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Archive for the ‘DealZone’ Category

November 6th, 2009

How Leo DiCaprio started a car company

Posted by: Bernie Woodall

Henrik Fisker, the storied car designer who has shaped Aston Martins, Fords and BMWs, told the Reuters Autos Summit this week that he now wants a starring role in the green revolution.

But he also wants to make the world safe for sports cars for generations to come.

“Being a car enthusiast and loving cars, to be quite honest, I could not imagine a life without a beautiful, fast sports car,” Fisker said. “I needed to do something to make sure that I could drive one of those nice cars, my children could drive one of those beautiful, fast cars.”

So what was Fisker’s inspiration? What was the epiphany when he realized that the world was ready for the upcoming Fisker Karma, a $90,000 plug-in hybrid with 50 miles of all-electric fun?

Leonardo DiCaprio…in a Prius.

“A couple of years ago it started, by people who were maybe a little ahead of their time. You saw some movie starts like Leonardo DiCaprio buying a Prius.

“He could have bought any car in the world, and I remember seeing that on television and thinking to myself, you know, when you’ve got a guy who could buy any Ferrari or Rolls Royce and he’s buying a Prius, you know something is changing dramatically.”

(Henrik Fisker photo by Rebecca Cook of Reuters; Leonardo DiCaprio photo by Mario Anzuoni of Reuters.)

October 8th, 2009

Wealthy clients ask about Facebook relationships for kids

Posted by: Adam Pasick

Northern Trust has thought very carefully about how to communicate with its wealthy clients. In the U.S., it says it has people within a 45 minute drive of 50 percent of all of the millionaire households.

It advertises on NPR, CNBC, the Wall Street Journal, and local newspapers.

Now it might start “friending” people on Facebook.

“We had a client earlier this year who asked if we could be a friend to their child on (her) Facebook page because the child is a beneficiary of a trust that we manage and they said what better way to get to know my child when they’re awfully remote than to do this through the Facebook page?” said Lee Woolley, President of Northern Trust Bank’s Personal Financial Services division in Boston.

The family said Facebook would be a great way to communicate with the next generation of heirs before they inherit the family fortune.

Of course the 20 year-old daughter would have to accept the invitation for it all to work out.

Woolley told the Reuters Global Wealth Management Summit his firm had said “no” in the near term, but was interested.

“We have clients spread out all over the United States of America, including Hawaii . . . and then a couple around the world as well, so yeah, the idea of using social networking sites beyond just e-mail communication is a really intriguing idea,” he said.

Of course it took the 120 year-old company more than 100 years to change its stationery.

“That was scandalous at the time,” Woolley said.

October 1st, 2009

Diamonds in the rough

Posted by: Tom Freke

Diamond pictureSomewhere out there are ailing companies in need of a turnaround specialist. These experts -- also known as company doctors -- parachute into troubled businesses to turn their business around.

Funds, such as Oaktree Capital, HIG Capital and Apollo Management, specialise in buying up companies in distress (either through buying equity or debt) and turning them round.

And this should be a great time for these investors -- banks are loaded with stakes in troubled companies and unwieldy corporates may want to spin off unwanted businesses.

But banks are not playing ball. They want to wait until the economy recovers and sale values rise. So few companies are up for sale. But the funds want bank sales of stakes to accelerate otherwise it might be too late to turn these companies around.

Private equity certainly has the appetite for new deals. As Reuters reported yesterday, the private equity industry -- which may have up to $1 trillion in 'dry powder' -- is looking to the next restructuring wave for opportunities.

"Sponsors want new proprietary deals to show their limited partners they are not just churning portfolios," a top investment banker told the Reuters Restructuring Summit.

September 30th, 2009

Restructuring calls heat up

Posted by: Jessica Hall

After a cool few months, the phones are heating up again for restructuring advisors. 

Michael Kramer, head of restructuring at Perella Weinberg Partners, told the Reuters Restructuring Summit that the calls he gets from possible clients aren’t quite as panicked as early this year. 

“I think the new inquiries are picking up today — not nearly the way they were at the beginning of the year, and the emotion behind the inquiry is a little bit different.

“At the beginning of the year, it was desperation. We are in real trouble. We have to do this. How are we going to deal with this? We are going to have problems next week. We are running out of capital.” 

“Today it’s much more, ‘We think we’re going to have a problem in the future and how do we deal with that?’” 

Some distressed companies looking for buyers may want to take solace in the fact that it looks to Kramer like there might be some interested buyers out there now.

He says they’ve been calling to, saying “We’re fine, we’re healthy, but we want to take advantage of the overall situation.”

(Reporting by Caroline Humer)

May 22nd, 2009

Tech execs, where would you put a million dollars?

Posted by: Tiffany Wu

Most top technology executives are used to juggling businesses worth hundred of millions of dollars, yen or euros. But this week at the Reuters Technology Summit, we asked: if we gave you $1 million to invest anywhere -- but not in your own company -- where would you spend it?

