The transformation of business by technology continues to be a work in progress for consumers and developers. As technology has driven change in business, business is driving change in technology. The proliferation of mobile devices in the workplace has forced businesses to come to terms with issues such as security, compliance, and privacy risks—much in the same way that the Internet of Things carries such implications into the domestic sphere. How technology responds to this requires care, thought, and caution.
In the broader marketplace, the emergence of mobile as the dominant platform for content distribution raises real issues for existing content providers and distributors. The current wave of M&A reflects in part the legacy technologies that have dominated media in the twentieth century. How this will evolve over the next decade is probably the most interesting conundrum facing suppliers and distributors alike.
What is the biggest challenge facing technology companies as they pursue M&A transactions in today’s environment?
One of the biggest challenges facing technology companies in M&A transactions is how to monetize optimally and generate additional revenues from the combined technology post- acquisition. This is a process that requires careful pre-M&A planning and post-acquisition execution, and is absolutely critical to the long-term success of the combined entity, and to the ability to generate better performance, products, and profitability.
What is the top data privacy and security issue TMT companies must consider in the year ahead?
Privacy and data security are moving front and center in M&A deals, as buyers across industries begin to recognize their impact on business value. Understanding a target’s collection, use, protection, and disclosure of personal information is now a critical component of the M&A process, impacting everything from deal valuation to allocating liability between buyer and seller. Developing and deploying this expertise in an environment of intensifying regulatory scrutiny in the U.S. and internationally will be a growing challenge.
What is the biggest challenge for Asian companies to overcome as they pursue cross-border TMT deals?
The biggest challenges for Asian companies pursuing TMT investments and acquisitions in the U.S. are regulatory restrictions, such as national security and antitrust concerns. We already see considerable interest on both sides of the Pacific in high-profile and complex transactions, so once the U.S. government agencies are more comfortable with such interest, we expect to see a high number of successful transactions.
With the smartphone patent wars seemingly drawing to an end, what do you think will be the next wave of patent litigation to impact technology clients?
Patent litigation involving the Internet of Things (IoT) is likely to develop, as a growing number of conventional products become network enabled and mass adoption makes litigation investment more attractive. Essentially a subclass of IoT, wearable technology—such as smart glasses, fitness bands, and the like—is already beginning to generate significant revenue and surely has the attention of patent assertion entities looking for the next wave of opportunities.
What is the most critical antitrust challenge that digital and tech companies face in 2015?
Market leadership by a U.S. technology company will almost always trigger a European investigation of competitive practices by the EU, certain member nations, or both. Moreover, government agencies continue to ignore or misunderstand innovative markets, complicating certain mergers. Technology leaders engage in sales and recruitment practices that seem to make business sense but could trigger antitrust actions. They need to get the right antitrust advice before they expose their companies to regulatory action.
We represented RBC Capital Markets, LLC in connection with the commitments for the US$1.6B financing of leading local television broadcast company Media General Inc.’s acquisition of Lin Media LLC. The combination enhances Media General’s position as one of the largest pure-play broadcast companies in the U.S. and provides new opportunities to grow its industry-leading digital business.
We advised underwriters Credit Suisse, Deutsche Bank, and HSBC Securities on the SEC- registered offering of US$1B of 5% 30-year bonds by Televisa. The largest Spanish-language media company in the world, Televisa provides most of the programming for the U.S. television network Univision. The offering was reported to be more than seven times oversubscribed, driven mostly by demand from U.S. investors.
Our lawyers represented Accelrys, Inc., a leading provider of scientific innovation lifecycle management software, in its US$750M sale to Dassault Systèmes, the world leader in 3D design software. We have served as outside counsel to Accelrys for almost 10 years, advising our client on numerous M&A transactions as the company has grown and evolved its products.
Smartphones sold in 2014, a new record—with an even higher volume expected in 2015
Source: IDC