| From: richardred | 1/19/2014 10:50:34 PM | | | | | | 2014: Maybe the happiest New Year in a while for middle-market M&A
BY JAMES CASSEL jcassel@casselsalpeter.com
When it comes to middle-market mergers and acquisitions, 2014 is positioned to be quite a happy new year — the best one yet since 2008. For middle-market business owners seeking to sell their businesses, borrow money or raise capital, it looks like the stars may align to present attractive opportunities.
Typically, the M&A market gets bifurcated into large deals and small deals. In 2013, the large deal business came back but the middle market lagged. In 2014, we will see the large deal business continue while more small deals and middle-market deals begin to happen.
M&A last became bullish in 2006, and the market has since been hungry for another peak. Q4 2012 was particularly strong, and some middle-market analysts projected that 2013 would post record-breaking valuations for businesses, creating an ideal climate for exits and driving bidding wars. However, preliminary data show that the middle market lagged a bit in 2013, as the overall dollar value of deals closed in 2013 was only slightly higher than the dollar value of deals closed in 2012. According to a January 2014 S&P Capital IQ report, the dollar value of deals surged by 20.1 percent across the board between 2012 and 2013, predominantly driven by a few megadeals, but the number of deals actually slipped by 3.9 percent.
The end of 2012 was particularly strong due to the tax law changes. The slower deal volume can be attributed in 2008-2012 to a wide array of factors, including posturing in Washington over tax and estate issues, the slow debt market recovery, lack of job growth, and the stalled economy. Granted, this slow upward trend has been building since 2008, and early projections for 2014 indicate that this gradual increase will continue throughout the year. There could be pent up demand to sell.
In my experience at Cassel Salpeter, an investment banking firm that focuses on the middle market, several industries — namely healthcare, media, telecom and technology, financial services, insurance and real estate, retail, energy and manufacturing — enjoyed more concentrated deal-making opportunities. Companies with predictable cash flow were able to leverage multiples of four and five times cash flow, and companies with EBITDA in excess of $25 million gleaned even more. Calling 2013 a bad year or a good year all depends on where you happen to be standing, but across the board, it was a year of learning, and those lessons shed a telling light on what the market can expect from 2014.
In a recent KPMG survey of more than 1,000 M&A professionals, approximately 63 percent responded that their U.S. companies or clients will initiate at least one acquisition this year, and 36 percent expect their companies or clients will complete a divestiture. In a similar survey among 145 C-level executives, almost three quarters indicate that they expect their companies to make an acquisition in 2014 — almost double from last year. Are they righteously optimistic or kidding themselves?
The key drivers of this uptick in M&A confidence include: employment is improving; GDP has increased and is expected to be north of three percent in 2014; customer confidence has improved; home values are improving; the stock market is up; and interest rates remain relatively favorable. Despite the doom and gloom forecast that has been permeating some media, which is now finally subsiding, there is still a powerful notion of stability and safety in North America’s M&A markets. So, while regions like Western Europe and China might have some opportunities, the U.S. will undoubtedly attract dollars from investors seeking stability and growth.
Although 2014 might produce some megadeals, the middle market will be the main driver of M&A. According to the KPMG survey, approximately 77 percent of survey respondents say they expect their M&A deals to be valued under $250 million. This is an important detail: Middle-market executives have expressed confidence regarding their ability to access credit markets to finance deals, and simultaneously, a wide swath of companies are sitting on large reserves of cash, so these middle-market deals will become attractive targets for larger companies in the coming 12 months. The savvy ones have spent the past few years paying down lines of credit to prepare for the next bullish era of opportunities.
On the subject of credit, interest rates will remain low for at least the first six months of the year, maybe longer. Simply put, it’s ideal to borrow now, because if and when the Federal Reserve reduces its stimulation, interest rates may begin to move. A small uptick will produce minimal impact, but more significant increases could shake things up.
That doesn’t mean there isn’t money out there, particularly in the private equity markets and strategic buyers. Private equity firms are flush with cash and credit availability as are companies. Companies are looking to buy, and the convalescence of factors like cash reserves and increased consumer confidence will produce a favorable environment in 2014 for companies looking to make acquisitions. In addition, we can also expect that this will be a good year for initial public offerings, particularly for technology, financial services and health care ventures.
The unknown is not whether there are buyers but whether there are sellers willing to sell. At some point, aging business owners will make the difficult decision and take the plunge. As with all things, time will tell how the New Year will treat the middle market’s M&A sector, but insights from last year and new developments in the market are promising a healthy and strong 2014.
