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Meg Whitman Stepping Down as HPE CEO (https://goo.gl/9LGLsE)

We're sidestepping from #merger talk today and discussing an organizational change from a company that's been making headlines in the acquisition space for years - Hewlett Packard Enterprise. One of the most high-profile women in technology is calling it after six years with the company.

She will remain on the board and officially hand the reins off to the new chief, Antonio Neri on February 1st. An article in Data Center Knowledge described more about how Whitman changed the arc of the company:

Whitman, 61, took over Hewlett-Packard Co. after it suffered a series of missed targets amid rising competition under her predecessor, Leo Apotheker. She set about slashing jobs and dramatically resetting investors' expectations for how well the company could perform at a time when customers were adopting cloud computing services HP was ill-equipped to provide.

Notable achievements from Whitman include overseeing $18 billion in share repurchases and dividends and delivering a shareholder return of 89 percent.

You can check out the full article through the link above.

Cheval Capital: (https://goo.gl/b6mhYh)

#technews #HPE #technology +Frank Stiff

This post and its links are intended as general information only and should not be construed as advice nor an offer, solicitation, or recommendation with respect to any transaction. Where advice is necessary or appropriate consult with a qualified advisor. Cheval assumes no responsibility for the content of this post or its links nor duty to update them for changes in conditions or circumstances.
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DOJ Objects to AT&T Time Warner Deal (https://goo.gl/pCyAYn)

Last week news trickled out from the #telecom M&A space that the Department of Justice has raised an objection to AT&T's ownership of Turner Broadcasting. This deal is something of a blockbuster in the telecom space, as Turner also owns CNN, HBO, TBS, TNT, and Warner Bros among others.

A short article in Telecom Ramblings last week highlighted some of the potential implications of the DOJ's objection:

So the easy tack to take here is that the Trump administration would like nothing more than to cut fake-news CNN loose from its moorings. After all, before the election Trump came out against the combination quite early. But then things cooled down and it looked like regulators were just going through the motions one would expect from the merger-friendly Republican party.

AT&T may be ready to take its cause to court and could possibly use Trump's public words to hobble the government's case, but the options markets seem to think the game is over.

Interesting developments here, you can count on more updates as they become available. The full article is available through the link above.

Cheval Capital: (https://goo.gl/b6mhYh)

#mergers #ATT #Turner +10740950442921279846

This post and its links are intended as general information only and should not be construed as advice nor an offer, solicitation, or recommendation with respect to any transaction. Where advice is necessary or appropriate consult with a qualified advisor. Cheval assumes no responsibility for the content of this post or its links nor duty to update them for changes in conditions or circumstances.
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Amazon Sells Cloud Assets to Chinese Partner (https://goo.gl/9Yowxt)

Amazon has recently agreed to sell some of their #Chinese #cloud assets to a local partner. Beijing Sinnet Technology Co. is the buyer, the bill of sale includes servers and miscellaneous "operational assets" from AWS; Early reports from those close to the matter say the deal is worth approximately $302 million.

AWS' Chinese business has been stunted by the growth of rival Alibaba Group Holdings Ltd., which has taken over a healthy market share in both the cloud computing and data center markets.

An article in Bloomberg Technology has more:

Amazon, the global leader in internet computing, is vying for a slice of domestic spending on cloud services and gear that IDC estimates will reach $30 billion by 2021. But the U.S. company has to deal with laws introduced this year that mandate the storage of data within the country and bolster government control over the movement of information.

Amazon controlled more than 40 percent of the global market for public cloud services in 2016, well ahead of Microsoft Corp. and Alibaba, Gartner estimates. But like its peers, the company has had trouble making headway in China, which is dominated by local tech giants Alibaba and Tencent Holdings Ltd.

You can read more through the link above.

Cheval Capital: (https://goo.gl/b6mhYh)

#technews #cloudcomputing #AWS +Frank Stiff

This post and its links are intended as general information only and should not be construed as advice nor an offer, solicitation, or recommendation with respect to any transaction. Where advice is necessary or appropriate consult with a qualified advisor. Cheval assumes no responsibility for the content of this post or its links nor duty to update them for changes in conditions or circumstances.
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Sprint Shares Tumble After T-Mobile Merger Talks End (https://goo.gl/Ttfqe3)

While the #finance and #technology markets are constantly in-flux, the news of the breakdown of merger talks between Sprint and T-Mobile had a negative impact on Sprint's stock price. As we discussed earlier this week in our post here: (https://goo.gl/Ssy1V3) creating a situation where Softbank would retain a controlling stake was the main hurdle.

Sprint's shares declined 12% at $5.84

An article in Reuters provided more context:

The Altice partnership was not contingent on merger talks with T-Mobile failing, Robbiati said.

He also said comments by Sprint Chairman Masayoshi Son on raising capital expenditure to $5 billion to $6 billion annually, from $3.5 billion to $4 billion, was for the medium term and not for 2017.

Asked how Sprint would pay for the increase in spending, Robbiati said the company could fund it through cash, debt and borrowing against its spectrum, or wireless airwaves.

You can read more through the link above to the Reuters article.

