Vector Capital to buy BroadVision
San Francisco private equity firm Vector Capital is buying Redwood City web site software company BroadVision and taking it private, the companies announced today. Vector will pay shareholders 84 cents a share in cash, a 36 percent discount from Monday's closing price of $1.32.
BroadVision was a pioneer in providing software that helps large companies set up and operate complex web sites. Customers have included Circuit City, Vodafone and Hewlett-Packard. But the company has struggled since the dot-com bust and has been losing money. The company posted a net loss today for the second quarter of $2.9 million, or $0.08 per share. The company recently shed 22 percent of it workforce.
"They have a big hole in their balance sheet, and they don't have the cash or liquidity to do anything,'' Chris Nicholson, a partner with Vector, told us this morning. "We're able to step in and provide stability. There need to be some dramatic changes in the way the company operates if the company is to survive.''
But Nicholson said Vector is a seeing a resurgence in BroadVision's industry and "there are some very exciting potential long-term benefits.''
BroadVision gets about $16 million from Vector to retire the notes and associated warrants
Vector was in the news recently for another noteworthy acquisition. It bought WinZip Computing, the company that makes file compression software, earlier this month. Vector bought Corel in 2003.