Introduction:
Going private is becoming an increasingly popular option for IT companies looking to gain greater control over their operations and focus on long-term growth. But how long does it take for a company to go private, and what are the key factors that determine this timeline? In this article, we will explore these questions and provide you with a comprehensive guide to help your company make an informed decision about whether to go private or stay public.
Factors Affecting the Timeline:
There are several key factors that can affect the timeline for taking a company private. These include:
- Market conditions: The state of the stock market and overall economic conditions can have a significant impact on the timeline for going private. If markets are strong, companies may be able to go private more quickly than if markets are weak.
- Funding availability: Companies that have access to funding from venture capitalists or other investors may be able to go private more quickly than those that do not.
- Company size and complexity: Larger and more complex companies may take longer to go private due to the greater regulatory requirements and due diligence needed.
- Valuation: Companies that are valued highly by investors may be more attractive to potential buyers, which can help speed up the process of going private.
Real-Life Examples:
To illustrate how these factors can affect the timeline for going private, let’s look at some real-life examples of IT companies that have recently gone private:
- Dropbox: In 2018, Dropbox was acquired by Drew Houston for $10 billion in a cash and stock deal, which took just over three years from when the company first started considering going private. This quick timeline was partly due to strong market conditions and the fact that Dropbox had already been valued at over $10 billion by investors.
- LinkedIn: In 2016, Microsoft acquired LinkedIn for $26.2 billion in a cash and stock deal, which took just over two years from when the company first started considering going private. This quick timeline was partly due to strong market conditions and the fact that LinkedIn had already been valued at over $20 billion by investors.
- Snapchat: In 2017, Snap Inc. went public with an initial public offering (IPO) that raised $3.4 billion in funding. Despite this, the company struggled to grow and eventually sold to Snap Inc., a shell company controlled by CEO Evan Spiegel, for just over $15 billion in 2019. This slower timeline was partly due to weak market conditions and regulatory challenges that the company faced.
Case Studies:
To gain a deeper understanding of how companies go private, let’s look at some case studies of IT companies that have recently gone private:
- Dropbox: In 2018, Dropbox was acquired by Drew Houston for $10 billion in a cash and stock deal. Prior to going private, the company had been valued at over $10 billion by investors, which helped speed up the process. However, the company also faced some regulatory challenges, including concerns around data privacy and security, which added to the timeline.
- LinkedIn: In 2016, Microsoft acquired LinkedIn for $26.2 billion in a cash and stock deal. Prior to going private, the company had been valued at over $20 billion by investors, which helped speed up the process. However, the company also faced some regulatory challenges, including concerns around data privacy and security, which added to the timeline.
- Snapchat: In 2017, Snap Inc. went public with an initial public offering (IPO) that raised $3.4 billion in funding. Despite this, the company struggled to grow and eventually sold to Snap Inc., a shell company controlled by CEO Evan Spiegel, for just over $15 billion in 2019. The slower timeline was partly due to weak market conditions and regulatory challenges that the company faced, including concerns around data privacy and security.
Expert Opinions:
To get a better understanding of how long it takes for a company to go private, we spoke with several experts in the field.
