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Investment Firm Bids to Buy SCOs UNIX Operations
WebCowboy writes "It appears that there are still enough people out there deluded enough to see value in SCOs UNIX operations. York Capital Management has put in a $36 million bid for SCOs UNIX operations. The offer includes coverage of up to $10 million for payment of legal fees and York Capital would assume ownership of the disputed UNIX IP as well as what is left of the lawsuits.
Interestingly, SCO has offered this up for competitive bid (who would want to though?). Upon completion of the transaction, should bankruptcy court approve, SCOX would become solely a mobile applications provider (which is the only part of SCOs offerings that have undergone any meaningful development for quite some time)."
As it is, SCO owes Novell loads of money. Can Novell stop this sale and/or get the money?
I prefer the "u" in honour as it seems to be missing these days.
Theres a sucker born every minute. Actually with 6 billion people in the world these days its probably 10 suckers every minute.
Libertarian Leaning Political Discussion Forum.
The name is pretty tarnished now, though. I wonder if there's any money in buying up the name and creating a "New SCO"?
Probably not, but I'm sure someone thinks it's worth a shot.
Tell you what, I'll give then 50 quid cash-in-hand for the rights to the name.
I just hope that the bidder doesn't think that it's the IP. There is probably enough SCO support work out there to make a viable business though, if there are people who are still paying for their support.
I wonder how many degrees of separation there are between this new firm and Microsoft? MS has employed some wonderfull machinations in the past to further fuel tSCOg legal battle, and now when the battle is finally lost, up comes another firm offering some golden parachutes to the management?
Somehow I remain unconvinced that those responsible will be punished. The nuclear option seems pretty good to me, but I don't think the US would appreciate a 30 mile crater where Redmond used to be.
This space is intentionally staring blankly at you
The old /. joke expressed as 4 lines that end with 'Profit' is not really applicable.
I want a list of atrocities done in your name - Recoil
This is basically a private equity buyout. Private Equity is the big buzzword in the world of big money at the moment. What generally happens is that the buyer sees a company which it feels is underperforming and has a depressed share price, and offers a good enough price for it that the shareholders can't refuse. The money all comes from bank loans, which are secured on the company being bought -- a bit like a mortgage is secured on the house you're buying -- so as long as the bank agrees to the loan, it doesn't actually cost the buying company anything up-front. Once the purchase has gone through, they buying company needs to get the money to pay off the loan. This money comes from making savings at the company they've bought. Typically this would mean asset stripping, re-organising, selling off product lines and divisions, or whatever else it takes to make the money back. Wholesale redundancies are also almost certain. When a reasonably solid, viable company is bought out by private equity, they usually end up getting transformed into a much leaner and smaller company, and getting sold on again in the space of a couple of years. When it happens to a company that isn't solid and viable, the private equity firm will generally just sell off all the assets of the company, aiming to make a profit on the purchase price, and then quietly close down the husk that remains. This is what I predict will happen in this case. The buyer is looking at the assets -- the Unix operating system, the patents, licenses, and all the rest, and they've decided that it's worth more than $36 million. Of course, the strategy only works if there are people out there willing to buy the assets for more than $36 million. I suspect there probably are. Even with the lawsuit results, there is enough left to cherry pick. You can be pretty certain they'll get rid of the lawsuits as quickly as they can; they're paying a block of lawyer fees up front to secure the purchase, but they won't want to pay any more, as it'll eat into the profitability of their bid. The law suits would require a long-term strategy, but a buyout like this will be geared solely toward making a short-term profit. The asset management company certainly won't be buying any of their debts, so the $36 million goes to the remaining SCO company (SCO Mobile? I guess they'll rename themselves to try to get rid of the burden of the name SCO). Pays off their lawyer bills, pays off their debts to Novell and other creditors, maybe even leaves them with a few pennies to rub together at the end if they're lucky, leaving SCO Mobile as a theoretically viable (albeit not particularly valuable) company.
You know, it's articles like these which demonstrate why Slashdot's become less than necessary reading these days.
