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CommVault Says It Can ‘Get Big on Its Own’ Without Takeover
CommVault Systems Inc. (CVLT) Chief Executive Officer Bob Hammer, who has fielded takeover offers ever since the company went public in 2006, said it can “get big on its own” by courting new financial-service customers.
CommVault will reach $1 billion in sales in the next three to nine years, Hammer said in an interview at Bloomberg headquarters in New York. That compares with an estimated $308.9 million in revenue for the fiscal year just ended, according to analysts’ projections compiled by Bloomberg.
Hammer aims to get there by targeting government and corporate customers, including banks and insurance companies, which are struggling to manage a flood of information. CommVault specializes in software that makes it cheaper and easier to handle data. That makes it a possible target for Dell Inc. (DELL), Oracle Corp. (ORCL), EMC Corp., Microsoft Corp. (MSFT) and Hewlett- Packard Co., which are shoring up their storage businesses, according to Goldman Sachs Group Inc. (GS)
Hammer said he has been approached by the “usual suspects” about a buyout. His response is to suggest a price that’s so high, they back off, the 69-year-old said. He declined to name his asking price.
“I can increase my net worth more building this company than taking the cash,” said Hammer, CommVault’s biggest shareholder. “I don’t need the cash.”
CommVault has risen 84 percent in the past year, fueled in part by takeover speculation. Shares of the Oceanport, New Jersey-based company climbed 39 cents, or 1 percent, to $38.24 today in Nasdaq Stock Market trading.
Anticipating a Deal
“The shares are currently priced at the thought that the company would be acquired,” said James Gilman, an analyst at Capstone Investments in Miami who has a “hold” on CommVault’s shares.
Companies have increased spending on software acquisitions this year, aiming to expand their offerings as the economy rebounds. U.S. deals totaled $5.17 billion, with an average premium of 18 percent, according to Bloomberg data. That’s up from $4.47 billion in the year-earlier period.
Storage-technology companies have been especially big targets, though the frenzy of acquisitions has died down since Hewlett-Packard and Dell waged an 18-day bidding war for 3Par Inc. last year. In that deal, HP agreed to pay $2.35 billion, more than triple 3Par’s market value before the bidding began.
Hewlett-Packard and Dell still need to improve their storage software, said Brian Freed, an analyst at Memphis, Tennessee-based Wunderlich Securities Inc. He has a “hold” on CommVault’s stock.
The companies are trying to capitalize on the growth of cloud computing -- the delivery of software and information via far-flung data centers. They want to be one-stop shops for a wider range of cloud-computing services, including storage.
“HP and Dell need CommVault theoretically more than CommVault would need them,” Freed said. “Both are woefully lacking in storage software.”