|Bid||108.10 x 76700|
|Ask||108.12 x 56500|
|Day's Range||106.48 - 108.56|
|52 Week Range||83.95 - 125.00|
|Beta (3Y Monthly)||0.54|
|PE Ratio (TTM)||41.54|
|Forward Dividend & Yield||1.50 (1.41%)|
|1y Target Est||N/A|
(Bloomberg) -- Germany will finally get another major listed tech company when software maker TeamViewer AG completes a 2.3 billion-euro ($2.5 billion) initial public offering this month -- the biggest in the industry in almost two decades.While Germany has several established tech companies, including software giant SAP SE, there have been few sizable newcomers since chipmaker Infineon Technologies AG listed in 2000. TeamViewer will provide a boost to the weakest European IPO market in years and comes as Germany’s economy teeters on the brink of a recession. The share sale, which is oversubscribed, will be the country’s largest so far this year.Founded in 2005, TeamViewer has developed from a local provider of remote computer access tools to one that offers connectivity to customers in about 180 countries. The company plans to further expand in Europe, Asia and the U.S., and will add to its offerings for large corporate customers to help them connect anything from mobile phones and tablets to machine sensors, smart farming equipment or wind turbines.With a sudden influx of new offerings in Europe, IPO investors have a lot to choose from. Apart from TeamViewer, private equity firm EQT Partners AB is also marketing its initial public offering, with a management roadshow kicking off next week. On Thursday, Helios Towers Plc -- one of sub-Saharan Africa’s largest mobile-phone tower operators -- announced plans to list on the London Stock Exchange.TeamViewer’s owner, private equity firm Permira, plans to sell as many as 84 million shares for 23.50 euros to 27.50 euros each via holding firm TigerLuxOne, the company said late Wednesday. TeamViewer stock is expected to start trading on the Frankfurt Stock Exchange on Sept. 25.The price range would give the company a market value of between 4.7 billion euros and 5.5 billion euros. Bloomberg News previously reported the valuation could be 4 billion euros to 5 billion euros. The listing will improve TeamViewer’s brand recognition and make it easier for it to grow organically and via “selected acquisitions,” spokeswoman Martina Dier said.TeamViewer may hire more people in the U.S. and opened offices in China, Japan, India and Singapore last year to expand sales in those markets. In China alone, TeamViewer has “tens of millions” of free users, more of whom the company wants to convert into paying customers, according to Chief Executive Officer Oliver Steil.“Our big growth combined with strong profitability -- even if market conditions have been difficult -- makes our financial profile attractive to investors,” Steil said in an interview last month.TeamViewer’s cash billings grew more than 35% in the first half, faster than last year’s 25% growth, to over 140 million euros, the CEO said. The company posted a cash operating profit margin of more than 50% during the period. It says its software has been installed on more than 2 billion devices.Permira bought the company for 870 million euros in 2014. It has since partnered with firms including Alibaba Group Holding Ltd. and Salesforce.com Inc. to bolster its cloud offerings.The free float, a measure of company stock available to trade, will be 30% to 42%, depending on the size of the IPO, according to the statement.Goldman Sachs Group Inc. and Morgan Stanley are arranging the IPO, with Bank of America Corp., Barclays Plc and RBC Capital Markets. Lilja & Co. is acting as an independent adviser to Permira and TeamViewer.(Updates with company comment in sixth paragraph. An earlier version of the story was corrected to remove reference to IPO proceeeds)To contact the reporter on this story: Stefan Nicola in Berlin at firstname.lastname@example.orgTo contact the editors responsible for this story: Dale Crofts at email@example.com, Andrew Blackman, Chris ReiterFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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(Bloomberg) -- The owners of software maker TeamViewer GmbH are planning a Frankfurt listing this year that could be the biggest German initial public offering for a technology company in nearly two decades.Permira will sell shares in the listing, planned before year-end, via its holding firm, TigerLuxOne, the company said in a statement Wednesday. TeamViewer could seek a valuation of 4 billion euros ($4.4 billion) to 5 billion euros, people familiar with the matter said previously.Permira could sell 30% to 40% of the company, depending on investor demand, the people said. While Germany has a bevy of established tech companies, including software giant SAP SE, there have been few sizable newcomers since chipmaker Infineon Technologies AG listed in 2000.“It is hard to pick the right moment in time but our big growth combined with strong profitability, even if market conditions have been difficult, makes our financial profile attractive to investors,” TeamViewer Chief Executive Officer Oliver Steil said in an interview on Wednesday. “There is a lot going on in the space and it’s still a bit early, but we will see more tech players emerge in a few years.”TeamViewer and Permira declined to comment on the size of the offering.Europe is grappling with its worst market for IPOs in years. Escalating trade wars and the specter of Brexit has lead to the fewest companies choosing to go public in a decade, according to data compiled by Bloomberg.Read More: Going Public With One Hand Tied Behind Your BackStill, there are signs that the environment is improving. Besides TeamViewer, Helios Towers Plc, one of sub-Saharan Africa’s largest mobile-phone tower operators, and French glass bottle maker Verallia are gearing up to kick off their own European IPOs in the next few weeks, people familiar with the matter have said.Based in Goeppingen in southern Germany and founded in 2005, TeamViewer develops software for collaboration and remote desktop access. Permira bought the company for 870 million euros in 2014. It has since partnered with firms including Alibaba Group Holding Ltd. and Salesforce.com Inc. to bolster its cloud offerings.Financial GrowthTeamViewer’s cash billings grew more than 35% in the first half, accelerating from 25% last year, to more than 140 million euros. It says its software has been installed on more than 2 billion devices.For the full year, the company said it expects billings growth of 35% to 39% and adjusted earnings before interest, taxes, depreciation and amortization of as much as 183 million euros.