Mergers and Acquisitions

August 19, 2013

Alibaba buys into California eCommerce company

Chinese eCommerce giant Alibaba has continued its relationship with Yahoo and gained another foothold in California with its recent investment in ShopRunner, run by former Yahoo Chief Executive Scott Thompson, Shoprunner is an ecommerce firm based in San Francisco with existing relationships with many major brand names. They are growing fast with orders in 2012 increased two and a half times more than in 2011.

Alibaba, which is planning for an IPO later this year is reportedly paying $75 million for a minority stake in ShopRunner, While Mr. Thompson is no longer at the company, Yahoo owns almost a quarter of Alibaba so some relationship apparently persisted.

This is said to be one of many purchases Alibaba is making in advance of their IPO on the Hong Kong Stock Exchange, that is expected value the firm at $60-$100 billion. The move has not been without controversy. A Hong Kong journalist recently quit her job in a controversy over disputed remarks that Jack Ma, founder of the Alibaba Group, is said to have made in support of Beijing’s violent crackdown on Tienanmen Square protesters in 1989. Mr. Ma denies he said that but the newspaper is sticking to the story and it apparently caused quite a stir in Hong Kong.

Alibaba began in 1999 as a business-to-business portal to connect Chinese manufacturers with overseas buyers. It has since become the biggest eCommerce system in the world, with with sales more then Amazon and eBay combined. The planned IPO will likely secure its position as a global powerhouse in eCommerce for many years to come.

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July 30, 2013

Cisco buys Sourcefire for 2.7 billion in cash

Cisco Systems, the worlds biggest maker of networking equipment has agreed to acquire Sourcefire Inc., a cybersecurity firm, for about $2.7 billion in cash.

Sourcefire, based in Columbia, Maryland, builds security platforms including firewalls, intrusion detectors and malware protection that is used extensively by the U.S. Government and major corporations. The company was founded in 2001 and has grown into a major cybersecurity provider – last year it had revenue of over $200 million.

According to a report in Bloomberg Markets Watchlist, many of Sourcefire’s products are built on Snort, an open-source program developed by Sourcefire founder Martin Roesch. The system is used by most Fortune 100 companies and 30 of the largest U.S. government agencies to detect attempted attacks on their networks. Sourcefire’s business with the U.S. government is a “very valuable” part of the deal and will give Cisco more access to key federal cybersecurity decision-makers, according to Christopher Young, senior vice president of Cisco’s security group.

The deal is Cisco’s biggest since its $5 billion acquisition of NDS Group Ltd. last year and is thought to reflect a growing interest for companies that can help guard against computer-based attacks by governments and corporations.

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March 26, 2009

Huge demand for California bonds

The Sacramento business journal is reporting “huge” demands for California bonds: Investors were more enthusiastic about buying California debt than expected, putting in orders for $6.54 billion in general obligation bonds in a sale by the state Treasurer’s Office that ended Tuesday State officials had expected to sell $4 billion. The extra cash will allow officials to restart more stalled projects that were halted in December due to the state’s cash crisis. Treasurer Bill Lockyer’s office said there was “huge” demand from both individual investors and institutional buyers such as mutual funds. Officials have not determined which of 5,300 halted projects should be allowed to proceed. Until this sale, the tight credit market and the state’s prolonged budget crisis kept California out of the bond market for nine months.

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Yasheng Group seeking stock exchange listing

Agricultural holding company Yasheng Group reported a $76 million profit for 2008 as part of its goal to be listed on a major U.S. stock exchange, according to a report in the San Francisco Business Times. Yasheng Group is a Redwood City holding company focused on agriculture in China. It has about 15,000 workers. It owns seven agricultural businesses in China that grow products such as onions, potatoes, apples, alfalfa, flax, beets, wheat, apricots, sunflowers, beer barley and cumin. As part of its move towards a major stockmarket listing, Yasheng published its financial results for 2006 and 2007 in January. More on Yasheng Group seeking stock exchange listing

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August 14, 2008

Chevron will sell 2,000 Texaco stations in Brazil

San Ramon-based Chevron Corp. will sell 2,000 Texaco gas stations and some related businesses in Brazil for about $730 million. As reported in San Francisco Business Times:

Chevron agreed to sell the businesses to Ultrapar Participações S.A., based in São Paulo. The deal requires separating out Chevron’s lubricant and oil exploration businesses, which aren’t included in the deal. The separation will take until early 2009, according to Ultrapar. Pedro Wongtschowski is CEO of Ultrapar. The company will pay the price, which is subject to a working capital adjustment, out of its cash reserves.

