The technology business week: Dell goes private, Kerry firm Fexco signs e-payments deal with Sofort

11 Feb 2013

Dell founder Michael Dell

A digest of the top business technology news stories from the past week.

Dell goes private in US$24bn transaction – founder regains control of company he started

 Computer giant Dell is to go private under a US$24.4bn transaction led by founder Michael Dell and global tech investment firm Silver Lake and involving loans and financing from Microsoft and major investment banks.

Under the terms of the agreement, Dell stockholders will receive US$13.65 in cash for each share of Dell common stock they hold, in a transaction valued at about US$24.4bn.

The transaction is expected to close before the end of the second quarter of Dell’s current financial year.

The price represents a premium of 25pc over Dell’s closing share price of US$10.88 on 11 January, 2013, the last trading day before rumours of a possible going-private transaction were first published.

Once the transaction is complete, Michael Dell will hold 14pc of the company and will continue to lead it as CEO and chairman. He will also make a significant cash investment in the company.

The US$24bn transaction will be financed through a combination of cash and equity provided by Michael Dell, as well as cash from Silver Lake, cash invested by MSD Capital, a US$2bn loan from Microsoft, a rollover of existing debt and debt financing from Bank of America Merrill Lynch, Barclays, Credit Suisse and RBC Capital Markets.

In terms of e-payments Europe is still very far from being an internal market

Kerry-based transaction processing company Fexco has signed a deal to provide cross-border online payment services to e-commerce bank Sofort in Germany. The CEO of Sofort said that when it comes to cross-border transactions, Europe is a long way away from being an internal market.

The deal will provide a boost to customers of Sofort Bank’s direct transfer transactions service, particularly between countries like the UK and Germany.

The next stage of the process will see people use their own currencies for transactions via Sofort Banking, even if the purchase is being made in a foreign currency.

“Europe is growing ever closer together – only when it comes to payment transactions are we still a long way from an internal market,” said Dr Gerrit Seidel, CEO of Sofort AG and Sofort Bank.

“By partnering with Fexco, a global leader in financial transactions services, this is an important step for us in the direction of a unified European payment area,” Seidel said.

Yahoo! signs ‘non-exclusive’ ad deal with Google

Yahoo! has announced an advertising deal with Google that will see ads from the search giant appearing on some of Yahoo!’s websites.

Yahoo! revealed details of the new alliance via a blog post. Announcing that it is to team up with Google on contextual advertising, Yahoo! said it has signed a global, non-exclusive deal with Google to display ads on various Yahoo! sites and certain co-branded sites.

The non-exclusive clause means Yahoo! may be planning on forging similar advertising deals with other companies down the line.

The move will see Yahoo! using ads derived from Google’s AdSense and AdMob services.

Twitter eyes the total media prize – acquires social TV firm Bluefin Labs

Twitter’s claim to be a media company that has technology at its core is becoming clearer. The company has acquired social TV analytics company Bluefin Labs.

Bluefin Labs is a social TV analytics company providing solutions to brand advertisers, advertising agencies, and TV networks.

In Bluefin’s own words: “Bluefin Labs’ technology and data enable clients, for the first time, to tap into data at scale that links people’s social media commentary to the shows and commercials they watch on TV. Grounded in 15 years of cognitive science and machine learning research at the MIT Media Lab, Bluefin Labs was founded by Deb Roy and Michael Fleischman in 2008 and is headquartered in Cambridge, MA.”

The acquisition of Bluefin – estimated at between US$50m and US$100m – makes sense. For Twitter, which is keen to monetise through advertising – it will enable it to be where the audience is and steal a march on rivals like Facebook and Google in real-time.

LinkedIn posts 81pc and 86pc increases in Q4 and full-year revenues

Business social network LinkedIn reported solid fourth-quarter and full-year revenues of US$303.6m and US$972.3m, respectively. The figures represent an 81pc increase from Q4 revenues of US$167.7m in 2011, and an 86pc jump from 2011 full-year revenues of US$$522.2m.

The company’s net income for the fourth quarter amounted to US$11.5m, also an increase compared to net income of US$6.9m for the fourth quarter of 2011.

LinkedIn’s adjusted EBITDA for the fourth quarter totalled US$78.6m, or 26pc of revenue, compared to US$34.4m for the fourth quarter of 2011, or 21pc of revenue.

Diluted earnings per share for the quarter amounted to US$0.10.

For the full year 2012, diluted earnings per share reached US$0.19.

Alcatel-Lucent CEO Ben Verwaayen to step down

The CEO of network equipment maker Alcatel-Lucent Ben Verwaayen is stepping down from the role and will not seek re-election as a director at this year’s annual general meeting in the spring.

Verwaayen’s resignation will take effect once a new CEO is successfully in place, the company said in a statement.

“Alcatel-Lucent has been an enormous part of my life,” said Verwaayen, who served as Alcatel-Lucent’s CEO for four years. 

“It was therefore a difficult decision to not seek a further term, but it was clear to me that now is an appropriate moment for the board to seek fresh leadership to take the company forward.

Alcatel-Lucent has been struggling to return to profit in the past few years. In the face of competition from companies such as Huawei, Ericsson, and Nokia Siemens Networks, the company has undergone restructuring that included laying off staff.  

Stay informed – get daily updates on the latest happenings in technology directly to your inbox.