March 31, 2016

When one merger door closes, another opens

When one door closes, another opens in the M&A industry.

As the saying goes: when one door closes, another one opens. The merger and acquisition industry is fraught with challenges, as companies strive to ensure the best deal possible for their employees and business. With the help of a professional M&A advisor, many organizations agree to deals that exceed their initial expectations. Those who fail to partner with an expert, do not heed professional advice or encounter other difficulties, may find their M&A deals to be less than optimal.

Failed Origin Technologies Corporation-Affymetrix, Inc. deal
Sometimes deals do not play out as they were initially planned. This unfortunate reality proved to be true with the potential Origin Technologies Corporation-Affymetrix, Inc. acquisition. Origin, a newly formed organization created by a group of former Affymetrix executives, recently announced its intentions to acquire gene-sequencing products maker Affymetrix in an all-cash offer valued at $17-per-share.

Unfortunately, after Origin submitted its proposal, Affymetrix countered on the evening of March 25 with the demand that Origin send millions of dollars to a U.S. escrow account by the following Monday. This demand left only one business day to comply and send funds. Reuters reported that Affymetrix also concluded that Origin's deal was less ideal than Thermo Fisher Scientific Inc.'s proposal, which was significantly less than Origin's offer at $17-a-share.

"We are disappointed that Affymetrix has chosen not to pursue our compelling proposal despite our efforts to work in good faith toward a definitive agreement," Wei Zhou, President of Origin, explained. "We disagree with Affymetrix' assessment of the perceived risks of our proposal. It is an unfortunate outcome."

As a result of this failed acquisition, Zhou stated that Affymetrix alumni as well as the current Origin management team remained supportive throughout the process and were significantly enthusiastic about this potential merger. Bloomberg reported that following this announcement on March 28 Affymetrix's shares fell 0.8 percent.

Prosperous Beamr-Vanguard Video deal
While Origin received a less-than-ideal outcome of its merger pursuit, Beamr, an Israeli maker of video streaming optimization technologies, recently announced its success in acquiring the leading provider of HEVC and H.264 codec technologies, Vanguard Video. As a result, Beamr has already raised $15 million with the help of Disruptive Growth, Marker LLC and Innovation Endeavours.

This purchase of Vanguard, an impressive organization that recognizes Microsoft, Netflix and QuickFire Networks among its many customers, will improve Beamr's media compression, video encoding and overall optimization of its products. Beamr already boasts the technology that lowers bit rates without compromising on the overall quality of the video. As video traffic increases in the coming years, the ability to shrink file sizes while still still enjoying HD content is unmatched.

"For Beamr, the acquisition is an important milestone, and we gladly welcome our new, talented colleagues from Vanguard Video, to the family," Sharon Carmel, Founder and CEO of Beamr, said. "On a personal note, it's no secret that I'm fanatic about quality, and we have found that Vanguard Video's encoders produce the best visual quality, at the lowest bit rates, with the highest performance levels. Together we will lead the video encoding market by far with unprecedented quality and performance."

Founder and CEO of Vanguard Video Irena Terterov said she was confident that this merger will bolster both companies' "competitive position and secure their consumers' loyalty."

Companies that want to succeed like the Beamr-Vanguard merger and not fail like the Origin-Affymetrix deal should partner with a skilled M&A advisor. With our expert advice, organizations plan out and agree to M&A deals that meet or exceed their initial expectations. Contact us today to see how your company could dramatically benefit from a partnering with our team of professionals.