Season of transition
Happy Friday, and Happy New Year to all my Jewish readers! I'm enjoying this little fall break from our place in upstate New York. We picked the perfect weekend to go: the leaves on trees are at their peak color, the air is crisp and fresh, and the sun is still warm and bright, illuminating everything in gold. It finally feels like fall.
Yesterday, we took a family trip to a local farm, where my son met a real-life cow for the first time. He's been a fan of cows from seeing them in books, so meeting one "in-person" was a big deal. We also went through a corn maze, played a bunch of field games, and picked our own pumpkins. One thing about having young kids is a chance to see those simple things as something special again. Thanks to my almost 1-year-old and my French au-pair, we get to experience the familiar through new eyes again.?
In the world of TMT M&A, people familiar tell me that this time of transition applies to M&A as well. Coming back from summer's slowdown, M&A is getting busy, however, not quite as busy as people familiar predicted the post-Labor Day environment to be. Companies are evaluating their options, but not necessarily rushing to come to market before the holiday season. Instead, the CEOs are gearing up for sale processes in the new year. Some situations that I reported on continue to stay in play, while some are no longer active, which people familiar blame on sellers' unrealistic valuation expectations. Overall, divestments, private-to-private, and companies that are undervalued in the public markets, continue to remain main target groups for M&A.
In telecom...
I reported that fiber network owner Zayo Group and buyout firm TPG are competing to acquire the fiber and wireless assets of Crown Castle, in a deal that could be valued at nearly $10 billion, according to people familiar with the matter.
Zayo, which is owned by buyout firms EQT AB and DigitalBridge, and TPG are the two remaining bidders for the assets, which include Crown Castle's fiber business and its small cell business, which provides wireless services and technology, the sources said, requesting anonymity as the discussions are confidential.
Both units are worth less than $5 billion each and it is possible that Crown Castle could choose to sell only one of the assets, one of the sources said. If both assets are sold, the deal is likely to be valued between $8 billion and $10 billion, the source added.
In media...
I interviewed DirectTV CEO Bill Morrow in light of DirectTV's announced acquisition of Dish TV.
DirecTV on Monday agreed to buy EchoStar's satellite television business that includes Dish TV, capping decades of on-and-off talks to create one of the nation's largest pay TV distributors with a combined 20 million subscribers.
The transaction comes at a time when satellite TV services DirecTV and Dish are hemorrhaging market share to competitors such as Netflix and Amazon's Prime Video, which have benefited from changing consumer habits and the rising popularity of streamed video.
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DirecTV CEO Bill Morrow told Reuters the combined pay TV company would have the clout to negotiate smaller programming packages tailored to consumers' interests.
It also plans to offer an improved viewer experience that makes it easier for subscribers to find their favorite shows - whether on a traditional TV channel or via streaming - and manage their subscriptions from one place.
"We believe that consumers don't want to be the aggregators - or at least a majority of consumers in the marketplace would not prefer to have to go out and manage all these multiple accounts of those direct-to-consumer SVOD services," Morrow said in an interview, using the industry term for streaming, or subscription video-on-demand.
In tech...
My colleague Krystal Hu reported that OpenAI , the company behind ChatGPT, has raised $6.6 billion from investors, which could value the company at $157 billion and cement its position as one of the most valuable private companies in the world.
The funding has attracted returning venture capital investors including Thrive Capital and Khosla Ventures, as well as OpenAI's biggest corporate backer Microsoft and new participation from Nvidia.
The closing of the funds coincides with the company's ongoing restructuring efforts and executive changes , including the abrupt departure of its longtime Chief Technology Officer, Mira Murati, last week.
Other news & commentary:
What else is going on? For any anonymous deal tips you can find me on Signal (@MilanaVinn.01) and Telegram (@milanavinn). I am also available by email [email protected] and via cell.
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Have a great weekend!
Milana
Happy Friday indeed, Milana. ?? “One thing about having young kids is a chance to see those simple things as something special again.” #quoteoftheday ??? #familyforever ??