Endace Share Discussion Threads

[knackers] 26/3/2012 17:06

Could latency kill the cloud?

[knackers] 26/3/2012 16:15

Endace have poached the VP of corporate development and strategic alliances from Fortinet (he has a corporate/IT legal background). Was a colleague of Spencer's at Juniper by the looks.

He's not yet completed his first month with EDA, but would imagine he's being kept busy ;o)

[knackers] 22/3/2012 10:07

Pete Harris's assessment from Low Latency.com.

"If the company is looking for a new owner, it would probably be one from the world of mainstream networking, looking for Endace's expertise in monitoring and cyber security - as opposed to its more focused latency measurement business. So some market dynamics might shift in the low latency management space down the road."

Big IF m'thinks. Last sentence emphasises what a hold Endace have on the low latency HFT/algo market.

[knackers] 22/3/2012 10:04

Quite possibly Mike but I don't think you need a $250k+ Global IT Exec/Strategist to tell you that ;o) No way they could take on and overcome US market parochialism with $4m in the bank and no weight to their local presence. Purchasing decisions there notoriously favour local vendors. There is a veritable graveyard of UK/EU IT Cos who thought they could take on the US market...

[mikepompeyfan] 22/3/2012 09:03

Interesting that you mention Spencer Greene K. It has occurred to me that eda's sudden decision to 'review options' could be partly down to his input. If he has reported back to the board that 'l could potentially sell lots of our products but we are just not well enough known and trusted in USA etc.' They would have to sit up and take notice.

[knackers] 22/3/2012 08:36

I missed that amongst the smoke, Aspex ;o)

The Nasdaq suggestion in the Unlimited article was indeed intriguing, but having worked in marketing for a Nasdaq listed consultancy know all about the pain the same can present. It's an expensive business and qtrly reporting used to drive me to distraction! There would have to be a very good reason for doing so, i.e. if part of a programme to enhance profile in the US market all fine, but they would need a v significant recruitment drive in the local market to coincide/justify it IMHO.

First priority to my mind is secure their NAM enterprise channels to market via a series of non-compete (sector based) strategic tie-ups with systems integrators (IBM etc), Telcos (Verizon, AT&T..) and Defence contractors (Northrop, Boeing, Raytheon etc)....or via big ticket APM/NPM vendors.

I'm certain that's where Spencer has been concentrating his efforts, and if no offer forthcoming would expect that to be the big news story to accompany FY results....hopefully together with confirmation on the closure of one of those deferred FY12 contracts ;o) heck, why not!

[aspex] 21/3/2012 19:22

Did nobody read my post 2145?
No offence taken.

[knackers] 21/3/2012 16:11

You may be getting warm, Ed. Wouldn't that be a turn-up!
That interview was indeed fighting talk and just didn't marry with a business a fortnight later [supposedly] rolling on its back and throwing arms and legs in the air.

A sale may well be the outcome but I still think there's way more going on behind the scenes than we realise. These guys have great technology and a burgeoning sales pipeline. They want to get into the mainstream US enterprise mkt - not throw in the towel! Big question is of course, what will the largest shareholders support..?

Interesting times ahead for sure.

[edwardt] 21/3/2012 14:27

complete long shot but last sentence a reference to potential float on nasdaq to bridge the valuation gap with us listed peers?! he mentioned a nasdaq listing in the recent interview!

[knackers] 20/3/2012 21:15

Interesting - just looking at today's trades in detail, says it all. Of course it could be a potential suitor buying up any slack but I don't think we're getting anything close to perfect information (as economists say) on this business - let alone what's going on behind the scenes, not by a long chalk. That last sentence in y'days RNS was a bit of a seamer. Sir Richard Haldlee would've been proud of a delivery with that much movement in the air ;)

[knackers] 20/3/2012 20:38

I think a winning bid would be a stretch for them, Ed, but they're having a look.

[edwardt] 20/3/2012 16:48

has sourcefire got the cash?

[mikepompeyfan] 20/3/2012 16:39

I thought that k. They took no notice of the 'for sale' sign being hoisted. That's the trouble if you religiously follow a stop loss system.

[knackers] 20/3/2012 15:34

PIs giving away stock cheaply y'day by the looks.

