Private Equity
Had a few free minutes, so figured I'd put together a list of the year's largest venture capital deals (so far). Fairly liberal with the term "venture capital," but that's why this is an interim list rather than an official/final list. Of note: Half of the ten companies could fall under the cleantech category. None of them are healthcare. Take a look after the jump...
3 min read · 04 March 2010
Yesterday we wrote about the pending Ohio factory closure by Hugo Boss, a publicly-traded retailer controlled by private equity firm Permira. The central issue, of course, is money. What's odd, however, is that Permira seems to be making a questionable financial decision. Hugo Boss reportedly asked the workers to take a 25% pay cut from $12 to $9 and, when they refused, opted to shutter the facility and move the jobs overseas. Ohio officials tried to intervene with financial incentives, but it was too late.
3 min read · 04 March 2010
Each year, the New England Venture Capital Association hosts a fundraiser at F-1 Racing, a popular go-kart facility in suburban Boston. Teams of venture capitalists compete for the checkered flags, with winning teams getting the $4,500 in event proceeds donated to the charity of their choice. The most recent event took place this past Monday night, with 90 participants. Tom Reardan of WestView Capital taking first place for Citizen Schools. Coming in second was Battery Ventures' Michael Brown, who was racing for Partners in Health. Placing show was Kevin Bitterman of Polaris Venture Partners, who chose Boston Children's Hospital. Get photos of the winners after the jump...
1 min read · 04 March 2010
Just one hour ago, KKR portfolio company NorthgateArinso, a UK-based provider of HR software and services company, signed a deal to buy the HR unit of Convergys for $100 million in cash. The paperwork originally was supposed to be finished up before market close, but sometimes these things take a bit longer than expected. I spent a few minutes on the phone with NorthgateArinso CEO Mike Ettling, shortly after the final T was crossed. What follows is an edited version of our conversation: 1. How did this deal process begin? Ettling: Convergys started the process last fall, and we've been engaged since last October. We stayed in it, and ultimately were the last horse in the race." 2. What does the Convergys unit bring NorthgateArinso that it didn't already have? Strategically we have a goal to become world’s leading HR services company. Today 35% of the global market is in the U.S., but up to this point only a very small percentage of our global revenues came from the U.S. In addition, one of our primary sweet spots in terms of our service offerings is providing services to global multinational corporations, and the U.S. simply has more of them than anyone else. So we just had to have a much bigger presence in the U.S. markets, which is why we stayed focused on this transaction and why we were there in the end. It just makes an enormous amount of sense for us.
2 min read · 04 March 2010
Platform G, a startup formed last year by MySpace founder and former CEO Chris DeWolfe, has raised around $20 million in funding led by Austin Ventures, as first reported by TechCrunch. The company is designed as a serial acquiror, and already has bought social gaming platform MindJolt. No financial terms of the transaction were reported. We're hoping to speak with someone from Austin Ventures shortly... In the meantime, here is a press release that was just distributed:
4 min read · 03 March 2010
When upscale men's fashion retailer Hugo Boss decided to close its Brooklyn, Ohio plant, state officials begged controlling shareholder Permira to reconsider. Both the facility and Hugo Boss itself were profitable, they argued, and the community could hardly afford the loss of another 400 jobs. Permira, a European private equity firm, didn't seem to listen. And, to add insult to injury, Hugo Boss said it was still on track to pay out a special dividend. Erin last month suggested that Permira was playing with fire: Companies usually cite fiduciary duties in making layoffs and shutting facilities — they have an obligation to make money for their shareholders. In the case of a private equity firm, those shareholders often are pension funds, which could quite possibly include the pensions of the workers getting laid off (and subsequently, losing their pensions?). Well, one of Permira's investors is the Ohio Public Employees Retirement System (OPERS), which has committed approximately 160 million to a pair of Permira funds (including the one that holds Hugo Boss). It doesn't appear that any OPERS members work at the Hugo Boss plant, but the system is still steamed with how the factory closure has been handled.
2 min read · 03 March 2010
Most of the debate over Chris Dodd’s financial reform bill has involved the proposed creation of a consumer protection agency. But there also are some smaller provisions in the 1,139-page bill that would directly impact angel investors and startup companies. First up is Section 412, which would change the requirements under which someone can qualify as an “accredited investor.” Since 1982, individuals have been considered “accredited” if they had at least $1 million in personal assets and/or annual income of $200,000 ($300,000 in the case of a joint filing). Under Dodd’s proposal, however, the threshold would become subject to “price inflation” adjustments at least once every five years. The bill does not explain the metrics that would be used to determine “price inflation,” although a 2007 SEC report used a Department of Commerce price index to project a 90% hightening of the asset floor. That same index would have caused the individual and joint income tests to increase to $388,000 and $582,000, respectively. Accredited investor standards were originally created under a thesis that richer folks would have a better understanding of financial risk than would poorer folks, or would at least have the resources to hire
3 min read · 03 March 2010
"The bubble gets bigger... and pop, money goes to the weasels..." Funny or Die's Presidential Reunion from Will Ferrell
1 min read · 03 March 2010
The European Venture Capital Association today released a white paper on the next stage of venture capital's evolution in Europe. Download it here.
1 min read · 03 March 2010
The new Tommy Hilfiger store on 5th Ave. will close at 6pm tonight, in order to get ready for a private party being hosted by private equity firm Apax Partners. Maybe I'm just bored, but the news got my mind raicing. Could this party be related to a Women's Wear Daily about how Apax is looking to either sell Hilfiger or take it public? WWD wrote, in part: At the moment, the lead candidate to acquire Hilfiger is said to be $2.4 billion Phillips-Van Heusen Corp., which has been openly on the prowl for acquisitions and proved with its 2002 purchase of Calvin Klein that it can successfully incorporate a large global brand into its business... But buying Hilfiger could be a bit of a stretch for PVH, which has about $480 million in cash on hand. Sources said one option for PVH could be to structure a deal that resembled its acquisition of Calvin
1 min read · 02 March 2010
