WSJ : Dell Reaches Deal to Sell Boomi to TPG, Francisco Partners

Dell Reaches Deal to Sell Boomi to TPG, Francisco Partners
Transaction values the cloud-based integration platform at $4 billion including debt

Dell Technologies Inc. DELL -1.57% struck a deal to sell its Boomi cloud business to private-equity firms Francisco Partners and TPG, part of a larger reordering of the PC and data-storage giant.

The transaction, announced Sunday, values the Chesterbrook, Pa., cloud-based integration platform at $4 billion including debt.

The Wall Street Journal had earlier reported that Dell was nearing a deal to sell Boomi to the private-equity firms.

Boomi, which Dell acquired in 2010, makes software that helps applications communicate with each other by transferring data between them. It is a player in a fast-growing market known as iPaaS, which stands for integration platform as a service. When a business makes a sale, it might need aspects of that sale to be reflected in other applications such as those that keep tabs on financial forecasts or maintain customer databases. Most business applications aren’t currently able to share data with one another without the help of software like Boomi’s.

In 2016, Francisco Partners teamed up with Elliott Management Corp. to acquire Dell Software Group, which included Boomi as well as the Quest and SonicWall businesses. Dell wasn’t interested in parting with Boomi at the time but has decided to do so now after a broader strategic review that resulted in the announcement last month that it would spin off its 81% stake in VMware Inc., according to people familiar with the matter.

VMware, a major player in the market for cloud software, has a market capitalization of nearly $70 billion, but investors have been frustrated, believing its value hasn’t been reflected in Dell’s share price. While Boomi is fast-growing, it doesn’t produce a lot of profit, the typical metric by which Dell’s shares are valued, the people said.

Investors have cheered Dell’s move to part with VMware, with the stock roughly tripling from its pandemic low in March of last year. The shares closed Friday at $98.33, giving the company a market value of about $75 billion.

Based in San Francisco, Francisco Partners focuses on partnering with technology companies. Founded over 20 years ago, it has made over 300 investments and manages more than $25 billion in assets.

TPG manages more than $91 billion in assets and has offices around the world. The firm is doing the Boomi investment out of its big buyout strategy, known as TPG Capital.

“Both of our firms have really distinguished ourselves in technology carve-outs,” DJ Deb, chief executive of Francisco Partners, said in an interview. “Dell was very focused on who was going to take care of their baby.”

In October, Francisco announced a deal to buy cybersecurity company Forcepoint from Raytheon Technologies Corp. and in November said it was buying the international business of automotive-software company CDK Global Inc. TPG bought Wind River and a majority stake in McAfee LLC from Intel Corp. , and it announced a deal in February to buy a stake in DirecTV from AT&T Inc.

Together, the two firms hope to continue to accelerate Boomi’s growth by investing more in the business.

“Software is eating the world,” said Nehal Raj, a partner at TPG who leads its investments in software. “The average enterprise has about 850 applications, and today, less than 30% of them actually talk to each other.”

FT : S4 Capital raises targets on advertising rebound

S4 Capital raises targets on advertising rebound
Media company founded by former WPP chief Martin Sorrell acquires Brazilian group

Sir Martin Sorrell raised profit targets at S4 Capital after a strong first quarter for the digital advertising company, which he said outpaced bigger groups such as WPP because it was unencumbered with “bad” businesses.

Account wins with Mondelez and BMW helped boost like-for-like revenues by 35 per cent in the first three months of the year, Sorrell said, leaving him “extremely optimistic” about the economic rebound in the coming year.

Launched a few weeks after Sorrell’s acrimonious departure in 2018 from WPP, the advertising group he led for 33 years, S4 has grown rapidly to equal almost a quarter of the bigger group’s market value.

Although it still generates a fraction of the revenues of WPP, S4 on Tuesday raised its target for organic profit and revenue growth for the year from 25 per cent to 30 per cent. S4 will raise bonds and aggressively deploy what it estimates to be £500m of “transaction firepower”.

“The pipeline for deals, as it is with [new] clients, is strong, probably as strong as it’s ever been,” he told the Financial Times. Sorrell on Tuesday also announced the acquisition of the Brazilian agency Raccoon, which specialises in digital search and data analytics.

Analysts at Morgan Stanley described it as a “very positive” trading statement, with Sorrell “noticeably more upbeat” about the year ahead.

