Eminence Capital and TIBCO Software Inc.
Eminence Capital increased its position in TIBCO Software (TIBX) during 3Q14. The stock accounts for 3.08% of the total portfolio—up from 1.76% of the fund’s 2Q14 portfolio.
About TIBCO Software
TIBX provides infrastructure and business intelligence software. It sells products through a direct sales force. It also sells products through alliances with leading software vendors and system integrators. Worldwide, companies in diverse industries license TIBX’s products. TIBX operates in two segments:
- service and maintenance
TIBX and Vista Equity Partners
On December 5, Vista Equity Partners completed the acquisition of TIBX for $4.3 billion, or $24 per share, in cash transaction. It includes the assumption of debt. The purchase price is at 26.3% premium to the closing price of TIBX common stock on September 23, 2014.
In November, TIBX announced Balboa Merger Sub, Inc.’s offering of $950 million of senior notes. The net proceeds from the offering, together with other financing sources, will be used to fund the acquisition. TIBX will assume all of the obligations after the acquisition is complete.
3Q results missed estimates
GAAP (generally accepted accounting principles) total revenue was $255.6 million—a decline of 6% year-over-year, or YoY. Software revenue was $85.9 million—down 20% on a YoY basis. Services and maintenance revenue was $169.7 million—up 4% YoY. Net income was $2.6 million, or $0.02 per diluted share—compared to $21.3 million, or $0.13 per share, for 3Q13.
According to company reports, “The migration of perpetual to subscription-based licensing, together with less-than-expected revenue in Europe, had an impact on overall software revenue.”
During the quarter, it launched TIBCO Engage. It’s a new technology platform. It would leverage TIBCO’s Fast Data platform and integration technology to harness the opportunities within customer experience management. TIBCO Spotfire, TIBCO StreamBase, and TIBCO ActiveMatrix BusinessWorks are all named as leaders in reviews by Forrester and Gartner Inc.
Eminence Capital’s other 3Q14 positions
During 3Q14, Eminence Capital also initiated new positions in GNC Holdings (GNC), Apple (AAPL), McDonald’s (MCD), Cognizant Technology Solutions (CTSH), and Zimmer Holdings Inc. (ZMH). It raised its position in CBS Outdoor Americas Inc. (CBSO). It sold its position in Ralph Lauren (RL). It decreased positions in National Oilwell Varco (NOV), Dollar General (DG), Cadence Design Systems, Inc. (CDNS), Kar Auction Services, Inc. (KAR), and VCA Antech, Inc. (WOOF).
The next part of this series will explore Eminence Capital’s position change in CBSO.