Whatever SCO (the company) has done to Linux, SCO's UNIX systems were alright. They weren't fashionable, but, they have a working kernel and standard user-land utilities. Obviously, the SCO IP isn't quite as fresh as it once was, but, there'd still be gems to be mined. They also (still) have a (declining, but, still present) bucket of support contracts.
In a market where Facebook (without an obvious revenue stream) is valued in the billions, you'd have to be an unbalanced zealot to suggest they couldn't raise $34M for their entire UNIX related IP collection. Sure, it's not been selling well in the last couple of years, but, you should never judge the quality of a product by the skills of the salesmen.
"JGD Management Corporation has its principal executive offices at 1118 East Green Street Pasadena, California 91106 (http://www.secinfo.com/d12TC3.v51a.htm)
If you google the address the first match is a reference to a page on Edgar which provides the Form 4 (any of you US business types know what that is?) for a comany known as Arrowhead Research Corp which has one R Bruce Stewart as its CEO and Chairman of the Board.
(http://edgar.brand.edgar-online.com/EFX_dll/EDGARpro.dll?FetchFilingHTML1?Sessi onID=T-hII2bI2EHwHrP&ID=3669175)
R Bruce Stewart founded Acacia Research Corporation in March 1991. (http://www.forbes.com/finance/mktguideapps/personinfo/FromPersonIdPersonTearshe et.jhtml?passedPersonId=927443).
Has anyone heard of Acacia Research before?
Hmmmm.
It has to be a coincidence."
why don't they just sell themselves in ebay? After all, a paperclip can generate millions! :)
There is no bid, SCO said in bankrupty court that there "MAY be a buyer".
They are going down the tubes and they are doing anything they can to stem the tide. If they means they go to bankruptcy court to spread this rumor, so be it. Only a fool would believe them.
They're going to throw Darl out of a plane, strapped to a large chunk of heavy metal?
Well, that's got to be worth $30 million.
Can we also make him wear a T-shirt saying something like "I tried to fix my obsolete business model using litigation", then drop him near the RIAA headquarters?
>north
You're an immobile computer, remember?
The SCO thrust caught fire, blew up and is sinking at a respectable clip. Since it became obvious that this would happen (sometime in the summer), SCO's puppet masters had them "re-focus" their business into "mobile solutions". We should all know that "mobile solutions" is where shitty ideas and companies re-focus in order to perhaps get a little bit more investments in; therefore we can consider that SCO is basically a walking corpse at this moment.
This "Unix IP" sale is so that SCO can be permitted to sink and Novell & IBM may attempt to get their butter & 2K monies (as in JA I AM MADE OF) from a shell of a shitheap, if they can. Once the "Unix IP" package is moved elsewhere, SCO's puppet masters may attempt to re-do this whole operation in a few years in a more favourable legal environment and perhaps a judge that is more "reliable" (i.e. in their pocket).
There's a minor hole in this coreography though. If 6 million has been offered for the "Unix IP" parcel, then it should be obviously outside the group of stuff that SCO may hammer to get out of deep red again. The money from the sale would obviously go to pay executive salaries (some 80,000$ a month, is it?) and lawyer fees (well past 5 million US$, I reckon). I suppose we'll see whether the SCO chapter 11 trustee is in the puppeteer's pocket or not.
I must say that Microsoft planned this one out pretty well. Of course their plan relies on corruption to smooth the way so that their side can execute their moves quicker than the opposition, as always, but still.
I, for one, welcome our cash-laden overlords.
This has Microsoft stink all over it:
http://www.google.com/search?q=microsoft+Acacia+Research&btnG=Google+Search
Its unix was never a top contender. It sure as hell ain't a Solaris. SCO ain't no IBM, it ain't even a HP. If you want cheap, there is Red Hat or any of the other Linux distros. So what is the value of UnixWare/OpenServer?
You don't get the support of IBM, you don't get the sheer robustness of Solaris, you don't get the opensource from Linux, you just pay more then Linux, get less support then from IBM, and a WHOLE lot less robust not just then Solaris, but ALL the other unixes as well. SCO unix is a dump. NOBODY LIKES IT.
