With billion dollar acquisition, Bentley doubles down on Digital Twins

Tom Paine

Exton-based Bentley Systems (Nasdaq: BSY) announced Thursday afternoon it was acquiring Christchurch, New Zealand-based Seequent from PE firm Accel-KKR for just over $1 billion dollars. Bentley describes Seequent as “a leader in software for geological and geophysical modeling”.

Bentley will pay $900 million in cash, the rest in company stock.

Tom Barnds, co-managing partner at Accel-KKR and Seequent board member, said, “We had been looking forward to Seequent’s IPO this year, but we are so convinced of the logic of this combination that we are glad to anticipate instead becoming BSY shareholders.”

Bentley’s current offerings enable digital twins to incorporate what’s constructed “near surface”, the company says. But Seequent’s software will enable Bentley to see deeper.

Bentley expects Seequent to be accretive to its key metrics, and boost its organic growth rate. Presumably, it will also grow Bentley’s total addressable market (TAM).

Bentley also says Seequent can benefit from Bentley’s existing presence in China.

Since its September IPO, Bentley’s share price looks as if investors are expecting an increased organic growth rate from the current single-digit level.

After closing, Bentley says Seequent will operate as a stand-alone Bentley subsidiary, with Seequent’s current Chief Operating Officer Graham Grant, succeeding its retiring CEO Shaun Maloney, reporting to Bentley’s Chief Product Officer Nicholas Cumins.

Bentley CFO David Hollister said he expects Seequent “to contribute in excess of $80 million to our ARR during this year”. I’m not quite sure what that exactly means (calendar year, or months after expected 2nd quarter close), but I guess I’ll find out in Bentley’s investor call 8:30 AM tomorrow morning.

Roblox finishes first day worth $45 billion

Tom Paine

On a day when the big number is $1.9. trillion, $45 billion may seem relatively small. But when it’s first day of trading ended, that’s what the California-based youth gaming platform Roblox was worth. With a direct listing there’s no predetermined price. Last valued at $29.5 billion, Roblox (NYSE: RBLX) shares opened at $64.50, or $35.5 billion market value, 43% above its last valuation. They closed at $69.50, giving it a fully diluted value of $45.3 billion.

Cofounder David Baszuck’s shares were worth $5.5billion at the end of the day. (His cofounder passed away from cancer a few years ago.). First Round Capital shares were said to be worth $2.3 billion.

But Roblox wasn’t an overnight success. Founded in 2004, Roblox’ growth mushroomed over the past five years before reveniue climbed 82% in 2020, with a boost from the pandemic.. It’s highest valuation was just $4 billion a year ago. First Round, as usual got in early in a Series A in 2005.

Manchin & daughter understand leverage

Heather Manchin Bresch

Tom Paine

Senator Joe Manchin (D-WVa) understands the power of leverage. As the 50th Democratic senator in a 50/50 senate, he finds himself in a position to”make or break” new legislation. Because of his position, Manchin can gain key concessions (like reportedly no minimum wage increase) in return for his support.

Likewise, his daughter, Heather Manchin Bresch, as CEO of Pittsburgh-based Mylan Labs, understood her company’s leverage over pricing of the anti-allergic EpiPen, increasing the price by 500% over an eight-year period. There may have been. legitimate reasons for the price increases (such as liability insurance), but the fact that Mylan had become the sole manufacturer of the device helped.

Politically, in 2016 Congress made Mylan a national poster child, fairly or not, for outrageous Pharma price hikes.

Update: Mylan acquired Pfizer’s Upjohn business after FTC clearance in late 2020, and integrated the two to form a new company, Viatris. Bresch, who started as a data entry clerk at Mylan in 1992, then stepped down. Mylan will be closing its Morgantown,West Virginia plant by mid-2021, a move that will result in the loss of 1,500 jobs. The Morgantown layoffs are among 45,000 employees the company will cut from its workforce.

