Quick Thoughts


This post is by from Random Roger


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The foreclosure rate appears to be going up. Maybe the rate and persistence of the increase is open to interpretation but more foreclosures seems like a certainty. Losing his home does not necessarily mean a person becomes homeless and penniless.

Some portion of these people will still have their jobs and be living somewhere like in an $800 apartment (versus a recently adjusted $3500 mortgage) or with a relative. Won’t some portion of these forcibly downsized people put a lot of their stuff in storage? If so could this be a positive catalyst for Public Storage (PSA), Sovran Self Storage (SSS) or U-Store-It Trust (YSI)? Do you know any other related companies like maybe a Canadian storage trust of some sort?

Lately there has been discussion trying to decipher why gold is going up (presumably signaling inflation worries) while at the same time treasury yields are going down which signals a lack of concern about inflation and might be signaling a deflation worry.

There are several possibilities for this I suppose including no reason at all but there is one possibility that I have not read or heard anywhere but I am sure that someone has thought of this somewhere.

For simplicity sake let’s say gold is expressing an inflation worry and bonds are expressing a deflation worry. Isn’t it possible that that each asset class is working on a different timeline? For example gold is worried about inflation in five years while the bond market is worried about deflation right now and for the next, say, two years?

The first flaw I can think of for this line of thought is that I would expect the ten year treasury to look further into the future than gold but the idea of different asset classes being on different time lines seems worth thinking about.

A spirited debate about social safety nets of healthcare and other entitlements broke out in the comments yesterday. I figured out how to articulate my thoughts on this subject and they will be very unappealing to some. In yesterday’s post I made a remark about having enough money saved for some sort of medical thing that turns out to not be covered.

I do not want to be in a position where my fate is decided by someone else like an insurance company. If a person needs something medical done and insurance will not cover it and they cannot pay for it out of their savings then yes that is a rotten outcome but there is not much I can do other than pay whatever taxes I am told to pay.

People give themselves a better chance for avoiding this sort of problem by working longer and staying fit. Working longer means less time living off of savings. Staying fit reduces the odds of certain types of medical problems. If you love your work and are motivated to keep doing it until you are 80 then I have to think that the only things in the way of that would be any sort of medical thing or dying. In this case the savings becomes a giant emergency fund, most likely for a health event that is either a one time thing or a chronic thing if insurance somehow doesn’t cover what you need.

It may seem like I am harping on insurance not covering but isn’t that the biggest fear that most people have; some sort medical need that is not covered and not affordable from savings? I am sorry but I am more inclined to try to prevent my own problems than solve someone else’s.

On a somewhat lighter note the picture is from the Boston Globe (hat tip to my brother), they have a bunch of pictures posted from the fires in Los Angeles. This particular picture amused me because I have lived it a few times. A few hours after we start an initial attack on a fire we see a scene similar to the one in the picture; that is a bunch of dudes (typically hot shot crews) half my age marching to the fire single file to relieve us.

On a much lighter note did you see the end of the Broncos-Bengals game? That was crazy. Directv gave away Sunday NFL Ticket for free yesterday and I took in quite a bit of the Red Zone Channel, what a great idea. No we are not getting it, only the baseball package for us…for this year anywayXD

Why Japan’s handset makers are merging


This post is by from Tech Blog


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NEC, Casio and Hitachi announced today that they are merging their mobile handset divisions. The following two graphs explain why:

Handset sales in Japan have been falling steadily since 2007, when the mobile networks cut subsidies on new phones, and the market has now all but halved in size. The blue line shows the twelve-month moving […]