Cheval Capital: (https://goo.gl/b6mhYh)

#technews #merger #Sprint +Frank Stiff

This post and its links are intended as general information only and should not be construed as advice nor an offer, solicitation, or recommendation with respect to any transaction. Where advice is necessary or appropriate consult with a qualified advisor. Cheval assumes no responsibility for the content of this post or its links nor duty to update them for changes in conditions or circumstances.
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Helpful Guide to Acquiring an Online Business (https://goo.gl/3Pm179)

Earlier this year, the #ChevalCapital team had the pleasure of sharing a blog post from Mark Daoust the owner of Quiet Light Brokerage. One question we get quite frequently centers around the acquisition of online businesses with the help of SBA loans.

Did you know that the Small Business Administration (SBA) will lend up to $5 million to businesses that meet specific eligibility criteria? This access to capital represents a significant value for those looking to acquire online businesses.

We discuss more about these requirements to be eligible for the SBA loan on the Cheval Capital blog. Here's a clip:

Currently, the SBA wants to see a debt to earnings ratio of 1.25:1 or better. In other words, for each dollar in loan payments, the business needs to make $1.25 in earnings. This ratio does change from time to time (it was 1.35:1 when we originally published this blog post in 2015).

Make sure you visit our website through the link above!

#technews #online #business #SBA +Frank Stiff

This post and its links are intended as general information only and should not be construed as advice nor an offer, solicitation, or recommendation with respect to any transaction. Where advice is necessary or appropriate consult with a qualified advisor. Cheval assumes no responsibility for the content of this post or its links nor duty to update them for changes in conditions or circumstances.
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A Monthly Digest of Our Content - November Edition
Cheval Capital: (https://goo.gl/b6mhYh)


Runaway IPO! MongoDB IPO Raises Valuation To $1.17 Billion (https://goo.gl/jgp87P)

#Analysts might be scratching their head reviewing the numbers posted by MongoDB recently. The open source company initially announced they would be asking $24 a share (Class A shares) during their IPO - ahead of the $20-22 range that Wall Street had originally forecasted.

Digital Realty Continues Expanding, Buys Chicago Property from Carter Validus (https://goo.gl/2uSxvp)

We are well into #fall, which means cooler temperatures across the nation but that hasn't slowed down Digital Realty's hot streak of acquisitions. Carter Validus recently agreed to sell the Ascent Data Center property to Digital Realty. The property is a 19-acre in the Chicago area, a notable supply-constrained part of the market. Ascent has continued to operate the property the multi-tenant property since the acquisition.

HashiCorp Secures $40 Million in Funding (https://goo.gl/sgoHVP)

The #cloud infrastructure #automation is becoming a popular target for investors lately. Today's post regarding San Francisco-based HashiCorp is a part of that trend, securing $40 million in funding to support their growing customer base.

Is Tech's "Winner Take All" System Spiking Company Valuations? (https://goo.gl/E6iXxZ)

2017 has seen its share of record #technology company #valuations, but at least one professor at NYU thinks the 'winner take all' system is making these valuations spike. The trend has been favorable for certain technology companies, like Uber for example which landed a valuation of $70 billion.

Datto and Autotask Merger, What Lies Ahead (https://goo.gl/r7yCtx)

With the end of 2017 on the horizon, the #mergers and acquisitions world does not seem to be showing any signs of slowing down. The combination of the business continuity vendor and an RMM/PSA software maker seem obvious, but the real benefits of the merger for customers remain to be seen.

Data Center IPO Could Be 3rd Largest This Year (https://goo.gl/ZpGuJp)

Switch, a quickly growing #datacenter provider has big things in mind when it comes to their upcoming IPO. At a valuation of $3.7 billion, the provider prices for their IPO could be $14 to $16 per share.

Hivelocity Acquires Rack Alley, Boosts Los Angeles Presence (https://goo.gl/q8Urjn)

Hivelocity, a #webhosting provider has announced the acquisition of IaaS provider Rack Alley. The deal provides a significant boost for their data center presence in *Los Angeles.

Google Purchases Cloud Management Startup Bitium (https://goo.gl/PpsQho)

#Google, or more specifically, parent company Alphabet that runs the Google Cloud business has agreed to purchase an identity management company called Bitium.

An Alternative Path To Public Ownership? (https://goo.gl/YGTEjT)

When you hear of a company going #public, that immediately (and appropriately) brings to mind an IPO. The process of setting up an initial public offering, is no small undertaking. These processes are complicated and require help from advisors and regulators. But could there be a way for specific companies, namely "unicorns" to go public without the risks associated with an IPO?

Fusion Reaches Agreement to Acquire Birch Communications' Cloud Services (https://goo.gl/ozKjch)

A recent #pressrelease from Marketwired announced that this deal will create one of the largest North American cloud services providers. Fusion (NASDAQ: FSNN) has reached an agreement.
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Datto and Autotask Merger, What Lies Ahead (https://goo.gl/r7yCtx)

With the end of 2017 on the horizon, the #mergers and acquisitions world does not seem to be showing any signs of slowing down. The combination of the business continuity vendor and an RMM/PSA software maker seem obvious, but the real benefits of the merger for customers remain to be seen.

