The Federal Trade Commission announced on Tuesday this week that it is creating a Technology Task Force to oversee competition – including mergers & acquisitions and anti-competitive practices - in the US tech industry. The FTC said that the task force will have the capability to break up past mergers & acquisitions or spin offs in order to enhance competition. It is anticipated that the task force will comprise about 17 FTC lawyers who have experience in areas such as online advertising, social networks, mobile operating systems and apps, and platform businesses.
2018 was the year of the electric scooter. Four-letter e-scooter brands such as Lime, Bird, Spin and Skip have become the attention-getters of the venture world. So far, these four raised a total of $1.02 billion in venture funding this year – $455.7 million for Lime, $415 million for Bird, $18.2 million for Jump, and $131 million for Skip. Established transportation companies are also getting involved in the craze. Jump Bikes, a bike- and scooter-sharing service, was bought by Uber for $250 million in April, and Spin was acquired by Ford for $100 million in November. Lime is even in partnership with Uber to offer scooters through the Uber app.
Last week's IPO environment was very quiet. Ant Financial Services Group, the fintech company that operates the Chinese transaction payment service Alipay, noted plans for another funding round. Local and foreign investors appear to be acquiring additional equity ahead of a potential IPO, which could happen as early as the second half of 2018.
Mergers and acquisitions (M&A) activity within the information technology (IT) space showed signs of slowing in 2017, although deal multiples remained elevated. In North America, IT M&A ended the last quarter of 2017 with 14.8% fewer deals closed than the fourth quarter of 2016. Similarly, deal value in the fourth quarter fell 30.3%, from $79 billion in the fourth quarter of 2016 to $55 billion in the fourth quarter of 2017.
Today Amazon released its “short list” of potential new homes for its planned $5 billion second headquarters, called HQ2. Last year, 238 cities submitted bids to welcome HQ2, the potential 50,000 high-paying jobs that accompany it, to their city.
Swedish music streaming service Spotify discretely filed for a direct listing on the New York Stock Exchange last month, with plans to begin trading before the end of 2018’s first quarter. The direct listing method is different than traditional initial public offering procedures, which may involve road shows and cost considerably more. Instead, Spotify’s current investors could begin trading shares on the open market without a formal offering or predetermined price – a process that may encourage other tech companies to do the same.
Smart home security provider Blink said it had agreed to be acquired by Amazon for an undisclosed amount. Blink’s wireless home security cameras and doorbells, which are compatible with Amazon’s Echo, send motion-activated alerts and HD video to users’ smartphones when it detects any unusual activity.
Aconex (ASX: ACX) announced Monday that it received a $1.56 billion AUD (~$1.2 billion USD), or $7.80 per share, buyout offer from Oracle (NYSE: ORCL). Aconex shares were up 45% following the announcement.
The Walt Disney Company (NYSE: DIS) has announced it has reached a deal to acquire most of the assets of Twenty-First Century Fox (NASDAQ: FOXA) in an all-stock transaction worth about $52.4 billion, or $29.54 per share, based on Fox's closing price on Wednesday. After the assumption of approximately $13.7 billion in debt, the total consideration will be roughly $66.1 billion. Disney will issue approximately 515 million new shares to current Fox shareholders, who will have about a 25% stake in the new company. The transaction is estimated to generate $2 billion in cost savings.
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