Is Tibco for Sale?
Updated · Aug 07, 2014
Is Tibco for sale? The Wall Street Journal and Dow Jones both published reports that it is, which led to a 7.5 percent increase in its stock price yesterday.
CNBC analyst Herb Greenberg believes HP and IBM are among the likeliest buyers.
The company has been tight-lipped about a possible sale. As observers like Dennis Howlett are pointing out, it is hardly the first time Tibco has reportedly courted suitors. In the recent past IBM, HP and SAP have all been mentioned as possible acquirers.
Howlett, writing for Diginomica, states his belief that Tibco may not find it easy to line up a buyer, given that the growing use of lightweight integration tools and cloud-based applications means interest in Tibco’s middleware isn’t as strong as it once was.
While Tibco’s Spotfire analytics software should, in theory, be attractive to potential buyers, it has underperformed in the market when compared to fast-growing competitors like Tableau and Qlik. The latter company also is reportedly an acquisition target.
Tibco’s earnings have been soft and the stock price has suffered, falling 14 percent since the beginning of 2014. The latest earnings, buoyed somewhat by its $185 million purchase of Jaspersoft, an open source business intelligence provider, still fell short of expectations.
TheStreet cited Tibco’s strengths as “revenue growth, reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures.” Weaknesses include “deteriorating net income, disappointing return on equity and weak operating cash flow.”
In a recent interview with Benzinga, Tibco CEO Vivek Ranadive, said he felt financial analysts undervalued Tibco, given that it turned a profit while companies like Tableau did not. The primary difference between Tibco and upstarts like Tableau, Ranadive said, is a longer and more complex sales cycle, an issue Tibco is working to address.
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