Tag: Adobe

ROIC and M&A. Adobe Gets an “F”.

ROIC and M&A. Adobe Gets an “F”.

Quality management teams measure the effectiveness of their M&A programs on a deal-by-deal basis. My favorite measure is Return On Invested Capital or ROIC. There are various ways to calculate ROIC. More important is the discipline of working through the process. Consider Adobe's $21.8 billion acquisition of Figma ($20 billion of cash and stock plus … Continue reading ROIC and M&A. Adobe Gets an “F”.

Evaluating M&A Target Products & Services

Evaluating M&A Target Products & Services

One of the most important elements when evaluating an M&A target is the target company's Product & Services portfolio. The ultimate Product question to be answered is: "Does it make more sense to build or acquire?" It is important for the acquiring company to answer a few key questions about the target company's product portfolio. … Continue reading Evaluating M&A Target Products & Services

Analyzing an M&A Transaction

Analyzing an M&A Transaction

We were critical of Adobe's (ADBE) acquisition of Figma for a few reasons. These elements can be applied to the analysis of any M&A transaction. Valuation: 50x revenue is a rich valuation no matter how you slice it. I don't care how unique Figma's product offerings may be or how competitive the deal may have … Continue reading Analyzing an M&A Transaction

Adobe’s Oversized Board Nodded Its Collective Head In Approval As It Relates To The Figma Deal

Adobe’s Oversized Board Nodded Its Collective Head In Approval As It Relates To The Figma Deal

As a follow-up to our two recent Adobe (tkr: ADBE) articles that were highly critical of Adobe CEO Shantanu Narayen as it relates to the Figma acquisition, we highlight for you Adobe's Board of Directors who signed off on the Figma deal and its outrageous 50x forward ARR valuation. Here is Adobe's "go along to … Continue reading Adobe’s Oversized Board Nodded Its Collective Head In Approval As It Relates To The Figma Deal

CEOs That Put Themselves First

CEOs That Put Themselves First

"G" is the most important letter in "ESG" investing. "G" or "Governance" refers to the men and women who comprise corporate management teams and Boards. Management - the CEO in particular - matters a great deal as to the long-term success of any company. Too frequently CEOs and Boards put Executive Compensation ahead of corporate … Continue reading CEOs That Put Themselves First

When CEO Compensation Is The Primary M&A Driver

When CEO Compensation Is The Primary M&A Driver

Too frequently companies execute M&A transactions not because a given acquisition strengthens the acquiring company's competitive position or enhances customer value, but because the acquired company could help boost CEO compensation of the acquirer by driving some combination of higher total revenue growth, higher EBITDA, higher bookings and/or a higher stock price. Today's announcement that … Continue reading When CEO Compensation Is The Primary M&A Driver

CEORater Portfolio Ahead of The Benchmark

CEORater Portfolio Ahead of The Benchmark

CEORater began an experiment several years ago whereby we built a concentrated "buy and hold" equal-weight portfolio consisting of quality Enterprise Software names that would be held for a minimum of five years. The benchmark is the S&P North American Expanded Technology Software Index (SPNASEUP). CEORater is up 4.2% Year-to-Date vs. 2.0% for the benchmark … Continue reading CEORater Portfolio Ahead of The Benchmark

Update: Battle-Tested Software CEOs

Update: Battle-Tested Software CEOs

We published a piece in March 2020 entitled Battle-Tested Software CEOs, that highlighted a group of CEOs that we believed would hold the line and successfully navigate the COVID waters. Here is our updated thinking regarding that list. Tickers mentioned: AAPL, ADBE, CSGP, CVLT, FISV, MSCI, PYPL, SPGI, SQ, SSNC, VRSK Andy Florance. Founder & … Continue reading Update: Battle-Tested Software CEOs

CEORater “Quality” Portfolio Outperformed in 2020

CEORater “Quality” Portfolio Outperformed in 2020

The CEORater "Quality" Portfolio is an experiment which we began running at the end of 2018. The portfolio consists of a mix of Software, Information Services and Fintech companies, half of which are led by founder CEOs (we generally prefer founder CEOs). The question the experiment sought to answer was "How would a basket of … Continue reading CEORater “Quality” Portfolio Outperformed in 2020

Artificial Intelligence Is Electricity 2.0

Artificial Intelligence Is Electricity 2.0

AWS, Azure and GCP are to thank in large part for the proliferation of applications powered by broadly-defined AI. The big three remote server platforms have made it increasingly easy for companies of all sizes from all industries to build applications that incorporate core AI, machine learning, deep learning and related capabilities. A wide variety … Continue reading Artificial Intelligence Is Electricity 2.0