Say Goodbye To Your Margins: What Google Fi Means For Verizon
Cameron Graham • 73 Comments
Cameron Graham • 73 Comments
Thu, Sep. 22, 10:05 AM
- Verizon (VZ +0.6%) is in advanced talks to buy Vessel, the mobile video startup founded by former Hulu chief Jason Kilar, Recode reports.
- Vessel originally wanted to become a hub between YouTube stars and fans, but is reportedly pivoting to more of a "Snapchat-like" product that includes image filters among other features.
- The company has raised more than $130M from backers and has been on the block for months. Meanwhile, Verizon's still interested in video and may be retooling its Go90 mobile video service, which hasn't worked out to date.
Mon, Sep. 12, 6:21 PM
- "Job changes" are ahead for Yahoo (YHOO +1.3%) as it heads for a merger with AOL (VZ +1.5%), says AOL chief Tim Armstrong, but that doesn't necessarily mean cuts.
- Speaking at TechCrunch Disrupt, Armstrong said the deal's "not about job cuts" but synergies would inevitably lead to changes.
- "Google is search, Facebook is social, we're going to be brand," Armstrong said in outlining a strategy that builds its media brands to leverage ads across all its platforms.
- On Friday, Yahoo posted the lengthy sale proxy for its $4.83B acquisition by Verizon and AOL.
Mon, Sep. 12, 2:05 PM
- Verizon (VZ +1.5%) has agreed to acquire privately held Sensity Systems, a move into adding "smart city" solutions using the Internet of Things.
- Terms weren't disclosed, though the deal is expected to close in Q4.
- Sensity -- which uses the transformation to LED lighting as the basis for its IoT efforts -- has a "strong ecosystem" of partners, says Verizon's Mike Lanman, and the deal will "accelerate the deployment of large-scale implementations that will drive the digital transformation of cities, universities and venues."
- Verizon's Smart Communities organization is part of the company's IoT business, using ThingSpace, the company's platform.
Fri, Sep. 9, 7:29 PM
- In a lengthy acquisition proxy filed tonight, tied to its eventual $4.83B deal to be acquired by Verizon (VZ -3.3%), Yahoo (YHOO -3.3%) revealed that as many as 51 parties expressed initial interest in buying the company after Feb. 19, a number that whittled down to 32 signing confidentiality agreements, then 19 in early April and 14 by April 18.
- The filing also provides voluminous details of discussions around an (unconsummated) deal between Yahoo, Yahoo Japan and Alibaba.
- As forecast, what's left after the Verizon sale ("RemainCo") will be only cash and marketable securities, shares in Alibaba, shares in Yahoo Japan, other minority equity investments, and IP assets held in Excalibur. It will be an investment company with a new ticker.
- Yahoo would owe a $144.8M termination fee if it bolts for a "superior proposal."
- Along with authorizing the sale to Verizon, shareholders will be asked to consider a nonbinding advisory proposal to approve compensation payable to Yahoo execs -- and "certain directors and executive officers of Yahoo have interests in the Sale Transaction that may be different from or in addition to the interests of Yahoo stockholders generally."
- In particular, Yahoo restricted stock units held by those employees who would be heading to Verizon would be replaced with cash-settled Verizon RSU awards. CEO Marissa Mayer has $86.4M in Yahoo stock options and RSU awards outstanding; CFO Ken Goldman has $27.1M; Chief Revenue Officer Lisa Utzschneider $21.8M; General Counsel Ronald Bell $16.2M. Co-founder and "Chief Yahoo" David Filo cashed out.
- Golden parachutes tied to the sale, for named execs: Mayer, $44M; Goldman, $12.2M; Utzschneider, $20.5M; Bell, $12.4M; Filo, $65,742.
- After hours: VZ -0.2% ; YHOO -0.4%.
Tue, Aug. 2, 2:39 PM
- Yahoo (YHOO -0.7%) has answered employee questions about its deal to be acquired by Verizon (VZ -1.3%) for $4.8B, and one loomed larger than others: The company says there won't be layoffs between now and the deal's completion, set for Q1.
- Yahoo has laid off at least 1,600 since initiating cuts in February. And while job losses may be off for now, analysts had predicted heavy workforce cuts in the eventuality that Yahoo were acquired by someone like Verizon.