Brown Brothers on the Tariff Controversy


This post is by from Across the Curve


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Talk of a trade war between the US and China is exaggerated.  The key facts are straight forward.  Last week the US Commerce Dept announced as much as 31% duties (average 21.3%) on steel pipe imports from China.  It is the largest countervailing duty complaint filed against Chinese made-products.  Late Friday night (9:15 pm EST), the Obama Administration announced a 35% tariff on Chinese auto tires that would fall to 25% in three years.  The US International Trade Commission had recommended a 55% initial tariff.  The current tariff is 4%.  The Obama Administration is invoking a right secured in China’s WTO ascension that had been rejected all four times by the prior administration.   The pipes and tires are relatively minor in the huge bilateral trade, but there is a risk that the Obama Administration’s action signals a shift in the political environment and encourages a rash of additional complaints just as the previous administration’s rejections discouraged complaints.  China immediately responded by initiating probes into allegations of dumping by the US auto industry and chicken products.  While there is a risk of a protracted retaliatory spiral, it seems unlikely at this juncture and the upcoming bilateral and G20 meetings will provide an opportunity to diffuse it at the top levels.  Moreover, there are two contextual considerations that should not be lost on investors as they contemplate the implications.  First, domestic political calculations may also be important.  Cynically, Obama needs to solidify support for his healthcare efforts.  The unions are important.  The unions rather than the businesses led the tire complaints.  Also there are three bilateral trade deals (Colombia, Panama and South Korea) that could see Obama pick up a bit of support in exchange for being perceived to “be tough” on China.    Lastly, there is a rather clear political pattern by US presidents going back more than a quarter of a century for a newly elected commander in chief to take a tough–protectionist–line his early days, ostensibly earning respect/fear-before embracing freer trade later.



German Dollar Bond Sale Via Bloomberg


This post is by from Across the Curve


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Germany Sells $4 Billion of Bonds to Broaden Funding (Update1)
2009-09-14 09:26:40.597 GMT

(Adds analyst’s comment in sixth paragraph.)

By Anchalee Worrachate and Esteban Duarte
Sept. 14 (Bloomberg) — Germany’s $4 billion bond sale, its
first issue in the currency since 2005, broadens the nation’s
sources of funding at a time when it’s seeking to raise a record
amount of debt.
Germany will price the three-year notes issue today at a
yield spread of 25 basis points below the benchmark mid-swap
rate, according to a banker involved in the transaction. The
issue is also being arranged by Bank of America Corp., Citigroup
Inc
., Deutsche Bank AG and HSBC Holdings Plc.
“The sale should be a bang,” said David Keeble, head of
fixed-income strategy in London at Calyon, the investment
banking
arm of Credit Agricole SA. “There’s a lot of demand for
it. It seems to be cheaper for Germany to issue in dollars at
these yield levels.”
Europe’s biggest economy plans to sell 346 billion euros
of debt this year, the most ever and almost half of this in
bonds, according to data compiled by Bloomberg. Selling debt in
dollars rather than euros may allow Germany to appeal to a wider
range of investors, including money managers in the U.S. that
don’t want to take on foreign-exchange risk.
Germany’s bond sale follows syndicated dollar bond issues
from Spain and Belgium last week, which raised a total $3.5
billion, according to Bloomberg data. Governments around Europe
have hired banks to lead bond issues this year to help them
raise more money to pay for fiscal stimulus programs amid the
deepest recession since the 1930s.
The spread on Germany’s bond issue compares with a yield
gap of 18 basis points more than swaps on Spain’s three-year
note sale, according to data compiled by Bloomberg. A basis
point
is 0.01 percentage point.
The German spread “is a fair price for investors,” while
the government “is saving taxpayers about 10 basis points
compared with a possible issue in euros,” said Kornelius Purps,
a fixed-income strategist at UniCredit SpA in Munich.


An economics lesson from ‘Ferris Bueller’s Day Off’


This post is by from The Big Picture


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“In 1930, the Republican controlled House of Rep, in an effort to alleviate the effects of the… Anyone? Anyone?… the Great Depression, passed the…Anyone? Anyone? The tariff bill? The Hawley-Smoot Tariff Act which, anyone? anyone? Raised or lowered?… Raised tariffs, in an effort to collect more revenue for the federal gov’t. Did it work? Anyone? Anyone know the effects? It did not work, and the US sank deeper into the Great Depression.” Thank you Ben Stein for trying educate millions of students and others on this important subject of economics in “Ferris Bueller’s Day off.” Over 7 days right before and after the Smoot-Hawley act was passed in mid June 1930, the DJIA fell 15% but got most of the decline back by late July before falling more than 30% into year end. Let’s hope the just announced tire tariff on China and their possible response is just a one off spat but global stocks are down as a result.


Bond Market Open September 14 2009


This post is by from Across the Curve


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Prices of Treasury coupon securities have posted mixed results in overnight trading. Securities which mature in 5 years or less have registered minuscule price gains while benchmark securities which mature in seven years or more  are dramatically unchanged.

Equity markets have declined in all corners of the globe and pre market trading of US stocks points to a lower opening. Bloomberg relates stories which recount some angst regarding the banking system and some fear that the stock market may be out in front of its skis regarding the potency and power of the economic recovery.