Read more here: miamiherald.com |
| | Speculating in Takeover Targets | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last Read |
|
| To: richardred who wrote (3588) | 1/19/2014 11:07:07 PM | | From: richardred | | | | 2014 energy M&A trends in Canada
Whether measured by volume or aggregate value, 2013 was a weaker year for energy-related M&A than 2012, continuing a four-year decline in activity in the sector. There was a noteworthy lack of public company M&A in 2013 and nothing to match the marquee deals of 2012: PETRONAS’ $6B acquisition of Progress Energy or CNOOC Limited’s $20B acquisition of Nexen. In spite of that, 2013 still saw a significant number of large and complex transactions, including Suncor’s sale of its conventional natural gas properties for $1B to Centrica and Qatar Petroleum, Progress/PETRONAS’ $1.5B acquisition of Talisman Energy’s Farrell Creek and Cyprus properties and Exxon Mobil/Imperial Oil’s $750M acquisition of part of ConocoPhillips’ non-producing Clyden oil sands acreage.
Reasons for the decline in M&A activity in 2013 included the following:
- Asian investors paused to digest what they bought after five years of significant investment in the Canadian energy sector, particularly in the oil sands.
- Changes to Industry Canada’s State Owned Entity (SOE) guidelines announced in December 2012 under the Investment Canada Act, coupled with the failure of two transactions to pass “national security” reviews, have chilled foreign investment by SOEs.
- Increased uncertainty about whether regulatory approvals would be obtained for pipelines and other projects needed to expand the capacity to transport Canadian crude oil and natural gas to the U.S. and to provide access to offshore markets contributed to investors’ concerns about the future prospects for Canadian production.
In addition to the absence of major acquisitions, 2013 also saw a decline in financing activity by oil and gas issuers. While a select few were able to raise the equity they required, many others could not – at least until Q4 when a spike in oil and gas-related capital markets activity occurred. The numbers of oil and gas issuers on the TSX and TSXV, the number of financings by those issuers and the aggregate equity capital raised to the end of Q3 of this past year were all significantly lower than over the same period in 2012.
The key question for 2014 is whether Canada’s energy sector will begin to see an upswing in M&A activity and, if so, where that upswing will first be felt. As transactional counsel to a significant number of companies in the energy sector, we have identified a number of trends, opportunities and challenges that are likely to influence Canada’s M&A activity in 2014.
1. Scrutiny of SOEs will continue to chill the market for Asian investors
It has been just over a year since Prime Minister Stephen Harper’s announcement – following months of controversy – of reforms to the Investment Canada Act that effectively prevented further acquisitions of majority stakes by SOEs like CNOOC and PETRONAS in the oil sands, and appeared to cast a pall over the perception of Canada as a welcoming destination for foreign investment.
The changes announced in 2012 were enacted in June 2013, although not all of the changes have taken effect. The SOE guidelines were amended to clarify that, in addition to considerations regarding the corporate governance of the investor and its management on profit-maximizing lines, the degree of foreign-state control of the SOE would be considered, along with the importance of the Canadian target in the industry and the degree of existing participation of SOEs in the sector. In the words of the Prime Minister, “Canadians have not spent years reducing the ownership of sectors of the economy by our own governments only to see them bought and controlled by foreign governments instead.” Majority acquisitions in the oil sands by SOEs will be permitted going forward only on an “exceptional basis”.
The Investment Canada Act itself was also amended in June 2013 to include a broad definition of SOEs – including entities that are “influenced” by foreign states. The Minister has been given the power to determine – retroactively – whether an investor is in fact an SOE or in fact controlled by an SOE, even if it does not meet the test for “control” that otherwise applies in the Act. As well, the higher dollar thresholds for the review of transactions by Industry Canada will not apply to SOEs.
At the same time, the Government began to use its new (since 2011) national security powers under the Act. Despite pronouncements welcoming – indeed urging – foreign investment in telecommunications, national security reviews led to the demise of two proposed high-profile telecom investments in Wind Mobile Canada and in Manitoba Telecom’s Allstream division by foreign acquirors.
Together with depressed prices for Canadian oil and gas production, high costs and regulatory burdens, the uncertainty over deal completion created by Ottawa’s pronouncements on SOEs and its unexplained rejections of the telecom deals has poured cold water on foreign investment in the energy sector, estimated by CIBC in late 2013 to be down 92% from the same period in 2012.
2. There will be lots of properties for sale. Will there be buyers for them?
Persistently low natural gas prices and an oversupply have resulted in several large producers, including Penn West Exploration, Talisman and Encana Corporation, announcing asset disposition programs in an effort to shift their focus away from natural gas to liquids-rich gas and light oil plays. In addition, Devon Energy recently announced its intention to sell most of its Canadian natural gas properties to help finance its US$6B acquisition of GeoSouthern Energy’s Eagle Ford light oil assets.
These asset disposition programs add more properties to an already overcrowded market that has been characterized by unsuccessful attempts to sell assets and joint venture offerings that were postponed or withdrawn because of a lack of interest.
That being said, 2013 concluded with an increase in M&A activity.
