Last chapter of Pmarca Guide to Startups: Sell to HP for $1.6 billion
Over the past month, Marc Andreessen has run a series of posts sharing his insights into the process of starting a tech company. Aside from his familiarity with a lot of valley start-ups, Andreessen’s cred and his place in the history books were of course cemented as a co-creator of the Mosaic browser and co-founder of Netscape, later sold to AOL for $4.2 billion. Since then, he’s bolstered his reputation by getting his second start-up, Loudcloud, off to a roaring start, keeping the core of the company and its IT automation technology afloat through the tech bust, re-launching it in 2002 as Opsware, and growing it into a company with 550 employees and $100 million in annual revenue. But today’s development ought to send the page views for Andreessen’s start-up advice soaring: He’s selling the company to HP for $1.6 billion, or $14.25 a share, a 39 percent premium over the stock’s closing price Friday.
Andreessen himself, with more than 9 percent of the shares, will make out handsomely, but so will everybody who believed in him. “One of my favorite facts about this deal,” he wrote today, “is that at our acquisition price of $14.25 per share, everyone who bought and held stock in Loudcloud or Opsware in the public market at any time made money.”
Opsware itself is getting close to breaking even, Andreessen said, but is well poised to capitalize on the growing demand within large companies to automate IT tasks like testing servers and applying patches. And that’s the attraction for HP. “We’re buying the market leader in data center automation,” said Ann Livermore, executive vice president of HP’s Technology Solutions Group. “We get some of the best people in world in software who understand the technology and what business are grappling with.” The acquisition was announced almost one year to the day after HP made an even bigger software buy, the purchase of Mercury Interactive for $4.5 billion. And the Opsware buy overshadowed another HP acquisition today — $214 million for Neoware, maker of thin client and virtualization software for centralizing management of corporate desktop computers. Together, the additions signal HP’s intent to become a one-stop shop for everything you need to build and run a data center.
Almost breaking even? Not even close according to the Google Finance stats. They have lost money every year since 2002 even when excluding extraordinary items. No this just speaks to the fact that people continue to overvalue companies and that people like Andreessen are given credit for running successful companies even when they have never turned a profit.