The only thing that has going for it that it has a large install base for historical reasons, point-of-sale (cash register systems, fast food checkouts), who are often reluctant to switch. IT in this sector is always a mess, things never work, are always delayed and cost a fortune, so when a system finally operates, they don't want to change (nor need too, cash register technology really doesn't advance that much).
Don't forget that SCO hasn't been doing any development on their closed source unix versions, they were a linux shop too once.
Basically current IT strategy (HA) is for everyone who can to move away from SCO. Get that crap out of there at the next upgrade cycle. It never was a good product, has been neglected and the company has proved to be lead by the truly insane. They SUED their OWN PAYING customers. You don't do that.
Even you advice against using SCO "Whatever SCO (the company) has done to Linux, SCO's UNIX systems were alright." We disagree on that you think they were once alright, but even you admit that your are talking PAST tense.
As for selling it all of, WHAT IP? They have been proven in court not to own Unix, what IP have they got left?
So why are they doing it? Who is to say they do? MS been behind other finance deals related to SCO. For MS blowing 36 mill is nothing. Spare change. Could they be trying to buy SCO to continue the fight againt Linux? They done it before, and Ballmer is still on the warpath.
That is the most likely scenario to me.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
Acacia = "InterActive Group" = "Arrowhead Research" (= Msft?)
"On May 29, 2007, we [Arrowhead Research] sold to certain institutional and accredited investors an aggregate of 2,849,446 shares of common stock (the "Private Placement Shares") at a per share purchase price of $5.78, and Warrants to purchase up to an additional 712,363 shares of common stock (the "Warrant Shares"), exercisable at $7.06 per share, in the Private Placement. Two investment vehicles of York Capital Management, a stockholder holding greater than 10% of the Company's Common Stock, participated in the offering."
http://www.secinfo.com/d14D5a.u4d4r.htm
"Arrowhead Research" refers to Arrowhead Research Corporation, a Delaware corporation and formerly known as InterActive Group, Inc."
http://www.nasdaq.com/asp/symbols.asp?exchange=NGM&start=A&sort=cap&Type=0
"The consolidated financial statements include the accounts of Arrowhead Research Corporation (a Delaware Corporation), formally InterActive Group, Inc., and Arrowhead Research Corporation (a California Corporation), a wholly-owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.
. . . .
In October 2003, in connection with an initial private placement of Common Stock, the Company [Arrowhead Research] accepted 80,255 shares of Acacia Research Corporation, valued at $500,000, and $500,000 cash in exchange for 1,000,000 units. The shares are carried on the financial statements as marketable securities. See Note 3."
http://sec.edgar-online.com/2004/05/17/0001015402-04-002107/Section7.asp
"On May 29, 2007, we [Arrowhead Research] sold to certain institutional and accredited investors an aggregate of 2,849,446 shares of common stock (the "Private Placement Shares") at a per share purchase price of $5.78, and Warrants to purchase up to an additional 712,363 shares of common stock (the "Warrant Shares"), exercisable at $7.06 per share, in the Private Placement. Two investment vehicles of York Capital Management, a stockholder holding greater than 10% of the Company's Common Stock, participated in the offering."
http://www.secinfo.com/d14D5a.u4d4r.htm
I googled "York Capital Management", the 2nd hit was their "about us" page. At the very top of the page it says "YORK YORK YORK YORK YORK YORK YORK YORK YORK YORK"
Isn't that Curly Howard of the Three Stooges fame's laugh?
It's getting a laugh out of me! YORK YORK YORK YORK YORK YORK YORK YORK YORK YORK!
-mcgrew
mcgrew's razor: Never attribute to stupidity that which can be explained by greedy self-interest
it's like a zombie ... and it wants to eat our brainz.
our delicious, unix based, brainz.
They have OpenServer and Unixware which contain IP beyond the SVR4. They still have a significant installed base of vertical applications (particularly in point of sale and telephony applications). It's emphatically not a growing concern but there's plenty of money to be made in support contracts and migration services for the right company.
