Proposed TikTok Partnership with Oracle and Walmart

By Gaspard Baroudel, Raphael Berz, Itai Almogy (Yale University), Kevin Lee, Thomas Fujimoto, and Ho Hai Ivan Chung (Hong Kong University of Science and Technology)

 

Overview of the deal


Investors: Oracle/Walmart

Target: TikTok

Implied Equity Value: TBD (pre-IPO financing to come)

Total Transaction Size: TBD

Closed Date: N/A

Target Advisor: Unclear


At the behest of the US government, ByteDance has agreed to relinquish control of TikTok Inc. in order to avoid an outright ban in the United States over concerns of national security. Oracle intends to take a 12.5% stake in TikTok Global and use its cloud infrastructure to support American users. Walmart appears likely to participate in the deal as well, with a planned 7.5% stake in TikTok. As a "trusted technology partner," Oracle will get insight into the source code and store the data of American users. Risks remain as the transaction is yet to be approved by either government, and the exact details of the deal have yet to be worked out fully.


“I have given the deal my blessing — if they get it done that’s great, if they don’t that’s okay too” - US President Donald J. Trump

Company Details: Oracle


Oracle is a publicly-traded multinational technology company founded in 1977 in California, USA. Its primary focus is enterprise software solutions (SaaS) and cloud computing (PaaS) and it is the second-largest software company by revenue and market capitalization in the world. Oracle is famous for their cross-platform functionality and integrated suite of applications. They have a history of aggressively growing their product portfolio through acquisitions, such as Aconex, DataLogix, NetSuite, MICROS Systems, and more.


Founded in 1977, headquartered in Redwood City, California, USA

CEO: Safra Catz

Number of employees: 135,000

Market Cap: $183 bn as of 9/21/2020

EV: $212 bn

LTM Revenue: $32 bn

LTM EBITDA: $17 bn

LTM EV/Revenue: 6.6

LTM EV/EBITDA: 12.5


Company Details: Walmart


Walmart is an American multinational retail giant, founded by Sam Walton in 1962. The Walton family continues to own a majority of Walmart. The corporation operates over 11,000 stores and clubs, and it is the world’s largest company by revenue, bringing in more than half a trillion dollars annually. It has been publicly traded for nearly 50 years, having been listed in October 1970.

Founded in 1962, headquartered in Bentonville, Arkansas, USA

CEO: Doug McMillon

Number of employ