Ultrapar is licensing the Texaco brand name for up to five years, during which time it will phase in the use of its own Ipiranga brand name. In this deal it will also get some equity in terminal operations. Texaco is the No. 4 fuel brand in Brazil by sales volume, with sales of about 120,000 barrels per day.

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August 13, 2008

Mitsubishi offers $3 billion for Union Bank of California

Japan’s Mitsubishi UFJ Financial Group has offered to purchase the 35 percent stake in San Francisco based UnionBanCal- parent of Union Bank of California, that’s held by the public. As reported in the San Francisco Business Times:

Japan’s largest bank my market cap sees the Union Bank branch network as a nice launch pad for its own banking ambitions in America. “We view this transaction as a first step of our growth strategies in the United States, and we will achieve greater management flexibility and aim to further strengthen our presence,” MUFG said.

MUFG unsolicited offer calls for the Japanese bank to pay $63 per share, or $2.7 billion, for the UnionBanCal shares in public hands. That was up from a previously undisclosed offer of $58 per share that the San Francisco bank’s board rejected in June as too low. The proposed transaction values the entire bank at $8.8 billion. Investors anticipate that the purchase price may be nudged higher, pushing the bank’s shares up 13 percent Aug. 12 to $65.50 at the close of New York Stock Exchange trading.

UnionBanCal operates 330 branches in California, Oregon and Washington state. Union Bank in recent years has adopted a strategy of courting business owners and affluent customers rather than trying to go head-to-head against California’s two-largest banks, Bank of America and Wells Fargo. The numbers don’t work for Union Bank to engage in that costly battle, given the larger banks’ ubiquitous branches and ATMs.

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May 19, 2008

Craigslist charges eBay with corporate espionage

Two California-based Internet icons- Craigslist and eBay have become involved in a bitter legal dispute. Ebay, which owns about 28 percent of Craigslist, fired the first salvo by filing suit in Delaware state court that that accused Craigslist of discriminating against eBay as a shareholder and using “clandestine meetings” to dilute eBay’s ownership stake. Craigslist has now filed a countersuit charging that eBay used its position to gather competitive information that was used to help lauch Kijiji, which many consider to be a direct competitor to Craigslist. The complaint charges that eBay code-named this its “Craigslist killer” in internal strategy discussions. Craigslist’s also alleges a plot by eBay to use its position as a minority shareholder and its position on the board to pressure Craigslist into a full-scale acquisition deal by eBay. “In the months leading up to the launch of its competing Kijiji site … eBay used its shareholder status to plant on Craigslist’s board of directors the individual responsible for launching and/or operating Kijiji,” the suit alleges. “Using the pretext that the information was necessary for Craigslist board-related matters, eBay made constant demands for confidential information in excess of what was required for that purpose”.

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April 8, 2008

Disney to buy Chinese game developer

The Walt Disney Co.’s video game arm will buy a Chinese game developer as the U.S. entertainment giant expands in China. As reported in the San Francisco Chronicle, Disney Interactive Studios plans to buy Chinese company Gamestar, Founded in 2002, Gamestar has offices in the Chinese cities of Shanghai and Wuhan, according to the company. The acquisition will contribute to his Disney’s “global growth plans” and new products, said Graham Hopper, general manager for Disney Interactive. Gamestar had previously done outsourcing work for Disney, according to the Chronicle report and terms of the deal were not disclosed. Following the acquisition, Gamestar will help with existing projects but may move on to developing original games for the Chinese market. Walt Disney Internet Group has also reached a deal with China’s Shanda Interactive Entertainment to launch Disney-themed Internet-based video games.

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January 21, 2008

Sun buys open source MySQL for $1 billion

Sun Microsystems Inc.has agreed to buy software company MySQL AB for $1 billion, a move that is expected to bolster their position with database technology and make them more competitive with Oracle Corporation: As reported in the San Francisco Chronicle:

The MySQL deal lets Sun – the third-largest maker of server computers – enter the $15 billion market for database software, challenging Oracle Corp. and adding a source of service revenue. Closely held MySQL develops databases and lets customers such as Google Inc. and the Chicago Mercantile Exchange use them for free, making money from maintenance.

Sun is bolstering its software unit to offer more programs that businesses need to build Web-based systems, Chief Executive Officer Jonathan Schwartz said. Schwartz, who became CEO in April 2006, restored Sun to profit after five years of losses by cutting jobs and adding products.

