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Craig RussillRoy
This is when it all changed ...
on Dec 17, 2014 at 12:52:37 pm

London VFX software developer The Foundry, which own the Nuke digital composition system used on films such as Gravity and Guardians of the Galaxy, has been put up for sale by its owners Carlyle Group.

Owners of The Foundry, US private equity giant Carlyle Group, has appointed advisers Arma Partners to find a buyer and expects to realise £200m from the sale.

Carlyle Group is said to want to realise its investment of the company, which employs 270 people across its London, Manchester, Los Angeles, Silicon Valley and Shanghai offices, by the middle of next year.

Earlier this year, the Foundry launched Nuke Studio, a single application for VFX, editorial and finishing based on compositing tool Nuke with the aim of allowing creative to work independently as well as in collaborative teams on quick-turnaround projects.

The Foundry has recently ramped up efforts to move beyond professional VFX software to sell more products to designers.

The Foundry said at the time: “The Nuke family has grown with the official launch of Nuke Studio, as part of Nuke 9. We also introduced our new subsidiary, Made With Mischief, which will focus on designing tools for creative artists.”

The private equity group bought The Foundry in 2011 with a value of around £75m.

Here is the link
http://www.televisual.com/news-detail/Carlyle-Group-puts-the-Foundry-up-for...

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Steve Connor
Re: This is when it all changed ...
on Dec 17, 2014 at 1:00:24 pm

Should be interesting to see who the buyer will be?


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Phil Hoppes
Re: This is when it all changed ...
on Dec 17, 2014 at 1:45:48 pm

Interesting. I use NukeX as well as Modo which is now owned by them. Nuke is the compositing software of choice in VFX. Nothing else comes close. Since it is a private company no one knows the financials but one would hope this sale is simply indicative of the success of the products and the company, thus the increase in price and value, and not some deeper indication of trouble. Gad I would hate to see Nuke go down the same road that happened to Shake.


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Eric Santiago
Re: This is when it all changed ...
on Dec 17, 2014 at 2:07:17 pm

Autodesk?


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Scott Witthaus
Re: This is when it all changed ...
on Dec 17, 2014 at 2:35:18 pm

Apple? ;-)

Scott Witthaus
Senior Editor/Post Production Supervisor
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Oliver Peters
Re: This is when it all changed ...
on Dec 17, 2014 at 2:47:24 pm

[Scott Witthaus] "Apple? ;-)"

Why? No advantage to them. Remember what has become Nuke links back to Shake. So they've been there and walked away. Unless they buy it to kill it in order to promote Motion. What? Motion still exists??

;-)

Autodesk or Quantel would be the most logical matches.

- Oliver

Oliver Peters Post Production Services, LLC
Orlando, FL
http://www.oliverpeters.com


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Steve Connor
Re: This is when it all changed ...
on Dec 17, 2014 at 2:58:31 pm

[Oliver Peters] "Autodesk or Quantel would be the most logical matches."

or Blackmagic? That would really shake things up


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Oliver Peters
Re: This is when it all changed ...
on Dec 17, 2014 at 3:18:46 pm

[Steve Connor] "or Blackmagic? That would really shake things up"

I doubt it. They already have Fusion, so this no longer fills a gap for them. Also the investors want to cash out. It's not a fire sale.

- Oliver

Oliver Peters Post Production Services, LLC
Orlando, FL
http://www.oliverpeters.com


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Phil Hoppes
Re: This is when it all changed ...
on Dec 17, 2014 at 3:37:48 pm

One would hope it's not Autodesk. I use Maya and they have (finally) started to extend and develop that package well. They got Softimage XSI from Avid and proceeded to decimate it and finally killed it. Matchmover... destroyed it. Toxic... a joke.

If they bought it, and they have the pockets to do so, Nuke would probably continue and after a few years of most likely messing it up it might still be around. I don't see that for Modo however. I love using Modo, especially for modeling but with 3DsMax and Maya in the barn already there would be no room for Modo. Just look at what happened to XSI.