INTERNET / STARTUPS

If you want the quick answer, I would invest it in Twitter.  I'm sorry that we weren't in it. I don't know where it's going and it would be a fun ride.

-- Tim Draper, managing director of venture capital firm Draper Fisher Jurvetson.

I would love to work more with some of these interesting startups like kiva.org that are developing interesting and innovative ways to create micro-lending programs for folks around the world.

I've a couple of friends and I would like to invest in their companies, little start-ups. One of them is called Trazzler and the other is called Fluther. One is an innovative travel startup and the other is a service that helps people get answers to questions they need.

I'm not a real big stock guy. Maybe a little Apple, a little Google -- companies I use every single day so why not invest in them?

-- Twitter Co-founder Biz Stone

It's stuff in our industry. The most vibrant industry is ours. We're complaining but the reality is we're making money. I would literally go after a couple of smaller companies that are up and coming. (Such as) Lala. It's iTunes without having to download the client. It's a really neat job. Check it out. You take music on the go. It's a really nice design.

-- Yahoo Inc  Chief Technology Officer Ari Balogh

I have done some angel investing and what I have found in angel investing is it hasn't been because I was excited about the sector, it was because I was excited about the person. So I don't know that I could pick a sector, but if I see the right people, that is where I would put the $1 million.

-- NetSuite Inc Chief Executive Zach Nelson

ENERGY

I would put it in the hands of scientists who are trying to discover the next energy alternative. By giving them more R&D dollars, we fuel opportunities for higher education. We hopefully allow them to buy better supercomputers and that could improve the computer industry's short-term prospects and it could obviously help discover the next generation of energy source that could change humanity altogether.

-- Nvidia Corp Chief Executive Jen-Hsun Huang

There are many attractive companies in the environmental energy sector. Especially in Japan, technologies are advanced and there are a lot of companies that established business strategies and models from early on. Also, health and safety will be more valued in the future, so healthcare is a very important area.

-- Konica Minolta Holdings Inc Senior Executive Officer Shoei Yamana

MIXED PORTFOLIOS

"Because I'm 60, I would probably put half in corporate bonds, spread them around, get a nice interest rate on them. And I would probably put some into energy because I am a long-term believer that energy costs are going to continue to climb, and I think they've gotten depressed. And then I would put it into consumer electronics stocks and consumer non-durables. I'm a believer that consumers will come back and will spend again. So I would invest in those things.

-- Corning Inc Chief Financial Officer Jim Flaws

The financial sector will come back. I think some smart investment in the financial sector makes sense. Tech will be one of the first industries to emerge from this because that spending is important to the growth and cost agendas of companies.
I'd probably put a third in natural resources probably oil and gas. The fact is it is a diminishing asset. That is probably going to create supply problems that will tend to drive up the value of those problems.

-- Dell President of Large Enterprise Steve Schuckenbrock

I'd invest in a company whose business is not doing well. Stocks of companies that are making a lot of money don't have much room to grow. There are many sectors that are not well performing but won't ever vanish. For example, chipmakers may be struggling, but that's only because of the supply/demand balance. When demand comes back, the business will pick up again.
Also, materials and infrastructure industries are interesting. There are countries like China that still need to improve infrastructure, so I think it would be interesting to invest in those.

-- Capcom Co Ltd CFO Kazuhiko Abe

HEALTHCARE

Personally, I still think health care. I think the pharmaceutical companies have been beaten down a lot...As population ages, everybody needs more medical help. Pharmaceuticals, drugs are a big part of it. Short term, I think the dollar is going to fluctuate. I wouldn't sell dollars for the long term. If I had a million dollars, I would probably move to a very beaten down currency at this point, maybe Australian dollars, and then back into U.S. dollars in a year or two.

-- Sybase Chief Executive John Chen

I think that the area that is worth investing is in the healthcare area. Small start-up companies that are looking to wirelessly enable health. This whole area of letting people monitor their own health and give them feedback and let others have access. I think there is just a huge revolution in healthcare coming with high-tech. When people can give you a pill, and track it and see inside of your body and tell you what's really wrong with you...I think that whole area is about to just mushroom. It defies economic cycles. People get sick or get ill regardless of economic cycles.

-- AT&T Mobility President Ralph de la Vega

MISCELLANEOUS

I like very much these electronic readers. We actually started that several years back, we were ahead of the time, and we found that publishers, textbook publishers, were not very receptive. The area of flexible paper and digital paper and publishing. We're not there yet. But (Amazon's) Kindle is stepping in the right direction. There is a lot of innovation in that space. But it's got to be like a $49.95 product, not a $300 or $400. It's got to be for the masses. It's got to bring educational qualities to kids in the Amazon, 1,000 miles away from civilization.