“Going down the IPO route versus selling means that we can remain an independent player, and it is important for us to sustain our independence,” Steil said.Goldman Sachs Group Inc. and Morgan Stanley are arranging the IPO, with Bank of America Corp., Barclays Plc and RBC Capital Markets. Lilja & Co. is acting as an adviser to Permira and TeamViewer.(Updates with quotes from CEO interview starting in fourth paragraph.)To contact the reporters on this story: Myriam Balezou in London at firstname.lastname@example.org;Aaron Kirchfeld in London at email@example.com;Sarah Syed in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Dinesh Nair at email@example.com, Amy Thomson, Giles TurnerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The editors will sit down with McDermott and talk about SAP’s quick growth due, in part, to several $1 billion-plus acquisitions. On September 5, you'll enjoy three breakout sessions --two from SAP and one from Pricefx.
(Bloomberg) -- Salesforce.com options are showing a decidedly bullish tilt ahead of its second-quarter earnings report, signaling that investors are betting the business software maker’s results will be better received than those of European counterpart SAP SE last month.There are more than twice as many calls than puts among contracts set to expire Friday in the wake of this afternoon’s release, and options prices imply a 6% earnings-day price move. That’s almost double the 3.1% average of the past eight reports, when rallies outpaced declines five-to-three. The stock has gained 8% this year, compared with a 31% rally in the the S&P 500 Software Index.It’s probably going to be a “noisy” earnings report, given Salesforce.com’s recent acquisition of Tableau Software Inc., according to SunTrust Robison Humphrey analyst Terry Tillman. He said the acquisition closed about two months sooner than targeted and he would expect stability and modest upside for the second-quarter with more catalysts ahead.San Franciso-based Salesforce.com has low exposure to China and is unlikely to reiterate the same concerns around the U.S.- China trade dispute that SAP has, Bloomberg Intelligence analysts Anurag Rana and Gili Naftalovich said in an Aug. 14 research note. Margins are likely to expand as sales growth exceeds the rate of investment in new products and geographies, but the acquisition of Salesforce.org and currency headwinds may weigh on the rate of expansion, they said.SAP, which traded at a record high on July 3, has since fallen 14%, with the decline accelerating after it reported a second-quarter slowdown in new cloud bookings and disappointing margins. Analysts also underscored weak growth in software license revenue, hit by uncertainty in Asia.About 17% of total open interest in Salesforce.com is set to expire on Friday, and implied volatility is elevated at 117% versus a three-month average of 30%.To contact the reporter on this story: Gregory Calderone in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Catherine Larkin at email@example.com, Richard Richtmyer, Brendan WalshFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The vast enterprise tech category is Silicon Valley’s richest, and today it’spoised to change faster than ever before
(Bloomberg) -- The promise of artificial intelligence has yet to translate into big business. Now Kai-Fu Lee, a prominent venture capitalist in China and founder of Sinovation Ventures, says his firm’s new startup should be able to reach $100 million in revenue next year and go public the year after.AInnovation, established in March 2018, develops artificial intelligence products for companies in industries such as retail, manufacturing, and finance. Its customers include Mars Inc., Carlsberg A/S, Nestle SA, Foxconn Technology Group, China Everbright Bank Co. and Postal Savings Bank of China Co.Chief Executive Officer Hocking Xu, a veteran of International Business Machines Corp. and SAP SE, has hired staff that work with traditional companies to figure out how to take advantage of AI in their operations. AInnovation is on track to hit $100 million in revenue within two years of its founding, the fastest pace yet for such a startup, Lee said.“We took the approach of ‘Let’s take some of the best business people and let’s target the industries which need AI the most’,” he said.Lee figures AInnovation will be able to go public in less than two years at a valuation of $1 billion to $2 billion. The firm has raised about $70 million so far from Sinovation, CICC ALPHA and Chengwei Capital. Since the company was funded with yuan, it would most likely list domestically, either on China’s new NASDAQ-like Star market, or on the country’s ChiNext.For retail companies, AInnovation sells products including a smart vending machine that opens with facial recognition and software that monitors retail shelves with image recognition. It’s created computer vision technology that detects defects on the production line for manufacturers and underwriting software and natural language processing technology for financial firms. There’s a large market in particular for technology to catch flaws early