Who knows about Mari, Ocula, Hero and their other products. Speaking from the outside I don't understand at all their latest acquisition, mischief. That is a simple drawing program that sells for $25. Compared to their product family that is like the 25 cent give-away pen the sales guy gives you so he can keep talking to you for another 10 minutes. That one completely mystifies me. It makes no sense what so ever. That simple act right there might be more telling than anything else. The investors are dumping because the leadership has lost direction or are scrambling. Who knows.


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Craig RussillRoy
Re: This is when it all changed ...
on Dec 17, 2014 at 4:14:51 pm

May as well be AJA so they can battle BMD ;-)

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David Mathis
Re: This is when it all changed ...
on Dec 17, 2014 at 4:58:08 pm

[Craig RussillRoy] "May as well be AJA so they can battle BMD ;-)"

That would interesting.


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Walter Soyka
Re: This is when it all changed ...
on Dec 17, 2014 at 4:23:11 pm

[Phil Hoppes] "Speaking from the outside I don't understand at all their latest acquisition, mischief. That is a simple drawing program that sells for $25. Compared to their product family that is like the 25 cent give-away pen the sales guy gives you so he can keep talking to you for another 10 minutes. That one completely mystifies me. It makes no sense what so ever."

Mischief looks like a simple little paint program -- but there's really a very cool technology behind its infinite canvas:

http://www.fxguide.com/featured/whats-the-foundry-buying-the-tech-of-adf/


[Phil Hoppes] "The investors are dumping because the leadership has lost direction or are scrambling. Who knows."

I wouldn't read too much into the sale. Buy and hold is not the private equity model. It is the destiny of all PE-acquired companies to be sold in order to return money to investors.

Carlyle holds The Foundry in an investment fund, which buys, (hopefully) improves, and then sells stakes in companies. If they don't sell the companies they buy at significant multiples (in this case, 75 million euros to 200 million euros), fund investors cannot realize the gains that make PE so attractive.

Walter Soyka
Designer & Mad Scientist at Keen Live [link]
Motion Graphics, Widescreen Events, Presentation Design, and Consulting
@keenlive [twitter]   |   RenderBreak [blog]   |   Profile [LinkedIn]


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Phil Hoppes
Re: This is when it all changed ...
on Dec 17, 2014 at 4:41:30 pm
Last Edited By Phil Hoppes on Dec 17, 2014 at 4:53:27 pm

[Walter Soyka] "I wouldn't read too much into the sale. Buy and hold is not the private equity model. It is the destiny of all PE-acquired companies to be sold in order to return money to investors.

Carlyle holds The Foundry in an investment fund, which buys, (hopefully) improves, and then sells stakes in companies. If they don't sell the companies they buy at significant multiples (in this case, 75 million euros to 200 million euros), fund investors cannot realize the gains that make PE so attractive."


I understand all of that and agree.... but having personally been on the receiving side of numerous acquisitions my own experience has been that it has been a positive thing 0% of the time. No, not all acquisitions are bad, of course not. But the success rate of acquisitions is not all that stellar and in particular, when company A is sold to company B, company A has no standing what so ever inside B. Internally, believe me, this is a true Master/Slave relationship. There is a clear head of the dog and it's not the company that just got bought. Any strategic plans and directions just got tossed and who knows what's going to shake out.

About the only thing I can say with certainty is I'm not springing for Modo 901 until I see where the dust settles.

.... and anyway, this is really what I'm looking for



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Tim Wilson
Re: This is when it all changed ...
on Dec 17, 2014 at 6:02:22 pm

[Walter Soyka] "Carlyle holds The Foundry in an investment fund...(in this case, 75 million euros to 200 million euros)...."

Not euros. POUNDS.

[Craig RussillRoy] "expects to realise £200m from the sale....Carlyle Group is said to want to realise its investment of the company, which employs 270"

[edit: corrected in a later article to 370]

Keep an eye on those numbers. They're huge. That's US$314 million give or take, plus 370 employees, which means as much as another $30-40 million or so a year in payroll + benefits. By my math, that rules out EVERY company in this industry but one.

It definitely rules out AJA. I don't know what kind of money they have laying around, but aja.com says they have "over 200" employees. They'd need a LOT of money laying around in order to nearly double the size of their company.

