Why Global Growth Is Still Feeble, in Eight Charts


This post is by Ian Talley from Real Time Economics


Click here to view on the original site: Original Post




The World Bank may be projecting a moderate pickup this year in global growth, but that doesn’t mean the economy is out of the woods.

Yes, the world’s biggest growth engine, the U.S., is picking up steam and a rebound in commodity prices is helping to stabilize many of the world’s commodity-exporting emerging-market economies.

But the outlook for the global economy is still dim. Beyond the long-running crises still vexing policy makers, here are eight charts that help explain why.

Stagnating trade is a key symptom of the ailing global economy.

Global uncertainty has topped crisis levels as the world’s largest economies undergo major political shifts, largely with a more protectionist bent.

Many economists fear the U.S.-China tensions could devolve into a trade war. The future of the European Union is under threat as the U.K. negotiates an exit and anti-euro platforms gain momentum ahead of Continue reading “Why Global Growth Is Still Feeble, in Eight Charts”

China Tripled Pace of Investment in U.S. in 2016, but Hurdles Loom


This post is by Bob Davis from Real Time Economics


Click here to view on the original site: Original Post




Chinese investment in the U.S. tripled to $45.6 billion this past year from 2015, according to tabulation by Rhodium Group, a New York consulting firm, but don’t expect as large a jump in 2017.

“While the economic fundamentals and deal pipeline suggest that 2017 will be another boom year for Chinese investment in the U.S., the political realities on both sides pose a major downside risk to both pending transactions and new deal flow in coming months,” Rhodium wrote in a short report released on Thursday.

In other words, the election of China-hawk Donald Trump, who Rhodium diplomatically says may take a “more confrontational approach” to China, may put a damper on Chinese investment. That’s especially true in high-tech areas.

Under President Barack Obama, the U.S. had become increasingly sensitive to Chinese purchases of semiconductor firms.

In December, the Committee on Foreign Investment in Continue reading “China Tripled Pace of Investment in U.S. in 2016, but Hurdles Loom”

Elevation to make 1.8x its money with Forbes sale


This post is by from PE Hub Blog: Buyout Deals


Click here to view on the original site: Original Post




Elevation Partners may finally get to exit Forbes Media after eight years.

Today, Forbes announced that an investor group, Integrated Whale Media Investments, is buying a majority of the media company. The Forbes family is retaining a “significant” stake, a statement said. Financial terms of the deal were not announced but press reports pegged the deal value at $475 million.

The investor group includes Integrated Asset Management and Wayne Hsieh, the co-founder of ASUSTeK Computer.

New York-based Forbes, parent of Forbes magazine, was put up for sale late in 2013. Deutsche Bank advised on the process.

Once the transaction closes, which is expected later this year, Elevation will fully exit its investment in Forbes. Elevation, the PE firm that includes the rock star Bono as a co-founder alongside Roger McNamee, paid about $240 million for a roughly 45 percent stake of Forbes in 2006, according to press reports. The investment came from Elevation’s first and only fund, a $1.9 billion pool that closed in 2004. The fund, Elevation Partners LP, is producing a 10.86 percent net IRR and a 1.5x multiple, according to performance documents from the Washington State Investment Board.

Elevation’s total realized proceeds with the Forbes sale would be 1.8x invested capital, according to a letter sent to Elevation’s LPs that was obtained by peHUB. Elevation, once it distributes the Forbes proceeds, will have returned 95 percent of Fund I’s value, the communication said.

“Our results continue to exceed benchmarks,” Elevation said in the letter. The firm said its pro forma gross IRR is 17.7 percent and its net IRRs is 11.5 percent. Using Cambridge Associates’ benchmarks for 2005 private equity and venture capital this IRR is 400 basis points higher than the median benchmark and places the firm in the top 30 percent of all 2005 funds, the letter said.

Forbes Media did not return calls for comment.

Photo courtesy of Reuters/Keith Bedford

How Attractive are Different M&A Markets Globally


This post is by Scott Moeller from Intelligent Mergers


Click here to view on the original site: Original Post




Over the past several years, the M&A Research Centre at Cass Business School has been studying the relative attractiveness of different countries for M&A deals.

This has focussed on the domestic and inward investment attractiveness (that is, we did not look at countries or their companies as buyers, but as targets, either from companies based externally to that country or from within). The results are based on a detailed analysis of a number of factors in the following areas: regulatory and political, financial and economic, technological factors, socio-economic and factors relating to the development of physical infrastructure and the availability of assets.

There have been some surprising results, but also some not-so-surprising results, as we’ve reported in the April issue of the European Journal of Finance.