in the manufacturing process, said Jeffrey Ding, a researcher with Oxford’s Center for the Governance of AI. That effort “aligns with the Chinese government’s priorities to upgrade smart manufacturing capabilities to compete with countries like Germany and Switzerland,” he said in an email.The former president of Google China, Kai-Fu Lee founded Sinovation Ventures in 2009. It manages more than $2 billion across seven funds in U.S. and Chinese currencies. It holds shares in more than 300 companies, most of which are in China. Its investments include autonomous driving company Momenta, consumer AI chip firm Horizon Robotics Inc. and bitcoin mining and AI chip company Bitmain Technologies Ltd.In artificial intelligence, “we’re still at a very early stage in the commercialization,” Lee said. “We’re still at the equivalent of early internet portals, back when everybody was using Yahoo and there wasn’t even a Google, Amazon, or Facebook.”Global economic ructions, however, may present short-term challenges. Venture deals in China have been plummeting as investors pull back amid escalating trade tensions and slowing economic growth. The value of investments in the country tumbled 77% to $9.4 billion in the second quarter from a year earlier.“In an economy that’s slowing down, everything slows, including venture capital. There will definitely be a shakeout,” Lee said. “The positive side is that if the economy is challenging, and valuations are down, it’s a good time for us to go shopping.”Sinovation was one of the first Chinese venture capital firms with a presence in the U.S. With the trade war and the Trump administration’s tighter scrutiny of foreign investments, the firm has scaled back investments and no longer has an office in the U.S., Lee said, adding that investments in America have always been a small fraction of its overall investments.“In the long term, it’s a pity if we have to cause a total separation of two countries because one could argue that AI got to where it got because the whole world has been able to work together.”(Updates with analyst’s comment in the 9th paragraph)To contact the reporter on this story: Selina Wang in China at firstname.lastname@example.orgTo contact the editors responsible for this story: Jillian Ward at email@example.com, Peter Elstrom, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Why exactly is a German metalworkers union teaming up with YouTubers to take on Google?The answer has as much to do with concerns over how to organize labor in the era of digital disintermediation as it does with teenagers uploading clips of themselves playing Minecraft.IG Metall, whose 2.3 million members make it Europe’s largest trade union, joined forces last month with an unlikely ally: the German YouTuber Joerg Sprave, whose Slingshot Channel boasts 2.2 million subscribers and who produces viral videos of himself firing off, among other things, Ikea pencils. Two years ago, he set up a Facebook group called The YouTubers Union, which now has 21,000 members, after his videos started getting “de-monetized” -- so-called because, with no ad revenue, the uploader doesn’t make any money. They complain that Google’s YouTube refuses to explain why it stops running advertisements alongside some videos. YouTube CEO Susan Wojcicki wrote in a blogpost the move was in response to complaints by brands that their ads were being shown alongside “inappropriate” content. But creators aren’t explicitly told what rules they breached when a clip becomes ineligible for ads.Some saw their income fall by 80% after a 2017 change to the rules. Even the prominent YouTuber Casey Neistat, who now has 11 million subscribers, found an apparently uncontroversial Indonesian travelogue was de-monetized. Others have puzzled over the rationale. British YouTuber Jack Massey Welsh, who posts his wacky antics on the channel JackSucksAtLife, revealed last year that clips of himself drinking milk and of someone swearing while playing Minecraft were de-monetized. He said YouTube never explained why.Regardless of whose side you’re on, the entry of a heavyweight labor union into this battle should be seen as a healthy test of its ability to rebalance the power dynamic between Google and the millions of people whose income derives from uploading videos to the site. The fight reflects how digital platforms have reconstructed the seemingly straightforward relationship between employer and employee.IG Metall wants YouTube to be more transparent with its community of creators. The German union is inviting YouTubers to become members and is running a campaign called FairTube to press for better terms. The initiative is in its early days and IG Metall won’t disclose how many YouTubers it’s signed up. Even so, it’s given Google a deadline of August 23 to come to the negotiating table. If it refuses, IG Metall plans to use its deep pockets and army of lawyers to pursue legal options.It’s a remarkable precedent. While labor unions have already represented others who aren’t salaried employees of tech firms – ridehailing drivers and other gig economy participants, for instance – IG Metall is trying to organize a disparate group which provides a less tangible service.Meet Monopsony, Creature of a Puzzling Labor MarketIt’s a far more challenging battle than for, say, factory workers. Online platforms by their very nature tend to pit diverse groups of people, sometimes thousands of miles apart, against each other to offer the best service at the lowest possible price. Collective bargaining, in this context, doesn’t really work.A strike in the traditional sense would achieve little. Even in the extreme unlikelihood that every YouTuber in Germany boycotts the platform and stops uploading videos, it would have a limited impact on the site’s profitability. While a localized strike by Uber drivers can cripple the ridehailing service for its duration, YouTube