- Was Meltwater ever serious in wanting to buy Cision?
- Who from GTCR will join Cision board?
- Will Cision and Vocus integration be straightforward?
In a few hours’ time (16:00 CEST) shareholders of Cision AB will meet in Stockholm to vote in a pointless ballot.
Whilst we can’t pre-judge the outcome of the vote in my opinion the meeting is only procedural – the company secretary merely having to follow due process – Blind Freddy could predict the outcome of the vote.
GTCR Investment X AIV Ltd will ensure it has seats on the board. The next step will be for the directors to rubber stamp the sale of Cision to GTCR via its investment arm Blue Canyon Holdings AB.
Cision’s constitution allows for shareholders holding more than 10% of the company to stop a compulsory acquisition of the shares. Guess what? At the time, Meltwater held 10.1% in stock.
This extraordinary general meeting was called by Blue Canyon which at the time held 63.4%. It has since ramped up its equity to 71.9%.
It called the EGM in response to being thwarted in its original bid attempt by Meltwater who announced a counter bid on 03 April. Cision’s constitution allows for shareholders holding more than 10% of the company to stop a compulsory acquisition of the shares. Guess what? At the time, Meltwater held 10.1% in stock.
Meltwater currently holds around a 15.3% shareholding buying the additional shares since Blue Canyon’s bid was unanimously recommended by the Cision board back in February.
The purpose of the EGM became pointless on Friday when Meltwater withdrew its bid for Cision. With its withdrawal came the removal of urgency for GTCR to have its representatives appointed to the Cision board. Board appointments will be voted on next week at the company’s annual general meeting.
But was the San Fransisco headquartered company ever really serious about buying Cision? I don’t think so. April’s first Meltwater counter offer to the GTCR bid was conditional on it becoming owner of at least 80% of Cision shares. This condition was softened to 70% equity in its raised bid of 16 April after Blue Canyon upped its offer on 07 April. Regardless of whether the condition stood at 80% or 70% GTCR was never going to sell. The Meltwater bid was never going to succeed.
Jorn Lyseggen, Meltwater’s founder and CEO, has gained three important arrows to his quiver from this dance:
- Media coverage – Financial, trade and social media
- Alignment with heavy-hitting GTCR and, by association, its far larger $446.5m Vocus deal
- Successfully increasing the amount GTCR will have to stump up for Cision shares so creating a significant premium on the Meltwater’s investment in the Scandinavian SaaS company.
In many ways, the acquisition of Vocus and Cision will be the easy part of the process for GTCR. The next, more onerous, phase will be the integration of the two PR/marketing services companies. For instance, who’ll get top job? Peter Granat or Richard Rudman? The answer to this will help form the culture of the new company.
The fast-growth regions of Southeast Asia look enticing compared with the sluggish North American and European media intelligence landscape.
And then, what next? The deal creates a company which will over service the North American market. There will be plenty of ‘rationalisation’ at the new company.
GTCR will demand a heavy return on its investment. In pursuit of increased revenues the new company will look to other geographical areas. The fast-growth regions of Southeast Asia look enticing compared with the sluggish North American and European media intelligence landscapes.
But as I recall both Vocus and Cision have: “Been there. Done that” having already independently tried to enter the Southeast Asian market in the past before beating a retreat for ‘strategic’ reasons.
Anyway if GTCR gets the integration of Vocus and Cision right it will probably be easier to buy rather than build a local Asia Pacific offering. So, they can get back on the acquisition trail.