It rules out BMD too. I don't know the size of the company or its bags of cash, but my guess is that DaVinci and eyeon COMBINED were more like 10% of what Carlyle wants for The Foundry, and probably not much more than 10% in personnel either.

The other issue is business model. Carlyle thinks they've nearly tripled the value of The Foundry in 3 years. It seems unlikely that there's enough upside for another investment group to say, "Yeah, we can make a lot more than $300 off this thing in a buy-to-sell in the next 3-5 years." Eventually, somebody's going to have to say, welp, the equity is the equity. I need this to pay for itself out of income.

Compare this to Grant Petty's approach at BMD. It's clear that BMD isn't needing to create a bunch of incremental dollars from software sales. Quite the contrary. Just the idea of decoupling DaVinci software from hardware tells you that he's playing a longer game.

Sure, there's a hardware upsell for the DaVinci control surface, but that's trivial compared to how much he's leaving on the table with ridiculously capable software for free.

For hardware, his pattern is even more clearly to let the air out of the tires on margins. That's how he buys Teranex, and takes $75,000 standards converters to sell them for $1995, while making them smaller and quieter, and adding features and formats. The exact OPPOSITE of what's required for monetizing a deal the scale that The Foundry is gonna be.

While BMD's website doesn't say, I wouldn't be surprised if they're also a smaller company than the 370 people at The Foundry. It's one thing to say "But nobody predicted they'd make a camera" when I rule this out, but it's another thing to say that they'd want to spend $300 million for the privilege of adding another 370 employees. Not gonna happen.

The last time there was a deal of this scale in this industry was Avid buying Pinnacle for $300 million in 2005, right? That didn't go all that well in the end. Besides, a lot of that deal was in stock.

Otherwise, you have to go back to Macromedia by Adobe for $3.75 billion, but that was ALL stock.

So that means you're looking at a publicly traded company as the only kind of precedent for a deal this scale.

Apple won't bite on this one because there's no chunky jewelry or apparel. Maybe if The Foundry made giant ugly hats. No wait. Those would cover the ugly headphones. Maybe giant ugly shoes? Parachute pants?

Avid's out for reasons cultural and financial. Autodesk could conceivably do it, but I don't see it. They're in pretty rough shape, and are going to have to do some major restructuring just to hit current targets. Analysts are downgrading their stock. Nobody's going to take that as part of a deal, and I can't imagine that Autodesk wants to spend that kind of cash on anyone but themselves for now.

You know who I like? Adobe.

Adobe is the ONLY one I can see doing it, because they DON'T need to spin equity into another equity deal, and they don't need to make incremental dollars. They need Nuke et al to add incremental VALUE.

It'll give more people more reasons to sign up and stay signed up. Nuke could really cement Adobe's place all the way to the end of the production pipeline, past where they now end with After Effects.

Thinking about Macromedia as an all stock deal, Lord knows Adobe's stock is valuable enough to throw around. Their stock has nearly TRIPLED since the Macromedia deal, from $27 to $77 give or take, and has been skyrocketing of late. And Adobe has the payroll resources.

The big burst of energy behind their latest stock surge -- in addition to, ahem, a terrific quarter for CC adoption, sorry haters -- is their $800 million acquisition of Fotolia, a stock media company.

Did I mention that Fotolia was a cash deal? Fotolia was a cash deal. Adobe had $800 million in cash. They spent it all in once place. On Fotolia. For $800 million.

Who knows? Adobe could have another $300 million cash already tied up in a bow. That suddenly sounds like not all that much money. But as sharply as their stock is climbing, and as quickly as analysts are raising their targets, a deal sweetened with stock could be a pretty sweet deal indeed.

The stock makes sense to me, in that it looks to my beady, bloodshot eyes like Adobe will be partly monetizing Fotolia by selling you stock media from inside your CC apps, and as noted, I don't see $300 million cash to be extracted from Nuke and its kin in the next few years.

That's also why I think after Adobe, you're pretty much looking at another investment group, right? And there you run into my quandry about how much more juicy equity goodness you can suck out of The Foundry.

That means it HAS to be monetized through new sales...unless you're a company whose cashflow is reliable enough without sales per se, but needs to keep adding value to make long-term commitments attractive to both existing and new customers. You also continue to burnish your well-established track record for exactly this kind of relentless value addition.

