Case ID: 899160
Solution ID: 22980

Metapath Software Case Solution

Case Solution

In September 1997, John Hansen called together his board to debate an interesting choice that his company had to make. Hansen--the CEO of Meta path Software, a provider of software and services to wireless carriers--had two offers to describe. The first was an offer to be acquired by Cell Tech Communications, a wireless products company which had only recently gone public. Under the terms of the deal, Meta path's shareholders would at closing receive common stock in Cell Tech valued at $115 million. Cell Tech at that time had a market capitalization of approximately $260 million. The second offer was from a consortium of investors led by Robertson & Stephens Omega Fund and Technology Crossover Ventures to buy $11.75 million of stock at a $76 million pre-money valuation. The terms of the preferred stock the funds were proposing to buy were much stricter than the terms of the stock owned by existing shareholders.

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