I think that far and away the crucial story is the imposition of a tariff by the Obama Administration on imports to the US of tires manufactured in response and the subsequent reaction by the Chinese to consider taxing our exports to that country of chicken and automotive product.

The action by the US Administration on a common sense level is ludicrous. We are a debtor nation with a gargantuan need for funding. What do we do? We take an action which antagonizes a buyer who in general blindly buys our debt.

The world is on a system wherein the rest of the world manufactures widgets and relies on the US consumer to purchase said widgets. The overseas countries then pile the dollars that they have amassed into US bonds and fund our deficit and profligate spending. That is a crude and simplistic explanation of what transpires.

One can argue about the efficacy of such a system and its impact on US workers and manufacturing. That is not what I am discussing. The simple fact is that if someone provides the foreign buyers of our securities with a serious reason to question the sensibility of such a patchwork arrangement and reduces the role of those foreign entities as marginal buyers of US securities, then we will confront a serious problem.

Actually it is not a serious problem but a simple problem as US interest rates will rise and in short time asset prices will move lower. It does not take a rocket scientist or even an economist to discern that.  So why the Administration would take such an action  for domestic political gain is beyond me. The potential longer term deleterious impact of the move for the great mass of American people far outweighs the gain which accrues to the Administration’s  union supporters.

Maybe there is a former blogger within the inner councils of the Administration with a deep and abiding knowledge of the gravity of the issue who can provide his colleagues with some clarity on this subject!!!

In my mind this is the main story of the day and deserves serious vigilance over the next few weeks as we observe the reaction of foreign governments and investors.

There is no economic data today.

The yield on the 2 year note has slipped two basis points to 0.89 percent. The yield on the 3 year note has also declined by 2 basis points to 1.42 percent. The yield on the 5 year note edged lower by a basis point to 2.29 percent. The yields on the 7 year note and the 10 year note and the Long Bond are unchanged at 2.94 percent, 3.35 percent and 4.18 percent, chronologically.

The 2year/5year/30 year spread is a little narrower at 49 basis points.

The 2 year /10 year spread is 246 basis points and the 10 year/30 year spread is 83 basis points.


First Reserve Commits $500 Million to KrisEnergy


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First Reserve Corp. has committed up to $500 million in equity financing for KrisEnergy Holdings Ltd., a new Asia-focused oil and gas exploration, development and production platform. KrisEnergy’s founding team previously formed Pearl Energy.

PRESS RELEASE

First Reserve Corporation, the leading private equity firm specializing in the energy industry, today announced that it has committed to an equity investment of up to US$500 million in KrisEnergy Holdings Ltd (“KrisEnergy”), a newly established oil and gas company aimed at building a portfolio of exploration, development and production assets in Asia, where increasing primary energy consumption is underpinned by healthy economic growth.

KrisEnergy is the latest venture of Keith Cameron, Chris Gibson-Robinson and Richard Allan Lorentz Jr., who each have more than 25 years of experience in the oil and gas sector. The company has also been joined by a team of experienced upstream oil and gas specialists, who will aim to identify opportunities to acquire and develop a valuable portfolio of assets located in prime geological basins in Southeast Asia.

The management trio established Pearl Energy, an exploration and production company, in 2000. Eight years later, the business was sold on to an investment company of the Abu Dhabi government at which time it was producing more than 20,000 barrels of oil a day.

“The management team of KrisEnergy has an outstanding track record in a region where demand for oil and gas continues to grow at healthy rates in parallel with development and economic expansion,” said Will Honeybourne, Managing Director at First Reserve Corporation. “The company’s strengths lie in the long-standing experience of its people and its technical excellence in the discovery, development and monetization of oil and gas resources. We are delighted to have the opportunity of providing KrisEnergy with finance and support to help it become a leader in this sector and geographic region.”

“We are extremely excited about our partnership with First Reserve, whose commitment reflects its belief in the ability of our management and technical teams and the validity of our business model,” said Keith Cameron, Chief Executive Officer of KrisEnergy. “We see significant opportunities in Asia to grow our business through acquisitions and organically despite global economic uncertainties. This partnership provides us with the confidence and financial resources to bring our plans to fruition.”