has unparalleled cross-border scale – 450 hours of video are uploaded every minute – and an almost bottomless library of existing content.So what exactly can IG Metall do? A lawsuit is the most likely next step. The union claims that decisions made to de-monetize a video with no explanation contravene the European Union’s General Data Protection Regulation. One strand of the rules, introduced last year, gives people the right to know whether their personal data is being processed, for what purpose, and to request a copy of it all. The union argues that algorithms deciding to stop ads being attached to a clip generate such data. It’s a smart play. With the deep pockets afforded by its huge membership, IG Metall is able to contest issues where an individual would struggle.Notably, the union is trying to use the same tool of its members’ atomization – the online platform – to organize them. Even before it joined forces with the YouTubers Union Facebook group, IG Metall had launched an initiative called FairCrowd, a website where gig economy workers provide feedback on the apps they work for. It’s not that far from its home turf: IG Metall already represents employees at tech companies like SAP SE.Unions are ultimately fearful that disruption from digital platforms could unravel much of the progress they’ve made in improving labor conditions over the past 150 years. The employee-employer contract is, at its core, fairly basic: the employee receives a steady income and other insurance and agrees to subordinate him- or herself to the employer (within reason) in return. Trade unions have helped establish the limits of what is reasonable.Conversely, an independent contractor enjoys greater freedom and isn’t subordinated to a single employer, but can’t bank on getting a guaranteed salary. Digital platforms often now impose strictures which can give them an employer-like power over people who are dependent on them for their livelihood, but without the associated benefits such as a steady income. Meanwhile unions, whose membership numbers are slowly declining, are trying to establish their role in that relationship. IG Metall’s FairTube is an early sally.To contact the author of this story: Alex Webb at firstname.lastname@example.orgTo contact the editor responsible for this story: Stephanie Baker at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. He previously covered Apple and other technology companies for Bloomberg News in San Francisco.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- It’s been a good year for Qualtrics International Inc.’s Ryan Smith. In January, he completed the sale of his company to SAP SE for $8 billion, then three weeks later teamed up with pro golfer Josh Teater to finish third at the AT&T Pebble Beach Pro-Am.For his efforts, the three-handicapper picked up the Jack Lemmon Award as the amateur who most helped their pro in the tournament. While his social set now includes top golfers like Tony Finau, who posted this photo from Smith’s Pebble Beach home ahead of June’s U.S. Open, Smith still dedicates the bulk of his time to ventures off the course.He and older brother Jared continue to oversee the day-to-day operations of the Provo, Utah-based software company they founded in their parent’s basement. He’s also branching out into real estate, while backing a crowdfunding charity that supports cancer research. Ryan, 41, recently spoke with Bloomberg about his investing priorities, as well as philanthropic efforts spurred by events close to home. Comments have been edited and condensed.Which sports are you most passionate about?I play basketball almost every morning I’m in town, and I am an avid golfer. I don’t play golf as often as I would like, but I love everything about the game: respect, integrity and the challenge that you can never beat it entirely. I also love that golf is a way to unplug without your phone or technology. Some of the greatest relationship and bonds I have in this life have been created on the golf course.Is there a sports team you’d love to own?I love the NBA. Qualtrics sponsors the jersey patch of the Utah Jazz and donates it to our cancer charity, 5 For The Fight, which invites everyone to give $5 to the fight against cancer. It’s crowdfunding for cancer research. It’s been incredible to work with the players, the Jazz organization and the NBA as a whole. As far as team ownership, I have a hard time not seeing myself more involved with teams in the future.What’s your approach to investing?One of our principles at Qualtrics is being “All In.” So until recently, I have been very focused on only investing in Qualtrics and putting 100% of my energy and time into that. While I’m still all in on Qualtrics, I am also looking at where and how to invest going forward. My current thoughts are threefold. One, I know tech. I’m good at tech. Tech will be a big part of all my investing. Two, I want to back the funds that backed us. Three, real estate. As for what I look for, it’s 100% founders. It’s absolutely simple. I want to back people who know how to win and who use sheer force of will to carry their ideas forward.Tell me more about real estate investing.I have always been passionate about real estate. It’s how I was able to survive while bootstrapping Qualtrics. I stayed afloat in college because I owned the apartment I lived in and rented out the other rooms. I got free rent and didn’t require much of a paycheck from Qualtrics to live on. We’ve now opened more than 20 Qualtrics offices around the world, including designing a new headquarters in Utah. I love that process. Real estate is something I understand and always want to be involved in. Plus, good real estate projects can have a really positive impact on local communities and that’s important to me. Are projects in particular?I recently founded 50 East Capital with an investment manager who relocated from