Brooks Borcherding, the CRO at Datto gave some thoughts published in an article on Talkin' Cloud:

He expects a deepening of Datto's existing integration with the Autotask platform.

There might also be new ways to leverage an existing relationship where Datto customers receive Autotask Endpoint Protection as a perk of their subscriptions.

Patrick Burns, VP of product management added this:

"Both companies were doing really well on our own and have strategies that were effective," he said. "But once Vista saw the opportunity to put us together, it was just too undeniable to pass up."

While the terms of the deal were not disclosed, both parties remain optimistic the deal can close before the end of 2017.

You can read more through the link above to the full article in Talkin' Cloud.

Cheval Capital: (https://goo.gl/b6mhYh)

#technews #acquisition +Frank Stiff

This post and its links are intended as general information only and should not be construed as advice nor an offer, solicitation, or recommendation with respect to any transaction. Where advice is necessary or appropriate consult with a qualified advisor. Cheval assumes no responsibility for the content of this post or its links nor duty to update them for changes in conditions or circumstances.
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Ahead of IPO, Dropbox Seeks More Customers (https://goo.gl/PViwXi)

The recent launch of a cloud-based file sharing option by #Dropbox may help lure additional paying customers before the expected public share sale. The product is designed for business users and creative professionals to help streamline marketing and design projects.

Dropbox Professional represents an additional tier in the company's paid subscription programs.

Here's what The WHIR had to add about the upcoming IPO:

Dropbox could file its initial public offering documents as soon as this year, people familiar with the matter said in July. The San Francisco-based company is a major seller of software for file-sharing and synchronizing, but is trying to boost revenue by providing new programs that help workers create, edit, share and track work projects. It's a market that will put Dropbox even further into competition with companies like Google and Microsoft Corp.

You can read more through the link above.

Cheval Capital: (https://goo.gl/b6mhYh)

#technews #IPO +Frank Stiff

This post and its links are intended as general information only and should not be construed as advice nor an offer, solicitation, or recommendation with respect to any transaction. Where advice is necessary or appropriate consult with a qualified advisor. Cheval assumes no responsibility for the content of this post or its links nor duty to update them for changes in conditions or circumstances.
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Who Might Be Interested in Buying Interoute? (https://goo.gl/ngyF2s)

There was a #merger rumor floating around about European network and cloud infrastructure operator, Interoute, potentially seeking a sale. Those close to the matter reported that Credit Suisse and Evercore were brought in to assist with evaluation.

The company is currently owned in majority by the Sando family. Their network was constructed from assets accumulated during the dot-com crash. Recently, they had notable acquisitions of Vtesse and EasyNet.

Here is a bit more about the potential sale of Interoute from Telecom Ramblings:

In the first half of 2017, Interoute posted €354M in revenue and €79.6M in adjusted EBITDA while spending €36.1M in capex. As the EasyNet integration winds down, the company's EBITDA margins have risen up toward the 22% mark. The rumors indicate they'd be looking for a multiple of somewhere in the 7-10xEBITDA range, which puts the value of any potential deal at somewhere in the $1.5-2.0B range.

Potential buyers named in the article include Level 3, Zayo, Teliasonera, Colt and many others. You can check out more through the link above.

Cheval Capital: (https://goo.gl/b6mhYh)

#telecomnews #acquisitions #cloudnews +Frank Stiff

This post and its links are intended as general information only and should not be construed as advice nor an offer, solicitation, or recommendation with respect to any transaction. Where advice is necessary or appropriate consult with a qualified advisor. Cheval assumes no responsibility for the content of this post or its links nor duty to update them for changes in conditions or circumstances.
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Disappearing Revenue? (https://goo.gl/sDf4Pa)

Deferred #revenue is a tricky concept in the world of business, especially when it comes to the merger and acquisitions space. We wanted to discuss a blog post published on Cheval Capital's website today which aptly discusses some of the reasons it might not an attractive quality for prospective buyers.

While the revenue is not technically "disappearing" the GAAP standards (rules for US accounting) require that a buyer adjust their Deferred Revenue to a "fair value" - which is typically the cost of providing the service that underlies the Deferred Revenue.

DR is essentially a balance sheet liability created when a service is paid for in advance.

Our blog post goes into more detail:

So if the cost of providing the underlying service is 70% of the revenue, then on closing the value of Deferred Revenue goes down by 30% and all the revenue & income associated with it disappear for Income Statement purposes. The customers are still there and when they renew that revenue comes back at 100%.

This kind of revenue loss can have a big impact on loan ratios, earn-out payments, budgets, etc. and is best identified and dealt with prior to closing.

Follow the link above to our website for more information.

#merger #GAAP #revenue +Frank Stiff

This post and its links are intended as general information only and should not be construed as advice nor an offer, solicitation, or recommendation with respect to any transaction. Where advice is necessary or appropriate consult with a qualified advisor. Cheval assumes no responsibility for the content of this post or its links nor duty to update them for changes in conditions or circumstances.
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