Tech investors urge BlackLine to consider sale as SAP shows interest

A growing group of influential shareholders is pushing BlackLine Inc., a maker of cloud-based accounting automation software, to explore a potential ￰0￱ effort comes as word has spread that the company, SAP SE, the German enterprise software giant, has attracted renewed interest from potential ￰1￱ pressure arises as software valuations have cooled and public-market investors are voicing concerns about where companies should position themselves for the next leg of ￰2￱ some time now, BlackLine has been recognized as a leader in the financial close and reconciliation automation software ￰3￱ counts corporate finance departments among its customers, who rely on its products to automate additional manual accounting-related tasks and produce end-of-month reports more ￰4￱ company was a leading beneficiary of the larger move to cloud computing over the past ￰5￱ growth has also slowed, although it has decelerated from an extremely high historical ￰6￱ broader markets have become less inclined to underwrite long-term profits for subscription-style software vendors in a booming ￰7￱ only way for BlackLine to fulfill its potential, in their view, is by combining with a larger player, say, SAP, that can integrate its products, sell them worldwide, and innovate at a much faster clip on alternative uses for the ￰8￱ push for strategic review A few investment firms that own significant chunks of BlackLine have informed the board in recent weeks that it may need to consider selling ￰9￱ them are Ananym Capital Management, Tensile Capital Management, and Sheffield Asset Management.

A second large shareholder has also privately thrown its support behind the ￰10￱ is trading at a discount to its long-term potential, they say, particularly as software designed to automate the financial close market heats ￰11￱ acquisition by a well-financed acquirer may allow the company to grow more rapidly and enhance product integration, while providing immediate benefits for shareholders in the form of a premium buyout ￰12￱ pressure started mounting after the activist investment firm Engaged Capital publicly advocated for a ￰13￱ letter stated that the company is at a strategic crossroads: The business has positions of strength in the market for finance automation, but growth has slowed, margins are declining, and investor sentiment has turned negative.

BlackLine’s chief executive, Owen Ryan, hinted at the surging phone traffic during an earnings call last ￰14￱ board is aware of how shareholders feel and maintains regular conversations with investors, he added. However, he offered no specifics on the next steps for launching an official sales process. Nevertheless, proponents of BlackLine’s current approach argue that there remains significant room for growth in the world of finance ￰15￱ also note that an era of technology may have dawned . However, many companies are still stuck with old-school manual ledgers containing a significant amount of revenue, one to which Palabra has relatively appealing access.

However, for those who do want a sale now, the window to extract that kind of value may well be today, not in some more distant tomorrow, when bidding wars and, with them, pricing power will only grow ￰16￱ moves to strengthen its cloud finance strategy SAP had already attempted to acquire BlackLine earlier this year with an acquisition offer for the company’s shares, according to media reports. BlackLine’s board at the time rejected the offer, claiming that it could create better long-term value for itself independently of ￰17￱ of BlackLine have been lackluster this year, recently closing in the mid-$50s. The shares dropped further after the company lowered its profit forecast, as investors are increasingly skeptical that it can deliver better-than-expected performance on its ￰18￱ investors increasing the pressure and given changes in market dynamics, BlackLine is being presented with a major strategic choice: continue along its current path of independence or take advantage of an opportunity for partnership or outright ￰19￱ the interest from deep-pocketed players, including SAP, the company’s next move could be the one that either helps it grow its global presence or leaves it too far behind in a march to dominate a crowded finance automation ￰20￱ will be watching closely, as the result could set the tone for how software companies find flexibility to maintain their independence and strategic leeway in the era of cloud ￰21￱ your free seat in an exclusive crypto trading community - limited to 1,000 members.