New York City to Provo. We’re pursuing commercial real estate investing in two areas. The first is opportunity zones, focusing primarily on multifamily and student housing. The second is more opportunistic, with a strategy to purchase existing, positive cash-flow commercial real estate properties in primary and secondary markets. How did you celebrate the sale of Qualtrics?I don’t know that I’ve really celebrated the sale. I think “sale” is often referred to as a finish line. It’s not. I view the acquisition a lot like the various funding rounds we had at Qualtrics. People would always congratulate us as if the goal was to get funding. The goal isn’t to get funding, it’s to build a great company. I have always said that congratulating someone on getting funding was like congratulating someone on getting a mortgage. It shouldn’t be “congratulations,” it should be “good luck.” That said, I just bought a truck -- a black Ford Raptor. My kids are pretty excited about hauling stuff and put things in the back. So maybe that’s how I celebrated.What about philanthropy?When we started Qualtrics, my dad was fighting cancer. Because of some incredible research being done, he survived. We decided that if our then-little tech project ever became anything, cancer research could be the cause we supported. There are so many amazing causes out there, but we have always believed that if we focus on one area, we can have the biggest impact. For years, we donated to great cancer research hospitals like the Huntsman Cancer Institute. A few years ago, I co-founded 5 for the Fight. At Qualtrics, we know the power of researchers and the impact they can have.To contact the reporter on this story: Gillian Tan in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Alan Goldstein at email@example.com, Steven Crabill, Pierre PauldenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Elliott Management Corp. is resuming confrontational activism in Germany, potentially reviving fears that “locust” funds are back and up to no good. Investors are probably being too skeptical that Elliott will be able to force positive change.The activist hedge fund has lambasted managers at Scout24 AG, a Frankfurt-listed online real estate and car classifieds business capitalized at 5.4 billion euros ($6 billion). They are a soft target. The company’s board backed a cheap bid from Scout24’s former private-equity owners in February, only to see shareholders resoundingly reject the offer in May. The debacle has exposed the group to the broader attack that bad management is the reason for the share price weakness which triggered the attempted takeover.Elliott has had some Teutonic success through behind-the-scenes activism with SAP SE and Bayer AG. Here, it’s publicly calling for a break-up and much more aggressive leverage, accusing management of a “shocking lack of ambition” that has left the shares trading at a near 25% discount to an estimated fair value of 65 euros share.The market isn’t so sure. Scout24’s shares barely moved in response. It’s not hard to see why. To get to this higher value would require an uplift in operating performance. Scout24 already trades on 19 times expected Ebitda, nestling between real estate and auto peers Rightmove Plc and AutoTrader Group Plc. That feels about right given it’s a hybrid of the two. To be worth substantially more, the company will have to lift revenue and margins while maintaining its valuation multiple. That probably means raising prices. Suppose Scout24 could lift Ebitda from the 321 million euros expected this year to 375 million euros, a 17% jump, and nudge its valuation multiple a little higher to 20 times. That would imply an enterprise value of around 7.5 billion euros. Deduct net debt and the equity would be worth 6.8 billion euros, or 63 euros a share. Increase leverage via a buyback and Elliott’s share price target isn’t far off. It’s easier said than done. Elliott reckons a sale or demerger of the auto arm would help speed things along. Not only would it likely fetch a full price if there were competing bids, but Scout24 management could focus on lifting the performance of the real estate business. Perhaps.The danger is that Elliott has made change harder to achieve by blatantly telling the board what to do. The forthcoming annual meeting will see three new directors nominated. That provides a chance for Elliott to put forward an alternative slate. But suspicions have lingered around hedge funds and private equity in Germany ever since 2005, when politician Franz Muntefering described them as “swarms of locusts” that devour companies and destroy jobs. Elliott’s approach may be friendly to other shareholders, but the firm will need to tread carefully if it ups the pressure. The best hope is that a bidder now surfaces with an offer for the auto business that management can’t refuse. That would give Scout24 management a pretext to re-think leverage levels for what remains and adopt much of Elliott’s thinking without it looking that way. But whether that happens is not in Elliott’s hands.To contact the author of this story: Chris Hughes at firstname.lastname@example.orgTo contact the editor responsible for this story: Stephanie Baker at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Elliott Management Corp. demanded German classifieds group Scout24 AG split itself in two and pursue a bigger share buyback to boost investor returns after a sale of the company fell through in May.The U.S. activist investor, which disclosed a 7% stake in Scout24 on Monday alongside a letter laying out its position, said the company should sell its car listing business and focus on its real-estate unit, a move that Elliott predicted could lift the stock close to 65 euros a share. That’s well beyond the company’s previous record and more than twice its initial-public offering of 30 euros in 2015.