- "At this time, Yahoo is not planning any layoffs in anticipation of the transaction closing," the company said in one of two sets of answers (SEC filing). "Prior to the transaction closing, we will continue to operate our business independently, focus on achieving our corporate goals and manage employee performance in the ordinary course of business." Will there be layoffs after the transaction closes? "That is a decision for Verizon."
- On CEO Marissa Mayer: "Marissa is committed to Yahoo, its employees and its stockholders and plans to see the company through the next phase of its transition to Verizon ... Post-closing Verizon will determine the leadership structure of the combined entity."
- As expected, what's left after the Internet assets and real estate go -- now called "RemainCo" -- will retain stakes in Alibaba Group and Yahoo Japan along with non-core IP, and be renamed as a registered investment company. Employee shareholders of Yahoo stock will continue to hold RemainCo stock after the closing.
Mon, Aug. 1, 11:36 AM
- Verizon's (VZ -0.8%) $2.4B deal for Fleetmatics (FLTX +38.7%) didn't come as a surprise to Citigroup analyst Kenneth Wong, who noted an "aggressive pace" of consolidation in the sector.
- Verizon had announced a deal in June to buy fleet-management software maker Telogis as well. The Fleetmatics deal is in line with recent transaction multiples of 6 to 9 time recurring revenue, Wong says.
- “There has been significant consolidation across the fleet management space from across the auto ecosystem (OEMs, telco, pure play FMS vendors (FLTX mainly), fuel card providers, etc.) so we believe the bidding process was competitive," he writes.
- RBC's Matthew Hedberg calls it a "healthy multiple," saying the deal reflects "6.1x FTM EV/S vs. 5.1x for software acquisitions."
- Despite today's jump, Fleetmatics at $59.60 isn't quite that stock's 52-week high: It hit $62.86 in December and had fallen 31.7% since then.
Mon, Aug. 1, 8:09 AM
- Verizon (NYSE:VZ) announces it will acquire Fleetmatics (NYSE:FLTX) for $60.00 per share in a deal valued at approximately $2.4B. Shareas of FLTX closed at $42.96 on Friday.
- “Verizon and Fleetmatics share a vision that the SaaS-based fleet management solution market is extraordinarily large, lightly penetrated, global and fragmented which can best be attacked together with a world class product offering and the largest distribution channel in the industry,” said Fleetmatics CEO Jim Travers.
- The acquisition is subject to customary regulatory approvals and closing conditions, including the approval of Fleetmatics’ shareholders and the sanction of the Irish scheme of arrangement by which Verizon will acquire Fleetmatics by the Irish High Court, and is expected to close in the fourth quarter of 2016.
- As a result of today’s announcement, Fleetmatics has cancelled its earnings call previously scheduled for August 9, 2016 and has withdrawn its most recent guidance with respect to 2016.
- Source: Press Release
Mon, Jul. 25, 7:22 AM
- The deal is expected to close in Q1, and while the sale includes Yahoo's (NASDAQ:YHOO) core Internet assets and real estate, it does not include Yahoo's stake in Alibaba and Yahoo Japan, or its cash. There assets will continue to be held by Yahoo, which will change its name upon the deal's closing, and continue to be a publicly traded company. Said cash is expected to be returned to shareholders.
- Yahoo will hold a dial-in conference call to discuss at 8:30 ET. Verizon (NYSE:VZ) will discuss when it holds its earnings call tomorrow at 8:30 ET.
- VZ +0.35% premarket; YHOO halted
- Previously: Reports: Verizon to announce $4.8B deal for Yahoo before open (July 24)
Sun, Jul. 24, 2:53 PM
- Verizon (NYSE:VZ) is set to pay $4.8B to acquire Yahoo (NASDAQ:YHOO) in a deal that is likely to be announced before the market opens Monday, according to Bloomberg.
- As reported in the past few days, the deal will include core Internet assets as well as Yahoo's real estate, though some intellectual property will be sold separately.
- After those sales, Yahoo would hold its stakes in Yahoo Japan and Alibaba Group (combined value of about $40B).
- Verizon's expected to keep its new purchase relatively intact in a bid to combine it with AOL and compete with Google and Facebook in digital ads "by tapping into users on sites like Yahoo Finance," Bloomberg notes.
- Previously: Verizon's Yahoo interest includes real estate, not IP; Munster: 'Great outcome' (Jul. 22 2016)
- Previously: Verizon reported to be close to landing Yahoo (Jul. 22 2016)
Fri, Jul. 22, 12:44 PM
- Leaks that Verizon (VZ +1%) continues to be the front-runner to close a deal for core Yahoo (YHOO +1%) have the telecom spending about $5B on the deal, vs. an earlier $3.75B-$4B.