Roblox set for Direct Listing on Wednesday (Update: Roblox starts trading at $64.50 / $35.5 billion market cap)

Tom Paine

Roblox, the California-based kids gaming platform, is finally set to go public on Wednesday after two delays. Originally, it was going to go in December , but was delayed first for a reevaluation of pricing strategy and secondly for a small accounting adjustment.

Some people might be wowed by its incredible growth rate (82% revenue growth in 2020), but this Motley Fool piece is quick to remind investors that 2020 may have been to some extent a pandemic-induced aberration. Because its a direct listing, you don’t get the kind of pricing guidance you get with an IPO.

First Round Capital, an early investor with a 7% stake in Roblox according to the S-1, stands to have a billion dollar-plus payday (although most of that goes to its limited partners). But at least it will cover the firm’s office expense for a while.

Fanatics goes to China; Coursera going public & more

Tom Paine

Jacksonville-based sports licensing giant Fanatics, majority owned by Michael Rubin’s Conshy-based Kynetic LLC, is going to China, so to speak. Fanatics China will be a 50/50 joint venture with Asian PE firm Hillhouse Capital, and Fanatics sources indicate it should be a billion dollar opportunity.

Fanatics is reported to be edging closer to an IPO by some, though I haven’t found comments attributed to a specific source. It has over $3 billion in sales, and its most recent valuation was $6.2 billion.

Also, Fanatics last week announced the appointment of basketball great and sports business executive Earvin “Magic” Johnson to its Board of Directors.

Coursera, which enables people to attend university -level course online, has filed to go public. It would list on the NYSE under the symbol “COUR”.

Penn was among the first institutions to offer content on Coursera, and. was also an early equity investor.

Coursera had total revenue of $293 million in 2020, a gain of 59%, while losing $66 million. It attributed some of the revenue gain to the pandemic, so it will be interesting to see how they hold up this year.

Apple plans to release new iPad and MacBook models with OLED displays in 2022, according to MacRumors citing reports by Digitimes. Some iPhones are already using OLED, but those have much smaller screens.

Ewing, NJ-based Universal Display (NASAQ: OLED) shares are up 5%. today. UDC is the primary producer of the raw materials that go into OLED displays. UDC’s market value is $9.4 biilion.

PPG (which manufactures for UDC) and UDC last week announced plans for a new OLED plant in Ireland. Whether this is directly related to Apple’s plans is not known at present, and there are other factors contributing to UDC’s growth.

Osage University Partners, a separate sister fund to Osage Venture Partners that specializes in investing in university research., is an investor in quantum -computing startup IonQ  which plans to merge with a SPAC for the purposes of a public listing. It will become the first publicly traded quantum computing company.

Look at Osage University Partners’ portfolio: some fascinating investments.

Wu joins Biden administration

Tim Wu / Columbia Law

Tom Paine

Big tech critic and net neutrality advocate Tim Wu is joining the Biden administration to work on technology and competitive issues on the National Economic Council.

Wu, who has been a law professor at Columbia, is most widely known as a proponent of Net Neutrality, a term he is credited with inventing. But his interests in using antitrust versus dominant tech companies are really much broader than that.. His appointment appears to signal the direction the Biden Administration may take on the regulatory front, though he won’t directly possess much policy power on the NEC.

As President, Donald Trump railed against Comcast, calling it names such as “Concast”. But he barely touched Comcast during his term in office, and his free market-oriented FCC Chairman Ajit Pai reversed the net neutrality regs imposed during the Obama administration. I can tell you that Comcast mostly loved Pai for his policy positions. But Wu’s appointment must mean that a resumption of Net Neutrality will be under consideration.

Beyond Broadband, Wu’s book “The Curse of Bigness” attacks the M&A culture of bigness that characterizes big tech. He argues for breaking up Facebook. Although Wu is a favorite of progressives, if he plays his cards right he might garner support from conservatives on some issues who are also alarmed by Big Tech’s power..

On another note, Wu evidently cleaned out his tweets prior to accepting his government role.