Indications that this trend may continue into 2014 include:
- Spain’s Repsol Energy is reported to be looking to make a US$5-10B purchase of a North American oil company. This is part of Repsol’s push to increase its investments in politically stable countries after the Argentinian government seized Repsol’s controlling stake in YPF SA. As well, Indian Oil Corporation (IOC) is rumored to be in talks to buy a stake in Progress Energy Canada’s shale assets for US$1.1-1.5B. If Repsol’s target is in Canada, a transaction of that magnitude would boost interest and M&A activity in the sector. That transaction, and the IOC acquisition if they occurred, would reinforce Canada’s reputation as a safe geopolitical environment for business and the Canadian energy sector as an attractive place for foreign investors to deploy capital.
- Asian investors continue to be interested in making energy sector acquisitions in Canada. However, these are likely to be strategic additions to existing positions and smaller transactions, rather than the marquee deals of the past five years.
- The push to develop LNG export projects on the West Coast may drive investment in natural gas assets in northeastern British Columbia in 2014, as the participants in those LNG projects move to build reserves and consolidate landholdings to feed their export projects.
- Continued weakness in prices and intense competition in markets for conventional dry gas will continue to result in property sales as smaller producers look for capital and larger producers look to shed non-core assets. The purchasers of these assets will include producers taking advantage of counter-cyclical opportunities by buying assets for depressed purchase prices. These producers with strong balance sheets and minimal debt will look to purchase natural gas production for less than it would cost them to develop that production through the drill bit.
3. Innovative marketing strategies will emerge
With the significant number of oil and gas properties that are expected to be on the market in 2014, innovative strategies will be required for successful dispositions. In that regard, Encana may have come up with a trend-setting idea.
The company owns approximately 5.2 million net acres of fee title oil and gas rights. These rights were granted to the Canadian Pacific Railway (CPR) when the CPR built its rail line across the prairies in the 1880s. Those fee title rights were transferred to PanCanadian Energy and then to Encana when PanCanadian and the Alberta Energy Company merged in 2002.
In Q4 of 2013, Encana announced plans to transfer its fee title rights and associated royalty interests across southern Alberta into a separate company, followed by an IPO of that company that is to be completed by mid-2014.
The new company will then lease these fee title rights to explorers in exchange for royalty interests.
Encana will benefit from the deal in two ways:
- First, it will receive the proceeds of the IPO.
- Second, it plans to retain a significant number of shares in the new royalty company and thus will participate in dividends paid from cash flows from the royalties paid to the new company.
The proposed formation of this new royalty company is considered to be an innovative alternative to Encana attempting to sell those fee title rights in an already crowded marketplace. Currently, there are only a few royalty companies available to investors including Freehold Royalties, which is publicly traded, and Range Royalties, which is private. However, if Encana’s concept is successful others may adopt similar strategies.
Various companies including Apache, Talisman and Canadian Natural Resources Limited hold significant fee title interests. Their interests were part of what was originally granted to the Hudson Bay Company. While their fee title holdings are not as extensive as Encana’s, they may be sufficient for additional royalty company offerings similar to Encana’s concept.
4. Resistance to proposed pipeline projects will continue
Increased access to refineries in the U.S. is required to reduce the discount that Western Canada Select heavy crude blend sells for in comparison with the price for West Texas Intermediate. In addition, the fact that U.S. markets are increasingly being supplied by U.S. domestic production (particularly from shale plays) is making the development of overseas markets more important than ever in the Canadian energy sector. As is well known, efforts to promote access to Canadian oil and gas are running into roadblocks. In particular, the pipeline projects necessary to access these refineries and new markets have been facing, and will likely continue to face, active and effective resistance from First Nations, environmental and other interest groups and from governments in reaction to political pressures surrounding these projects.
Expect some important decisions regarding these pipeline projects in 2014. However, the road ahead for most of them still looks long and difficult, and which of these projects will actually be completed remains highly uncertain.
The following is an update on the current state of a few of the major projects, and what may occur in 2014.
Keystone XL
TransCanada Corporation split its Keystone XL project into two parts when the Presidential Permit for the combined project was denied in 2012. The southern part has been completed and will deliver 700,000 barrels per day of crude from Cushing, Oklahoma to the Texas Gulf Coast. The northern part of the project is proposed to ship up to 590,000 barrels a day of crude oil from Hardisty, Alberta to Steele City, Nebraska. A new application for a U.S. Presidential Permit for the northern part was made in May 2012. A decision on the application was expected in the first quarter of 2013. However, that did not occur.
The U.S. State Department issued a Draft Supplementary Environmental Impact Statement on March 1, 2013 stating that the Keystone pipeline would not significantly impact the rate of extraction in Canada’s oil sands, and that with or without Keystone, oil will be shipped to refineries either by rail (which could be more carbon intensive), or through new alternative pipelines to either coast in Canada.
