Open Text to Buy Global 360 for $260 million

OpenText, Canada’s acquisitive enterprise content management software company, has ambitions in the fragmented business process management (BPM) market. This time, it has acquired Global 360, a US software vendor specialising in case management - 16 of the top 20 financial services firms use its software to streamline processes and ensure regulatory compliance.

OpenText says the acquisition, valued at about $260 million, will help it compete in the emerging field of adaptive case management, which combines content management, BPM, analytics and user experience technologies.

In February, OpenText acquired Metastorm, one of the best-known specialist BPM vendors. The latest version of Metastorm’s BPM software, unveiled last week, incorporates new features designed to improve collaboration with colleagues.

Open Text is one of the two largest independent Enterprise Content Management (ECM) player about to reach a billion dollar mark. The company has announced great quarterly results and seems to have increased its pace and scale of acquisitions. In the light of more go-to-market investments, headcount increase in direct sales and consultants while also increasing capex into data centers for Cloud services, I tend to increasingly worry about what might hapen later this year.

KKR to Acquire 49% Stake in Groupo T-Solar

KKR and Munich Re have joined forces to acquire a 49% equity stake of Grupo T-Solar. Deal terms were undisclosed. It would appear a bargain buy for both firms given Spanish economy’s uncertain future, subdued government subsidies into renewables but solar in particular. There are many different solar technologies PV being the oldest and most traditional one. Without a doubt, the future lies on various forms of thin film technologies at different stages of commercialization readiness. I stongly believe they ought to move to Turkey fast where the government is ready to pass a series of subsidies for solar energy with emphasis on local built and assembled components.

 As a subsidiary of the Isolux Corsan group, Group T-Solar got its start in late 2006 and within four years its revenues brought in €110.2 million ($154 million).

 The assets being acquired includes 42 solar PV plants of which 34 are located in Spain and the remaining plants are based in Italy. The two sites have an aggregate installed capacity of 168 MW and a generation capacity of over 250 GWh per year of clean energy. The assets will be housed in a new company under the name, T-Solar Global Operating Assets.

 Grupo T-Solar, which is one Europe’s largest solar photovoltaic (PV) power generator, will continue to own a 51% equity stake of the business and will carry out management services.

In addition, MEAG and KKR entered into an agreement with Grupo T-Solar which gives the company the option to acquire new solar plants developed by Grupo T-Solar once they are fully operational.

 Grupo T-Solar currently has 61 MW under construction and a pipeline of 900 MW throughout Southern Europe, South America, India and the US. Grupo T-Solar’s CEO stated in the press release that he intends on to increasing the generation capacity from 168 MW to more than 500 MW by 2014.

 Grupo T-Solar makes the second major European infrastructure investment for KKR. The firm’s first European renewable energy investment took place in June where it formed a joint venture with the Italian energy company Sorgenia to produce wind energy in France.

With more than $61 billion of assets under management, KKR will continue to build out its infrastructure platform. Jesus Olmos, the European Head of KKR’s infrastructure business insists that renewable energy is one of the most promising areas of infrastructure and that the Spanish renewable sector continues to be a hot spot for future investments.

 Munich Re will tap into its Renewable Energies and New Technologies (RENT) fund to finance its new investment. MEAG’s managing director, Dieter Wolf, stated in the press release that the firm will continue to invest in wind and solar farms as well as new technologies that will increase generating capacity.

 The insurance group, Munich Re, is represented through the asset management arm of MEAG Munich. MEAG currently manages close to €202 billion in of which €10 billion is in real estate.

How Does Google Make Deals?

Here are some very practical insights into how large Silicon Valley firms are now valuing deals, which illustrates why too-big-to-innovate firms desparately need acquisitions to grow...until of course the earn-outs expire.

Google’s chairman, Eric E. Schmidt talked to reporters about his company’s takeover ambitions and the threat of regulatory challenges. While increased antitrust scrutiny is a “concern,” Mr. Schmidt, the former chief executive of Google, said it should not significantly impact the company’s purchasing power, since the company is largely focused on bite-size acquisitions that are too small to land on regulators’ radar screens.

“Last year, as part of our policy, we agreed to accelerate our rate of acquisition of small companies,” he said. “Because it’s the fastest way to fill out some of these broader strategies.”
In terms of acquisitions, 2010 was a banner year for the company, with a record 48 deals.

Schmidt, chief executive of Google, speaks to reporters at the Sun Valley conference.

From the hundreds of start-ups in Silicon Valley, how does Google pick its targets and assess their value?

It certainly has enough money to be liberal with its offers. Google has one of the largest cash hoards in the sector with some $36 billion in cash on hand.

But the company tries to exercise some discipline by adhering to a simple formula. For example, if Google finds a 10- person team with unique intellectual property, it will consider how long it would take for an in-house to build a similar product and at what cost, according to Mr. Schmidt.
“So what’s a year worth? We then calculate the value of the team plus the value of the year, and that’s the amount of money we’re willing to pay for the company,” he said. “These are $10 million, $20 million, $30 million kind of deals.”

He added, the acquisition model “at Google is driven pretty much bottoms-up.”

“It’s a product manager who has a problem; they can’t solve the problem,” he said, “and we have a team that goes out and does that.”

That doesn’t mean Google is turning its back on bigger deals in the nine-figure or billion-dollar realm. Last month, it agreed to acquire AdMeld, a deal he acknowledged was valued in the hundreds of millions of dollars. Meanwhile, Hulu is said to be talking to Google, among others, about a potential takeover.

On Thursday, Mr. Schmidt was coy about its intentions for Hulu, the Internet video company. He only acknowledged that it’s been “widely reported that Hulu is being discussed.” In regards to YouTube’s push into premium content, he said, “anything involving Hulu would be incremental.”