Notable Mergers and Acquisitions of the Day: EBAY, CDCS

November 6, 2009 10:33 AM EST

• eBay Inc. (NASDAQ: EBAY) today announced that the investor group led by Silver Lake, which had previously entered into a definitive agreement to acquire a majority stake in Skype from the company, has reached a settlement agreement with Joltid Limited and Joost N.V. that gives Skype ownership over all software previously licensed from Joltid and ends all litigation currently pending against the investor group and eBay at the closing of the acquisition.
  
  As part of the settlement agreement, Joltid and Skype founders Niklas Zennstrom and Janus Friis will join the investor group, contributing Joltid software and making a significant capital investment in exchange for a 14 percent stake in Skype. As a result, Silver Lake and other investors including Andreessen Horowitz and the Canada Pension Plan Investment Board, will together hold 56 percent of Skype and eBay will retain 30 percent. As previously announced, eBay will receive approximately $1.9 billion in cash upon the completion of the sale and a note from the buyer in the principal amount of $125 million. The deal, which values Skype at $2.75 billion and is not subject to a financing condition, is expected to close in the fourth quarter of 2009.
  
  "Skype will be well positioned to move forward under new owners with ownership and control over its core technology," said eBay Inc. President and CEO John Donahoe. "At the same time, eBay continues to retain a significant stake in Skype and will benefit from its continued growth. We look forward to closing the deal and focusing on growing our core ecommerce and payments businesses."
  
  Commenting on the agreement on behalf of the investor group, Silver Lake Managing Director Egon Durban said: "We are very pleased to have the litigation resolved. We remain confident in a great future for Skype, and we look forward to working with Niklas, Janus and the other investors as partners to help the company achieve its full potential."
  
  The investor group will no longer include Index Ventures, which has withdrawn from participation. Commenting on its decision to withdraw, Danny Rimer of Index Ventures, said: "We are pleased that Skype will now be able to put litigation behind it, and we wish Josh Silverman, his team and the Skype investors well in continuing to grow a great business. Although Skype has the potential to be a great investment, the deal terms changed for Index such that it no longer matches our investment criteria and thus we have decided not to participate in the transaction."
  
  
• CDC Software Corporation (NASDAQ: CDCS) today announced the acquisition of Activplant Corporation, a Canadian-based provider of manufacturing business intelligence solutions, that is expected to position CDC Factory as a market-leading solution in the packaged Manufacturing Operations Management (MOM) solutions space.
  
  For more than a decade, Activplant solutions have promoted continuous improvement initiatives for the factory floor in discrete and process manufacturing. Activplant is a market leader in providing manufacturing business intelligence software for some of the world's leading Tier 1 automotive manufacturers, as well as food and beverage, forestry products and CPG companies. Their software is installed at more than 200 plants around the world. Its patented business intelligence software helps companies manage their operational performance by focusing on the key issues in their facilities, which ultimately affect cost, quality, and supply chain demand requirements. This acquisition is expected to generate new cross-selling opportunities for CDC Supply Chain in the Tier 1 automotive market, as well as expand CDC Software's manufacturing solutions' already significant footprint in the food and beverage and consumer packaged goods markets.
  
  "We are excited to acquire this innovative developer of manufacturing intelligence solutions which is an ideal fit with our CDC Factory product line," said Bruce Cameron, president of CDC Software. "We expect this to be an accretive acquisition and fits within our strict valuation criteria. We believe Activplant will help CDC Software take a leadership role in the packaged MOM applications market. It also expands CDC Factory's already significant presence in the food and beverage and CPG markets, as well as help CDC Supply Chain solutions penetrate further in the Tier 1 automotive industry.
  
  "With CDC Factory and Activplant's out-of the-box MOM functionality, manufacturers do not have to spend costly consulting fees to customize the software to fit their distinct business processes. With these CDC Software solutions, manufacturers can now focus their budget on implementing best practices and continuous improvement initiatives that will ultimately improve their profitability," Cameron added.
  
  "CDC Software's acquisition strategy is a key part of the company's plan for growth and we believe our strategy is enabled by our global scalable business and technology platform that features an infrastructure of multiple complementary applications and services, domain expertise in vertical markets, cost effective product engineering centers in India and China and a worldwide network of direct sales and channel operations. We believe our global platform is a key reason why we have successfully integrated acquisitions that have resulted in a deeper and broader product portfolio, expanded geographic reach, and increased vertical expertise. "
  
  This acquisition announcement marks the latest of several strategic initiatives undertaken by CDC Software. Last quarter, CDC Software completed the acquisition of WKD Solutions Ltd., a leading provider of supply chain event management solutions marketed under the brand Categoric. In addition, CDC Software recently announced plans to acquire two SaaS companies as part of its SaaS rollup strategy to expand in this growing market.

To see all the Mergers & Acquisitions for today in real-time go to http://www.streetinsider.com/Mergers+and+Acquisitions

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