In what’s Microsoft’s second largest deal for the past 12 months the company offered to buy Fast Search & Transfer ASA, a leading provider of enterprise search solutions based in Norway. Details are as follows: Microsoft Corp. today announced that it will make an offer to acquire Fast Search & Transfer ASA (OSE: “FAST”), a leading provider of enterprise search solutions, through a cash tender offer for 19.00 Norwegian kroner (NOK) per share. This offer represents a 42 percent premium to the closing share price on Jan. 4, 2008 (the last trading day prior to this announcement), and values the fully diluted equity of FAST at 6.6 billion NOK (or approximately $1.2 billion U.S.).

FAST’s board of directors has unanimously recommended that its shareholders accept the offer. In addition, shareholders representing in aggregate 35 percent of the outstanding shares, including FAST’s two largest institutional shareholders, Orkla ASA and Hermes Focus Asset Management Europe, have irrevocably undertaken to accept the offer. The transaction is expected to be completed in the second quarter of calendar year 2008.

FAST has over 3500 enterprise clients, including heavyweights like Disney, The Washington Post, AutoTrader.com, and LexisNexis. According to Mary-Jo Foley from ZDNet, we should pay attention to how Microsoft will integrate FAST into their SharePoint Server. “Remember what Microsoft CEO Steve Ballmer said about SharePoint last year: He characterized SharePoint as the next big operating system from Microsoft,” she writes. “More and more, it’s looking like enterprise search functionality is one of the biggest reasons why.”

“Enterprise search is becoming an indispensable tool to businesses of all sizes, helping people find, use and share critical business information quickly,” said Jeff Raikes, president of the Microsoft Business Division. “Until now organizations have been forced to choose between powerful, high-end search technologies or more mainstream, infrastructure solutions. The combination of Microsoft and FAST gives customers a new choice: a single vendor with solutions that span the full range of customer needs.”

The companies possess a number of complementary strengths that advance a shared vision for helping businesses deliver information worker productivity and improved business results. FAST has a deep talent pool and is respected throughout the technology industry for its expertise in best-in-class, high-end search solutions. Microsoft offers worldwide customer reach and an extensive partner network, and is the recognized leader in business productivity with the popular Microsoft Office SharePoint Server, which combines search with best-in-class collaboration, business intelligence, portal and content management capabilities.

“This acquisition gives FAST an exciting way to spread our cutting-edge search technologies and innovations to more and more organizations across the world,” said John Lervik, CEO of FAST. “By joining Microsoft, we can benefit from the momentum behind the SharePoint business productivity platform to really empower a broader set of users through Microsoft’s strong sales and marketing network. It validates FAST’s momentum and leadership in enterprise search.”

In addition to bolstering Microsoft’s enterprise search efforts, this acquisition increases Microsoft’s research and development presence in Europe, complementing existing research teams in Cambridge, England, and Copenhagen, Denmark, with new and significant capabilities in Norway.

The offer will be subject to customary terms and conditions, including receipt of acceptances representing more than 90 percent of FAST shares and voting power on a fully diluted basis, and receipt of all necessary regulatory approvals on terms acceptable to Microsoft. The complete details of the offer, including all terms and conditions, will be contained in the offer document, which is expected to be sent to FAST shareholders during the week of Jan. 14, 2008. The offer will not be made in any jurisdiction in which the making of the offer would not be in compliance with the laws of such jurisdiction.

Larry Dignan, also from ZDNet, thinks this will lead the rest of the industry to consolidate the same way the advertising industry has been. “Until now organizations have been forced to choose between powerful, high-end search technologies or more mainstream, infrastructure solutions. The combination of Microsoft and FAST gives customers a new choice: a single vendor with solutions that span the full range of customer needs,” said Jeff Raikes, president of Microsoft’s Business Division.

More about FAST

FAST, which was founded in 1997, creates the real-time search and business intelligence solutions that are behind the scenes at the world’s best-known companies with the most demanding information challenges. FAST’s flexible and scalable integrated technology platform and personalized portal connects users, regardless of medium, to the relevant information they need.

FAST is headquartered in Norway and is publicly traded under the ticker symbol ‘FAST’ on the Oslo Stock Exchange. The FAST Group operates globally with presence in Europe, the United States, Asia, Australia, the Americas, and the Middle East. For further information about FAST, please visit http://www.fast.no/.

FAST’s Business is Enterprise Search. Since they have set up their company in Norway back in 1997, they have grown rapidly to become a global organization with offices across six continents. FAST is said to be the forefront of search technology and it knows how to do the heavy lifting, as they claim. 
 
Execution excellence
With over 3500 installations, many at Fortune 500 and Global 2000 companies, we have an illustrious pedigree. These blue-chip companies rely on us to help them achieve their business goals and they are loyal. If you ask our customers why they remain loyal, they will probably tell you how we exceed their expectations, provide an unparalleled level of service and show a demonstrable return on their investment. In many cases we have fundamentally contributed to their success.

In 2005 independent evaluations of our support organization gave us a 98% satisfaction rating. We get tested quarterly. In 2005 we delivered more than 300 successful customer projects on schedule and within budget. We also ran over 100 Search Best Practices workshops across the world with extremely positive feedback. It helps that more than 60% of our work force are engineers and that close to 50 of our engineers have PhDs in relevant fields. They enable us to meet complex needs by delivering simplicity.

Financial strength
We are the market leader in Enterprise Search and number one in revenue growth. We have no debt. We have been profitable, exceeding our projections, for every quarter during the last 4 years. And we have made these profits while investing a quarter of our income back into R&D. Performance like this gives us the freedom to invest in innovation and win on value and financial return.