Ends

Contacts:

KrisEnergy +65 6435 6167
Richard Lorentz +65 6435 6169
Director Business Development
Richard.lorentz@krisenergy.com

For First Reserve Corporation

In the UK:

Cubitt Consulting +44 (0)207 367 5100
Michael Henman
michael.henman@cubitt.co.uk

Caroline Merrell
caroline.merrell@cubitt.co.uk

In the US:
CJP +1 212 279 3115
Caroline Harris
charris@cjpcom.com

About First Reserve Corporation

First Reserve is the world’s leading private equity firm in the energy industry. For more than 25 years, it has invested solely in the global energy industry, and has developed an unparalleled franchise, utilizing its broad base of specialized energy industry knowledge as a competitive advantage. The firm is currently investing its most recent fund, which closed in 2009 at approximately US $9 billion. First Reserve invests strategically across a wide range of energy industry sectors, developing a portfolio that is diversified across the energy value chain, backing talented management teams and building value by building companies. With a multi-billion dollar portfolio of worldwide oil and gas exploration and production companies, First Reserve continues to focus on Exploration & Production as a core segment within its diversified energy strategy. Further information is available at www.firstreserve.com.

About KrisEnergy Holdings Ltd

KrisEnergy is a newly established oil and gas exploration, development and production company based in Singapore. The company’s principal focus is to use its technical and commercial expertise and local knowledge to find, develop and produce hydrocarbon resources in a geographic region encompassing Southeast Asia

The management team of KrisEnergy has many long-standing working relationships, including those formed during the development of Pearl Energy. The company built a portfolio of 24 onshore/offshore contract areas in Indonesia, Thailand, the Philippines and Vietnam and was producing approximately 20,500 barrels of oil daily, when it was acquired in May 2008 by an investment vehicle of the Abu Dhabi government.

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Scott Chou Named Managing Director at Gabriel Venture Partners


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Gabriel Venture Partners has promoted Scott Chou to managing director. He originally joined the firm in 2000, and has led such deals as STEP Labs, NextG Networks, Boston-Power and SkyCross.

PRESS RELEASE

Gabriel Venture Partners, an early-stage venture capital firm that invests in capital-efficient disruptive companies, today announced that Scott Chou has been promoted to Managing Director. Chou joined Gabriel in 2000, a year after the firm was founded, and has contributed his deep technology and investment expertise to help grow the firm from the ground-up.

During his nine years at Gabriel, Chou has invested nearly $45M into many leading disruptive technology companies. Two of Chou’s investments, STEP Labs and NextG Networks, were recently acquired – bringing Chou’s total realizations to date at Gabriel to over $60M. Chou heads the disruptive technology practice at Gabriel, where he has led investment syndicates in companies such as Boston-Power and SkyCross, both of which are on growth trajectories towards near-term public offerings.

“Scott has been an integral part of Gabriel’s success almost since day one, and his focus on laboratory spinouts and leveraging connections in China for capital-efficient growth has not only differentiated him within a crowded venture community, but has enabled him to achieve profitability during one of the toughest periods for venture capital,” said Rick Bolander, Managing Director and Co-Founder of Gabriel Venture Partners. “We’re honored to promote Scott from Partner to Managing Director, and look forward to working hand-in-hand with him to identify, invest in, and nurture the next generation of technology and cleantech market leaders.”

“I witnessed the tail end of the roaring 90s as a Kauffman Fellow, so when I started at Gabriel in early 2000, I thought it would take less than two years to generate exits that surpassed invested capital. Instead, the entire venture industry has weathered both the dot-com bust and the great recession, but I was still able to achieve the major career milestone of generating positive returns on my invested capital,” said Chou. “As I look at my remaining portfolio companies just in Gabriel’s 2001 fund, I’m bullish on exceeding the $100M threshold in realization – which would be a good result for a smaller fund like ours during any year – but especially for a 2001 vintage fund.”

Chou’s investment approach centers on proactively managing relationships with universities, as well as corporate and government labs, to identify groundbreaking innovations with enormous market potential. Chou has successfully led Gabriel’s efforts in funding paradigm-shifting innovations such as distributed antenna systems, zero-power color displays, solid-state lighting, embeddable antennas, lithium ion batteries, tunable filters, noise-cancellation software, and perpetual cloud computing.

