There have been a few deals this year that make a lot of sense for the shareholders, but make very little sense for the acquiring private equity firm, despite the discounts: Broadvision’s acquisition by Vector Capital is one such. The second one is Golden Gate Capital’s acquisition of Blue Martini, presumably to merge with Ecometry, one of their other portfolio companies.
Both Broadvision and Blue Martini, as independent companies, belong in the ranks of the living dead. Blue Martini’s chance was to merge with Retek, which did not happen, and instead, Retek got bought by Oracle. Broadvision’s chance doesn’t exist, unless I am missing something big!
Make no mistake, both companies needed to go private. Sustaining the costs of being a public company for many of these sub-$100 Million concerns are rather unappetizing.
Nonetheless, it makes me wonder what Golden Gate Capital or Vector Capital have been thinking, or is it that skill-gap I wrote about earlier in display here? To make these two deals turn into anything that produces reasonable return, a very serious surgery will be required. I have a hard time believing that the two investment firms under discussion have the capacity for that sophisticated surgical procedures!