Deals

Gillian Tan is a Bloomberg Gadfly columnist covering deals and private equity. She previously was a reporter for the Wall Street Journal. She is a qualified chartered accountant.

Deal or No Deal?

That question has been front of mind for Cvent shareholders since July, when it became clear that the Department of Justice had taken issue with Vista Equity Partners' $1.65 billion buyout of the software maker because the private equity firm already owns Lanyon Solutions, which makes software that helps manage travel, meetings and events.

The deal values Cvent, whose software is used for events management, at $36 a share. The very presence of antitrust authorities has chilled shareholders, pushing the stock to about $32 in recent days, which represents a 12.5 percent discount to the offer on the table. 

Cliffhanger
Some investors are skeptical that a buyout of event management software company Cvent will be approved by antitrust regulators
Source: Bloomberg

An easy solution would be the sale of Lanyon, which would squash any antitrust concerns. And a deal wouldn't be a complete shock, considering Vista has already owned the company for three and a half years, more than double the time it owned payments processor TransFirst before it was sold. But Vista would be surrendering the upper hand in price negotiations to any would-be buyer, given its predicament. 

For what it's worth, the company has done its best to reassure stakeholders. Analysts, including those from Piper Jaffray, left a Cvent-hosted lunch on Tuesday convinced that antitrust regulators will approve the deal in coming months. 

That stance assumes that the Cvent-Lanyon situation will play out differently from the blocked mergers of Office Depot and Staples and, digging back even further, TaxAct and H&R Block. In both cases, the Justice Department narrowly defined both markets and emphasized the lack of any sizable competitors. Notably for Cvent-Lanyon, Piper Jaffray figures that event-management startup E-Touches, which raised $20 million in new financing in May, could quickly grow into a valid competitor. 

Plus, if the transaction is blocked, Cvent's previous suitors could revisit a deal valuing the company at up to $35.50 a share, the price a losing bidder offered before Vista clinched its deal, according to a proxy filing

Still, skeptics who witnessed the way the regulatory ax fell in cases like Anthem-Cigna and Aetna-Humana aren't convinced. But shareholders willing to roll the dice on the outcome could be rewarded for their patience. 

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Gillian Tan in New York at gtan129@bloomberg.net

To contact the editor responsible for this story:
Daniel Niemi at dniemi1@bloomberg.net