http://www.businesswire.com/news/home/20151007006216/en/Thoma-Bravo-Announces-Sale-Embarcadero-Idera#.VhZ-zUa-nwr


Roy Lambert

Roy Lambert wrote:

>
>
http://www.businesswire.com/news/home/20151007006216/en/Thoma-Bravo-Announces-Sale-Embarcadero-Idera#.VhZ-zUa-nwr
>

I wonder how that will change anything...

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Matthew Jones

Matthew


>http://www.businesswire.com/news/home/20151007006216/en/Thoma-Bravo-Announces-Sale-Embarcadero-Idera#.VhZ-zUa-nwr
>>
>
>I wonder how that will change anything...

My crystal ball's in for a service at the moment - I'll let you know when it comes back.

Roy Lambert

Roy,

Interesting....

Everyone kind of expected the private equity guys to sell at some point, but I don't know much about Idera.

Tim Young
Elevate Software
www.elevatesoft.com

On 10/8/2015 1:22 PM, Tim Young [Elevate Software] wrote:
> Everyone kind of expected the private equity guys to sell at some point, but I don't know much about Idera.

They appear to be a SQL tools company as well and appear to be owned by
private equity : TA Associates.

Looks like a similar play of market consolidation and only interesting
question is whether they are just after the DB tools (i.e. old
Embaracdero) or also interested in dev tools (old Codegear).

With the "enterprisy" Delphi has made over the years (higher prices,
annual maintenance, move to cloud services like EMS,Analytics, etc) it
should be a decent fit there as well (assuming of course any of those
things made money for Embarcadero).

Time will tell.

Raul

Raul wrote:

> and appear to be owned by private equity

My experience of private equity has been interesting, and the key is
that often there is a lot more interesting goings on under the surface.
One case I know of, the investors basically decided that the company
wasn't the value-rocket they wanted, and so they sold out to another
competitor. All very good on the public surface, but under the hood
they were sold for less than the stock in the warehouse. It was a "get
anything back" sale, not the merger it was presented as. For the
record, if you are thinking it must be company A & B then you are
probably wrong - I'm not revealing anything... Oh, and of course I'm
not saying that is what is happening with Embarcadero either - I have
no info - but as Raul says, the only way we will know is the passage of
time.

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Matthew Jones

A key consideration here is that the purchase price is almost 100% financed by borrowing, so we can expect to see large chunks of money being pulled out of the company to pay off the borrowings.  Meaning less spending on research and development, asset stripping etc. ownership based on borrowing never works out well for the company involved.  I hope I'm wrong, but experience makes me fear for the worsted.

On 10/10/2015 2:12 AM, James Dooley wrote:
> A key consideration here is that the purchase price is almost 100% financed by borrowing, so we can expect to see large chunks of money being pulled out of the company to pay off the borrowings.  Meaning less spending on research and development, asset stripping etc. ownership based on borrowing never works out well for the company involved.  I hope I'm wrong, but experience makes me fear for the worsted.

Good point but i can't think of any really significant "assets"
Embarcadero has that the new company can pull out quickly (especially
for $400M).

I don't think they have IP/patents, real estate, equipment or other
assets that would be worth that much. It has the brands (including
delphi), employees (skillset), products and customers mostly.

SQL side i can't speak to much but i did not think the tools they had
were that unique in the marketplace (i might be wrong).

Definitely on dev tools side u believe this to be true and significantly
raising prices and cutting R&D will impact their own cash flow first.

Pricing is one area i'm less worried about - product is already priced
for commercial use so doubling of price would not be popular but i think
most of us would continue to pay (at least short term for 1-2 years) as
long as we make money with it.

However cutting R&D and/or not improving quality would be the main
problem - most of us can use products we already have likely for aother
5+ years but without significant improvements to products i feel we will
start using alternatives more and more thus eroding their customer base.

The really curious bit is that there has been no announcements of any
kind to existing customers !? One would assume these talks have been
going on for months so i would have expected a prepared PR statement at
least by now.

Raul

Raul


>The really curious bit is that there has been no announcements of any
>kind to existing customers !? One would assume these talks have been
>going on for months so i would have expected a prepared PR statement at
>least by now.

That's a very interesting point. You'd expect them to be shouting how this was good news for customers at the very least.

Roy Lambert

Raul


Marketing/sales emails are still arriving though


Roy Lambert