‘The USA remains in the top spot, mirroring its position in terms of global M&A activity (currently 21% of global volume), with the UK Continue reading “How Attractive are Different M&A Markets Globally”

How Attractive are Different M&A Markets Globally


This post is by Scott Moeller from Intelligent Mergers


Click here to view on the original site: Original Post




Over the past several years, the M&A Research Centre at Cass Business School has been studying the relative attractiveness of different countries for M&A deals.

This has focussed on the domestic and inward investment attractiveness (that is, we did not look at countries or their companies as buyers, but as targets, either from companies based externally to that country or from within). The results are based on a detailed analysis of a number of factors in the following areas: regulatory and political, financial and economic, technological factors, socio-economic and factors relating to the development of physical infrastructure and the availability of assets.

There have been some surprising results, but also some not-so-surprising results, as we’ve reported in the April issue of the European Journal of Finance.

‘The USA remains in the top spot, mirroring its position in terms of global M&A activity (currently 21% of global volume), with the UK Continue reading “How Attractive are Different M&A Markets Globally”

How Attractive are Different M&A Markets Globally


This post is by Scott Moeller from Intelligent Mergers


Click here to view on the original site: Original Post




Over the past several years, the M&A Research Centre at Cass Business School has been studying the relative attractiveness of different countries for M&A deals.

This has focussed on the domestic and inward investment attractiveness (that is, we did not look at countries or their companies as buyers, but as targets, either from companies based externally to that country or from within). The results are based on a detailed analysis of a number of factors in the following areas: regulatory and political, financial and economic, technological factors, socio-economic and factors relating to the development of physical infrastructure and the availability of assets.

There have been some surprising results, but also some not-so-surprising results, as we’ve reported in the April issue of the European Journal of Finance.

‘The USA remains in the top spot, mirroring its position in terms of global M&A activity (currently 21% of global volume), with the UK Continue reading “How Attractive are Different M&A Markets Globally”

How Attractive are Different M&A Markets Globally


This post is by from Intelligent Mergers


Click here to view on the original site: Original Post




Over the past several years, the M&A Research Centre at Cass Business School has been studying the relative attractiveness of different countries for M&A deals.

This has focussed on the domestic and inward investment attractiveness (that is, we did not look at countries or their companies as buyers, but as targets, either from companies based externally to that country or from within). The results are based on a detailed analysis of a number of factors in the following areas: regulatory and political, financial and economic, technological factors, socio-economic and factors relating to the development of physical infrastructure and the availability of assets.

There have been some surprising results, but also some not-so-surprising results, as we’ve reported in the April issue of the European Journal of Finance.

‘The USA remains in the top spot, mirroring its position in terms of global M&A activity (currently 21% of global volume), with the UK in fourth position. However, we note that three Asian countries occupy top five positions, with South Korea, Singapore and Hong Kong in second, third and fifth place, respectively. Further analysis of the database leads us to conclude that Singapore’s and Hong Kong’s high rankings are driven mainly by their highly developed infrastructure, the availability of sizeable assets to purchase (measured as the number of companies with assets valued at $1 m or higher) and business-friendly regulatory environments. This is in contrast to most of the remaining top ten countries, their competitive advantage mainly being their highly developed technological environments, including high levels of high-tech exports and innovation in terms of patents filed, indicating an extremely skilled business community which should attract investment interest.’

The full article discussing these results can be found here, and includes a chart which shows the five year trends: http://www.tandfonline.com/eprint/fnQAsYpsmMPzc5aT9Y6e/full#/doi/full/10.1080/1351847X.2014.888362

Sampler Chapter of Second Edition, Intelligent M&A


This post is by Scott Moeller from Intelligent Mergers


Click here to view on the original site: Original Post




Here’s a sampler chapter of the second edition of Intelligent M&A, Navigating the Mergers and Acquisitions Minefield (Wiley, 2014) which has been released on 9 May.

Book Sampler v6 May

The book is also on Amazon (http://www.amazon.co.uk/gp/product/1118764234?adid=0EJAAYMKPEM0B5PAKCD2&camp=1406&creative=6394&creativeASIN=1118764234&linkCode=as1&tag=intellmerger-21) where there are some other electronic excerpts.

The book is not yet available in full electronic form, but keep an eye on Amazon for when it is.

Sampler Chapter of Second Edition, Intelligent M&A


This post is by from Intelligent Mergers


Click here to view on the original site: Original Post




Here’s a sampler chapter of the second edition of Intelligent M&A, Navigating the Mergers and Acquisitions Minefield (Wiley, 2014) which has been released on 9 May.