While Comcast claims victory, Altice faces criticism (Update: Report on March 16th hearing)

Tom Paine

Altice’s NY, NJ & Connecticut footprint

Comcast issued a somewhat self-congratulatory press release yesterday morning, highlighting its network’s performance during the pandemic.

As the pandemic took hold, parent frequently worked from home, children were attending class via Zoom, and there was much more home entertainment via streaming.

Peak traffic on Comcast’s network increased 32% during 2020, reaching a peak of 50% in some markets in March.

But on the whole, response times held up. (Though I am not a Comcast customer; I am relying on other’s reactions and comments).

“The Internet was a bright spot during the darkest hours of 2020, keeping hundreds of millions of people connected to work, school, entertainment, and most importantly, each other,” said Tony Werner, President of Technology, Product, Xperience at Comcast Cable in the release. “We’re proud of the years of strategic investment and innovation that enabled us to build the foundation of a high-speed, intelligent network designed to scale to the needs of our most demanding users, and also adapt to unexpected events.”

As talk of reimposing some measure of net neutrality regulations rose with the change of administrations, Comcast wisely backed down from plans, at least on the east coast, to enforce data caps that could lead to extra charges for the remainder of 2021.

But the performance of Altice, the French outfit that bought the former Cablevision a few years back and serves wide swaths of New Jersey (perhaps more than half after its recent acquisition of a large part of Service Electric’s New Jersey service area) under the Optimum brand name, before and during the pandemic was not so warmly reviewed. From Montville to Jackson to Piscataway to Hamilton, the complaints sounded strikingly similar, according to a state Board of Public Utilities report:

“Citing issues raised by their respective residents concerning frequent and lengthy service disruptions (across all services), inconsistent connections and fluctuating Internet speeds,long telephone wait times, poor customer service, and an inability to get a satisfactory response to these issues from the company both before and after the COVID-19 pandemic.”

Although Altice has met with some local communities, overall it hasn’t resolved much.

A virtual hearing will be held on Tuesday, March 16, at 10 a.m., because of. the BPUs’ “review of various complaints from municipal and government officials requesting a Board investigation and intervention in this matter.” It will give both officials and Altice customers the opportunity to raise issues about the services received from Altice and have the company respond to the concerns, according to the BPU.

Update: Ashbury Park Press reports on yesterday’s Altice hearing.

EPAM Announces Agreement to Acquire Salesforce-boutique PolSource

Newtown-based EPAM announced today an agreement to acquire Salesforce consultancy Polsource.

Polsource is described by EPAM as a “Salesforce boutique” with over 300 employees (according to LinkedIn) spread out over Poland, the UK and the US.

EPAM’s objective is “to scale EPAM’s growing Salesforce capabilities and expansion into new markets.” 

According to Crunchbase, PolSource had a Series A in 2019 led by Salesforce Ventures.

EPAM Announces Agreement to Acquire PolSource

EPAM logo (PRNewsfoto/EPAM Systems, Inc.)


Mar 01, 2021, 10:02 ET

NEWTOWN, Pa., March 1, 2021 /PRNewswire/ — EPAM Systems, Inc. (NYSE: EPAM), a leading global provider of digital platform engineering and development services, today announced its agreement to acquire PolSource—a Salesforce Platinum Partner with more than 350 experienced Salesforce specialists—to scale EPAM’s growing Salesforce capabilities and expansion into new markets. The proposed acquisition is expected to close at the beginning of EPAM’s fiscal second quarter, subject to required regulatory approvals and other customary closing conditions, at which time PolSource’s senior leadership team and hundreds of Salesforce experts will join forces with EPAM Systems. 

PolSource is known as a global boutique Salesforce partner, specializing in consultancy services and delivering powerful digital transformation solutions. As a Salesforce Platinum Partner, PolSource brings a reputation for industry innovation—delivering successful multi-cloud end-to-end solutions across many key industries, including consumer goods, retail, manufacturing, automotive, technology, healthcare, and life sciences. The five-star rated company has more than 1,000 Salesforce certifications (including Salesforce Certified Technical Architects), has earned 14 AppExchange Navigator Specialist & Expert Awards, and is an active member of six Salesforce partner advisory boards.