However, this positive preliminary result for Keystone has been undermined by two subsequent developments:
- First, the U.S. Environmental Protection Agency challenged the State Department’s analysis of the oil market, and particularly the U.S. State Department’s ultimate conclusion that Canada would find another way to ship its oil, if Keystone was not approved. The Environmental Protection Agency strongly suggested that the State Department redo its energy/economic modeling effort.
- Second, the State Department opened an investigation into whether a consulting firm that worked on the draft Environmental Impact Statement had previously worked for TransCanada. If a conflict of this nature is confirmed, that finding could undermine the benefit of the Environmental Impact Statement.
At this time, there is nothing to indicate when President Obama will make a decision on the Presidential Permit application for Keystone. Last year, most observers expected that a favourable decision would be made early in President Obama’s second term. Now, it is not clear whether a decision will be made before the November 2014 U.S. mid-term elections.
The longer it takes to make the decision, the more uncertain it becomes whether Keystone will be approved.
Energy East
There is greater optimism that TransCanada’s proposed $12B Energy East project will be successful. That project is intended to deliver 1.1 million barrels per day of crude from Alberta and Saskatchewan to refineries in eastern Canada. TransCanada intends to convert an existing gas pipeline into oil service, construct new lines to link up to the converted pipe and construct ancillary facilities, including tank terminals and marine facilities that will provide waterborne access to markets. Filing of the application in respect of Energy East with the National Energy Board (NEB) is expected in early 2014.
The fact that most of the Energy East line will be on the existing right of ways for the gas line should expedite approvals and reduce opposition. Moreover, the Premiers of the Provinces through which Energy East passes are supportive of the project. However, the line traverses the traditional territory of 180 aboriginal communities and some new build is required in Quebec and New Brunswick. The concerns of those communities will have to be accommodated if TransCanada is going to win approval for the project. The experiences of Keystone and Northern Gateway show that nothing can be taken for granted.
Northern Gateway
The Northern Gateway Pipeline is being proposed by Enbridge to carry up to 525,000 barrels of crude oil a day from Alberta to Prince Rupert on the west coast of British Columbia. The project could be constructed by 2018 if approvals are obtained.
The joint Canadian Environmental Assessment and NEB review panel issued its decision on Northern Gateway on December 19, 2013. It recommended that the federal government approve the pipeline, subject to Enbridge satisfying the 209 conditions that will be included in the NEB’s Certificate of Public Convenience and Necessity.
This is a positive development, but there are still significant obstacles in the way. While the federal government is expected to approve the pipeline it remains to be seen whether Enbridge can satisfy the joint review panel’s numerous conditions and whether the project will be delayed by expected legal proceedings challenging the approvals.
TransMountain Expansion
Kinder Morgan has proposed increasing the capacity of its TransMountain Pipeline from 300,000 to up to 890,000 barrels of crude oil a day and has signed long-term contracts with 13 committed customers. Kinder Morgan filed its application for approval of the expansion with the NEB on December 16, 2013. The in-service date for the expansion is forecast for 2017 assuming that regulatory approvals can be obtained without delays. Even though most of this expansion will be constructed on the existing right of way for the TransMountain line, significant opposition from First Nations, environmental and land owner groups could occur.
Kinder Morgan has put considerable effort into consultations with those affected by the expansion project. Whether those efforts will be successful should become more clear in 2014.
The significant increase in oil tanker traffic on the West Coast that would result from the construction of Northern Gateway and the TransMountain expansion has led to greater scrutiny of tanker safety and the adequacy of spill response measures. On November 15, 2013 the federal government released an expert panel report entitled “ A Review of Canada’s Ship-source Oil Spill Preparedness and Response Regime – Setting the Course for the Future”. In the report the panel made 45 recommendations which if implemented would “set Canada on a course of continuous improvement”. One of the recommendations was the abolition of the current limit of liability per incident.
Line 9 Reversal
In October 2013 the NEB concluded its hearing of Enbridge’s application to reverse the flow (from east-west to west-east) of its Line 9. If approved, the Line 9 reversal would allow Western Canadian oil producers to displace up to 300,000 barrels per day of crude oil from the North Sea, West Africa and the Middle East currently being delivered to eastern Canadian refineries. The NEB’s decision is expected in January 2014.
5. The shipment of oil by rail will continue, but with an appropriate response to public safety concerns
Between February 2012 and February 2013, there was a 60% increase in the amount of crude oil shippedby rail in Canada. We expect shipmentsof crude oil by rail across North America will continue to grow in 2014. Five new loading terminals in Western Canada are being constructed to move as much as 450,000 barrels per day of heavy crude by the end of 2014. Rail loading capacity in Western Canada is estimated to increase from 225,000 to over 900,000 barrels per day by the end of 2014.
That anticipated increase has resulted in conjecture that rail shipments might replace the need for new pipeline capacity. It’s more likely, though, that rail will be a supplement to, not a substitute for these pipeline projects.
