{"id":23813,"date":"2021-04-11T05:04:59","date_gmt":"2021-04-11T05:04:59","guid":{"rendered":"https:\/\/rbsitsoftwaresolution.com\/blog\/industry-experts-bullish-on-500m-kkr-investment-in-box-but-stock-market-remains-skeptical.html"},"modified":"2021-04-11T05:04:59","modified_gmt":"2021-04-11T05:04:59","slug":"industry-experts-bullish-on-500m-kkr-investment-in-box-but-stock-market-remains-skeptical","status":"publish","type":"post","link":"https:\/\/www.rbsitsoftwaresolution.in\/blog\/industry-experts-bullish-on-500m-kkr-investment-in-box-but-stock-market-remains-skeptical.html","title":{"rendered":"Industry experts bullish on $500M KKR investment in Box, but stock market remains skeptical"},"content":{"rendered":"

When Box<\/a> announced it was getting a $500 million investment<\/a> from private equity firm KKR this morning, it was hard not to see it as a positive move for the company. It has been operating under the shadow of Starboard Value<\/a>, and this influx of cash could give it a way forward independent of the activist investors.<\/p>\n

Industry experts we spoke to were all optimistic about the deal, seeing it as a way for the company to regain control, while giving it a bushel of cash to make some moves. However, early returns from the stock market were not as upbeat as the stock price was plunging this morning.<\/p>\n

Alan Pelz-Sharpe, principal analyst at Deep Analysis, a firm that follows the content management market closely, says that it\u2019s a significant move for Box and opens up a path to expanding through acquisition.<\/p>\n

\u201cThe KKR move is probably the most important strategic move Box has made since it IPO\u2019d<\/a>. KKR doesn\u2019t just bring a lot of money to the deal, it gives Box the ability to shake off some naysayers and invest in further acquisitions,\u201d Pelz-Sharpe told me, adding \u201cBox is no longer a startup its a rapidly maturing company and organic growth will only take you so far. Inorganic growth is what will take Box to the next level.\u201d<\/p>\n

Dion Hinchcliffe, an analyst at Constellation Research, who covers the work-from-home trend and the digital workplace, sees it similarly, saying the investment allows the company to focus longer term again.<\/p>\n

\u201cBox very much needs to expand in new markets beyond its increasingly commoditized core business. The KKR investment will give them the opportunity to realize loftier ambitions long term so they can turn their established market presence into a growth story,\u201d he said.<\/p>\n

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Box looks to balance growth and profitability as it matures<\/a><\/p>\n<\/blockquote>\n

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Pelz-Sharpe says that it also changes the power dynamic after a couple of years of having Starboard pushing the direction of the company.<\/p>\n

\u201cIn short, as a public company there are investors who want a quick flip and others that want to grow this company substantially before an exit. This move with KKR potentially changes the dynamic at Box and may well put Aaron Levie back in the driver\u2019s seat.\u201d<\/p>\n

Josh Stein, a partner at DFJ and early investor in Box, who was a longtime board member, says that it shows that Box is moving in the right direction.<\/p>\n

\u201cI think it makes a ton of sense. Management has done a great job growing the business and taking it to profitability. With KKR\u2019s new investment, you have two of the top technology investors in the world putting significant capital into going long on Box,\u201d Stein said.<\/p>\n

Perhaps Stein\u2019s optimism is warranted. In its most recent earnings report from last month<\/a>, the company announced revenue of $198.9 million, up 8% year-over-year with FY2021 revenue closing at $771 million up 11%. What\u2019s more, the company is cash-flow positive, and has predicted an optimistic future outlook.<\/p>\n

\u201cAs previously announced, Box is committed to achieving a revenue growth rate between 12-16%, with operating margins of between 23-27%, by fiscal 2024,\u201d the company reiterated in a statement this morning.<\/p>\n

Investors remains skeptical, however, with the company stock price getting hammered this morning. As of publication the share price was down more than 9%. At this point, market investors may be waiting for the next earnings report to see if the company is headed in the right direction. For now, the $500 million certainly gives the company options, regardless of what Wall Street thinks in the short term.<\/p>\n

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KKR hands Box a $500M lifeline<\/a><\/p>\n<\/blockquote>\n

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Article source: http:\/\/feedproxy.google.com\/~r\/techcrunchIt\/~3\/-JvqPSrz_RI\/<\/p>","protected":false},"excerpt":{"rendered":"

When Box announced it was getting a $500 million investment from private equity firm KKR this morning, it was hard not to see it as a positive move for the <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[19],"tags":[25],"class_list":["post-23813","post","type-post","status-publish","format-standard","hentry","category-enterprise-software","tag-enterprise"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t