Partner power
Partners give us the ability to deliver total solutions and our FAST X 10 partner program plays a major role in our success. We have over 90 Systems Integrators and VARs on board, and over 30 OEMs embedding our search technology. We have also certified close to 1000 developers in FAST University, drawing on our best-of-breed approach to partnering. Quantity is less important than quality, of course. We only pursue a partnership if there is a mutually beneficial, lasting opportunity.

Global presence
We have been a globally minded company, with a global outlook, since our inception. Maybe it is because of our Norwegian roots. In fact, soon after we opened our doors we established an office in the United States. We now have offices in 6 continents and development centers in 4 of them. Our products support close to 80 different languages.

John M. Lervik, Ph.D., serves as the Chief Executive Officer (CEO) and is a co-founder of FAST. Dr. Lervik served as the Company’s Chief Technology Officer from 1997 to September 2001 overlooking all of the company research and product development activities. Dr. Lervik holds a Ph.D. from the Norwegian University of Science and Technology, and was awarded the best overall PhD at NTNU in 1996/97.

Other co-founders of FAST are Mr. Thomas Joseph Fussell, who was a co-founder of Fast Search & Transfer ASA and has served as Executive Chairman of the Board of Directors since June 1997 and was Managing Director in 2000 and Mr. Robert Napier Keith, co-founded Fast Search & Transfer ASA and has served as Executive Director since June 1997.

Some people think this is a brilliant acquisition for Microsoft. Gartner says that Microsoft is struggling in this (already crowded) market. FAST is recognized as an industry-leader, along with Autonomy, Endeca, ZyLab, among others. 

The other thing to keep in mind is Microsoft’s biggest bet, which is its DYNAMICS (ERP/CRM) division. Because Business Objects was acquired by SAP, Microsoft possibly became more compelled to make an acquisition. Enterprise Search is going to be an absolutely massive component of ERP in the coming years, and this is a market that is strategic for Microsoft.

Fast.no seems to have some issues with its Board of Directors. More information enclosed below.

The conduct of Fast’s directors has been the subject of much comment in Norway. In Jan 2006 a article ran in the Norwegian IT paper that claimed that one of FAST’s directors Tomas Fussel had made a 2000% markup for himself by buying a loss making company Hercules communications and selling it to the public company Fast 3 weeks later for a massive mark up.

More recently there has been controversy at the board level with one director resigning and another making public statements about other directors and major shareholders. Fast’s board member Robert Keith said in a newspaper interview, “I ought to have seen the problems in Fast earlier. And I ought to have understood that Hans Gude Gudesen is a crazy liar. Also, I ought to have shot Oystein Stray Spetalen the first time I met him. That would have helped a lot of people, says the controversial Brit to the paper [Finansavisen].” Spetalen and Hans Gude Gudesen are both major shareholders in Fast. Furthermore directors Keith and Fussel are allegedly being pursued by the Norwegian tax authorities for $50M in unpaid taxes the government says it is owed by them. In the event of non payment liability may fall on the company. I should have shot Spetalen.

The ongoing turmoil has seen 3 directors resign from the board in the last month, the latest being Johan Fredrik Odfjell who is quoted in the company’s release as saying `FAST faces many challenges and opportunities going forward’

On December the 22nd Orka FAST’s largest shareholder demanded an EGM to force Fussel and Keith off the board

Need to Restate Accounts for 2006 and 2007

On the 12th of December 2007 Oslo Bors suspended trading of FAST shares. The next morning the company announced it was reviewing the accounting utilized for the 2006 and 2007 reports with a likely outcome that this would be changed. In an article titled “Fast restates its accounts” http://www.dagensit.no stated that Fasts results for 2006 and 2007 may be restated in what it called ”another clean up round.” It also stated “The Search technology vendor Fast Search & Transfer have had several rounds with restating of accounts. Also after CFO Joseph Lacson some months ago declared that “everything is cleaned up” one has found skeletons in the closet. Wednesday afternoon trading was suspended, after what the stock exchange called “certain conditions”.

Earlier last year FAST has acquired AgentArts, a San Francisco-based technology company with a personalization and recommendation engine for music, video, games and mobile entertainment. AgentArts clients include Infospace Mobile, Telstra Big Pond, Telstra Mobile, and Unipier. FAST said will add the technology to its enterprise search products, which will allow users to see the relationships between content and get recommendations for similar content based on their search patterns. It also includes a social recommendation feature, which helps users discover similar content based on patterns of other users with similar interests.

Although Fast Search & Transfer’s core business is widely known to be enterprise search, in 2007 the company seems to have sharply turned towards online advertising and search monetization, which seems the Web’s 2007 trend anyways, everybody is trying to become an ad company, platform or network. 

Also late last year (2007) FAST, which may be a company best known for specializing in site search, has launched a product platform that is looking to socialize the ecommerce storefront search function. It’s called FAST Recommendations and it is based on offering product recommendations similar to those of Amazon.com, but with a social twist.

If some of the information above proves to be true then this is a major, and in time, exit for the FAST’s shareholders.

More

http://www.fastsearch.com/
http://www.fast.no 
http://www.microsoft.com/presspass/press/2008/jan08/01-08FastSearchPR.mspx
http://www.forbes.com/prnewswire/feeds/prnewswire/2008/01/08/prnewswire200801080443PR_NEWS_USPR_____AQTU104.html
http://www.techcrunch.com/2008/01/08/microsoft-has-announced-a-takeover-bid-for-fast-search-transfer-priced-at-12-billion/
http://mashable.com/2008/01/08/microsoft-to-acquire-fast-search-transfer/
http://www.readwriteweb.com/archives/microsoft_fast_takeover.php
http://blogs.zdnet.com/microsoft/?p=1085
http://blogs.zdnet.com/BTL/?p=7518
http://www.microsoft.com/enterprisesearch/serverproducts/searchserverexpress/default.aspx