Not only is shipping crude oil by rail much more expensive than shipping it by pipeline, it is also more dangerous to ship crude by rail. Increased rail shipments of crude oil have resulted in more rail-related accidents, such as:
- the derailment in the summer of 2013 in Lac-Mégantic, Quebec that resulted in a fire that caused several railcars carrying highly flammable crude oil from the Bakken to explode, killing 47 people and destroying the downtown of the village; and
- the derailment in Gainford, Alberta in October that resulted in a dangerous fire that forced the evacuation of the village.
Companies that transport crude oil by railcar in 2014 should accordingly expect regulators to aggressively enforce existing regulations. In addition, a host of new regulations may be passed in an attempt to reduce the risk to the public of oil shipments by rail.
Transport Canada has already taken steps in response to those derailments. It issued Protective Direction No. 31, which requires, among other things, testing to determine the flashpoint of crude oil being transported. It also issued Protective Direction No. 32, which requires information on the nature and volume of dangerous goods to be reported to the designated emergency planning official of each municipality through which dangerous goods are transported by rail.
Despite those steps to improve safety, Canada’s Auditor General recently found that Transport Canada needs to address “significant weaknesses” in its oversight of railway-related safety risks. In particular, it found that Transport Canada’s level of oversight is not sufficient to ensure that federally regulated railways have implemented adequate and effective safety management systems.
New regulations in response to the foregoing may include requirements that crude oil tank cars be redesigned to avoid tragedies like what occurred in Lac-Mégantic. However, those changes may take time as the tank cars are mostly owned by railway customers and leasing companies as opposed to the railways themselves.
6. The consolidation of proposed LNG projects will occur
More than a dozen liquefied natural gas (LNG) export projects have been proposed for the west coast of British Columbia. Many of those projects will enter into the final investment decision stage in 2014.
The Province of British Columbia is expected to announce its tax framework for LNG export projects early in 2014. That will provide project sponsors greater certainty in determining their economics.
The challenges these projects face include significant capital costs, finding suitable sites for their liquefaction and export facilities, obtaining the required regulatory approvals and entering into the necessary commercial arrangements and alliances with First Nations and other groups in order for these projects to proceed.
There are also limits on the number of LNG facilities that can be built at locations such as Kitimat or Grassy Point (Prince Rupert), as well as on the number of pipelines that the province will allow to be built to bring the gas required by these projects across British Columbia to the West Coast.
In addition, the U.S. holds the lead over Canada in the early stages of the competition to export North American LNG.
For the foregoing and other reasons, only a few projects will ultimately be built in Canada. How the field will be narrowed remains to be seen. Some project sponsors may drop out. Others may combine their projects.
These challenges will also result in the sponsors of export projects selling down their interests in order to reduce their cost exposure and to secure customers for the LNG to be produced from these plants. Expect more deals like the sales PETRONAS made in 2013 to Japan Petroleum Exploration and Petroleum Brunei of part interests in PETRONAS’ Pacific Northwest LNG project.
7. Changes to boards and senior management will continue
Last year, we predicted that changes in the Canadian oil and gas industry’s leadership would continue in 2013 as energy companies’ financial performance came under greater scrutiny from increasingly activist shareholders.
That prediction turned out to be true. High profile shakeups occurred at a number of companies including Encana, Penn West, Athabasca Oil Corporation, Lone Pine Resources and Baytex Energy as investors grew impatient for share prices to improve. Recently these kinds of changes also occurred at Talisman and Sunshine Oil Sands. After Carl Icahn acquired 7% of Talisman’s shares, Talisman announced that two Icahn nominees had been appointed to the board and that those nominees would participate on the committee to identify the successor to Talisman’s chief executive officer. At Sunshine, both the president and the chief financial officer resigned.
Many think that the outlook is for declining prices for oil and natural gas during 2014. If true, this trend of changes at the top of Canadian oil and gas companies will certainly continue.
8. Expect more consolidation and M&A involving the juniors
The outlook for juniors continues to be challenging.
Prolonged low natural gas prices have diminished cash flows and deprived juniors of the capital needed to pursue growth strategies. As a result, numerous juniors announced processes to maximize shareholder value in 2013. However, those processes did not always result in transactions.
To make matters worse for juniors, in May of 2013 the Province of Alberta increased its security deposit requirements for oil and gas operators to cover the costs of restoring lands affected by wells, facilities and pipelines. That regulatory change further constrainedthe capital available to juniors and depressed the market for their assets as potential acquirers factored in these new financial requirements.
This environment has contributed to the consolidation or sale of junior companies over the past few years to the extent that The National Post reported the number of juniors has shrunk by half from the middle of the last decade.
In 2013, several juniors were either merged or acquired. Deals included acquisitions by Whitecap Resources of Invicta Energy ($63M), Twin Butte Energy of Black Shire Energy ($358M), Yanchang Petroleum International of Novus Energy ($347M), ORLEN Upstream of TriOil Resources ($263M) and Bellatrix Exploration of Angle Energy ($576M).