Prior to joining Gabriel, Chou participated in the Kauffman Fellows Program, a prestigious fellowship in venture capital awarded annually to a select number of recipients. Chou is also the author of Maxims, Morals, and Metaphors: A Primer on Venture Capital, a popular book used in teaching the art of venture capital. Earlier in his career, Chou founded and worked at a succession of at six startup technology ventures including Memory Card Associates, a systems integration firm he founded focused on portable computing; Poqet Computer, a pioneer in tablet computing; and Integrated Computing Engines (ICE), a venture-backed spinout from MIT Lincoln Labs where he was the Founding Manager of the engineering and manufacturing organizations. Chou joined his first startup as a software developer while still in high school, helping
build a small business accounting package. He has also worked at Bellcore, where he conducted fundamental research in broadband packet switching, and at IBM, where he received an Outstanding Technical Achievement Award for his design work in enterprise storage systems. Chou received Master’s degrees from Harvard and Stanford, and a Bachelor’s with honors in Electrical Engineering from Caltech.

About Gabriel Venture Partners
Gabriel Venture PartnersR is an early-stage venture capital firm committed to fostering innovation by actively assisting entrepreneurs in technology and technology-enabled businesses. Gabriel seeks investment opportunities in capital-efficient disruptive companies with the potential to become market
leaders in the fields of digital media, mobile, enterprise, and cleantech.

Gabriel is based in Silicon Valley and has over $260 million under management. Gabriel’s investment team consists of seasoned technology entrepreneurs and industry executives, each with international operating
experience and strong domain expertise. Current investments include many market-leading companies, including Chegg, Aurora BioFuels, Boston-Power, PlantSense, and SkyCross. Some of Gabriel’s successful exits include Placeware (acquired by Microsoft), NetScaler (acquired by Citrix), Iridigm (acquired by Qualcomm), and Neopath (acquired by Cisco). For more information on Gabriel, visit www.GabrielVP.com.

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KBConfusion


This post is by from FT Alphaville


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What fresh hybrid debt hell is this?

KBC Bank has today launched tender offers in certain countries in Europe and, in respect of one security, in the United States of America to repurchase four series of outstanding hybrid Tier-1 securities with a total nominal value of approximately €1.6 billion….

Rob McCombie Joins CBPE Capital


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Rob McCombie has joined CBPE Capital, a UK-based mid-market private equity firm, as an investment manager. He previously was with BC Partners.

PRESS RELEASE

CBPE Capital (CBPE), the UK mid-market private equity group, today announces the appointment of Rob McCombie as Investment Manager. He joins at the start of the investment period for CBPE’s eighth fund, which has already received commitments of just over £300m.

Rob joins CBPE from BC Partners in London, where he spent three years working on large private equity buyouts across Europe and North America. Prior to BC he worked for Deloitte where he specialised in private equity and corporate transactions.

CBPE also announces the following internal promotions; Ben Alexander and Mathew Hutchinson have been promoted to Partner and Andy Nelson and Anand Jain have been promoted to Investment Director.
John Snook, Managing Partner, commented: “We are very pleased to welcome Rob into the team at an important point in our development. Our fundraising for the mid-market is progressing well and we expect to be deploying the first capital from the new fund shortly.”

About CBPE
• CBPE invests in transactions with a value of up to £150m.
• It focuses on investment in the following sectors:
– Support services
– Leisure
– Industrial
– Transport & distribution
– Healthcare & pharmaceutical
– Consumer

• For further information visit www.cbpel.com

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Myths of the Collapse


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Here it is, one year later, and we continue to hear an enormous amount of misinformation about the Credit Crisis: What were the actual causes, what could have been done, what should have been done.

Lets consider the most widely held myths as the the cause of the crisis (skipping discredited nonsense).

Here is a quick overview of the key points many folks seem to be getting wrong:

The Crisis was a confluence of rare events, a “Perfect Storm”:  To the contrary, the crisis was inevitable. It was the end result of too much liquidity, bad central banking, special legislation, regulatory exemptions, too much risk, misaligned compensation systems, regulatory capture, and a unwavering belief that markets are efficient and humans are rational.

Lehman should have been saved:  This was not a yes/no decision. The best option would have been a more Bear Stearns approach (w/o the Fed $29B) — a prepackaged, orderly bankruptcy sale/liquidation.

Regulation was the cause of the collapse: It was not regulation, but specific exemptions from regulation that allowed bankers to run wild. Glass Steagall repeal, CFMA, Net Cap exemptions, ignoring the lack of non-bank lending standards, excess stock option comp, all contributed to the collapse.

Lehman’s collapse us what killed AIG:  The same riptide that drowned Lehman also swept AIG out to sea: Too much leverage, too much exposure to subprime loans, too many derivatives, too little risk management, with costs borne by shareholders and taxpayers. A classic correlation/causation error.