“We believe there is a growing demand among a wide array of stakeholders for Scout24’s leadership to demonstrate a level of urgency that has thus far been lacking,” Elliott said.Scout24 has been vulnerable to an activist since its shareholders rejected a 46-euro-per-share offer from private equity firms Blackstone Group LP and Hellman & Friedman in May. Last month, the company announced it would simplify its structure to better focus on its two biggest businesses -- auto and real estate -- as well as pursue a 300 million-euro ($334 million) share buyback. For Elliott, the moves aren’t enough.The stock is now trading near its record high, closing Friday at 50.25 euros, and is up about 25% this year. The shares rose 0.7% as of 12:08 p.m. in Frankfurt, while the broader Stoxx Europe 600 Index was down 1.6%.Elliott said it has outlined its views for a breakup of Scout24 in meetings with managers of the company, whom it said should never have recommended the Blackstone-Hellman & Friedman offer.The AutoScout24 car business and the Immobilienscout24 real estate unit “do not have any material synergies sitting under one roof,” Elliott said, arguing that the existing structure doesn’t allow for resources to be allocated efficiently across divisions and employees don’t have proper incentives.In a statement, Scout24 said it has had active discussions with shareholders including Elliott in the past few months, before and after announcing its new strategy and committed to continue the dialogue. “We have announced comprehensive steps to strengthen both core businesses, continue to grow revenue while increasing operational efficiency and capital structure optimization,” Scout24 said. AutoScout24 SuitorsThere is rumored or confirmed interest from potential buyers in AutoScout24, and Immobilienscout24 is worth more than 5 billion euros ($5.6 billion) alone, almost as much as the entire company, Elliott said.A number of competitors could bid for AutoScout24, Germany’s second-biggest car listings business after EBay Inc.’s Mobile.de, with 1.1 million listings and 1.5 million listings, respectively.Softbank Group Corp.-backed Auto1 Group GmbH has expressed interest in buying the business in the past, according to people familiar with the matter, who asked not to be identified because the deliberations were private. And German publisher Axel Springer SE, which is being acquired by KKR & Co., has been seen as a potential suitor by analysts at Liberum, who valued AutoScout24 at 2.3 billion euros in a note last month.Spokeswomen for Auto1 and Axel Springer declined to comment.Elliott’s six-page letter to Scout24, dated July 26, outlines what the activist sees as the company’s potential, what it views as “missed opportunities” and its opinion on Scout24’s path forward. Addressed to Chief Executive Officer Tobias Hartmann and Supervisory Board Chairman Hans-Holger Albrecht, it’s replete with strong criticisms. Elliott said Scout24’s current share buyback plan was “grossly lacking in ambition.”The investor complained that Scout24’s executives had heard the fund’s ideas privately and promised to give feedback on its proposals, but instead issued a July 19 press release with its strategy update that “widely missed the mark,” according to Elliott.Elliott in GermanyScout24 adds to Elliott’s campaigns in Germany, where it has recently targeted pharmaceutical giant Bayer AG, software company SAP SE and industrial firm Thyssenkrupp AG.Elliott wants Bayer to settle legal claims linked to products from its Monsanto unit to unlock shareholder value. SAP has pursued a restructuring since Elliott disclosed a 1.2 billion-euro stake in April. At Thyssenkrupp, the chief executive officer and chairman resigned following criticism from investors including Elliott, who derided the company’s slow turnaround and what they see as its poor share price performance.(Updates with Scout24 statement in eight paragraph, context throughout.)\--With assistance from Frank Connelly.To contact the reporters on this story: Stefan Nicola in Berlin at firstname.lastname@example.org;Eyk Henning in Frankfurt at email@example.comTo contact the editors responsible for this story: Rebecca Penty at firstname.lastname@example.org, Benedikt KammelFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- IFS AB, the Swedish software maker owned by EQT Partners, is on track for a stock-market listing as early as 2020.It’s "very likely" that IFS, which competes with larger rivals SAP SE and Oracle Corp., will IPO late next year or the year after, Chief Executive Officer Darren Roos said in an interview.IFS will by the end of 2021 generate "well over $1 billion in revenue,” said Roos, who joined IFS last April after four years in top positions at SAP. EQT declined to comment.IFS, which employs about 3,700 staff, says its products are cheaper and easier to implement and use than those of its bigger rivals, which tend to lock customers into long maintenance contracts. IFS says it offers clients the flexibility of up- or downgrading its standard software on the go, and gives them a choice whether they want to move to the cloud or not.More than half the company’s license revenue in the second quarter came from new customers, causing IFS to raise its sales guidance for the year to $711 million.EQT bought IFS in 2015, when it was listed on Sweden’s stock exchange. The private equity firm has since took the company private and bolstered it with several acquisitions, including that of U.S. cloud software firm Acumatica last month. IFS’s new listing would likely be outside Sweden, Roos said.