Sorrell’s relations with WPP’s leadership remain rancorous. Last week WPP cancelled a planned share award to Sorrell after finding he leaked sensitive client information to the media while he was running the company.

Without going into details of the case, Sorrell decried the decision as “extraordinary”, “outrageous” and “driven by personal animus”. Asked whether he would be taking legal action to contest WPP’s allegations, Sorrell said he had left the matter with his lawyers.

After a battering through the pandemic, all the big advertising holding groups comfortably beat market expectations for the first three months of this year, with WPP leading the pack with organic growth of 3.1 per cent.

Sorrell dismissed the significance of the return to growth, arguing it merely reflected the low bar set by the dire performance during the early parts of the pandemic.

“Three per cent? When you were down last year? Come on,” Sorrell said. “You know what the problem is. It is like the banks after the great financial crisis,” he added, referring to the traditional advertising work still done by big holding groups. “There is a good bank and a bad. And their good banks are very small in relation to their bad banks, that’s the problem.”

Shares in S4 rose about 2.5 per cent in morning trading, giving it a market capitalisation of about £3.1bn.

S4’s share price was hit earlier this year by privacy-related changes introduced by Apple and Google, which were transforming the use of tracking in digital advertising. Sorrell said the uncertainty created by the changes would ultimately benefit S4 as clients sought guidance on how to navigate the market.

WSJ : U.K. Open to U.S. Proposals for Global Minimum Corporate-Tax Rate

U.K. Open to U.S. Proposals for Global Minimum Corporate-Tax Rate
Treasury chief says proposal needs to go along with a fairer split of tax take from tech giants

LONDON—The U.K. is open to U.S. proposals for a global minimum corporate-tax rate, provided that it goes hand-in hand with a fairer split of the tax take from U.S. tech giants, U.K. Treasury Chief Rishi Sunak said.

Mr. Sunak’s remarks Tuesday at The Wall Street Journal’s CEO Council Summit highlight the potential for agreement on global tax rules in stop-start talks among dozens of nations that are scheduled to wrap up this year.

Talks had floundered for years and were disrupted by the pandemic, but received fresh impetus last month when the Biden administration offered new proposals on taxing multinationals based on their size and profits.

The discussions are being held under the umbrella of the Organization for Economic Cooperation and Development. Consensus isn’t guaranteed, with small countries such as Ireland voicing concern that they would be at a disadvantage to larger economies if they couldn’t compete on tax.

Mr. Sunak said London is receptive to a U.S. proposal to set a minimum corporate tax rate world-wide to limit the opportunity for globe-trotting multinationals to minimize their tax bills by basing themselves in low-tax jurisdictions, even if most of their activities are carried out elsewhere.

He said, however, that international tax rules are a layover from an earlier era and weren’t designed for the modern digital economy.

Britain last year imposed a special digital-services tax on the revenue search engines, social media services and online marketplaces generate from users in the U.K., reflecting public concern that companies such as Amazon Inc. and Google parent Alphabet Inc. weren’t paying enough tax.

The U.K. wants to replace that with “a multilateral solution that divvies up international taxing rights in a fair, appropriate manner” as part of any global deal on tax, Mr. Sunak said Tuesday.

“We’re open to having a package that involves both of these,” he said, adding that “the devil will be in the detail.”

France and Germany have also said they’d be supportive of such a package.

Mr. Sunak nudged up the U.K.’s corporate tax rate to 25% in March to help pay the bill for business-support packages and other coronavirus-related spending during the pandemic. The Biden administration has proposed raising the U.S. rate to 28%, and Treasury Secretary Janet Yellen has suggested 21% as the minimum corporate tax rate that should apply world-wide.

The U.S.’s latest proposals on taxing multinationals aren’t focused on the tech sector or others that have attracted politicians’ ire. That’s because U.S. officials in both parties view tech-focused approaches as targeted attacks on an industry where the U.S. dominates. But they would give European and other governments the ability to raise more tax revenue from the companies that have benefited most from globalization and digitization and have made further advances during the Covid-19 pandemic.

Mr. Sunak said the U.K. will host an in-person meeting of Group of Seven finance ministers in London on June 4-5.

FT : Tiger Global seeks $10bn for record tech venture fund

Tiger Global seeks $10bn for record tech venture fund
NY-based firm has been on a relentless dealmaking spree

Tiger Global Management, which has started the year with a blizzard of technology investments, wants to create another huge pool of capital for start-ups by raising a $10bn fund from investors.

