Thoma Bravo-owned QAD acquires Redzone in $1bn deal

BY Fraser Tennant

In a deal designed to deal with the challenges of rising input costs and labour shortages, Thoma Bravo portfolio company QAD has acquired employee productivity platform Redzone for $1bn.

The acquisition of Redzone’s connected workforce product – which serves over 1000 plants and 300,000 frontline workers globally – will enable QAD customers to drive rapid, tangible increases in empowerment, retention and productivity on the frontline.

“We are delighted to bring Redzone into the QAD family,” said Anton Chilton, chief executive of QAD. “We believe the emerging connected workforce space is the most transformational area of technology for manufacturing companies. As we assessed the market for the category leader, it was evident that not only is Redzone the number one provider globally, but also the pioneer of the category and the one who continues to define it.”

The addition of Redzone's connected workforce product supercharges the QAD Adaptive Applications product suite by enabling QAD customers to drive rapid, tangible increases in empowerment, retention and productivity on the frontline.

QAD Adaptive Applications are designed to support the Adaptive Enterprise where in a turbulent world, facing disruptions in supply and fluctuations in demand, manufacturers and supply chains rapidly respond to change and seamlessly optimise agility, efficiency and resilience for effective customer service.

“Joining QAD will accelerate our mission of transforming manufacturing by empowering the frontline,” said Richard Tester, co-founder and chief executive of Redzone. “We have always put the frontline worker at the heart of our technology and know that arming these teams with the right digital workflows is the fastest way to unlock productivity on the plant floor.”

QAD’s acquisition of Redzone is its second such transaction completed in the last two months. In December, the company acquired Livejourney, a provider of a real-time process mining and predictive modelling solution designed to discover, monitor and improve business processes.

“Since acquiring QAD in 2021, we have remained committed to supporting the company in its mission to enable its customers to rapidly adapt to disruption and effectively innovate for competitive advantage,” concluded Peter Stefanski, a partner at Thoma Bravo. “The acquisition of Redzone demonstrates our commitment to advancing QAD's vision and to further building its leadership position in the broader industrial software universe.”

News: Thoma Bravo-owned QAD to acquire Redzone for about $1 bln

Xylem to acquire Evoqua in $7.5bn deal

In a deal designed to address the world’s most critical water challenges, global water technology company Xylem Inc. is to acquire clean technology firm Evoqua Water Technologies in an all-stock transaction valued at approximately $7.5bn.

Under the terms of the definitive agreement, Evoqua shareholders will receive 0.480 shares of Xylem for each Evoqua share, representing a value of $52.89 per share or a 29 percent premium based on Xylem and Evoqua closing prices as of 20 January 2023.

Building on Xylem’s global leadership in water solutions and Evoqua’s leadership in advanced treatment solutions and services, the combined company will be uniquely positioned to develop and deliver an even more comprehensive offering of innovative solutions.

Moreover, the combination unlocks compelling new growth opportunities and is expected to deliver run-rate cost synergies of $140m within three years, driven by scale efficiencies in procurement, network optimisation and corporate costs.

“Solving the world’s water challenges has never been more urgent,” said Patrick Decker, president and chief executive of Xylem. “Our acquisition of Evoqua creates a transformative global platform to address water scarcity, affordability and resilience at even greater scale. The combined company delivers an unparalleled portfolio of advanced technologies, integrated services and application expertise across the water cycle.”

Following closing, the combined company will continue to be led by Mr Decker, with two current members of the board of directors of Evoqua expected to join Xylem’s board of directors.

"I am incredibly proud of what our team at Evoqua has achieved to date, providing mission-critical water treatment solutions to the market and for our customers,” said Ron Keating, president and chief executive of Evoqua. “Along the way, we have earned a reputation for quality, safety and reliability around the world. Together with Xylem, we will drive innovation on a larger scale for our customers, positioning us to create even more value for our stakeholders.”

The transaction, which is anticipated to close in mid-2023, is subject to approval by shareholders of Xylem and Evoqua, the receipt of required regulatory approvals and other customary closing conditions.

Mr Decker concluded: “Together, our complementary businesses will be even more strongly positioned to help our customers and communities tackle their most challenging water needs.”

News: Xylem to buy Evoqua in $7.5 bln deal to tap water demand

T-Mobile suffers another data breach

BY Richard Summerfield

US mobile phone operator T-Mobile has suffered a data breach affecting 37 million customers - the company’s fifth such incident since 2018.

In a Securities and Exchange Commission (SEC) filing, the company noted that it “promptly commenced an investigation with external cybersecurity experts and within a day of learning of the malicious activity, we were able to trace the source of the malicious activity and stop it”. The company has launched an investigation into the breach, but explained that “the malicious activity appears to be fully contained at this time, and there is currently no evidence that the bad actor was able to breach or compromise our systems or our network”.

According to T-Moble, the breach saw a bad actor use a single application programming interface (or API) to obtain limited types of information on customer accounts. T-Mobile said the hack did not expose payment card information, social security, tax, driver’s licence or other government-issued ID numbers. Passwords, PINs and other financial information is also believed to be safe, however the hack did compromise other information, including name, billing address, email, phone number, date of birth, and T-Mobile account number and information, such as the number of lines on the account and plan features.

The breach appears to have occurred in late November 2022, but T-Mobile did not become aware of the attack until 5 January.

“We understand that an incident like this has an impact on our customers and regret that this occurred,” the company said in a statement. “While we, like any other company, are unfortunately not immune to this type of criminal activity, we plan to continue to make substantial, multi-year investments in strengthening our cybersecurity program.”