So it's not my prediction by any means, but if I was Adobe, I'd have made this deal already.

Which is why I'm not Adobe. LOL They've made their fortunes by ignoring advice from idiots like me.

But no kidding, I love this. Make the deal by the end of the year, unless it's better for taxes to do it in January. But no dilly-dallying. You need time to give everybody a couple days off before working around the clock for next few months to add a new wing to the NAB booth.


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Phil Hoppes
Re: This is when it all changed ...
on Dec 17, 2014 at 6:14:23 pm

Interesting. Yea, I figured there was no way AJA or BM could even come close in buying them but Adobe could but my bets are still on Autodesk. The product family, sans Modo, is a perfect fit for what Autodesk currently sells, as is the volume and price points.

While I'd LOVE to have Nuke, Modo, Mari et.al. bundled in with my subscription, IMHO I think The Foundry product offering is a pretty far stretch for the market that Adobe currently sells and focuses on. Adobe sells to millions of customers with products in the hundreds of dollars. The Foundry sells to a few thousand customers with products in the thousands of dollars. Very different sales channel. Plus it is a very different market. I'm not sure the elasticity of the market would work such as dropping the price of Nuke to that of AE. You drop the price by a factor of 10 I'm not really sure you pick up 10x the volume so what's the point?

Either way it will be interesting to see what happens.


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David Mathis
Re: This is when it all changed ...
on Dec 17, 2014 at 7:26:21 pm

[Tim Wilson] "Apple won't bite on this one because there's no chunky jewelry or apparel. Maybe if The Foundry made giant ugly hats. No wait. Those would cover the ugly headphones. Maybe giant ugly shoes? Parachute pants?"

Priceless! :-) Going to pre-order a pair of iRun shoes with built in phone capability, if such product does exist. Imagine that Apple logo lighting up when a call is coming in.


[Tim Wilson] "dobe is the ONLY one I can see doing it, because they DON'T need to spin equity into another equity deal, and they don't need to make incremental dollars. They need Nuke et al to add incremental VALUE.

It'll give more people more reasons to sign up and stay signed up. Nuke could really cement Adobe's place all the way to the end of the production pipeline, past where they now end with After Effects."


Question is, would After Effects still exist in this scenario? Regardless, this would add value to the CC model but still prefer an off ramp. I just feel subscription only lacks options. Just my two cents.


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Walter Soyka
Re: This is when it all changed ...
on Dec 17, 2014 at 8:08:25 pm

[Tim Wilson] "Nuke could really cement Adobe's place all the way to the end of the production pipeline, past where they now end with After Effects."

[David Mathis] "Question is, would After Effects still exist in this scenario?"

I think so. After Effects and Nuke excel in different areas.

Walter Soyka
Designer & Mad Scientist at Keen Live [link]
Motion Graphics, Widescreen Events, Presentation Design, and Consulting
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Tim Wilson
Re: This is when it all changed ...
on Dec 17, 2014 at 10:18:56 pm

[Walter Soyka] "I think so. After Effects and Nuke excel in different areas."

That's exactly my point. There are millions of people who know the actual answer to this, rather than my armchair observations, but it seeeeeems to me that a large part of the use of After Effects in mainstream movie and vfx-ish tv making ends with a handoff to Nuke. There's something of an overlap in the feature sets, but they're more commonly used together than not, I think.

Not unlike, say, mocha's tracker or Resolve's grading. These aren't either/or products for After Effects. Certainly part of why Adobe bought SpeedGrade, even though there are color tools in both Premiere and After Effects. They all have room in the ecosystem, and perform unique, invaluable functions.

I do get the appeal of this for Autodesk, though, but I think their toolset actually has more of an overlap with Nuke, making it less attractive. I also don't see them having that kind of cash or high-value stock....but I would also be extremely surprised to discover I'm right about any important aspect of this. LOL Fun to talk about tho....