Book Sampler v6 May

The book is also on Amazon (http://www.amazon.co.uk/gp/product/1118764234?adid=0EJAAYMKPEM0B5PAKCD2&camp=1406&creative=6394&creativeASIN=1118764234&linkCode=as1&tag=intellmerger-21) where there are some other electronic excerpts.

The book is not yet available in full electronic form, but keep an eye on Amazon for when it is.

Second edition of ‘Intelligent M&A’ will be published in May


This post is by from Intelligent Mergers


Click here to view on the original site: Original Post




After a year of working together with Chris Brady on an update of  Intelligent M&A:  Navigating the Mergers and Acquisitions Minefield, our publisher has announced that the Second Edition of our book will be available on Amazon (http://www.amazon.co.uk/gp/product/1118764234?adid=0EJAAYMKPEM0B5PAKCD2&camp=1406&creative=6394&creativeASIN=1118764234&linkCode=as1&tag=intellmerger-21) and in bookstores in the UK in early May 2014 and in the US in late June 2014.

We hope that everyone will enjoy the new material that we’ve added to the book, with new case studies and recommendations on how to succeed in the M&A market in the new economic world since our last book was written in 2006.

M&A is back (ish)


This post is by Dan McCrum from FT Alphaville


Click here to view on the original site: Original Post




Can it be a merger Monday if the big deal leaked on Friday?

Either way, the second quarter deal making was already off to a fast start before the cement makers got involved, according to Goldman Sachs, and Europe is finally starting to join in the fun.

A week into 2Q, M&A announcements continued at a brisk pace (+21%y/y) while completions also saw gradual improvement (+7% y/y). While the year to date strength in M&A has been primarily driven by the US (+21% y/y), we have seen notable improvement in selected pockets of EU deal flow. Specifically, EU buyers’ appetite have seen sizable growth (+38% y/y), though more in favor of cross-border purchases (2x vs. 2013TD) relative to domestic consolidation (+27% y/y).

Continue reading: M&A is back (ish)

A gentle tug on the purse strings


This post is by Dan McCrum from FT Alphaville


Click here to view on the original site: Original Post




It may be something in the wind, but is it becoming acceptable for companies to spend again?

Exhibit A: Morgan Stanley politely suggests that, even though companies which actually increase investment in their business with capital expenditure have tended to trail the scrimpers, it might be time to look at the capital intensive types again.

Continue reading: A gentle tug on the purse strings

Options Update: EchoStar Volatility Flat Into $2B Acquisition of Hughes Communications


This post is by from BloggingStocks


Click here to view on the original site: Original Post




Filed under:

EchoStar (SATS) announced an agreement to acquire all of the outstanding equity of Hughes Communications (HUGH) in a transaction valued at approximately $2 billion. EchoStar overall option implied volatility of 29 is near its 26-week average of 31, according to Track Data, suggesting slightly lower price movement.

Emergency Medical Services (EMS) and Clayton, Dubilier & Rice announced a definitive merger agreement under which an affiliate of CD&R will acquire EMSC for $64.00 in cash for each share of EMSC Class A common stock and Class B common stock and each LP Exchangeable Unit. Overall option implied volatility of 16 is below its 26-week average of 32, according to Track Data, suggesting decreasing price movement.

Update is by Stock Specialist Paul Foster of theflyonthewall.com.

Options Update: EchoStar Volatility Flat Into $2B Acquisition of Hughes Communications originally appeared on BloggingStocks on Tue, 15 Feb 2011 09:15:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments



Add to digg
Add to del.icio.us
Add to Google
Add to StumbleUpon
Add to Facebook
Add to Reddit
Add to Technorati



Comfort Zone Investing: Did You Know … ?


This post is by from BloggingStocks


Click here to view on the original site: Original Post




Filed under: , , , , , , , , ,

Comfort Zone Investing: Wall StreetCoca-Cola (KO) has more than $13 billion in cash.

The top five companies (according to market cap) are:

  • Exxon Mobil (XOM): $398.3 billion
  • Apple (AAPL): $309.0 billion
  • Microsoft (MSFT): $237.5 billion
  • General Electric (GE): $215.0 billion
  • Berkshire Hathaway (BRK.A): $202.5 billion

Continue reading Comfort Zone Investing: Did You Know … ?

Comfort Zone Investing: Did You Know … ? originally appeared on BloggingStocks on Sat, 05 Feb 2011 10:30:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments



Add to digg
Add to del.icio.us
Add to Google
Add to StumbleUpon
Add to Facebook
Add to Reddit
Add to Technorati



2011 M&A Forecast


This post is by from Intelligent Mergers


Click here to view on the original site: Original Post




As every year, I would like to start the new year with some thoughts about the M&A volume for the coming year. I’ll be upfront about my outlook for 2011: it will be better than 2010, which itself was better than 2009. See below:

There’s a lot of interesting things about the chart above.  Most commentators have noticed the obvious improvement in activity in 2010 over 2009 (and 2009 does look set to be the ‘low’ point after the peak of 2007).