T-Mobile has suffered a number of damaging cyber attacks in recent years. Before the most recent breach came to light, in August 2021 the company noted that a hacker had accessed information pertaining to 7.8 million existing customers, and more than 40 million former and prospective customers, including social security numbers and driving licence details. That figure was subsequently revised upwards to around 76.6 million. T-Mobile is reported to have paid the hacker $200,000 via a third party to stop the data being sold on the dark web, but it was reportedly sold anyway.

The company also disclosed hacks in 2018 and 2019 and two other separate incidents in 2020.

Furthermore, in July 2022, the company agreed to pay $500m to settle class action lawsuits brought by those affected by the 2021 breach. The plaintiffs accused T-Mobile of failing to adequately protect customers’ data. As part of a settlement related to the breach, T-Mobile agreed to contribute $350m to cover legal fees and compensation, and to spend a further $150m on making improvements to data security and related technology.

News: T-Mobile’s $150 Million Security Plan Isn’t Cutting It

Britishvolt calls in administrators

BY Richard Summerfield 

Britishvolt, the battery startup company which had planned to build a giant factory to make electric car batteries in Blyth, Northumberland, has collapsed into administration. 

The company has appointed EY as administrators after failing to raise enough funding. The firm described the move as “disappointing”, and said all impacted staff were being offered support. The majority of Britishvolt’s 232 staff have been made redundant, with just 26 being kept on to assist with the sale of the company’s business and assets. 

Dan Hurd, joint administrator and partner at EY, said the firm had offered “a significant opportunity to create jobs and employment, as well as support the development of technology and infrastructure needed to help with the UK’s energy transition. It is disappointing that the company has been unable to fulfil its ambitions and secure the equity funding needed to continue. Our priorities as joint administrators are now to protect the interests of the company’s creditors, explore options for a sale of the business and assets, and to support the impacted employees.” 

The collapse of Britishvolt came after funding talks failed, leaving a string of disappointed backers ranging from FTSE 100 companies Glencore and Ashtead to property investor Tritax, owned by investment group abrdn, which had committed to fund a battery ‘gigafactory’ in Northumberland. 

Plans for the £3.8bn factory were part of a long-term vision to boost UK manufacturing of electric vehicle batteries and create around 3000 skilled jobs. The factory was expected to produce over 300,000 lithium-ion batteries a year by 2027.  

However, the company has been on shaky ground for some time. Britishvolt consistently pushed back its construction plans. It was expected that the first lithium-ion batteries would roll off the production line by the end of 2023, with the firm partnering with Siemens to make that a reality. That date was later pushed to mid-2025 due to a factory redesign, as well as “rampant inflation and rising interest rates”.

In November 2022, the company secured a short-term investment to stay in business and announced that its staff had agreed to take a temporary pay cut while the company attempted to secure longer-term funding for its planned gigafactory project in northern England. As of summer 2022, Britishvolt had only raised around £200m of funding, and £100m of promised government funding was delayed due to key targets for the investment being missed.

“As part of our efforts to see British companies succeed in the industry, we offered significant support to Britishvolt through the Automotive Transformation Fund on the condition that key milestones – including private sector investment commitments – were met,” said a department for Business, Energy and Industrial Strategy spokesman. “We remained hopeful that Britishvolt would find a suitable investor and are disappointed to hear that this has not been possible, and therefore no ATF grant has been paid out. Our thoughts are with the company’s employees and their families at this time, and we stand ready to support those affected. The UK is one of the best locations in the world for automotive manufacturing, and we want to ensure the best outcome for the site. We will work closely with the local authority and potential investors to achieve this.” 

News: Britishvolt: UK battery start-up collapses into administration

Forma Brands files for Chapter 11

BY Fraser Tennant

Following a string of supply chain issues and store closures, global multi-brand beauty company Forma Brands, the parent company of cosmetics manufacturer Morphe, has filed for Chapter 11 bankruptcy protection.

In addition to the filing, Forma Brands’ holding company FB Debt Financing Guarantor has entered into a definitive asset purchase agreement with a group of secured lenders, which will acquire all of Forma Brands’ assets.  

The proposed transaction is expected to significantly strengthen Forma Brands' financial position and provide additional support for the execution of its long-term growth strategy, which will focus largely on the company's global wholesale and e-commerce operations.

“Over the last year, Forma Brands has been implementing initiatives to stabilise our business and reposition our organisation for long-term growth,” said Simon Cowell, president of Forma Brands. “This agreement is a testament to the strength of our brands most meaningful to our consumers, including Morphe and Morphe 2.”

Moreover, Forma Brands has received a commitment for approximately $33m in debtor-in-possession (DIP) financing from the investor group, which, subject to court approval, will be available to support the business and its operations throughout the court-supervised sale process. The agreement with the investor group includes Forma Brands' wholesale operations, online platforms and international Morphe retail stores.

“We will have additional financial resources available to invest in our multi-category portfolio, product launches and innovative brand and marketing strategy as we advance our vision to inspire creativity, promote inclusivity and connect with consumers around the world through beauty,” continued Mr Cowell. “We are excited to reinforce our focus on opportunities and to continue bringing our thoughtfully selected beauty products to consumers through our individual online brand platforms, retail partners and Morphe stores outside the US.”

Throughout the Chapter 11 and sales process, Forma Brands’ customers can continue to shop the company’s portfolio of brands through the brands' online platforms, at leading specialty retailers and through the company's international Morphe retail stores.

Mr Cowell concluded: “We appreciate the continued support of our financial partners and believe this is the best path forward for Forma Brands as we position the business for the long term.”

News: Forma Brands Enters Into Agreement To Be Acquired By Group Of Secured Lenders