Huddle, an 11-year-old enterprise collaboration software provider, will be acquired by private equity firm Turn/River Capital for $89 million, according to industry reports.
That sum is far less than London-based Huddle's reported peak valuation of up to $300M when it snagged a $51 million Series D funding round in 2014.
And it marks yet another private equity buyout for a struggling veteran of enterprise collaboration software.
In an even sadder tale (in the fallen-valuation department), ESW Capital in May acquired Jive Software for $462 million, a buyout for a company whose value peaked at $1.7 billion in 2012.
Our CEO Said What?
Neither Huddle nor Turn/River immediately responded to CMSWire's requests for commentary this morning. (UPDATE, 1 p.m. ET: A Huddle representative returned CMSWire's email, saying, "Unfortunately, we don't have a comment on this topic at the moment, but will have more news to share after Aug. 16.")
Huddle CEO Martin Brøgger had plenty to say about the acquisition Sunday — only to delete his blog post later.
But not before Business Insider obtained the deleted blog post from Brøgger Sunday and first reported the news Tuesday that confirmed San Francisco-based Turn/River would be Huddle's majority shareholder. Brøgger is based in San Francisco.
"We believe Turn River is the perfect home for Huddle as we look to accelerate this growth, scale our business and continue to service our existing clients with the industry's most secure document collaboration solution," Brøgger said in the deleted blog post.
In a letter Huddle sent to its employees, Huddle further clarified that under the terms of the deal, the company’s ordinary shareholders were not due to receive any compensation. However, Huddle added that its preferred shareholders had agreed to give each ordinary shareholder $100 each upon transfer of their shares.
Going down Jive's Path?
This turn of events for Huddle may not come as a shock since Huddle said just four months ago that it needed $5 million in equity or would have to find a buyer immediately.
It may also not be shocking considering Jive's sale to ESW.
Rob Bellmar, executive vice president of business operations at Omaha, Neb.-based West Unified Communications Services, told us after the Jive acquisition that many of the vendors that folded or became the target of acquisitions were focused to do so because they lacked the resources to address their shortcomings in the face of giants like Microsoft and Cisco gaining steam.
We don't know Huddle's thinking quite yet. Is it too much to catch up to the giants of collaboration?
Earlier this year, Jive CEO Elisa Steele herself confirmed in a letter she sent employees that "the market we helped create has gotten more and more competitive."
"Big players," Steele added, "like Microsoft, Salesforce, Google, Facebook and Amazon are all now pursuing the same market we are.”
CEO's Prologue Commentary?
Huddle may not be speaking officially on the acquisition yet, but it did give some worthy insight to us back in early 2015:
Then, Brøgger told CMSWire reporter Virginia Backaitis right after he was hired that "Huddle already leads the market in secure Enterprise Content Collaboration."
The challenge now, he said, is to win market share faster than wannabes Box and SharePoint /Microsoft can.
“We have an advantage,” he added. “We were born for secure content collaboration in the cloud. We’re ready to fight for every customer and win our fair share.”