PolSource’s expertise spans the Salesforce Customer 360 platform (including Sales, Service, Marketing and Commerce), and key Salesforce practices across Heroku, AI, Data & Analytics, Integration (including MuleSoft), Mobile, and CX/UI. With consulting and delivery teams across the Americas and EMEA, PolSource is trusted to design, deploy, and support solutions for many of the world’s global brands.

To learn more about EPAM’s growing Salesforce Practice, click here

About EPAM Systems
Since 1993, EPAM Systems, Inc. (NYSE: EPAM) has leveraged its software engineering expertise to become a leading global product development, digital platform engineering, and top digital and product design agency. Through its ‘Engineering DNA’ and innovative strategy, consulting, and design capabilities, EPAM works in collaboration with its customers to deliver next-gen solutions that turn complex business challenges into real business outcomes. EPAM’s global teams serve customers in more than 35 countries across North America, Europe, Asia and Australia. As a recognized market leader in multiple categories among top global independent research agencies, EPAM was one of only four technology companies to appear on Forbes 25 Fastest Growing Public Tech Companies list every year of publication since 2013 and ranked as the top IT services company on Fortune’s 100 Fastest-Growing Companies list in 2019 and 2020. Learn more at www.epam.com and follow us on Twitter @EPAMSYSTEMS and LinkedIn.

About PolSource
PolSource is a Salesforce Platinum Partner with hundreds of experienced, certified Salesforce experts. We provide proven results with consulting, delivery, and success teams throughout the Americas & Europe. Our industry-specific accelerators deliver rapid transformation, and measurable outcomes across Retail and Consumer Goods, Manufacturing, Automotive, and Technology companies, to name a few. Learn more at www.polsource.com and follow us on Twitter @polsource and LinkedIn.

Forward-Looking Statements
This press release includes statements which may constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the accuracy of which are necessarily subject to risks, uncertainties, and assumptions as to future events that may not prove to be accurate. Factors that could cause actual results to differ materially from those expressed or implied include general economic conditions and the factors discussed in our most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. EPAM undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities law.

SOURCE EPAM Systems, Inc.

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Comcast & the “U” word; Living by Big Tech’s rules?

Tom Paine

Perhaps the only time you’ve heard the words Comcast and Union together has been in references to Philly’s pro soccer club?

Well, in Massachusetts, seven years after winning an election, Comcast technicians at the Fairhaven, Massachusetts, garage finally have a contract. Electrical Workers (IBEW) Local 2322’s new two-year contract was ratified by 79 percent of the eligible membership on February 3. The Fairhaven techs were the first group of Comcast workers in New England to unionize.

How would you like to live in a town owned by , say, Facebook or Twitter? Nevada’s governor,  Steve Sisolak (D), on Friday unveiled a proposal that would allow technology companies to establish jurisdictions with powers similar to those of county governments within the state.. So if one of these companies banned you, would that mean you are banned entirely from physical existence?

Governor Wolf didn’t need anybody’s approval to sign Boston Consulting Group to a no-bid $11.5 million contract to improve the state’s vaccine distribution logistics.

“The need for this intervention was so urgent,” Acting Secretary of Health Alison Beam said.. “I can’t say enough how urgently we needed resources on board … to put controls in place [and] make improvements on our vaccine allocation strategy.”  

One would think a team from Carnegie-Mellon, which is particularly skillful at operational logistics, or Wharton or Penn SEAS for that matter, could do the job as well at perhaps less than Boston prices.

Former Speaker of the House and VP candidate Paul Ryan, who often struck me as having an accountant-like mindset, has joined up with his old running mate Mitt Romney in a Boston PE firm Romney and one of his sons founded, Solamere Capital. Ryan, not one to miss out on a trend, had raised a $300 million SPAC a few months back. By the way, Ryan disagrees with Romney’s pro-impeachment vote.

Next move for Ryan: Conversion to LDS?