Box shares rise on report company is exploring sale – TechCrunch

Shares in Box, a well-known content and collaboration company that went public in 2015, rose today after Reuters reported the company was considering a sale. TechCrunch had previously discussed mounting investor pressures for Box to ignite its stock price after years in the wilds of the public market.

As of today’s close of trading, Box’s equity was $ 23.65 per share, up roughly 5% from its opening value, but below the intraday high of $ 26.47 hit after the news broke. The company went public at $ 14 per share a little over five years ago, only to see the share price soar to about the level it hit on its first day of trading today.

Box, which gained fame in its early stages thanks in part to its ubiquitous CEO and co-founder Aaron Levie, has continued to grow with the public, albeit at a slowing pace. Dropbox, a long-term rival, has also seen its growth rate decline since going public. In the past few quarters, both have emphasized the increasing profitability compared to the expansion in sales.

However, the problem that Box has encountered in public, namely hyper-scale platform companies with competing offerings, could also prove to be a lifeline. Google and Microsoft could be a future home for Levie’s company after years of duo asking Box for deals.

Last week, Box announced a deal for closer integration with Microsoft Office 365. Given the timing of the release, it was easy to speculate that the news might land before a possible deal. The Reuters article adds fuel to the option.

While we can’t know for sure if the Reuters article is correct, the possible sale of Box makes sense.

The article suggested that one of the possible acquisition options for Box could be to make it private again through private equity. Perhaps a company like Vista or Thoma Bravo, two companies who tend to like mature SaaS businesses with decent earnings and some problems, could buy the struggling SaaS company. By taking companies off the market, reducing investor pressures, and giving them room to maneuver, software companies can sometimes find new strength.

Consider the case of Marketo, a company that bought Vista for $ 1.6 billion in 2016 before flipping it and selling it to Adobe for $ 4.75 billion in 2018. The end result brought Vista strong profits and Marketo a definitive landing as part of a company with a broader platform of marketing tools.

It is not clear whether there are expenses at Box that could be reduced or whether a sales process could be improved. However, with a market value of $ 3.78 billion, Box could reach larger private equity funds. Or within reach of a variety of larger enterprise software companies that might want their list of business customers, technology, or both.

If the rumors are true, switching from Silicon Valley startup darling to public offering to sold company in just six years could be a baffling crash for the company. While it is important to note that these are just rumors, the letter for the company could be on the wall and it could just be a matter of when, and not of the case.

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