Blueprint Ventures reported last week that its portfolio company Platform Solutions Inc. (PSI) was bought by IBM Corp.
It’s great news on multiple fronts, not the least of which is that it puts an end to litigation between Big Blue and PSI, a maker of mainframe clones.
It’s also great news for Blueprint because it lends credence to its corporate spinout strategy. PSI is the second exit it has notched from the 15 corporate spinouts it has done to date, with LANDesk being the first, when the company was bought by Avocent (Nasdaq: AVCT) for $416 million in cash and stock in 2006.
The deal shows that corporate spinouts can reach exit much more quickly than traditional venture deals, says Blueprint Managing Director Bart Schachter. His firm held PSI for more than three years, far less than the average holding period for a VC-backed company, which is about 8.6 years, he says.
While the dollar amount of the acquisition was not disclosed, Schachter described it as “one of the top 10 VC-backed M&A deals in the IT space this year.”
“This was a home run [for Blueprint], but I’m not going to tell you how many runners were on the bases.” he said.
Overall, PSI raised about $52 million over four rounds, with its last round—$37.2 million in November 2007—being led by Microsoft. Blueprint Managing Director George Hoyem led the $5.2 million Series A for PSI when it spun out of Fujitsu in November 2003, bringing in Intel Capital, InterWest, Investcorp.
IBM sued PSI in December 2006, alleging patent violations, and PSI countersued in January 2007, claiming IBM was using its dominance in the mainframe market to stifle competition. The acquisition means the two companies will not meet in court in Q3, as had been planned. —Lawrence Aragon