GOOG + HUBS didnt end in Holy Matrimony. :-(
It was not even 2 months ago when I shared the post on a possible marriage (technically - acquisition) between AI-leader $Alphabet(GOOG)$ and CRM Expert $HubSpot(HUBS)$.
Click here ! to know the details and the immense AI-synergy coming out of this union.
Unfortunately, before the fairy-dust has even settled down, news broke that the merger is off. (see below)
Google parent Alphabet Inc. has shelved efforts to acquire HubSpot Inc., according to people with knowledge of the matter, putting to bed the prospect of a takeover that would have ranked among the biggest of 2024.
HubSpot - Shares.
Shares of HubSpot, a customer relationship management company, fell as much as -19% on Wed, 10 Jul 2024 in New York trading, the most since 2020.
In the end, the shares closed down -12.12% to $492.31, giving the company a market value of about $25 billion.
Alphabet had communicated its interest in a potential deal with HubSpot earlier 2024.
It was very unfortunate that both sides did not reach a point of detailed discussions around due diligence, said insiders, who asked not to be identified discussing confidential matters.
Representative from Alphabet (Google’s parent company) did not have an immediate comment.
While a HubSpot spokesperson declined to comment.
Such A Shame.
Based on data compiled by Bloomberg, any deal for HubSpot would have been one of the biggest this year for a tech company, putting it in the same league as the pending $34 billion acquisition of Ansys Inc by Synopsys Inc.
HubSpot, which builds marketing software for small and medium-sized businesses, has specialized in so-called inbound Marketing, where consumers start engagement with a brand.
HubSpot customers apply its software to make advertising content that consumers can click on.
Buying Massachusetts-based HubSpot (that focuses on small to midsize enterprises), would have helped Alphabet compete with other players in that market such as $Microsoft(MSFT)$, $Oracle(ORCL)$ and $Salesforce.com(CRM)$.
Fear of Antitrust Governance?
Perhaps there is fear that the M&A (merger & acquisition) transaction also would have likely gotten bogged down in reviews by US antitrust regulators.
Afterall, under the Biden Administration, the Justice Department (DoJ) and the Federal Trade Commission (FTC) have been aggressively signaling their opposition to big-ticket M&A, forcing sizable tech companies to rethink their plans to grow through acquisitions.
A Tale of 2 Cities.
Strangely enough, HubSpot shares had peaked in April at about $682 per share. (see above)
Since then, it has fallen by approx. -21% before Wed, 10 Jul 2024.
On the other hand, Alphabet shares have risen about +38% YTD (as of 10 Jul 2024). (see above)
My viewpoints: (mine only)
What started out as “promising” has fizzled out into foams, in the blink of an eye.
I think both companies have something to lose as a result of the breakdown.
For HubSpot:
Missed opportunity for a big payout: Google might have offered a high acquisition price, giving HUBS investors a good return.
Potential loss of momentum: The talks could have created a buzz around HUBS, attracting new customers or partners. Without the deal, they just might lose some of that excitement.
For Google:
Missing out on valuable tools: HUBS's marketing software could have helped Google better serve its own customers or compete more effectively.
Facing regulatory hurdles: If Google had acquired HUBS, it might have to face more antitrust scrutiny from regulators, potentially delaying or blocking the deal.
Parting question: Will Google be able to close the loop and compete in (a) contact management, (b) sales pipeline management, (c) email marketing and (d) reporting & analytics - all rolled into one ?
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