Why Don't Go-Shops Go Anywhere? Ask Management...
M&A may be ice cold in most sectors, but it's at least lukewarm in the world of middle market technology. Take for example, the recent heated auction for SumTotal Systems. There's also the go-shop struggle for Greenfield Online, and Symphony Technology Group's purchase of MSC Software. My eyes happen to be on Thoma Bravo's bid for Entrust, the fate of which will be decided by vote on Friday. Not because of Entrust's technology, per se, but because of the sale process' inherent conflicts of interest. The publicly-traded digital security business company received three bids during the go-shop period for its agreed-upon sale to Thoma Bravo. Notably, Thoma Bravo's already-sweetened bid for $1.85 per share is below a previously rejected $3 per share offer from an unnamed strategic. For unknown reasons, the board deemed those three go-shop bids inferior. Thomas Kirchner at Seeking Alpha suspects that that curious decision has everything to do with management. See, the deal was structured as what I've heard some analysts call a "BIMBO": Buy-In-Management Buyout.