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Walter Soyka
Re: This is when it all changed ...
on Dec 18, 2014 at 4:48:44 pm

[Tim Wilson] "That's exactly my point. There are millions of people who know the actual answer to this, rather than my armchair observations, but it seeeeeems to me that a large part of the use of After Effects in mainstream movie and vfx-ish tv making ends with a handoff to Nuke. There's something of an overlap in the feature sets, but they're more commonly used together than not, I think. "

Ae gets Hollywood glory for design elements like HUDs and FUIs (fantasy user interfaces), but it is also quietly used for comp work in movies, TV, TVCs, etc.

Why? Because Ae has unparalleled design tools, because Ae has a huge user base, because Ae has an astonishing third-party ecosystem, and because layer-based compositing is just plain easier for simpler and/or image-driven shots.

Nuke gets Hollywood glory for complicated comps and VFX work.

Why? Because Nuke has unparalleled compositing tools, because Nuke has a huge user base among professional compositors, because Nuke has an astonishing third-party ecosystem, and because node-based compositing is just plain easier for complex and/or multichannel or data-driven shots.

With so much in common, why doesn't Ae move upmarket more, or why doesn't Nuke move downmarket more?

1) Ae is cheap and Nuke is expensive.

2) Simple comps are harder to manage as nodes. You have to explicitly combine inputs together (gross). You have to manage what the viewer is actually showing you. You have to be able to answer this: "To premultiply or not to premultiply; that is the question."

3) Complex comps are harder to manage as layers. You can't branch a layer stack. All the disadvantages of nodes in (2) become advantages in (3).

4) Layers are a natural way of thinking for anyone who has ever used Photoshop, Illustrator, or an NLE. Flow graphs probably do not elicit the "I know this" reaction



unless you grew up with a soldering iron in your hand, so you need to become a specialist to use them.

5) Ae likes to think of images as images, but Nuke likes to think of images as data. This is an oversimplification of a lot of concepts, but Ae natively thinks in gamma-adjusted, pre-multiplied RGBA, and Nuke thinks in an arbitrary number of linear channels. This pays huge dividends in compositing CG.


Other corners of the internet are abuzz, aruging that BMD's Fusion move or the emergence of open-source compositor and Nuke knockoff Natron have The Foundry on the ropes. These positions are ignorant of some important strengths of The Foundry and Nuke:

1) Nuke was actually built by studios to do real work. Nuke developers continue to work hand-in-hand with teams doing real work. There's a pretty decent chance that a new feature you may see this year was refined in beta on last year's summer blockbusters.

2) Nuke is a platform with enormous second-party extension opportunities. It's totally customizable and TD-friendly. The degree to which you can script Nuke to tie it into your pipeline is insane. You can write your own tools, with a heterogeneous accelerated image processing kernel (Blink) built in. All of this is actually documented [link], too. (Eyeon, now BMD, I'm looking at you!)

3) The Foundry leads the industry in commercializing R&D. There, I said it. Their work bridging 2D and 3D with things like Model Builder and deep compositing support are unrivaled.

TL;DR -- horses for courses. Adobe and The Foundry have some overlap (I didn't even get into Ps/Il/MARI/Mischief), but I'd agree with Tim that they are not running on the same track.

Walter Soyka
Designer & Mad Scientist at Keen Live [link]
Motion Graphics, Widescreen Events, Presentation Design, and Consulting
@keenlive [twitter]   |   RenderBreak [blog]   |   Profile [LinkedIn]


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Oliver Peters
Re: This is when it all changed ...
on Dec 18, 2014 at 5:08:42 pm

Great synopsis.

[Walter Soyka] "4) Layers are a natural way of thinking for anyone who has ever used Photoshop, Illustrator, or an NLE. "

Ironically, I think nodes are actually a natural way of thinking for anyone who's driven a complex production switcher, like any large Grass Valley or Sony. There you have a complete upstream/downstream workflow that is very akin to nodes.

I think also nodes works best on a single-shot basis, while layers works best for a timeline of several shots back-to-back. That's evident by some of Stu Maschwitz's DV Rebel and ProLost posts about doing complete show grading in AE.