We expect this activity to continue in 2014 as value-hunting acquirers (including dividend-paying exploration and development companies) take advantage of buying opportunities in this part of the energy sector.
All dollar amounts are in Canadian dollars unless otherwise stated.
lexology.com |
| | Speculating in Takeover Targets | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last Read |
|
| To: richardred who wrote (3564) | 1/21/2014 9:19:47 AM | | From: richardred | | | | What do you do after a banner year in 2013. IMO you sell the company. Is there any coincidence Mr. Abkemeier was the former telcom sell side analyst at JPM. JPM happens to be the largest shaeholder at INTQ? Theorizing along the same pathway as American Pacific Corporation (APFC).
Inteliquent Appoints Kurt Abkemeier as Chief Financial Officer
CHICAGO, Jan. 20, 2014 (GLOBE NEWSWIRE) -- Inteliquent, Inc. ( IQNT), a leading provider of voice services, today announced that Kurt Abkemeier has been appointed Chief Financial Officer and Executive Vice President effective immediately. Eric Carlson, Inteliquent's interim principal financial officer and interim principal accounting officer from August 2013 until Mr. Abkemeier's appointment, will continue to serve as Inteliquent's Controller.
Prior to joining Inteliquent, Mr. Abkemeier served as the Vice President of Finance and Treasurer of Cbeyond, Inc. from 2005 to 2012. Prior to Cbeyond, Inc., Mr. Abkemeier was the Director of Finance and Strategic Planning at AirGate PCS, Inc., a regional wireless telecommunications service provider. Mr. Abkemeier also held various senior management positions within telecommunications-related companies and was a senior sell-side research analyst at J.P. Morgan & Co. analyzing telecommunications companies. Mr. Abkemeier holds a Bachelor of Science degree in applied economics from Cornell University.
"We are delighted to welcome Kurt as our CFO and Executive Vice President during this important time for Inteliquent," said Ed Evans, Chief Executive Officer of Inteliquent. "Today's competitive market requires a CFO with a superior understanding of the telecommunications industry, as well as the seasoned financial and strategic planning experience that makes Kurt particularly well suited to join our team. The entire Board of Directors also thanks Eric Carlson for his outstanding contributions and steady leadership during his tenure as interim principal financial officer and interim principal accounting officer and we look forward to his continued service as our Controller."
"The management team at Inteliquent has built a great business over the last decade, and I am excited to be joining such an accomplished team for the next decade," adds Mr. Abkemeier. "I am committed to help Inteliquent evaluate and execute on its strategy as its business continues to evolve, and to build value for its customers, employees and investors."
About Inteliquent
Inteliquent is a leading provider of wholesale voice services for carriers and service providers. Inteliquent is used by nearly all national and regional wireless carriers, cable companies and CLECs in the markets it serves, and its network carries approximately ten billion minutes of traffic per month. Please visit Inteliquent's website at www.inteliquent.com and follow us on Twitter @Inteliquent.
finance.yahoo.com |
| | Speculating in Takeover Targets | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last Read |
|
| To: richardred who wrote (3558) | 1/23/2014 7:39:56 AM | | From: richardred | | | | Lenovo to buy IBM's server business in China's biggest tech M&A(Reuters) - Lenovo Group Ltd has agreed to buy IBM Corp's server business for $2.3 billion as the Chinese PC giant grabs another piece of the computing world in a long-awaited deal.
The acquisition comes nearly a decade after Beijing-based Lenovo bought International Business Machines's (IBM) loss-making ThinkPad business for $1.75 billion, eventually becoming the world leader in personal computers in 2012.
But with the PC business now under siege in the face of powerful smartphones and super-fast tablets, Lenovo is diversifying its revenue and remodeling itself as a force in mobile devices and data storage servers.
The acquisition of the IBM unit, still subject to approval from the Committee on Foreign Investment in the United States (CFIUS), would lift Lenovo's market share in the server market to 14 percent from 2 percent currently, said Peter Hortensius, senior vice-president at Lenovo and president of its Think Business Group.
Before that happens, Lenovo has to turn the server unit around. The low-margin business - which sells less powerful and slower x86 servers than IBM's other higher-margin offerings - has posted seven quarters of losses as more clients switch to cloud storage from traditional infrastructure.
"We will do a variety of things, improve products, drive improved costs, and couple it with the scale we have and our PC business to improve go-to-market," Hortensius told Reuters on Thursday after the deal was announced.
Analysts say Lenovo will likely find it easier than IBM to sell the x86 servers to Chinese companies as Beijing tries to localize its IT purchases in the wake of revelations about U.S. surveillance.
Lenovo said it expects demand for computing power and recovery of global enterprise spending to further drive growth in the x86 server market.
