SMAC - Siemens Acceleration in Communications (21 FTE for 24 companies in the portfolio...) is rumored to be shutting down and to plan to sell off its portfolio companies within the next three weeks.
Corporate parent Siemens AG has recently instituted a major restructuring of its information and communications activities. It announced plans to lay off 5,400 employees, reportedly agreed to sell its Product-Related Services business to Fujitsu Siemens Computers and actually paid BenQ Corp. to acquire its money-hemorrhaging mobile handset unit. The shutdown of Siemens Acceleration in Communications is just another part of the restructuring, with the corporate upside of near-immediate liquidity. It is unclear if Siemens also will look to sell some of its other venture capital endeavors, like the Communications Fund unit of Siemens Venture Capital, or its fund of funds portfolio.
SMAC portfolio companies includes 3Dis, UK ; Dblur, Israel ; Exit Games, Germany ; FonJax, USA ; GO Networks, USA/Israel ; Jentro Technologies, Germany ; Ki-Bi Technologies Ltd., Israel ; LinkRich, China ; Magus Soft Ltd., China ; Mobile2win, India/China ; Mobixell, Israel ; MotionBridge, France ; NordNav, Sweden ; Oplayo, Finland ; OverSi, Israel ; PhoneBites, USA ; PurpleACE, Singapore ; Realeyes 3D, France ; Rock Mobile, Taiwan/China ; Scaraboo GmbH, Germany ; SVOX AG, Switzerland ; V-Enable, USA ; Xingtone, USA ; Zero Global, China/USA
What will this mean for the portfolio companies??
Posted by: Richard Elgin | December 13, 2005 at 07:02 PM
Richard,
the scenario couldunfold as follow :
- Portfolio is sold to a secondary player who buys all the SMAC position, and steps into SMAC shoes inside each portfolio company board
- New guys come on board as a director of your company, with a different mindset (hey this is not my deal, and I’ll have a cold objective look at why we are here, and if we should stay), and a different objective (liquidity and path to exit will not be the name of the game)
- Portfolio usually gets divided into three groups: the dogs, the turkeys and the cows. Dogs are here to be exited as quickly as possible. Cow are here to be milked (i.e. maximize the return). Turkeys are under observation to decide if they are dogs or caws.
So a secondary sale will have an impact for a portfolio company, as board behaviour will change
If might be a good news if you are in the top third of the portfolio
If might be a bad news is you are in the lower third.
Posted by: Marc Goldberg | December 14, 2005 at 10:07 PM