“MySQL gives Sun a flagship product, the most popular open-source database technology,” said Raven Zachary, an analyst with research firm 451 Group in Portland, Ore. The purchase “offers a model for Sun to follow as it tries to sell other open-source software products

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December 28, 2007 raises $196 million to buy SideStep, the travel search engine has completed a $196 million funding round that it will use to buy SideStep Inc. said it intends to maintain both the and brands and will develop and promote each site independently. As reported in the Silicon Valley Business Journal, Michael Moritz of Menlo Park-based Sequoia Capital will join’s board. Other participants include existing investors General Catalyst Partners of Cambridge, Mass., and Accel Partners of Palo Alto. SideStep investors involved included Norwest Venture Partners and Trident Capital, both of Palo Alto. New investors include Oak Investment Partners, which has an office in Palo Alto, Lehman Brothers Venture Partners, and debt lenders Silicon Valley Bank and Gold Hill Capital.

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October 15, 2007

Whole Foods Sells Henry’s Markets to Smart & Final

Whole Foods Market Inc. has completed the sale of its 35 Henry’s Farmers Market and Sun Harvest Market stores to a subsidiary of Los Angeles grocer Smart & Final Inc., according to a report in San Diego Business Journal. The Austin, Texas-based company sold its two operations to Smart & Final for $166 million, including a distribution facility in Riverside. Sun Harvest stores are located in Texas, and Henry’s are located in California, with 15 stores in San Diego County. “Our plans are to continue under the existing names and formats,” a spokesman told the Journal. “Overall what you’ve seen is the model that you’re going to get going forward, including the focus on natural and organic and lots of produce.” The sale of Henry’s was the result of Whole Foods’ bid to acquire Henry’s parent Wild Oats for about $565 million. Wild Oats was Whole Foods’ main rival in the natural grocery business.

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October 9, 2007

SAP to acquire Business Objects for $6.8 billion

SAP AG announced that it will buy Business Objects SA for an eye-popping $6.8 billion. SAP is an enterprise software firm based in Germany with it U.S. headquarters in Palo Alto. Business Objects is based in Paris and San Jose. Acquiring Business Objects is seen helping SAP compete with Oracle in the area of business Intelligence software that is used for risk management and corporate management.

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China Bank buys stake in United Commercial Bank

UCBH Holdings Inc., the parent company of United Commercial Bank, agreed to let China Minsheng Banking Corp. acquire a 9.9 percent stake in UCBH and have an option to buy 20 percent of the bank. According to report in San Francisco Business Times, this is “the first Mainland Chinese bank to successfully make a strategic investment in a U.S. bankment in a U.S. bank.” UCBH, based in San Francisco, with $10.7 billion in assets, several reasons for pursuing the investment: “the move increases UCBH’s access to capital, enhances the bank’s platform to conduct cross-border business and better positions UCBH for growth in China while becoming more competitive in the United States”. Minsheng, founded in 1996, has a market cap of $30 billion. The bank operates almost 300 branches and 1,370 ATMs in the wealthy coastal areas of China. UCBH itself announced plans to buy a bank in China earlier this year- Shanghai’s Business Development Bank Ltd. The Times reports that proceeds from this transaction will be used to fund that acquisition.

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October 2, 2007

eBay gets buyer’s remorse over Skype

That’s according the the “Good Morning Silicon Valley” newsletter:

In what will undoubtedly be a blow to the Skype founders’ seller rating, eBay finally acknowledged that its bid for the VoIP firm may have been a tad overenthusiastic and that whatever expectations it had were not being met. EBay announced that in the quarter just ended, it will take $1.4 billion in write-offs and charges related to the Skype acquisition. About $530 million will go to former Skype shareholders to help them forget about those additional performance-based payouts. And eBay will write off about $900 million in Skype-related “goodwill” to more accurately reflect the acquisition’s value. And just in case the message wasn’t clear, Skype co-founder Niklas Zennstrom was eased out of the CEO’s office and given the non-executive chairman’s seat at the Skype board table.

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September 27, 2007

New Enterprise Associates invests $100 million in Foreign Exchange Company

New Enterprise Associatesof Menlo Park has announced that it led a $100 million investment into Oanda Corp., a foreign exchange company. New York-based Oanda was the first company to make comprehensive currency exchange information available over the Internet. It now has three lines of business based on its currency database, including currency conversion and localization for individuals and businesses; decision support tools for institutional investors; and currency markets trading products.

