The latest to leave Nasdaq for the arms of private investors was online advertising technology provider DoubleClick, which was added to the portfolio of Hellman &Friedman for $1.1 billion.
The move illustrates how technology investors are looking beyond venture capital funding for large returns. Instead, they are targeting established high-tech companies that are arguably undervalued on Wall Street but which can be beefed up for a future sale or a colossal IPO. The forthcoming re-listing of ERP company, SSA, is just one example.
In the case of DoubleClick the purchase seems a safe bet. The company has two sources of revenue: it sells tools to support and track both website advertisements and direct marketing campaigns. That twin focus should allow it to weather fluctuations in marketing spend in either direction.
One company that recently found itself denying it too was considering a private equity buy-out, Sun Microsystems, went on an intellectual property shopping spree over a single week in May. The systems giant picked up the rights to Procom’s network-attached storage (NAS) appliances for $50 million and acquired application access software vendor Tarantella for $25 million.
Procom originally leveraged its strength as a maker of CD servers to build NetForce, a line of NAS filers. But it has struggled against formidable competition from NAS heavyweights EMC and Network Appliance.
Sun’s other buy, Tarantella, with its Citrix-like Secure Global Desktop for providing secure access to server-hosted applications, will sit well within Sun’s thin client division, SunRay.
Meanwhile, IT systems management and services company Compuware augmented its own vision of applications delivery with the acquisition of service delivery measurement appliance builder Adlex for $36 million. Adlex’s ‘passive listening devices’ monitor user sessions and traffic flows so administrators can track how well applications are meeting agreed service levels.