Housing’s special status caused the collapse: Housing has long had a special status in America. But the mortgage interest rate deduction has been around for a century. It did not cause the collapse — the abdication of lending standards is at the heart of this crisis.

That’s 5 of the big ones; there are obviously many more.

A greatly expanded version of this list is in Bailout Nation . . .


Reports: Intuit Buying Mint for $170 Million


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Intuit (Nasdaq: INTU) reportedly has agreed to acquire Mint, a San Francisco-based provider of online personal money management solutions. Business Insider first noted the deal via an anonymous tip, and TechCrunch subsequently reported it at a price of approximately $170 million.

Mint has raised just over $31 million in VC funding since 2006, from firms like Benchmark Capital, DAG Ventures, First Round Capital, Shasta Ventures, Sherpalo Ventures, Felicis Ventures and Hite Capital. www.mint.com

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Natus Medical Buying Alpine Biomed


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Natus Medical Inc. (Nasdaq: BABY) has agreed to acquire Alpine Biomed Holdings Corp., a Fountain Valley, Calif.-based maker of devices for the diagnosis of neurological disorders. No financial terms were disclosed. Alpine Biomed is majority-owned by Water Street Healthcare Partners.

PRESS RELEASE

Natus Medical Incorporated (Nasdaq:BABY) today announced that it has entered into an agreement to acquire Alpine Biomed Holdings Corp in a transaction that is expected to close today. Alpine Biomed, with corporate headquarters in Fountain Valley, California, is a leader in the development, manufacturing, and sales of devices for the diagnosis of neurological disorders. Alpine’s broad range of products includes advanced electromyography systems for the diagnoses of peripheral nervous system dysfunctions as well as devices for routine EEG and long term epilepsy monitoring. Water Street Healthcare Partners, a leading private equity firm focused exclusively on the healthcare industry, was the majority stockholder of Alpine Biomed.

Alpine Biomed has three neurology product divisions: diagnostic neurology devices under the Dantec brand, located in Copenhagen, Denmark; spike and seizure detection software applications and associated devices under the Stellate brand, located in Montreal, Canada; and neurology disposable products and accessories sold through the Alpine Biomed brand. These products are sold in the United States and in more than fifty countries around the globe.

Natus acquired all outstanding shares of Alpine Biomed capital stock for $43.2 million in cash, exclusive of direct costs of the acquisition. Alpine reported revenue of approximately $35 million in the twelve months ended June 30, 2009 through the neurology product divisions acquired by Natus; however, due to cross selling of Alpine and Natus products, Natus believes that third-party revenue was approximately $33 million during the period. Natus believes the acquisition will be accretive to earnings in the fourth quarter of 2009, exclusive of potential restructuring and other one-time charges.

“This acquisition affirms our position as the world-wide market leader in neurology,” said Jim Hawkins, President and Chief Executive Officer of Natus. “Approximately two-thirds of Alpine’s revenue is from outside the United States, and Alpine is the market leader in electromyography diagnostics, or EMG, in Europe with its well established Keypoint product line.”

“In addition, we believe this acquisition signals that our business model that combines internal growth and accretive acquisitions is back on track. We anticipate that in 2010 we will return to the revenue and earnings growth that we achieved prior to the worldwide economic slowdown that started in the fourth quarter of 2008,” said Hawkins.

“We plan to leverage our combined direct sales channels in the United States and Canada and provide new distribution for Stellate and Alpine products through the Natus international distribution organization, which operates in over 100 countries,” added Hawkins.

“It is a testament to our success in building Alpine Biomed into a leading provider of specialty diagnostic devices that Natus acquired our neurodiagnostic business,” said John Arnott, President and CEO of Alpine Biomed. “Together with Water Street, we created and executed a two-year strategic growth plan that has greatly enhanced Alpine Biomed’s products and the markets we serve. Alpine’s family of neurodiagnostic devices will benefit greatly from Natus’ industry leadership position.”

Natus funded the acquisition through available cash.

Financial Guidance

Natus intends to release its 2009 third quarter financial results on or about October 30, 2009, and will host a conference call the day of the release to discuss those results, the Alpine acquisition, and provide 2010 annual revenue and earnings guidance.