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August 9, 2007

Disney buys Club Penguin for $700 million

Club Penguin, a virtual world for kids, has been bought by the Walt Disney Company. The deal is valued at $700 million: $350 million in cash now, and another $350 million if performance targets are met through 2009, according to a report in Venture Beat. The company, based in British Columbia, has more than twelve million total users — mostly kids 6-14 in North America — and including more than 700,000 paying subscribers. It says it is completely funded through subscriptions. Founded in March 2005, Club Penguin features avatars of animated penguins that live in an antarctic virtual world. Users can play games together, chat, and furnish virtual homes with virtual accessories. Subscribers choose to pay between USD$5.95 per month and USD$57.95 per year to “[d]ress up your penguin, decorate your igloo, be the first to discover new areas and lots more.” The purchase shows that Disney is hungry to get into online gaming, a market that is expected to grow significantly in the coming years. One analyst expects US spending to hit $725 million in 2008, up from $375 in 2006.

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July 26, 2007

South Korean Company Buys SeaSpace

The San Diego Business Journal has reported that Allied Defense Group Inc., a Vienna, Va.-based defense contractor, announced July 25 that it has sold subsidiary SeaSpace Corp. of Poway for $1.7 million. Acetopia Holdings of Seoul, South Korea, purchased the company. Allied said the sale reflects an ongoing business plan to “eliminate losing business operations” to deliver value to shareholders. SeaSpace provides satellite ground operations and processing software and was established in 1982.

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June 19, 2007

Singapore May Take Minority Stake in La Jolla Hyatt

If a joint venture agreement becomes final in the third quarter, as expected, a real estate investment company connected to Singapore’s government will become a minority owner of the posh, 419-room Hyatt Regency La Jolla at Aventine, according to the San Diego Business Journal.  Strategic Hotels & Resorts of Chicago announced recently that it has entered into an agreement with GIC Real Estate Pte. Ltd., the real estate investment company of the Government of Singapore Investment Corp. Pte. Ltd., to acquire a 49 percent interest in two of Strategic’s hotels, the Hyatt Regency La Jolla and 792-room InterContinental Chicago. The transaction is valued at $450 million.

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June 1, 2007

Ebay buys StumbleUpon for $75 million

Venture Beat reports that eBay has acquired StumbleUpon.  Seems like a good move- Stumble Upon is a fun and interesting community:

Auction giant eBay has acquired StumbleUpon, an San Francisco company that helps people “stumble upon” and share new sites related to their interests, for about $75 million.  In a statement this afternoon, eBay said the acquisition will give it “exposure to a fast-growing community-based service” that has around 2.3 million users, and that StumbleUpon is attractive because it shares similarities with eBay’s concept of community.  The deal size is not large relative to other deals we’ve seen lately, but it is a big coup for the founders, who moved from Canadian to San Francisco more than a year ago, and were self-funded until March of last year. They raised a round of $1.5 million from Google’s founding investor, Ram Shriram, Lotus founder Mitch Kapor, Topic founder Ariel Poler, angel investor Ron Conway… Once people download is toolbar, StumbleUpon shows you Web sites that you can rate as good or bad. It starts showing you more of the types of sites you appear like, based on those sites have been rated highly by other people that have voted similar to the way you have. It does the same for videos, people and product information.  It makes money by showing an ad every hundred or so stumbles.  With no marketing, the StumbleUpon community has grown 150 percent from last year and delivers some five million new recommendations a day to its user base, the company said.

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May 23, 2007

Fremont sells real-estate unit for $1.9 billion

Fremont General Corp., whose loans to risky borrowers helped trigger the subprime mortgage crisis, will sell its commercial real-estate unit for $1.9 billion and bring in new managers led by billionaire banker Gerald J. Ford, according to a report in Bloomberg. IStar Financial Inc., a real-estate lending and leasing company, will buy the commercial loan operation. Fremont also will get $80 million by selling a minority stake in the remaining enterprise to investors headed by Ford, who once ran Golden State Bancorp Inc. Shares of Santa Monica, California-based Fremont surged 41 percent. The cash infusion lets Fremont stay in business as a retail bank with 22 branches in California. The Federal Deposit Insurance Corp. told Fremont in March to stop making home loans to unqualified borrowers and said executives didn’t effectively manage risks for mortgages and the commercial loans. Ford’s team helped build Golden State into the second-biggest U.S. thrift with 352 branches until it was sold in 2002 to Citigroup Inc.

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