Lenovo has agreed to pay $2.07 billion in cash and the rest with stock of the Hong Kong-listed PC maker, in a deal set to be China's biggest-ever technology M&A.
The deal surpasses Baidu Inc's $1.85 billion acquisition of 91 Wireless from NetDragon Websoft Inc last year, according to Thomson Reuters data, and underscores the growing clout of the country's technology firms as they look to expand overseas.
For IBM, the sale allows the company to focus on its decade-long shift to more profitable software and services.
"What the business is worth to IBM is no longer relevant. The only thing that matters is what it's worth to Lenovo," said Alberto Moel, a Hong Kong-based analyst at Sanford C. Bernstein. "If Lenovo can improve the margins... that could offset any continued revenue shrinkage."
The unit posted a $26.4 million loss after tax for the 12 months ended December 31, compared with a $187 million profit in the 12 months ended March 2013.
The x86 unit has annual revenues of $4.6 billion, Lenovo told Reuters.
HIGHER VALUATIONS
Talks between IBM and Lenovo fell apart last year due to differences over pricing, with media reports at the time suggesting IBM wanted as much as $6 billion for the unit.
Analysts said the sale may have been accelerated by IBM's China woes and ongoing weakness in hardware sales, after the world's biggest technology services company reported a 23 percent drop in fourth-quarter revenue from China on Tuesday.
Lenovo's purchase of IBM's PC business in 2005 became the springboard for its leap to the top of global PC maker rankings, and the market is betting Lenovo will enjoy similar success with its latest acquisition, which is partly reflected in a 9.44 percent rise in its shares this year. The broader Hang Seng index is down 2.5 percent in the same period.
IBM's server business was the world's second-largest, with a 22.9 percent share of the $12.3 billion market in the third quarter of 2013, according to technology research firm Gartner.
Hewlett-Packard Co is the biggest player, while Lenovo does not appear in the top five.
"The acquisition presents a unique opportunity for the company to gain immediate scale and credibility in this market," Lenovo said in a statement on Thursday.
Credit Suisse and Goldman Sachs Group advised Lenovo, the PC maker said.
reuters.com |
| | Speculating in Takeover Targets | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last Read |
|
| To: Glenn Petersen who wrote (3476) | 1/23/2014 7:57:54 AM | | From: richardred | | | | Quick Carl Icahn is making his list and checking it twice. IMO splitting the company would do more damage than good .
Icahn Adds eBay to His Targets in TechnologyAs if taking on Apple wasn’t enough, the activist investor Carl C. Icahn has another big technology company in his sights: eBay.
EBay, the big e-commerce and online payments company, disclosed a small stake by Mr. Icahn as it released full-year and fourth-quarter results on Wednesday.
In the news release accompanying results, eBay said that Mr. Icahn had submitted a nonbinding proposal to spin off its PayPal business and that he had nominated two of his employees as candidates for eBay’s board. Mr. Icahn’s total position amounted to less than 1 percent of eBay, which has a market capitalization of more than $70 billion.
EBay said it “welcomes the opportunity to listen to the perspective of all of its shareholders, including Mr. Icahn,” and said his nominees would be passed on to the company’s corporate governance and nominating committee. But it also said “eBay has a world-class board” of directors “who have significant experience in technology and financial services.”
Among those on the eBay board are the venture capitalist Marc Andreessen; the Intuit founder Scott Cook; the chairman of the Ford Motor Company, William C. Ford Jr.; and Pierre Omidyar, the founder of eBay.
The company dismissed Mr. Icahn’s suggestion that PayPal be spun off. Though it acknowledged it had considered such a move, it said that the board “concluded that the company and its shareholders are best served by the current strategic direction of the company and does not believe that breaking up the company is the best way to maximize shareholder value.”
It’s not that eBay hasn’t spun off big units in the past. Just a few years ago, it sold Skype to Silver Lake Partners, which in turn sold it to Microsoft. But eBay’s chief executive, John Donahoe, has made the relationship between eBay’s e-commerce businesses and PayPal a core part of his strategy. EBay shares have soared 310 percent since the financial crisis.
“As part of eBay Inc., PayPal is able to leverage the company’s technology capabilities, commerce platforms and relationships with retailers, brands and large merchants worldwide,” the company said. “Payment is part of commerce, and as part of eBay, PayPal drives commerce innovation in payments at global scale, creating value for consumers, merchants and shareholders.”