So far in 2021, Tiger Global has taken part in 100 investment rounds in just over 120 days that have raised a total of $22.2bn for private tech companies, according to data from PitchBook.

Its latest venture fund comes just weeks after Tiger Global raised what eventually became a $6.7bn fund, after it initially sought $3.8bn. It told investors on a recent call that it would begin seeking the capital for its next fund, according to people briefed on the call.

The company’s relentless pace of dealmaking reflects the boom in private tech companies, with venture capitalists saying that Tiger Global has won the lead position in some financings by moving faster and offering higher prices than competitors.


“The opportunity set across public and private markets in our core focus areas of consumer, enterprise, and financial technology in the US, China, and India is very large relative to the amount of capital we manage and evolving at a rate that is often hard to comprehend,” Tiger Global wrote in a letter to investors in February.

Investors poured a record $69bn into start-ups globally during the first quarter, according to PitchBook data, encouraged by a string of acquisitions and public offerings that have paid large dividends to early investors.

Tiger Global’s new fund would be the largest raised by an independent fund manager for minority investments in technology start-ups, according to PitchBook. The firm declined to comment on fundraising.

Several other firms have looked to raise multibillion-dollar technology funds in recent years, as low interest rates push sovereign funds and other institutional investors into riskier assets.

SoftBank, the Japanese conglomerate, raised $100bn for its first Vision Fund focused on technology investments, with about one-quarter of that total coming from SoftBank itself.

Insight Partners, a venture capital and private equity firm, is seeking $12bn for the newest fund in its flagship strategy this year, according to one person familiar with the plans. Unlike Tiger Global, Insight also invests in buyouts that give the firm a controlling stake in companies.


Tiger Global’s private investment funds distributed $2.2bn in proceeds last year, after fees, according to a letter to investors. The distributions mostly came from acquisitions, such as Uber’s $4.4bn purchase of the delivery start-up Postmates and Intuit’s $8.2bn deal for the fintech company Credit Karma, Tiger Global said.

The private investment funds returned 26 per cent annually after fees from 2004 to 2020, according to a letter to investors. That compared with a 21 per cent annual return in Tiger Global’s hedge funds during the past two decades.

FT : Vivendi/Mediaset: tycoons’ TV tussle cost them too much time

Vivendi/Mediaset: tycoons’ TV tussle cost them too much time
The moral of the tale is that, when business imitates popular culture, investors lose out

The fight between Vivendi and Mediaset resembled one of those continental TV sagas that repeats Dynasty’s tropes, only with classier suits. The bankable stars were Vincent Bolloré of France and Italy’s Silvio Berlusconi. The final episode in the current series played out on Monday, ending with a truce.

On the face of it, Mediaset, a Berlusconi business, has won the peace. Vivendi, the media group controlled by Bolloré, has agreed to sell most of its 29 per cent stake in its Italian competitor over five years. The shareholding has been a thorn in the side of Mediaset.

In reality, both sides may be deemed the losers.

The spat started when a deal for Vivendi to acquire Mediaset’s pay-TV assets collapsed in 2016. The transaction would have brought two of Europe’s most powerful media groups closer together via crossholdings. They would have had a better chance of withstanding US streaming services such as Netflix. 

Bolloré then built his Mediaset stake as a means of influencing its plans. For example, Vivendi opposed a tie-up between the company’s Italian and Spanish businesses in 2019. When the transaction finally got past shareholders, it was blocked in the Spanish courts. 

Consolidation will be back on Mediaset’s agenda — along with plans to headquarter the business in the Netherlands. However, five years has been lost while the two tycoons tussled. US rivals with global reach have conclusively outflanked European commercial broadcasters.

The market now sees linear TV as a niche for investors skilled in valuing diminishing cash flows. Shares in Mediaset reflect that, with losses of 30 per cent since the spat started. Total returns at Vivendi have been 80 per cent, thanks largely to its ownership of Universal Music, whose prospects streaming has revived.

The dim outlook for TV is not preventing either Vivendi or Mediaset from trying to buy French station M6 from RTL. That battle will have fewer viewers tuning in. The moral of the tale is that, when business imitates popular culture, investors lose out.

