Monotype to be Acquired
Comments
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Interesting!1
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Wow! Whether this is good or bad, I don't know. Could be either (or both).
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I'm glad I bailed out of Monotype last July. When beancounter companies take over I get a bad feeling for those they acquire.
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The outgoing majority shareholder is also private equity, I think.2
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Private Equity firms are bad news for any company they take over, look at what happened to Maplin!They are normally more interested in making as much money as possible out of their aquisition than what is in the best interests of the company. This can lead to asset stripping as it did with Maplin.0
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Olapic and Swyft are both in growing markets while fonts are, perhaps not shrinking but significantly shifting to Adobe. I wonder how HGGC will see it. I really expected to see significant product/application integration with the font side of Monotype. Maybe that's happening but I haven't noticed it.HGGC looks to invest in companies involved in updating end markets that are still steeped in outdated technology, including grocery stores, car dealerships, marketing agencies and insurance providers.Wikipedia
Perhaps traditional font sales are the outdated technology that they're interested in. Olapic and Swyft don't fit the description.
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Maybe they see potential to try another subscription service. They could probably pull it off if they could bring in most of the designers selling on MyFonts instead of just Monotype’s outdated library.Ray Larabie said:Perhaps traditional font sales are the outdated technology that they're interested in. Olapic and Swyft don't fit the description.1 -
Until now, anybody could buy Monotype shares. As I understand it, when a PE buys all shares at cash value, all current shareholders will get the agreed-upon amount of cash per share once the deal is effective, and their shares "disappear". Nobody will be able to buy MT shares at the stock market afterwards.JoyceKetterer said:The outgoing majority shareholder is also private equity, I think.
$19.85 per share is more than what the shares were worth right before the acquisition announcement, but a lot less than a couple of years ago.1 -
Does anybody here own TYPE stocks? What were they traded for before?0
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On the 26th, day after the announcement, it was at $16.16.
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I'm amazed the acquisition took place for less than a billion dollars. Since typefaces are used a great deal in web design, and many companies are willing to spend quite a bit to license the typeface that will be right for their image, I would not have thought that typography was currently a dying business, where an entire company can sell for less than a few hours' profits from one of the current Internet titans.
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@Jens Kutilek The fact that they think monotype was under valued is a whole other baffling nugget. And, did you notice that the press release bio for monotype still identifies it mostly as a branding company?0
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@John Savard There's a whole lot more to the valuation of a company than the simple assessment of the IP if sold off. There are costs to dissolve it, costs to run it in the meantime, debts that need to be deducted, etc. I think 825 Million is more than any bloated poorly run antiquated company that's about to be obsolete but happens to have some valuable assets should go for. The rumor I heard is that they had 17 failed sales attempts last year. But then, as someone pointed out on twitter, it's 50% less than the last time it was bought so this might feel like a fire sale price to a cocksure tech bro.5
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this might feel like a fire sale price
Or money laundering.
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I get the peculiar feeling that one day I will be able to watch a YouTube video titled something along the lines of "Shrowds of mystery: the rise and fall of Monotype". Everybody speculates about the MyFonts backlog and the acquisition, few actually know what's going on.
Investing in stocks seemed a reasonable strategy until I looked deeper into it.0 -
And, did you notice that the press release bio for monotype still identifies it mostly as a branding company?Monotype has been trying to rebrand itself as a branding company for years now. The fact that most people still think of it as a font company might say something about how good Monotype is as a branding company.
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@John Hudson You've done a better job of spelling out what I was getting at. My basic assumption is the reason they are failing is the ill conceived pivot to branding. Therefore, if a new buyer was dumping that and going back to fonts that would be a tick in their favor from my perspective5
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2
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Monotype has had to contend first with the rise of Google Fonts and open source (free web and desktop fonts, easily implemented), and then Adobe’s transmogrification of Typekit into Adobe Fonts last fall (with unlimited web and desktop fonts at no added cost for Creative Cloud users).
This is not an easy position to be in.
The pivot to branding may have been ill-conceived, but at least it leveraged Monotype’s strengths compared to Adobe and Google: having both dedicated sales people, and designers doing custom typefaces.
Unfortunately for Monotype, they have competition in this realm as well. Not from Adobe and Google, but from other foundries (Dalton Maag, etc.).
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And that includes searches for "Taylor Swyft"!Ray Larabie said:2 -
@Thomas Phinney That's certainly the argument.
I will say to you the same thing that I said to the branding guy who tried to buy Darden Studio from me when he learned I had bought it from Josh:
"It makes no sense to me to take a foundry business model, where the primary income is passive from retail fonts, and convert it to a branding model where one is selling the finite resource of their expertise and time."10 -
I can imagine there will be a migration from MyFonts to other font vendors/retailers.2
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I think MyFonts biggest functional competitor is Adobe Fonts, and will remain so.
One-stop shopping is really convenient. Having a single destination and interface to pick up fonts from is that much less to think about for the customer.
This doesn’t mean that small foundries can’t make a go of it. But I think the market will tend to support a big aggregator.3 -
@Thomas Phinney I don't think we're disagreeing.2
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But I think the market will tend to support a big aggregator.
Yes, Walmart Fonts is bound to succeed in some definition of the term.0 -
No disagreement here! I was responding to Vasil’s comment about a migration away from MyFonts. I think that a substantial chunk of customers want one-stop shopping in a jumbo marketplace, and will be happy to go to somebody like MyFonts or Adobe Fonts.JoyceKetterer said:@Thomas Phinney I don't think we're disagreeing.
John Hudson’s comment about “Walmart Fonts” is interesting. All the retail font players have some degree of quality bar, and it is just a question of how high that is. It is possible to be a jumbo aggregator with a significant quality bar. Both MyFonts and Adobe Fonts have raised theirs over time.
But I will also be the first to say that the goals of “jumbo aggregator” and “having a high quality bar” have an inherent tension between them, and you can’t maximize both at the same time.0
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