But look a bit more carefully at this ‘low’ of 2009:  it is almost double the low (2002) that happened between the last two merger waves.  Thus 2009 wasn’t really all that much of a low as only seven years earlier — although if you had listened to many, it was as if Armageddon had come to the M&A markets in 2009!  Many thought it had continued into 2010.

Look even more carefully at the above chart:  There were five years since 2000 when the market was worse than 2010, and that only four years exceeded it!  This means that 2010 is not the terrible year that everyone seems to think it was.  It is only so compared to the incredible peak of 2007 … itself a peak that few people feel will be reached again anytime soon (and I agree!).

What is notable about 2011 as we start the year is the uptick in confidence (note my own blog on the importance of business confidence in the M&A cycle:  ‘Why you should do an M&A deal now‘).  There is increased activity as well from private equity firms and large cash hoards in corporations (which in the past have been used to do deals).  I continue to hear anecdotally from people working in the M&A industry that they are very busy, and I know that many of the largest advisors are seeking new employees.  (I can tell you that my own unofficial statistic on this is from the requests that I receive from banks looking for new entry-level employees who are recent graduates of my own M&A class at Cass Business School.)

Last year when I put forth my forecast for the year (‘2010 M&A Forecast‘), I noted as well the increase in cross-border activity and the emerging markets.  These will continue as well.  In fact, I’m very proud of that forecast and several updates that I’ve made, as it appears at least this time that I was generally on the mark.

I still think there’s some stickiness to the current market levels that will keep the overall volumes constrained, but you should expect more deals in 2011 than the past two years.  Just don’t expect TOO many more.

I am sure a number of board meetings early in the year will have on their Board Agenda a strategic discussion of potential acquisition targets (or merger partners).  If this isn’t already on the agenda, it should be.  And the discussion should include a detailed assessment of what competitors will be doing in this regard.  Because it is likely those competitors will be doing the same.  No one in the board room wants to be left behind.

Any other thoughts about 2011?

M&A Maturity Index — Emerging markets for M&A


This post is by from Intelligent Mergers


Click here to view on the original site: Original Post




If you want to expand overseas — from whatever your base — what do you do?  Start up new in a country in which you’ve never operated before?  Maybe a joint venture?  Do a big acquisition there?

If you’ve decided that an acquisition is the best route forward, then you have the big decision to make about which country (or countries) to enter?  This question is easy to ask, but often expensive and difficult to answer.  Help is now at hand!

Cass Business School has an M&A Research Centre (full disclosure:  I’m the director of that research centre).  We’ve recently published, in conjunction with Allen & Overy, Credit Suisse and Ernst & Young, a new index which ranks 175 countries on the ease with which one can do an M&A deal there:  The Cass MARC M&A Maturity Index.  Ernst & Young have turned this study into an interactive website, and the study itself can be obtained from Cass here.

Whereas others have looked at the attractiveness of markets for M&A solely based on financial and economic factors, for example, or even the legal environment, this index looks at six country development indicators:

  • Regulatory factors (e.g., rule of law and regulatory quality)
  • Economic factors (e.g., GDP growth and economic freedom)
  • Financial factors (e.g., stock market capitalisation and access to financing)
  • Political factors (e.g., political stability and corruption of officials)
  • Technological factors (e.g., R&D expenditure and innovation)
  • Socio-cultural factors (e.g., people, talent and labour skills)

These are combined in the index and a score for each country is generated, ranging from 1.0 (best) to 5.0 (worst).  Approximately two-thirds of countries, including Indonesia, Egypt, Ukraine and Nigeria, appear in the bottom grouping as relatively unattractive — and the reasons differ per country, of course.  The top one-third has those that are mature (Canada heads the list, and ends with China) and those that are ‘transitional’, which is the most interesting group.

In fact, the press coverage of this study since its release three days ago has been greatest about this transitional group, which has a number of countries from the Middle East (led by the UAE but also including Qatar, Saudi Arabia and Kuwait), Central Europe (Czech Republic, Poland and some others), Latin America (Chile, Mexico, etc) and Asia (Thailand, India, Philippines, etc).  You can see some of these articles here:  Middle East and Asia, for example.  There’s even a video: Cass M&A research signals the emergence of Asia.