Challenges : Le fabuleux business du concours HEC

Le fabuleux business du concours HEC

SERIE QUERELLES ET COUPS BAS DANS LES PREPAS [2/3] - Comme dans les multinationales, les professeurs de la Prépa Autrement reçoivent une prime de bienvenue et des actions du nouvel établissement. Et leurs salaires s'envolent.

Thibaut Guilluy est fils et petit-fils de médecins d'Etaples-sur-Mer, où Thiphaine Auzière a installé son cabinet d'avocate. Et c'est aussi dans ce petit port de la Côte d'Opale que Christophe Cadet habite avec sa mère quand il n'est pas à Paris. La connexion avec la belle-fille du président de la République et l'ancien directeur d'Intégrale est donc simple à établir pour que l'aventure de La Prépa Autrement commence. "Nous allons constituer la meilleure équipe du monde avec les professeurs qui vont le suivre", s'enthousiasme alors la frêle trentenaire.

LIRE AUSSIET LA FILLE DE BRIGITTE MACRON CRÉA LA PRÉPA AUTREMENTMercato fou et pratiques de multinationales
Commence un mercato endiablé entre les prépas hors contrat parisiennes. Aux profs d'Intégrale démissionnaires, comme Hédi Joulak et Kevin Besozzi, La Prépa Autrement offre une part du capital et une prime de bienvenue comme dans les multinationales. "Cadet a aussi cassé les prix du marché en payant ses enseignants 150 euros net par heure, s'étouffe un concurrent. C'est 50% de plus que la pratique habituelle." Mais son directeur affirme travailler bénévolement et vivre chichement. "Je dors quatre jours par semaine au sous-sol de l'immeuble, raconte-t-il. Je pars ensuite à Etaples rejoindre ma maman. "

Pourtant, malgré son allure déguenillée, Christophe Cadet dispose d'un petit magot, dont 400.000 euros qu'il vient d'obtenir du lycée Saint-Jean aux prud'hommes. Et à ceux qui hésitent à le rejoindre, il susurre qu'il a la présidence derrière lui.

Des avocats pour stopper un "débauchage organisé"
Pendant l'été 2020, une sale guerre s'installe dans ce petit monde très concurrentiel. Pour remplacer les transfuges partis à La Prépa Autrement, Intégrale recrute à Ipesup des enseignants renommés en prépa HEC. L'un d'eux n'hésite pas à faire des appels du pied à ses anciens élèves, jusqu'à leur expliquer comment se rétracter s'ils ont déjà payé leurs frais de scolarité. "J'ai dû leur envoyer des avocats pour débauchage organisé", peste Bertrand Léonard, le propriétaire d'Ipesup.

Cette prépa historique est réputée pour ses classes qui mènent aux grandes écoles, fréquentées par l'establishment. François-Henri Pinault et Delphine Arnault y ont étudié. L'établissement, qui jouxte le lycée Henri IV, attire ainsi près de 4.000 élèves par an qui viennent suivre des stages intensifs de maths ou de culture générale, pendant les vacances ou en cycle continu le mercredi et le samedi. Une activité lucrative.

La promesse d'intégrer les meilleures business schools
Or un autre concurrent surgit au même moment dans le paysage. Olivier Sarfati, auteur du livre Mes secrets pour intégrer HEC (éd. Dunod) et créateur de la prépa 100% en ligne MyPrepa, ouvre son école dans un immeuble du XVe arrondissement. Et ses méthodes commerciales font hurler ses concurrents. Sur les réseaux sociaux, il promet 100% de réussite dans le Top 6 des écoles de commerce et 75 % dans le Top 3. "Ces résultats portent sur une classe étoile de quatre élèves", fulmine Jacky Assayag, le directeur d'une autre prépa privée, Commercia, qui s'est fait piquer son meilleur prof de géopolitique par La Prépa Autrement. Après avoir envisagé de porter l'affaire en justice, il a choisi de contre-attaqu

>>> US Gapping down

Gapping down
In reaction to earnings/guidance:

  • ARCB -26.3%, BLDP -12.8%, IRBT -9.3%, SDC -8.4% (also experienced a systems outage caused by a cybersecurity incident), MAXR -8.2%, FRPT -7.1%, RCM -6.1%, SHO -6% (also suspends dividend on common shares), RACE -5.7%, MOS -5.1%, LGND -3.6%, ATC -3.5%, MBUU -3.1%, VRNS -2.5%, BHC -2.5%, SANM -2.1%, VNOM -2%, VMC -2%, ATCO -1.9%, SEDG -1.9%, HLIT -1.5%, CAR -1.4%, IAG -1.2%, GPN -1.2%, MLM -1%, XPO -0.7%, QGEN -0.7%, CMI -0.7%, RIG -0.6%, SAGE -0.6%

