firm Vista Equity Partners.
“Informatica … is better positioned (than Tibco) to benefit from the adoption of cloud technologies,” Mizuho Securities analyst Abhey Lamba wrote in a note on Monday which did not end up on his fridge.
Analysts have said the company’s shift to cloud and subscription revenue is pressuring margins.
Activist investor Elliott Management is trying to get data storage products outfit EMC to spin off its VMware virtualization software unit or merge with someone else.
The outfit penned a 13-page letter to the company’s board which was signed by portfolio manager Jesse Cohn and warned that EMC’s structure of combining several businesses obscured its enormous value.
Elliott, which has $25 billion under management, owns a 2.2 percent stake in EMC and said it was writing a letter to help inform EMC’s board on its “current review process” of how to maximize long-term value at EMC.
EMC’s “federation strategy” comprises a core data-storage unit, a virtualization software unit VMware, enterprise security business RSA and cloud-computing software maker Pivotal.
EMC held merger talks with HP recently that broke down. Elliott said the acquisition interest in EMC’s assets on the part of several large companies that make strategic sense.
So far, EMC has publicly said it plans to keep its company together. But pressure is building as other technology companies recently have been spinning off operations in an attempt to become more agile and capitalize on faster-growing businesses.