- Oliver

Oliver Peters Post Production Services, LLC
Orlando, FL
http://www.oliverpeters.com


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Walter Soyka
Re: This is when it all changed ...
on Dec 18, 2014 at 5:20:47 pm

[Oliver Peters] "I think also nodes works best on a single-shot basis, while layers works best for a timeline of several shots back-to-back. That's evident by some of Stu Maschwitz's DV Rebel and ProLost posts about doing complete show grading in AE."

Yes indeed!

Why? Because the structure of the flow graph is static relative to time. Properties in nodes may change over time on the dope sheet, but the schematic itself is fixed over the entire duration of the output. That's a non-issue for single shots, but to accommodate multiple shots in the same script, you need a massive structure, one schematic that can accommodate every combination of media in the entire multi-shot structure with all time-based variability contained solely in tool properties.

Contrast this with a layered timeline, which sacrifices some flexibility in arbitrary render pipeline control for a flow structure that provides compositing order on the vertical axis and variability over time on the horizontal axis.

Walter Soyka
Designer & Mad Scientist at Keen Live [link]
Motion Graphics, Widescreen Events, Presentation Design, and Consulting
@keenlive [twitter]   |   RenderBreak [blog]   |   Profile [LinkedIn]


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Phil Hoppes
Re: This is when it all changed ...
on Dec 18, 2014 at 5:33:29 pm
Last Edited By Phil Hoppes on Dec 18, 2014 at 5:34:57 pm

Excellent analysis Walter. I use Nuke and AE and like using both. AE is fast and one does not have to bend your head around the whole linear workflow like you do with Nuke. For complicated comps however, especially with CGI, of which I do a fair amount, nothing comes close to what you can do with Nuke.

For all of us it's conjecture at this point as to who will buy TF. I might go as far as to say whom ever does, Nuke is probably on pretty strong ground as to being impacted the least. One of my other favorite 3D programs, Modo, however may not fair so well. As mentioned here before the list of possible suitors is really quite small. I'd put Adobe and AD on the tops of those lists. While I'd like to think that Modo might survive an Adobe acquisition it is difficult to see. Adobe already has a very tight integration with Cinema4D creator Maxon. Heck they distribute a light version of 4D with AE. They would really upset their current user base if they dumped 4D for Modo and I can't see them supporting multiple 3D authoring software so they would either sell off the assets of Modo or just scrap it. For AD to by TF the same scenario exists, Nuke would be supported very well and Modo is an also ran against 3DsMax and Maya. Just ask any XSI user ...... that movie has already been played and the hero died...... badly.

We shall see.....


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Tim Wilson
Re: This is when it all changed ...
on Dec 27, 2014 at 6:21:02 am

I've been thinking about this all week. Yes, this is what I do instead of give my full attention to my family. LOL

You know what bugs me about this? I'm an idiot. There's no way I should know about this. I should only have heard this news after a a deal was made.

Think about any deal of any size in this space. Did you know DaVinci was for sale? Teranex? Did you know that Macromedia was up for selling Final Cut to Apple? Did you know that Imagineer was available if the fit was right? Go down the list. Big or small. How often do we EVER hear about stuff like this in advance? I can't think of any examples at all.

That says a few things to me.

First, they couldn't get the deal done through the usual methods. If they could have, they would have.

Regular channels include companies that specialize in this kind of deal for this market. I know the managing partners at MediaBridge Capital Advisers in particular (one was the CFO of Avid when I was there, the other I've crossed paths with many times over the years: he did the Boris-Media 100 deal, the $100 million+ sale of On2 to Google, etc), and I think they're absolute aces.

There are others. If there was a deal to be made, couldn't one of these specialists have made it?

The investment groups that the current owners outbid for TF just a few years ago surely told them to pound sand, right? Because I'm still not seeing enough upside for another group to see a sound investment here when they could be putting that money into Adobe and earning 20% a year, or buying another company that's more seriously undervalued.

I'm not saying The Foundry is overvalued. Its current owners are an investment group, so any deal they pitch to another investment group would have to pass their own straight-face test first....but again, wouldn't they have already made a deal if the could have?

I'm also noticing how often names like Adobe and Autodesk are coming up, and really, not a ton of others. Surely an investment group wanting $300 million for The Foundry would be frequenting the COW, right? LOL Don't you think they approached Adobe, Autodesk, and a couple of other likely suspects first?