Other news:

  • BOOM -5.5% (announces 2.5 mln share offering; also files mixed securities shelf offering)
  • SYNH -3.9% (prices secondary offering of 7 mln shares of common stock by selling shareholders)
  • ASO -3% (stock offering)
  • MARA -2.9% (provides bitcoin production and miner installation update)
  • COO -1.3% (announces acquisition of obp Medical for $60 mln)
  • BTU -1.2% (new CEO)

Analyst comments:

  • ACI -3.5% (downgraded to Neutral from Buy at Goldman)
  • KR -2.5% (downgraded to Sell from Neutral at Goldman)
  • TEVA -2.2% (downgraded to Neutral from Buy at UBS)
  • LHDX -1.3% (downgraded to Mkt Perform from Outperform at William Blair)
  • CMC -0.9% (downgraded to Neutral from Outperform at Credit Suisse)
  • CCI -0.9% (downgraded to Mkt Perform from Outperform at Raymond James)
  • DG -0.7% (downgraded to Sector Weight from Overweight at KeyBanc Capital Markets)

>>> US Gapping up

Gapping up
In reaction to earnings/guidance:

  • IT +8.9%, REGI +8.8%, TRI +7%, HSC +5.6%, MYGN +5.3%, PLOW +4.5%, LNTH +4.3%, RGEN +4.3%, LEG +4.1%, CC +4%, CR +4%, NSP +3.8%, ARNC +3.7%, FI +3.5%, CBT +3.4%, RILY +3.4% (also declares $3 dividend, includes $0.50 regular and $2.50 special), LGIH +3.4%, CHGG +3.1%, UAA +3%, PINC +2.9%, VIRT +2.9%, CRSR +2.9%, CVS +2.7%, ETN +2.5%, CTLT +2.5%, NXST +2.4%, LPX +2.3%, KKR +2.2%, AGR +2%, KFRC +2%, BG +2%, COP +2%, MPC +1.7%, LTHM +1.6%, CRL +1.5%, FANG +1.4%, PFE +1.3%, AME +1.3%, RMBS +1.2%, ZI +1.2%, SU +1.1%, KMT +1.1%, BERY +1.1%, ETRN +1%, BR +1%, WMB +0.9%, APO +0.9%, WMG +0.9%

Other news:

  • BLRX +59.6% (reports "positive" top-line results from GENESIS Phase 3 trial)
  • VXRT +20.3% (reports data from oral COVID-19 vaccine Phase 1 study)
  • UFS +16.6% (Paper Excellence said to weigh potential acquisition bid for Domtar, according to Bloomberg)
  • TBBK +13.7% (to be added to S&P SmallCap 600)
  • PRQR +8.2% (ProQR Therapeutics and RTW Investments announce that Yarrow Biotechnology, a company newly created by RTW, has in-licensed exclusive rights to ProQR's antisense oligonucleotide technology to develop and commercialize potential therapies for an undisclosed non-ophthalmic target)
  • KYMR +6.9% (to present new pre-clinical data for KT0474)
  • GAIA +4.3% (stock offering)
  • UAA +3% (announces settlement with the SEC)
  • KKR +2.2% (KKR raises $18.5 bln for buyout fund, according to Reuters)
  • BNTX +2.1% (PFE/BNTX: FDA to authorize vaccine in adolescents 12-15 yrs old by early next week, according to NY Times)
  • FANG +1.4% (OAS to acquire Williston Basin assets from FANG for $745 mln; also stock offering)

Analyst comments:

  • CRNT +9.3% (upgraded to Buy from Hold at Needham)
  • NTNX +3.7% (upgraded to Overweight from Neutral at JP Morgan)
  • X +2.9% (upgraded to Outperform from Underperform at Credit Suisse)
  • CLF +1.9% (upgraded to Outperform from Neutral at Credit Suisse)
  • AAP +1.8% (upgraded to Buy from Sell at Goldman)
  • CCOI +1.8% (upgraded to Outperform from Neutral at Credit Suisse)
  • ON +1.1% (upgraded to Outperform from Neutral at Robert W. Baird)