\--With assistance from Sarah Syed.To contact the reporter on this story: Stefan Nicola in Berlin at email@example.comTo contact the editors responsible for this story: Giles Turner at firstname.lastname@example.org, Andrew BlackmanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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(Bloomberg) -- Billionaire Azim Premji has helped create India’s latest tech unicorn: a fast-rising software startup that symbolizes the growing investor interest in the Asian nation’s enterprise technology space.Icertis, which competes with SAP SE and Oracle Corp. to help businesses manage contracts in the cloud, has raised $115 million, propelling it to unicorn status as investors flock to enterprise software makers.The advanced-stage funding round in Bellevue, Washington and Pune, India-based Icertis was co-led by Greycroft Partners LLC and PremjiInvest, the fund managed by the family office of Indian tech billionaire Premji. Existing investors including B Capital Group, Eight Roads Ventures and Cross Creek Advisors participated. With this, Icertis has raised over $211 million.The enterprise software segment is heating up as investors from Tiger Global Management to Sequoia and Accel scour the industry for India’s next startup giants. Many are expected to be business- rather than consumer-focused, as the country’s talent pool shifts from IT outsourcing services for global clients toward designing and providing online software.Icertis said it now helps customers worldwide manage over 5.7 million contracts, from supply chain and procurement deals to employee agreements and nondisclosure pacts, that have a total value of more than $1 trillion.“As contracts get converted from static documents to digital assets for the first time in history, every dollar in or out is governed by a contract, putting them at the heart of every enterprise,” said Samir Bodas, Icertis’s co-founder and chief executive officer. “Every global company faces unprecedented global competition and needs software to manage contracts.”Icertis is currently valued at “well north of one billion dollars,” Bodas added. The company will use the additional funding to grow its business, including by expanding sales and marketing. Global compliance demands involving Brexit, tariffs, European data privacy regulations as well as rapid digitization has worked in Icertis’s favor, while technologies like artificial intelligence helped enhance the sophistication of its services.“We have been able to ride the technology wave and assert leadership in the space despite large competitors,” Bodas said, citing consultancies Forrester Research and Gartner.Icertis works on a subscription model, charging customers based on the number of contracts drawn up and tracked using its software. MGI Research forecasts the total spending by companies for such contract management at over $20 billion from 2018 to 2022, with services on the cloud growing around 37% annually over the same period.Founded in 2009 when Bodas and friend Monish Darda began exploring cloud-based applications, Icertis in 2015 homed in on building a contract management platform. Today, more than 600 of its 850 employees are based in Pune, where the product is developed. The startup operates a dozen offices from Sofia to Sydney.(Corrects wording to reflect right definition in fourth-to-last paragraph.)To contact the reporter on this story: Saritha Rai in Bangalore at email@example.comTo contact the editors responsible for this story: Edwin Chan at firstname.lastname@example.org, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- SAP SE fell the most in nearly five years on signs that its $10 billion bet on cloud-based software faces headwinds, but the companies executives are adamant there is still room to grow.After buying U.S. startups Qualtrics International Inc. and Callidus Software Inc. to bolster its portfolio, SAP instead posted slower growth in new cloud bookings -- a keenly watched metric because it indicates future revenue. With profitability diluted by the shift to internet-based computing, a push to shore up margins failed to make progress in the second quarter.SAP fell as much as 10%, its steepest intraday drop since August 2015. The stock was down 5.9% at 3:40 p.m. in Frankfurt trading."What you’re not counting on is how much revenue will come SAP’s way by relying on” cloud partnerships with the likes of Amazon and Google, SAP’s Chief Executive Officer Bill McDermott told analysts during a call. “There’s no reason to think this is slowing down."SAP’s new cloud bookings rose 15% at constant currencies, a drop from the 26% gain in the first three months of 2019 and the weakest figure in at least a year and a half.The lower order figure is due to the fact that SAP is focusing on higher-margin sales, and that more customers chose “pay as you go” products that aren’t counted toward that metric, Chief Financial Officer Luka Mucic said. Excluding infrastructure-as-a-service, growth would be 27%, he said.The figures underscore the difficult transition to internet-based software as McDermott challenges rivals such as Salesforce.com Inc. and Oracle Corp.Cloud sales can initially be less profitable than traditional on-premise installations, and SAP has pledged to increase its operating margin by 1 percentage point a year on average through 2023. In the second quarter, the figure was flat at 27.3%, with Walldorf, Germany-based SAP blaming trade tensions for delaying software spending in Asia as well as acquisition costs.“We’re exactly on track in what we need to hit our mid-term objectives to triple our cloud revenue by 2023,” Mucic said in an interview with Bloomberg TV. “Also the profitability in the cloud is steeply increasing.”Total sales rose 11% to about 6.7 billion euros ($7.5 billion), boosted by strong growth from existing cloud customers, with revenue for the segment jumping 40%. Operating profit increased 11% to 1.82 billion euros.Uptake of SAP’s flagship S/4 Hana software accelerated in the April-June period, with the company adding about 600 customers for a total of more than 11,500 users. The software allows businesses to run tasks on their own machines or in a cloud-computing arrangement hosted by SAP or one of its partners. The company is farming out more of the low-margin computing backend to partners including Amazon Web Services and Microsoft Corp.SAP stuck to its outlook for operating profit to rise at least 9.5% and cloud revenue to increase more than 33%. McDermott maintained his optimism that his strategy would pay off.The Qualtrics acquisition will prove to be a “growth catalyst,” the CEO said in a telephone interview. “There’s plenty of room to continue strong cloud bookings and cloud growth.”