[knackers] 20/3/2012 11:01

I think Sourcefire are sniffing around Endace, Mike. Their GC (an M&A specialist) is now following them on LinkedIn. Bit of a co-incidence...

Sourcefire can't do the high throughput stuff. This will be a highly desireable addition to their portfolio. Q. Can they afford them? an opening bid perhaps but I'm not sure EDA will be sold cheaply. (Sub £7)

Agree with you on timing; it's in EVERYONE'S interest (including clients and staff) that this is expedited.

[mikepompeyfan] 20/3/2012 09:53

I think eda will want their future decided by the time of the final results announcement (24th May last year). The next 2 months will be interesting.

[knackers] 20/3/2012 08:22

Does indeed look like Inst'l investor pressure has been applied. Offers could therefore be imminent, as looks like heads-up was given some time ago.

So the options:

Option 1: Outright sale (most likely outcome) target price iro £8-9
If offers not in territory of acceptable then...
Option 2: A strategic stake may be offered in the Company (15-20%)
Option 3: Neither of the above on acceptable terms. Business as usual, one or two late contracts are closed more done to secure US CTMs (channels)

I'm quite sure there's plenty more going on behind the scenes than we know. Option 1 or 2 however could be imminent. I'm expecting directional clarity within the month.

Reckon these guys will be snapped up (bidding war possible) but Endace will want some assurances on future of local NZ tech staff base.

[mikepompeyfan] 20/3/2012 06:58

The Independent think Endace are up for sale -

Shares in the cyber security group Endace's plunged yesterday as it said it would significantly miss its profit target this year and had potentially put itself up for sale.

The shares fell 13 per cent, or 72.5p, to 492.5p, valuing the business at £75m. Analysts predicted it would now probably be taken over by a much larger US rival.

Endace said it had seen a shortfall in orders for network monitoring in its second half, "particularly in the UK Government base".

It said pre-tax profits for the year which ends this month would be about $1m (£630,000) rather than the $3.4m which most analysts had expected. Revenues will be 10 per cent down on City forecasts at some $40m. The company said it would have cash of about $4m at the year end.

Endace said that it had appointed Deutsche Bank "to review options for the future".

[itchycrack] 19/3/2012 23:20

Last trade of the day, 2500 for 530p, a full 30p over the quoted price.
Looks like all sells were moped up during the day with nothing left in the kitty by end of day?

[knackers] 19/3/2012 11:16

...and for a Cisco this would be a wonderful value add acquisition - as it would an IBM and a few others besides. I'd dearly love to see them get that kind of support. The product is now fully baked and provides the industry 100% benchmark all the way to 100gb/s. Cruel timing indeed, but it's an unforgiving old world out there.

[mikepompeyfan] 19/3/2012 11:02

It's what l've thought all along tbh. Endace have great products but they would sell so much easier with a 'Cisco' or such label on them and their levels of marketing.

[knackers] 19/3/2012 10:23

G, perhaps no great surprise that that is where we've ended up...

Ed, have to agree with you, the balance of probability is that offers will be submitted before the end of the month - indeed we could have an offer any day now. Given just how 'hot' this space is I don't expect we'll be waiting long before the first...

Clearly mgt realised sometime ago that key contracts were taking too long to close, hence early advisor conversations.

If that big deal is to come in Aspex, now would be a great time! Of course the deal could involve a strategic tie-up with a major (what I've been hoping for and indeed was expecting). Endace just don't have the channels to market to get at the mainstream US market. If they could fashion something strategic that would be just fantastic but looks from this RNS that a sale is all but inevitable, (i.e. Inst'l investor driven/pressure) subject to rabbits being pulled from hats that is.

Call me old fashioned - against the balance of prob I'm not sure the Endace story is over quite yet ;o) as you say Aspex we've been here before...only this time it's genuinely a different situ.

[gargoyle2] 19/3/2012 09:09

At 497.5p it's bang on the 200 day moving average -- hoping this will provide some support and confirmation of top-up time.

[aspex] 19/3/2012 08:33

Wait.
What has changed?
No loss of customers. No loss of orders.
Cash flow affecting their big spend on development? Yes but just a blip.
Hold on. We have had this ride before.