In after-hours trading on Wednesday, shares were up 5 percent. It was not immediately clear how much of this was the result of Mr. Icahn’s presence in the stock, or the fact that eBay reported full-year revenue growth of 14 percent, a 9 percent increase in annual profit, and a new $5 billion share buyback plan.
dealbook.nytimes.com |
| | Speculating in Takeover Targets | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last ReadRead Replies (2) |
|
| To: Glenn Petersen who wrote (3603) | 1/24/2014 10:46:42 AM | | From: richardred | | | | Glen: I can agree with that thought. Paypal is a bright spot and their building on it with the Braintreee acquisition last year. Global Payments had it response today. Interesting note: While working to 2.00 am last night. I heard Mike Shedlock talking to George Norry about the demise of big box retailers. I agree E-commerce in retail is the future, to a certain extent. IMO- All the companies wanting a piece of the E-commerce action is definitely moving out of the limelight now, and into the spotlight. Amazon might not have it's delivery drones up and running any time soon, but I'm fairly sure their robots will be running the warehouse.
Global Payments to Acquire PayPros, a Leading Integrated Payments Technology Company ATLANTA, Jan. 24, 2014 /PRNewswire/ -- Global Payments Inc. ( GPN), one of the largest worldwide providers of payment solutions, announced today an agreement to acquire Payment Processing, Inc. (PayPros). PayPros, based in California, is an innovative provider of fully-integrated payment solutions for 58,000 small-to-medium sized merchants in the United States. PayPros delivers its products and services through a network of over 1,000 technology-based enterprise software partners to vertical markets that are complementary to the markets served by Accelerated Payment Technologies, Inc., a Global Payments company since October 2012.
(Logo: photos.prnewswire.com )
Global Payments' President and CEO Jeffrey S. Sloan said, "Our acquisition of PayPros will expand our direct distribution, add new vertical markets, accelerate growth in our largest geography and further enhance our existing integrated solutions business with the addition of PayPros' talented team."
Chuck Smith, Founder and CEO of PayPros, added, "I am very pleased to announce this partnership with Global Payments. This transaction is the culmination of nearly two decades of hard work and vision at PayPros. I am confident that Global Payments will be a fantastic partner for our customers and employees."
"We are very excited to be joining the Global Payments team. The strength of Global Payments' distribution combined with our differentiated service offering will accelerate value delivery to our partners and provide opportunities for growth over the long-term," said PayPros President, Eddie Myers.
Under the terms of the agreement and pending regulatory approvals and customary closing conditions, Global Payments will pay $420 million in cash to acquire PayPros, inclusive of tax assets. The transaction is expected to close by the end of Global Payments' 2014 fiscal year. PayPros' calendar 2013 annual revenues are anticipated to be approximately $100 million. Global Payments will provide further details when the transaction closes.
Refinancing
Global Payments also announced that it plans to expand its current credit lines to support its ongoing capital deployment and growth strategies. The company expects this expansion to be completed in the company's fourth fiscal quarter of this year.
About Global Payments
Global Payments Inc. ( GPN) is a leading provider of payment processing services for merchants, value added resellers, financial institutions, government agencies, multi-national corporations and independent sales organizations located throughout North America, South America, Europe and the Asia-Pacific region. Global Payments, a Fortune 1000 company, offers a comprehensive line of solutions and services for credit and debit cards, business-to-business purchasing cards, gift cards, electronic check conversion and check guarantee, verification and recovery including electronic check services, as well as terminal management. Visit www.globalpaymentsinc.com for more information about the company and its services.
About PayPros
PayPros is a payments technology company, dedicated to delivering innovative and profitable integrated payments solutions. Our belief is that payments should add value to software applications, resulting in better solutions for developers and their customers. It's what we mean by "Software Differentiation Through Payment Innovation." The PayPros Innovo technology platform is the backbone of this vision, delivering payment applications that support new technologies and allow for custom software solutions. This unique approach to payments is why–since 1995–more than 1,700 partners and 58,000 businesses have turned to PayPros.
This announcement and comments made by Global Payments' management may contain certain forward-looking statements within the meaning of the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including revenue and earnings estimates and management's expectations regarding future events and developments, are forward-looking statements and are subject to significant risks and uncertainties. Important factors that may cause actual events or results to differ materially from those anticipated by such forward-looking statements include the following: the effect on our results of operations of continued security enhancements to our processing system; foreign currency risks which become increasingly relevant as we expand internationally; the effect of current domestic and worldwide economic conditions, future performance and integration of acquisitions, and other risks detailed in our SEC filings, including the most recently filed Form 10-K. We undertake no obligation to revise any of these statements to reflect future circumstances or the occurrence of unanticipated events.
finance.yahoo.com |
| | Speculating in Takeover Targets | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last Read |
|
| To: richardred who wrote (3581) | 1/24/2014 11:14:54 AM | | From: richardred | | | | | Added to SUP on weakness today (yield & upside earnings improvement potential). I Also added to VCLK on weakness today. Earnings event coming up soon for VCLK (Feb 11). I'm not expecting to much from VCLK near term earnings, but they just received 80 million cash from the sale of web sights. They are are high on my Takeover scale of those who are being hunted to create bigger scale,and competition elimination. |
| | Speculating in Takeover Targets | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last ReadRead Replies (1) |
|
| |
