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DELTEK WORKING ON SOCIAL SOFTWARE

Deltek logoDeltek is working on a social enterprise software project, which is in the early stages of development. Called Kona, the project is discussed in revised documents filed with the SEC as part of the company's proposed acquisition by private equity investor, Thomas Bravo, for $1.1 billion. Originally, the information filed by Deltek said only that there was a project that the board of directors had considered spinning off, along with the sale of the company.
The amended information statement revealed the name of the general nature of the project, but not the details. A spin off was rejected because of Kona's lack of a revenue base or a defined strategy for generating revenue, and the attendant difficulty and expense of determining the proper value of Kona if it were spun." Deltek made several amendments to its information statement as part of a settlement of a suit filed by a shareholder. The settlement does not affect the sale price. The amended disclosure also reported that after June 11, the last day before Deltek authorized potential bidders to talk to alternative sources of financing and other advisors, the company's stock price began to appreciate significantly immediately after interested parties were allowed to broaden the circle of financing sources and advisors with which they were in communication ..." and that the dissemination of this information was probably the cause of the increase, one serious bidder dropped out of contention because its offer would have been lower than the new market price, although it wanted to be kept informed in case the stock moved lower. However, the document showed this bidder also expressed concern "about the potential for deep cuts in the Federal budget and uncertainty around which Federal government programs may be most affected." That concern is based on the fact that serving government contractors is an important part of the vendors' business. Deltek also reported that no decision was reached on the possibility of providing a transaction bonus to management for its work in supporting the sale and also running the company.
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