I found one of the most interesting findings to be that the technological factors were the discriminating factor amongst those transitional countries as to whether they were attractive for M&A activity or not:  in fact, technological development represented 40% of the differences between these countries.  Amongst the most mature markets, socio-cultural factors were most important.

Very interesting will be to see the movement in a year when the second such index is issued, and at which time I expect to see some of the ‘transitional’ countries to move into the ‘mature’ category.

Deal code names


This post is by from Intelligent Mergers


Click here to view on the original site: Original Post




One of the more interesting discussions in any deal is at the beginning when you need to decide what the confidential name should be for the project.  This is needed because at that time the deal is very hush-hush secretive with few people knowing about the potential takeover or merger.

Should the information about the deal get outside the company and its close-knit group of advisors, it could affect the pricing and even the ultimate success of the deal … maybe allowing a competitor to buy what you’re wanting to buy.  If other outsiders learn of the deal, they could trade on that inside information, making illegal profits.  And if the deal is prematurely annouced because of such a leak, the careful planning on the planned announcement date may be incomplete.

Thus it is that most companies (and their advisors) create a code name for the deal prior to public announcement.  During that period, the actual target and bidder’s names will not appear in any of the planning documents.  If one of those documents was seen by someone outside that inner circle, presumably they would not be able to determine who the target and bidder were.  (Of course, a deep analysis of any such document might reveal the identities of the two companies, as the discussion of those companies may be uniquely linked to just one possible real company for each of those with a code name.)

How to choose the names is fun.  Should it relate in some way to the company name itself?  Thus, when Bank of New York started looking to merge with Mellon Bank, they called the deal ‘Project Melody’, where the first three letters of the project name and the company name were the same.  Interestingly, some regulators today, concerned about market leaks, might think this was not enough in code to prevent inadvertent disclosure.

Or should the project name be linked to where the firm is located?  And thus Cadbury used the code name ‘Project Eagle’ for Kraft, as it was from the US as denoted by an American Eagle;  similarly, Banco Santander of Spain called it’s acquisition of Abbey National of Great Britain by the name of ‘Project Jack’, which was derived from a common term for the British flag, ‘Union Jack’; and Mellon Bank, in it’s code name for the above deal, called Bank of New York ‘Project Cider’, which was a play on words from nickname for the headquarters city of that bank, the ‘Big Apple’.

I was recently interviewed by Quentin Webb of Reuters for an article that was widely distributed on just this topic.  You can find it here in an article entitled ‘M&A deals are all in a code name’.  In it, he quotes me as saying:

Banker-turned-academic Scott Moeller said while at Deutsche Bank he worked with a list of composers Blu-Tacked to the wall; the musical giants stood in for financial technology companies that could be bid targets.

Moeller, now director of the M&A research centre at London’s City University, said codes must be memorable and should not be “too cute” or otherwise offensive to clients — making musicians a safe bet.

“Nobody can complain about being called Bach, or Beethoven, or Mozart,” he said in a telephone interview.

“My only other criterion was I had to be able to spell whatever it was — so no matter what, we’re not going to have Project Mussorgsky or Project Tchaikovsky,” he added.

I should add that the reason that we started using composer names was because we ran out of animals.  Originally in the Corporate Development department at Deutsche Bank, we had various code names for potential targets where the first letter of the animal name was the first letter of the potential target.  Thus, Project Penguin was Paine Weber, Project Dolphin was Donaldson Lufkin & Jenrette, Project Monkey was Morgan Stanley, etc.  This made it easier as we updated information about each of our competitors and potential acquisition candidates back in the mid-1990′s.  But there just aren’t as many animals as there are composers, and Deutsche Bank was making lots of acquisitions at the time.

Because they are fun and often tell a story about the start of the deal, I would love to collect some other code names, so please share them here.

Is Avon Buyout Bait?


This post is by from BloggingStocks


Click here to view on the original site: Original Post




Filed under: ,

Avon (AVP) logoFrom time to time, Avon Products (AVP) becomes the topic of buyout rumors. And yes, this week it happened again. Actually, investors are giving it some credence. In Tuesday morning trading, the shares of Avon were up 5.6% to 35.03. That’s only a couple bucks away from its 52-week high.

The buyout buzz comes from a report in the Daily Mail. According to this UK paper, it appears that L’Oreal is looking at a bid that could be as high as $44 per share, or $19 billion.

Continue reading Is Avon Buyout Bait?

Is Avon Buyout Bait? originally appeared on BloggingStocks on Tue, 12 Oct 2010 12:20:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments



Add to digg
Add to del.icio.us
Add to Google
Add to StumbleUpon
Add to Facebook
Add to Reddit
Add to Technorati