IPO
The public market volatility has deterred IPO activity across the board, including tech.
Zayo Group, a fiber optic cable leasing company, was the one TMT company to go public this week. The Boulder, Colo.-based company priced its shares at $19, below the previously projected $21 to $24 price range. The company has a fiber network that extends over 45,000 miles, with thousands of more miles laid out across Europe. The company generated over $1.1 billion in revenue last year but posted a $179 million net loss, and is operating on $3.3 billion in long-term debt. Despite pricing below the expected range, Zayo raised nearly $400 million in its offering, while its stock closed Friday up nearly 15 percent at $22.
M&A
After reportedly being in discussions for several months about a merger, it appears that Hewlett-Packard and EMC, Corp. will both walk away from a deal that would have created a combined entity with a $130 billion market capitalization. It comes at a time when other legacy technology companies, HP and EMC included, are making significant moves to become more nimble and better equipped to deal with disruption in their sectors. HP announced this month that it would be splitting into two separate companies, with the existing company’s enterprise hardware and software units continuing to operate under the HP Enterprises banner, while HP, Inc. will take over the current company’s personal printing and PC businesses. EMC has likewise been dealing with pressure to sell off its VMware virtualization business and its Pivotal Software cloud software business. Those decisions were weighed amidst announcements that EBay would be spinning off PayPal late next year, and that Symantec would be breaking into its constituent parts as well.
There was a big deal to go through this week, however. Qualcomm, the San Diego, Calif.-based semiconductor manufacturer, will pay $2.5 billion to acquire its British counterpart CSR. The purchase price represents a 37 percent premium over CSR’s closing stock price Tuesday, the day before the deal was publicly announced. While Qualcomm is the market leader in microchips for mobile devices, the purchase of CSR signals that the company is prepared to make a big push into connected devices and the so-called Internet of Things. CSR develops semiconductors and software but with a special focus on Bluetooth-enabled platforms. Bluetooth technology, specifically it’s updated version Bluetooth Smart, is experiencing a recent revitalization, as it is increasingly being used in newly-developed wearable technology products and as beacons, which can be inserted into “smart” home appliances.