Huddle, the British ‘silicon roundabout' based online collaboration company, is on the brink of a sale to private equity, according to reports.
The company, founded in 2006 and which has raised at least $40m in three rounds of venture capital financing, revealed in April that it needed to secure either $5m in funding or to find a buyer.
But according to Business Insider, it's the second of those two options that the company is set to take, with a buyout offer from private equity firm Turn/River, which has offices in London, as well as San Francisco, California, on the table valuing Huddle at $89m.
Business Insider claims that the company inadvertently published, then deleted, a blog post on Sunday revealing Turn/River as a majority shareholder. But it also sent letters to existing shareholders this week notifying them of the buyout deal.
The deal will be forced upon minority shareholders in what's known as a ‘drag along' covenant, forcing them to sell-out at the terms offered, whether they liked it or not. Only Huddle's preferred shareholders will see any money from the deal, the letter adds - ordinary shareholders, which includes staff, will get a ‘goodwill' payment of just $100 each.
In its last venture funding round in December 2014, the company had been valued as much as $300m. The company's CEO, Morten Brøgger, was installed in January 2015, replacing co-founder Alastair Mitchell, after that fourth funding round, which coincided with cost-cutting lay-offs.
However, while founded in 2006, the company has struggled to compete with more recent entrants in collaboration, such as Box and Slack, while also being squeezed by Microsoft with its various collaboration offerings, both free and provided with Office 365.
That said, Huddle, whose venture capital backers include the CIA's own In-Q-Tel venture financing outfit, counts 80 per cent of the UK's central government departments among its users, securing more than 200 contracts via the G-Cloud framework.
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