- While earlier Verizon interest excluded Yahoo's patent portfolio and real estate, the current talks do reportedly include the real estate.
- Yahoo had set aside about 3,000 patents into a subsidiary called Excalibur for separate auction by Black Stone IP, though other bidders like AT&T (T +1.5%) or a group with Quicken Loans' Dan Gilbert (still reportedly talking with Yahoo) or an aggressive TPG might yet want to buy the IP along with core assets.
- The deal would be a "great outcome," Piper Jaffray analyst Gene Munster says, with time of the essence since "the real value here is unlocking Yahoo Japan and Alibaba (BABA +0.1%) in a cash-free transaction. And they really need to get that done before the election."
- The $5B figure is still a bit low, Munster says, as he expects the deal to be around $6B. "If you look at the tax benefit for Yahoo Japan and Alibaba, that's about a $10B or $11B tax benefit, so a billion dollars here and there doesn't make much difference; there's still upside to Yahoo shares."
Fri, Jul. 22, 8:48 AM
Tue, Jun. 14, 2:21 PM
- Following second-round bids, AT&T (T +0.3%), Verizon (VZ +0.4%), P-E firm TPG, and a group led by Quicken Loans founder/Cleveland Cavaliers owner Dan Gilbert remain in the running to buy Yahoo's (YHOO +2.2%) core assets, a source tells Fortune's Dan Primack. A joint bid from P-E firms Bain and Vista Equity reportedly didn't make the cut.
- "Price talk" is said to be in the $4B-$5B range. "I think AT&T is just trying to drive the price up on Verizon," Primack also reports hearing from a source.
- Bloomberg reported last week AT&T and Gilbert each bid ~$5B for Yahoo's core business, patents, and real estate. Re/code reported Verizon bid ~$3B-$3.5B for just the core business.
- Yahoo is trading higher, but that's the result of Alibaba (up 3.1%) rallying after providing a strong sales forecast.
Fri, Jun. 10, 4:08 PM
- Bloomberg reports AT&T (T +0.6%) and a group led by Quicken Loans founder/Cleveland Cavaliers owner Dan Gilbert (backed by Warren Buffett) each submitted a ~$5B second-round bid for Yahoo's (YHOO -1.4%) core business, patents, and real estate.
- Separately, a day after CNBC reported Verizon (VZ +1.4%) made a ~$3.5B second-round bid, Re/code reports Big Red made an offer valued between $3B and $3.5B, depending on "how employee compensation commitments are treated." However, Verizon's bid excludes Yahoo's patents and real estate.
- When adjusted for the absence of patents/real estate, Verizon's bid might be competitive with the others. Re/code observes Yahoo respectively values its patents and real estate at $3B and $1B, while adding others assign much lower values to each (~$1B for the patents).
- Yahoo slipped today amid a 2.1% drop for Alibaba, and a 1.3% drop for the Nasdaq.
Thu, Jun. 9, 9:48 AM
Tue, Jun. 7, 2:23 AM
- According to a new report in the WSJ, Verizon (NYSE:VZ) on Monday planned to submit a second-round offer of about $3B for Yahoo's (NASDAQ:YHOO) core internet business.
- Private-equity firm TPG was also expected to submit another bid for the assets before yesterday's deadline.
- Yahoo is projected to hold at least one more cycle of bidding, and the offers could change by the final round.
Thu, Jun. 2, 10:17 PM
- Adding to the more colorful side of the stories about potential Yahoo (NASDAQ:YHOO) bidders: Twitter (NYSE:TWTR) met with a management team led by Yahoo chief Marissa Mayer weeks ago to discuss a possible merger, the New York Post reports tonight.
- But though the teams talked for several hours, it looks to have been just an informational tire-kicking, as Twitter reportedly got out of the bidding process afterward.
- Indeed, Twitter CEO Jack Dorsey didn't show up for the confab, and that company has enough on its plate, a source said: “They’re very scared their shareholders would be outraged ... which is not, quite frankly, an unfounded fear.”
- Bids are coming in for the second round in Yahoo's auction of core assets, with Verizon (NYSE:VZ) still widely believed to be a front-runner.
- Previously: SunTrust's Peck: Three pricing scenarios for Yahoo bids (Jun. 01 2016)