Heck, they probably approached Grant Petty, right?

Because this press release thing is the equivalent of Craigslist - just kinda throw it out there and see who nibbles. No sense of cultivation at all.

I wonder if part of the hitch is that a number of people who'd be interested had no idea of the scale of the thing. Did YOU know they had 250 people working there? Says so right on their website, and it never crossed my mind to look, but I can imagine that a number of people might have gotten the call, "Hey, we're shopping The Foundry around, want to take a look?," then heard the details and said, "What? You're kidding. I can't take on 250 people. And you want HOW much?"

Again, not saying that they're not worth every penny, and that the next owner won't make a bundle on it, but surely after such a big run-up in the past few years, this has to be a buy-and-hold deal....and with so few *obvious* potential buyers, who are the *actual* potential buyers...and if they're realistic candidates, why didn't one of them make the deal?

I dunno, maybe this is a play to drive the price up. They weren't getting the reaction they wanted one on one, but maybe one of our putative prospects will step up to make sure that a competitor doesn't acquire it first.

Anyway, I'm surely not alone in either ongoing vexation over this news, or letting my mind wander instead of giving my full attention to anything happening around me LOL but I wonder if you've had any more thoughts on this....


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Walter Soyka
Re: This is when it all changed ...
on Dec 29, 2014 at 3:50:36 pm

[Tim Wilson] "Because this press release thing is the equivalent of Craigslist - just kinda throw it out there and see who nibbles. No sense of cultivation at all."

I don't think it's a press release. There's nothing recent about The Foundry on Carlyle's press page [link].


[Tim Wilson] "Again, not saying that they're not worth every penny, and that the next owner won't make a bundle on it, but surely after such a big run-up in the past few years, this has to be a buy-and-hold deal....and with so few *obvious* potential buyers, who are the *actual* potential buyers...and if they're realistic candidates, why didn't one of them make the deal? "

I was actually pretty surprised when The Foundry went PE: it seems like a difficult deal to exit.

At $300M, and considering the niche nature of the products, I think the deal is too expensive for the "obvious" buyers (Autodesk and Adobe).

Autodesk has the most obvious business case, but Autodesk M&E had $137.8M gross profit on $174.7M revenue last year.

How would Adobe sell Foundry products if they bought them? Continuing the current license model seems unlikely, but so does folding them into Creative Cloud.

Is the M&E segment interesting enough for a company like Dassault, who has a significant presence in an adjacent DCC field, to buy their way in? Is Nuke important enough to studio workflows to build a coalition to buy it out? Does The Foundry generate enough positive cash flow that buy-and-hold makes sense for an institutional investor like a pension plan?

Walter Soyka
Designer & Mad Scientist at Keen Live [link]
Motion Graphics, Widescreen Events, Presentation Design, and Consulting
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Bill Davis
Re: This is when it all changed ...
on Dec 17, 2014 at 10:18:18 pm

[Tim Wilson] "Apple won't bite on this one because there's no chunky jewelry or apparel. Maybe if The Foundry made giant ugly hats. No wait. Those would cover the ugly headphones. Maybe giant ugly shoes? Parachute pants?
"


I know Tim's joshing us. But fashion fantasy aside, I still think the watch thing is NOT as much about fashion or "wearables" as a category as people are imagining. Sure there's a big dollop of that in play. Why not? Apple has always been focused on design and industrial excellence via fit and finish - but I still think there's a more fundamental understanding beneath the watch.

It creates an access point for EVERYTHING else that Apple does thats fully present on the user.

It takes the portal for the data you use to operate your life out of the dark recesses of your pocket or purse and lands a display on your wrist for instant access and even some basic interaction..

I used the example before, the first time in a group of business people is sitting at lunch when one a woman with an early iWatch gets a wrist alert and glances down to see that her next appointment arrived early and excuses herself from the table - every other executive at that table will want to be just as "connected at a glance" - and they ALL will want the same style of integrated wrist worn terminal.

The fashion makes you notice it - but the functionality is what will make so many humans strap one on each morning.

(Be nice. I know the temptation for joking will be HUGE after that last line. Resist it, please. ; )

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