Is Active Network Inc (NYSE:ACTV) Going Private Good Strategy?
It’s just over 2 years ago that Active Network Inc (NYSE:ACTV) went public and will now be acquired by Vista Equity Partners, a private equity firm. The deal is valued to be in the range of $904M. The latter will make the $14.50/share tender offer which represents a 27.2% premium to the company’s shares at Friday’s closing of $14.39.
The company has various prominent customers such as IBM, Bose, Cisco and Starbucks but has failed to rake in any annual profit in the 15 years since it was incorporated. Its software helps customers sign up for marathons, reserve campsites and buy hunting and fishing licenses. A major segment of its revenue comes from reservation and registration fees, all of which are paid by the participants.
Vista’s other investments
The Walt Disney Company (NYSE:DIS) has a 10% holding in the company and InterActive Corp is the owner of 7.4% stake. As per the latest filing by the company, as of 15 may, Active Network Inc (NYSE:ACTV) has 61.68M shares outstanding. Vista Equity primarily invests in various software companies and has approximately $7B in capital-commitments.
In 2013, it has made 3 other acquisitions apart from this one. In May, it acquired Websense Inc for $907M and Omnitracs in August for approximately $800M.This is the Qualcomm’s fleet-management software unit. Just last week, it has put forth an offer to take Greenway Medical Technologies, the medical software company, private, for an amount of $644M.
Citi is the financial advisor for Active Network Inc (NYSE:ACTV) in this deal while BofA Merrill Lynch is Vista’s financial advisor. The debt financing for this deal will be provided by RBC Capital Markets, BofA Merrill Lynch and BMO Capital Markets Corp.
In Monday’s trading session, Active Network Inc (NYSE:ACTV) rose by 25.53%. The company’s shares opened at a price of $14.39, which was also the intraday high and dropped to a close of $14.31.