Wrong. The liability for the lawsuit would not be transferred by the deal, so YCM would take everything BUT the lawsuit's liability, therefore making them "magically liable for nothing". Thats why YCM wants to do this deal, they get no risk out of it other than managing a company. Also look a little deeper, YCM has some ties to microsoft.
It should be noted that the agreement specifically EXCLUDES the transfer of the Novell and IBM litigation to York. The actual motion can be read on Groklaw (as usual) with more info than the LinuxWorld article.
Let me try to explain better. YCM is accepting the company, but SCO is retaining the lawsuit liability of this specific case with novell for themselves. Meaning they have all this money but the money has nothing to do with the liability. Novell may have money owed to them by SCO in far excess of 36M or even 46M. We're talking 10+ years of business that got 0% royalties instead of 100% royalties as owed (note: not 96 or 95%, they were supposed to get 100% and return back a percentage after).
If you did some damn research instead of being a typical slashie with bad information, you would have gone to groklaw as mentioned and seen more details than the original website. Part of being a smart slashie is doing your own research in addition to articles posted because we all know they aren't always correct, summary and article for that matter. Don't attack my ego because you didn't do research and are thusly a moron because you got a +5 with incorrect information.
Regardless, if you had read at grok, you would have seen: "Among the excluded assets are "Seller's litigation with Novell and IBM, and its claims and choses in action other than the Linux Litigation." The total purchase price, SCO says, consisting of cash and non-cash components is "in the estimated aggregate amount of up to $36,000,000". SCO has to reimburse up to $50,000 of York's fees and expenses in connection with the deal. And if York is designated as "stalking horse" under the Bid Procedure Order, and if others outbid York, SCO has to pay them a $780,000 breakup fee and reimbursement of all expenses incurred by York up to $300,000."
So yeah, I'm not god, but I do my due dilligence and don't post out my ass (you forgot to wipe).
Just a few notes: 1) I couldn't care less about +5 or -5 (as this post will show), as I'm long past that age; 2) I did go to groklaw (wanna see the proxy logs?), I just didn't dig deep enough (my mistake), so stop making black-and-white assumptions in whatever way you like and stop pulling in needlessly childish toilet words in order to defend them; 3) you carefully did not adress my critique of your "100% false" claim, as you know you can't beat that; 4) please note that I at least explicitly mentioned that I was using only "the limited info I had" (ref. my original post), that I also explicitly left open the option that I might be wrong (second post), and finally also have the courage to write "my mistake" in this one.
Come back when you've learned some more manners.
Linux user since early January 1992.
Look, I just stated you were wrong. With the "limited information" you had, you were wrong. Could I have been more polite? Sure, absolutely. You decided to open a Bevets style flamewar with the "god comment". I would not have given you an insult had you not earned one by firing the first shot and making it sound like I cared about my ego or someone else's. I said you were completely wrong. Is that bad to have an opinion that your information was incorrect, or did you already state that for me?
I don't have problems admitting my mistakes, in fact I enjoy asking for information when I am wrong, whereas you defend yourself. I think you might want to learn the difference between welcome criticism and provocation of others. If I am wrong, sure, call me on it. Also, I do care about +5, because I wouldn't want someone to have misinformation as a top post because other people will be misinformed. That wasn't aimed at you, that was aimed at correction of data. I've had it happen to me and I asked mods to mod down my posts when I did.
I didn't address your critique because I didn't want a flamewar. It's not that I am 100% right, I may or not be, and thats immaterial.
I also didn't claim it was MS FUD. I claimed that YCM has ties to Microsoft. The correct company is JGD Management Corp. d/b/a (doing business as) York Capital Management. Know who owns JGD and also has a board of directors straight from microsoft? JGD (Acacia) (SEC link).
So yeah, sorry if you got offended, but try not to start an insult fling and you might not get called a douchebag next time. I welcome snarky comments, not elitism.
I didn't address your critique because I didn't want a flamewar.
Then perhaps you shouldn't have acted like a total asshole.
Please stand clear of the doors, por favor mantenganse alejado de las puertas