(Update with details from analyst call.)To contact the reporter on this story: Stefan Nicola in Berlin at email@example.comTo contact the editors responsible for this story: Giles Turner at firstname.lastname@example.org, Chris Reiter, Iain RogersFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.At the heart of Chief Executive Officer Christian Sewing’s turnaround plan for Deutsche Bank AG is a contrarian bet: that he can cut spending on technology while gaining ground on the competition.Even with the digital revolution in finance accelerating, Deutsche Bank expects to trim its annual outlays on tech to 2.9 billion euros ($3.3 billion) in 2022 from a peak of 4.2 billion euros this year.“Deutsche Bank would probably love to be spending more on technology, but they need money for other parts of their restructuring,” said Pierre Drach, managing director of Independent Research in Frankfurt. “It’s pretty much impossible for European banks to catch up with the Americans at this stage.”Sewing’s team says it’s made progress in fixing information networks that his predecessor called “antiquated and inadequate.” Years of expansion left it with systems that couldn’t communicate with each other and didn’t adequately track its business. The bank, which has spent almost $18.5 billion on legal settlements and fines since 2008, has also suggested that the past breakdown in controls stemmed in part from weak systems.The 4.2 billion euros Deutsche Bank has budgeted this year to maintain and modernize its systems represents a fraction of the $11.5 billion JPMorgan Chase & Co. shells out. "You have to spend to win" with new technologies, Jamie Dimon, the bank’s CEO, said Tuesday.The gap is set to widen as the German chief executive wants to cut technology costs by almost a quarter. European banks, meanwhile, are forecast to increase tech spending at a 4.8% annual rate through 2022, according to the consulting firm Celent.“We continue to invest in IT to serve clients better, become safer, more efficient and better controlled,” Senthuran Shanmugasivam, a Deutsche Bank spokesman, said in response to questions from Bloomberg. “Despite our smaller footprint, our investment plans in 2019 are broadly unchanged as we reallocate resources to our core businesses.”It’s all part of a retrenchment Sewing announced last week to exit equities sales and trading and eliminate 18,000 jobs. Deutsche Bank aims to cut adjusted costs to 17 billion euros in 2022 from 22.8 billion euros last year; the share of technology expenses would remain stable over that time period.The company can modernize systems while spending less, for example by moving most of its applications to the cloud, according to Frank Kuhnke, who oversees its technology. He said Deutsche Bank has already cut the cost of crunching data by more than 30% since 2016 even as it increased computing capacity by about 12% a year to meet regulatory demands.Still, Deutsche Bank needs “to make a further step change in embracing technology,” Sewing told analysts last week.New HiresThe CEO has brought in new talent to do that. Bernd Leukert, who left the management board of software company SAP SE earlier this year, will start in September. Neal Pawar will join as chief information officer from AQR Capital Management the same month.Hiring outsiders hasn’t been a panacea in the past. Kim Hammonds, a former Boeing Co. executive, spent about four and a half years rebuilding the bank’s systems only to be ousted in 2018 after reportedly calling the bank “the most dysfunctional company” she’d ever worked for.Deutsche Bank expects its retrenchment from businesses to allow it to focus on its core operations. It will also save about 300 million euros by 2022 by shedding almost 5,000 external IT contractors and replacing them with internal staff at a lower cost. The integration of consumer lender Postbank will avoid duplication of expenses.The digital revolution is upending all aspects of finance -- from taking deposits to bond trading, a traditional Deutsche Bank strength. Citigroup Inc. has created a fintech division to invest in debt-market technologies while Spain’s Banco Bilbao Vizcaya Argentaria SA has created a unit to automate trade processes and generate intelligence from data. Dutch bank ING Groep NV has used artificial intelligence to win 20% more bond trades and cut costs.Cutting tech costs is also notoriously difficult.A three-year initiative announced in 2012 failed to stop technology spending from ballooning 44% by 2015. That was the year that then-CEO John Cryan said he would reduce the number of operating systems from 45 to four in 2020. Deutsche Bank still has 26, Sewing told investors in May. He kept the goal of eventually cutting them to four, but says the lender will need to run 10 to 15 systems for the foreseeable future.“Everyone knows that Deutsche Bank’s systems are a mess and I think they will have to end up spending more,” said Drach. “The fact that their new technology head hasn’t come on board yet gives them a good narrative for increasing the ultimate amount.”\--With assistance from Katie Linsell.To contact the reporter on this story: Nicholas Comfort in Frankfurt at email@example.comTo contact the editors responsible for this story: Dale Crofts at firstname.lastname@example.org, James Hertling, Giles TurnerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.