An ex-Investment Banker's View On the Novell Deal
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Greetings from Portland Maine! I'm a former mergers and acquisitions investment banker with a background in technology companies. I was a partner at Broadview, and I thought it might be helpful to add my two cents here. I have a more positive take on the deal than the majority of posters so far. I'm not worried about Novell squeezing SuSE at all. I listened to the conference call today and Novell clearly said that the deal with be earnings-neutral this year and accretive next year. In plain-English, this means that, even with all of the costs associated with completing this transaction, Novell's earnings per share (profits) will not be adversely affected by the deal this year, and; in subsequent years SuSE's profits will enhance Novell's earnings per share. This alone is the main reason why Novell's stock took off today. Doing earnings-neutral or accretive acquisitions is a rarity, and significantly reduces the need for Novell to make cuts. In most deals, the acquirer's shares tumble on news of an impending acquisition. Furthermore, a number of comments were made on the conference call that gave me the impression that Novell sees this as a "we've got a great sales/support channel; you've got a great product we can sell" deal. Novell specifically said they will not relocate anybody from Nuremburg, and they also said they will be making significant investments to train their sales channel, partners and ISVs. In addition, regardless of what you may think of Netware, the fact is that Novell has significant relationships in large enterprises--enterprises that are used to running non-Microsoft products in heterogeneous environments. Not a bad place to start selling SuSE Linux... Re SuSE's desktop products, I don't see that these are at risk at all. Novell acquired Ximian primarily for Red Carpet. That tool is overkill if you are only managing a bank of Linux servers. Ximian Desktop is a neat product that, like KDE, aims to make Linux easier to use for non-technical users used to Microsoft Windows. We may not like some of the Windows-like attributes of either GNOME or KDE, but if you want to roll out a few thousand Linux desktops in an enterprise that relies primarily on web applications, making that transition from Windows to Linux easy on the non-technical users is critical in keeping deployment training costs down. Probably I am telling most people on this list things they already know, but I've been a bit surprised by the trepidation expressed by many posters here in the past few hours, and I thought having an alternative, more positive view on things could be useful. With best regards to all (especially those who have answered my numerous dumb questions here!), Mark -- ______________________________________________________________ L. Mark Stone President Reliable Networks of Maine, LLC 477 Congress Street, 5th Floor Portland, ME 04107 Tel: (207) 772-5678 Email: LMStone@RNoME.com Web: http://www.RNoME.com
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L. Mark Stone wrote:
Greetings from Portland Maine!
I'm a former mergers and acquisitions investment banker with a background in technology companies. I was a partner at Broadview, and I thought it might be helpful to add my two cents here. I have a more positive take on the deal than the majority of posters so far.
SNIP - I don't like repeating large blocks, and apologies to those how do not keep eMails.
With best regards to all (especially those who have answered my numerous dumb questions here!), Mark
That was a nice summary, which I agree with, and is probably well enhanced by the RedHat news coming at the same time, we need ONE good desktop package :) I have reason to be interested in this as I have just spent 6 months moving everything over to SUSE because Borland seem to be moving to a Microsoft distributor, windows is far too bloated and expensive for 'intelligent terminals', and I prefer to choose my self ;) -- Lester Caine ----------------------------- L.S.Caine Electronic Services
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On Wed 5 November 2003 04:29, L. Mark Stone wrote:
Greetings from Portland Maine! [snipped]
Greetings. Thanks for taking the trouble to write this. Its good to get another perspective on the situation. -- GPG fingerprint = 3D45 5509 D380 26A4 523E A9D8 A66A 5F38 CA43 BB0E
participants (3)
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jalal
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L. Mark Stone
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Lester Caine