-- SanDisk Chief Executive Eli Harari

I'd say Apple. You wouldn't be able to find any other company in the world that can do everything from OS to hardware to services like Apple does. It is a company that has a potential to keep offering new services. Apple's ability to develop products is incomparably better than others.

-- Gree Inc CEO Yoshikazu Tanaka

Based on what I saw on CNBC, I think I would put it in Hormel. Since I saw the sales of the Hormel chili and Spam have increased recently because of the economy. It's as good an idea as any.

-- Advanced Micro Devices Inc CEO Dirk Meyer

I'd put it in the bank probably. Definitely not in the automotive industry.

-- Marvell Technology Group CEO Sehat Sutardja

You know, being pretty conservative in nature, it's either invested in TI or sitting in the most conservative way possible. I get more than enough excitement in my daily life than needing excitement with investments on the side on that front.

-- Texas Instruments CEO Rich Templeton

May 12th, 2009

Nasdaq president to finance companies: come hither

Posted by: Christian Plumb

A fertile planting ground for tech, biotech and even some energy offerings, Nasdaq OMX has historically struggled to lure listings in some other areas, notably financial services.

Now, that could be about to change, Nasdaq OMX President Magnus Bocker said at the Reuters Exchanges and Trading Summit. As Nasdaq looks for ways to attract new listings and end a virtual drought in IPOs, it sees financial services firms as one of the most promising areas.

That Nasdaq would at least be hoping to narrow the gap in financial services listings with NYSE, the traditional ruler of the space, is not as out of left field as it might sound.

The exchange has already made some inroads and can point to some recent conquests like CME Group, which moved from a dual listing on Nasdaq and NYSE to a sole Nasdaq listing. Northern Trust, the fund administrator which has weathered the financial crisis with relative ease compared with some larger rivals, is another bright point.

And looking forward, such longtime NYSE stalwarts as Morgan Stanley and Citigroup have both recently been reportedly eyeing spinoffs of high risk units — like Morgan Stanley’s trading desk and Citigroup’s Phibro energy unit. And there’s even talk that Bank of America could eventually spin off Merrill Lynch.

March 17th, 2009

Little orphan brandie

Posted by: Jessica Hall

FOOD-SUMMIT/B&GB&G Foods Inc wants the small, orphan brands that no one else loves. 

"We have a laundry list and any number companies that we talk to on a regular basis," said B&G Chief Executive David Wenner. "We're buying all these things people don't want to run."

B&G pointed to the success of its acquisition of Cream of Wheat, saying "no one was paying any attention to it. So that's where we come in."

"We're looking for things are aren't commodities. Higher margin products, ethnic foods are great. Las Palmas and Ortega -- they've grown steadily over the years and we love that," Wenner said.

B&G aims to stick to its tried-and-true practice of buying dry grocery products that immediately add to earnings or revenues.

B&G wants to carve out orphan products from larger food companies. When it approaches potential sellers, B&G says "We're able to come in and take these five things  you don't want.  We're able to come in and take these things over very very quickly," Wenner said. 

The company targets smaller brands or private companies. "We're not buying Kraft tomorrow." 

Still, some acquisitions may have to wait. Sellers are still looking for premiums that reflect higher stock prices from a year ago, rather than the current depressed prices, Wenner said.

"The brands that may be available are on hold -- I see some more consolidation in the food industry at some point," Wenner said. "But we still have sellers that are looking for double-digit EBITDA (earnings before interest, taxes, depreciation and amortization), and that's not where the world is today."

(Reuters photo)

December 3rd, 2008

Shane Kim’s crystal ball: videogame deals, new content

Posted by: Anupreeta Das

Microsoft's videogame chief Shane Kim came by our New York office this morning for the Reuters Media Summit and shared his thoughts on XBox 360 sales ("cautiously optimistic") and the outlook for the gaming industry amid the economic doom-and-gloom ("Who knows, maybe flat performance will be considered a remarkable achievement").

He also gazed into his crystal ball and served up some insights on the trends shaping the gaming business.

Consolidation is going to continue, he thinks, especially among the smaller videogame publishers as they search for hit games while keeping costs in check.

"There are a number of mid-tier publishers behind the Electronic Arts and Ubisofts and Activisions of the world who are struggling."

Another exciting trend for Kim is the return to videogame content developed by small creative teams, which he thinks could reduce the industry's dependence on sequels of hit games.

"That would be a good thing... because one of the challenges the industry has had, in my opinion, over the last five to 10 years is a growing reliance on sequels and licensed properties as opposed to those new creative hits. If we can find those nuggets that start smaller and can grow into big hits, that's a great thing."

He did wonder how smaller creative shops could find funding for their pitches, given that dollars could be hard to come by these days. But at the same time, it's an opportunity for bigger publishers, he said, since nothing rocks the gaming world like a hit game.

(Photo: Reuters)