A little over a week after Austin had its first tech company IPO in three years, one of its existing publicly-traded companies is being taken private in a buyout deal.
Bazaarvoice (Nasdaq: BV) has agreed to a $521 million buyout by Marlin Equity Partners, a Los Angeles-based investment firm. The deal, which is expected to close in the first quarter of 2018, is all about providing value for stockholders.
“We are pleased to announce this transaction which enables our stockholders to realize immediate cash value at a premium and provides Bazaarvoice with the operational flexibility it needs to continue its strategic vision,” Gene Austin, Bazaarvoice’s chief executive officer and president, said in a news release.
If the deal is terminated, Bazaarvoice could be forced to pay Marlin Equity Partners an $18.3 million termination fee.
Bazaarvoice, founded in 2005 by Brett Hurt and Brant Barton, built a powerful business out of organizing, authenticating and analyzing consumer-generated reviews and ratings. It has since expanded into marketing and advertising.
The buyout is the latest twist in what has been a relatively rocky ride for the Austin tech company. The company had a rapid period of growth, followed by an IPO in 2012 that raised $114 million. It then acquired one of its rivals, PowerReviews, for $152 million.
A half year later, Hurt, the company's co-founder and CEO, resigned from his role. At the same time, it announced it was acquiring Longboard Media Inc. for $26.9 million. And Bazaarvoice was then slapped with an anti-trust lawsuit tied to its acquisition of PowerReviews. It was later found guilty and had to divest from PowerReviews as part of a settlement with the Department of Justice. It's stock price plunged.
The company's stock price has never quite recovered and hit an all-time low of $2.82 last year. Its acquisition is priced at $5.50 per share after entering the market in 2012 at $16.51. Shortly after its stock hit that low point, Bazaarvoice opened its new headquarters in North Austin. Then, just weeks later, it announced it would layoff 50 employees as it tried to streamline operations.
Earlier this year, Bazaarvoice launched a new product, Brand Edge, a product that gives companies that don't sell directly to consumers access to reviews and ratings. The company expected the move to draw in thousands of new customers and drive revenue.
“The Board of Directors appreciates the patience that our stockholders have shown as we’ve worked to improve our business and operations,” Tom Meredith, chairman of the board, said in the news release. “The Board ultimately decided, after extensive engagement with stockholders and an extended and thorough process, that Marlin’s offer to acquire Bazaarvoice is the best way to maximize value for our stockholders.”
Several people in the Austin tech community congratulated Bazaarvoice on the deal via social media.
"Very happy to see Bazaarvoice going private! Big proponent of that strategy, it's the right thing for the biz. Congrats to mgmt + board for making that decision," tweeted Michael Svatek, a former chief product and strategy officer at Bazaarvoice and co-founder and current CEO of Rivet.
Bazaarvoice is just the latest Austin company to be bought out by larger public companies or private equity firms.
Dell went private in 2013 after about 25 years on the public market. Last year, Rackspace, a San Antonio-based cloud-services company with offices in Austin, was acquired by New York-based Apollo Global Management LLC for about $4.3 billion. Earlier this year, RetailMeNot, Austin’s big digital discounts company, was acquired by Harland Clarke Holdings Corp. And Whole Foods was recently acquired by Amazon.