About Alpine Biomed

Alpine Biomed is a global leader in specialty diagnostic devices for the neurology clinical market. On September 4, 2009 it spun off its gastrodiagnostic business in a merger with Sierra Scientific Instruments, LLC, creating a leading provider of specialty diagnostic devices for the gastroenterology market. Natus was not involved in that transaction. For more information about Alpine Biomed, visit www.alpinebiomed.com. For more information about Sierra Scientific, visit www.sierrainst.com.

About Water Street Healthcare Partners

Water Street Healthcare Partners is a leading private equity firm focused exclusively on healthcare. With more than $1 billion of capital under management, Water Street is one of the most active investors in the healthcare industry. The firm has a strong record of building market-leading companies across key growth sectors in healthcare. It has partnered with some of the world’s leading health care companies on its investments including Johnson & Johnson, Medtronic, and Smith & Nephew. Water Street’s team is comprised of industry executives and private equity professionals with decades of experience investing in and operating global healthcare businesses. The firm is headquartered in Chicago. For more information about Water Street, visit www.wshp.com.

About Natus Medical

Natus is a leading provider of healthcare products used for the screening, detection, treatment, monitoring and tracking of common medical ailments such as hearing impairment, neurological dysfunction, epilepsy, sleep disorders, and newborn care. Product offerings include computerized neurodiagnostic systems for audiology, neurology, polysomnography, and neonatology, as well as newborn care products such as hearing screening systems, phototherapy devices for the treatment of newborn jaundice, head-cooling products for the treatment of brain injury in newborns, and software systems for managing and tracking disorders and diseases for public health laboratories.

Additional information about Natus Medical can be found at www.natus.com.

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Aquafil Raises €45 Million


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Aquafil, a Bonazzi Group subsidiary that makes fibres for textile flooring, has raised €45 million in private equity funding from Hutton Collins. It is the first deal out of Hutton Collins’ third fund, which is capitalized with €600 million.

PRESS RELEASE

Hutton Collins,, has Hutton Collins, the preferred equity capital specialist, has completed a €45 million investment in Aquafil, the market-leading European producer of fibres for textile flooring. Aquafil employs 1,800 worldwide and had revenues of €380.7 million in 2008.  This is the second investment Hutton Collins has made in Italy and is one of the largest private equity transactions at local level since the beginning of 2009.  Aquafil is the first investment in Hutton Collins Fund III of approximately €600m

Aquafil, founded in 1969 in Arco di Trento (Italy), is a dominant player in the Nylon 6 synthetic fibre market with a specific focus on the manufacture of fibres for textile flooring.  Aquafil also has a significant presence in the engineering plastics and special textile fibres sectors  and has production plants in Italy, Slovenia, Croatia, USA and Asia.  The company has consistently increased global market share across all its business divisions, and is now the second largest player globally, as well as being the European market leader with c. 34% of market share.

Hutton Collins’ capital injection, by means of a preferred equity instrument, will accelerate the company’s growth strategy which is focused on the development of Econyl, an environmentally sustainable product, and expansion into the Asian market. The Bonazzi Group, which currently owns Aquafil, will retain a majority holding and overall control of the company.
Hutton Collins specialises in preferred equity capital (PEC), a form of equity finance that gives the PEC investor priority over ordinary equity holders in a company’s capital structure.  PEC is less dilutive than traditional private equity; PEC investors usually take minority positions allowing management more operational freedom.

Giulio Bonazzi, CEO of Aquafil commented:

“Aquafil completed the first half of 2009 with good growth despite the difficult economic environment.  The Bonazzi Group decided to partner with Hutton Collins to ensure we had the necessary resources to continue the company’s successful growth, to capitalise on our leadership of the  European market and develop further in the US and Asia.  In particular, we intend to accelerate investment in the field of sustainable products (Econyl) and in Asia, where the construction of a new plant will soon be completed. Recycled products and the development of Asian markets are the most important strategic projects for Aquafil in the near future.”

Graham Hutton, Co-founder, Hutton Collins commented:

“As part of the investment strategy of our latest fund we intend to focus on the Italian market in a more systematic way.  We believe our model fits very well with the characteristics of the Italian entrepreneurial system in that we will target, for the most part, minority partnership positions in the companies in which we will invest.  The significant number of high quality businesses we have analysed in the last 12 months, cullminating in our investment in Aquafil, has reinforced our determination to focus on the Italian market.”

Mauro Moretti, partner of Hutton Collins, commented:

“We are delighted to support the development of Aquafil, which is a typical example of an Italian company that has managed to excel in its niche market.  Hutton Collins’ investment strategy focuses on supporting entrepreneurs and management teams in successfully developing their businesses, and Aquafil represents an ideal opportunity.”

Legal assistance in the operation was provided by Bonelli Erede Pappalardo on behalf of Hutton Collins, and Freshfields on behalf of Aquafil. Clifford Chance and Paolo Nicolai acted as tax advisers, while Bain & Co. acted as business advisor.

Hutton Collins
Hutton Collins provides preferred equity capital to high quality businesses in the UK and continental Europe. Established in 2002, we manage over €1.4 billion of dedicated funds on behalf of leading global financial institutions. To date, Hutton Collins has completed 22 investment transactions in 21 companies, including one in Italy, the Elettra Group, which operates in electricity generation and the development of projects in renewable energy.

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Why the UNG is issuing new units


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In case you missed the news, the United States Natural Gas Fund — the exchanged-traded-fund — posted a note to the SEC on Friday saying it planned to restart the issue of creation baskets once again.

The fund originally suspended new issues after the SEC failed to grant it permission for further issuance of new units….

Avaya Wins Nortel’s Enterprise Unit


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(Reuters) – Nortel Networks Corp said Avaya Inc. has emerged as the successful bidder at a bankruptcy auction for its Enterprise Solutions business and has agreed to pay $900 million in cash for the unit.

Avaya will also pay $15 million reserved for an employee retention program, the bankrupt Canadian telecom-equipment maker said on Monday.

Last week, Verizon Communications (VZ.N) said it was ready to oppose the sale to Avaya citing public safety and security concerns. 

Nortel, once North America’s biggest maker of telephone gear, filed for bankruptcy protection in January.

The sale is subject to court approvals in the U.S., Canada, France and Israel as well as other regulatory approvals.

Nortel expects the sale to close in the late fourth quarter 2009.

(Reporting by R. Manikandan in Bangalore; Editing by Kavita Chandran)

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Blackstone, CVC Team Up for Bellsystem24 Bid


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TOKYO (Reuters) – CVC Capital and Blackstone (BX.N) are teaming up in the second round of bidding for Bellsystem24, Citigroup’s (C.N) telemarketing company in Japan, three sources with direct knowledge of the deal said.

Citigroup Inc (C.N) is looking to sell Bellsystem24 in a deal that could fetch more than $1 billion, as it sells assets globally to bolster its capital.

Last week CVC Capital was shortlisted along with Permira [PERM.UL] and Bain Capital for the second round of bidding, other sources told Reuters. [ID:nL716650]

Permira is expected to bid for Bellsystem24 on its own, while Bain Capital may also team up with other funds or strategic buyers, the other sources said.

Goldman Sachs Group Inc (GS.N) and Nikko Citigroup Ltd are advising Citigroup on the transaction, the sources said.

The sources spoke on condition of anonymity because the bidding process was not public. (Reporting by Junko Fujita in Tokyo and Stephen Aldred in Hong Kong; Editing by Chris Gallagher)

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Strauss-Kahn: Guard Must Say Up Amid Return to ‘Normal Times’


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Leaders of the Group of 20 largest economies are likely to agree to continue with stimulus measures for their economies when they meet in Pittsburgh at the end of the month, International Monetary Fund Managing Director Dominique Strauss-Kahn said Monday.

“The trend is good. Finance ministers [in London] understood that the crisis requires that we need to keep boosting the economy… good figures don’t mean that we can lower our guard,” Strauss-Kahn told France Info in an interview. “I think heads of state will take this line.”

In a statement at their London meeting last week, the G20 finance ministers said their fiscal and monetary policies would remain “expansionary” until the hoped-for economic recovery has taken root. A premature withdrawal of stimulus measures could lead to a “double dip,” or a return to recession after a brief period of growth, they said.

Strauss-Kahn also urged heads of state to adopt measures to limit the payment of bonuses to bankers, which pose an “unbearable” problem for ethics as well as for the functioning of the economy.

“They are a systemic problem, we can’t leave banks take on risks without any counterparty besides their losses, because… the economy is at stake,” Strauss-Kahn said.

The head of the Washington-based IMF also warned that while the financial crisis is over, the global slump will keep pushing up unemployment in the near future.

“The financial crisis is behind us, and the probability that a major bank goes under is extremely weak, we’ve gone back to normal times,” he said.

But while a general pick-up of the global economy will come in the first half of next year, the job market will follow with an 8-to-12 month lapse, depending on the country, he said. – Gabriele Parussini