Filed under: Industry, Casting, Reality-Free

Late last week, TV Guide’s Michael Ausiello reported that Khandi Alexander is leaving CSI: Miami at the end of the season. Alexander is know for her fierce but tender Medical Examiner modify ego Alexx Woods. There is no word yet about how the character will depart, but Ausiello hints strongly that the reason for the departure is some issues Alexander has with an aspect of the show.

Who knows? Cast members are leaving CSI, too (first Jorga Fox and now Gary Dourdan), so maybe there’s just a limit to how long you can do this kind of show (intense, lots of blood and gore, often depressing). I haven’t followed the plots on CSI: Miami, so I don’t know what kinds of issues Alexander would have with the show.

She is a terrific actress; one of the standout episodes for me was her grief over working on the body of a child, and how she combined tears with professionalism during the episode. She will have no trouble finding other work out there.

Reportedly, there is a search for a new medical examiner, and this one will be male.

Share This

Share This

Filed under: Other Reality Shows, Industry, Pickups and Renewals

I don’t keep a very close eye on weekly ratings, especially for cable shows, so it was sort of a surprise to me that Ghost Hunters is listed as one of Sci Fi’s “most watched shows” — not because it’s not good, but because I don’t know anyone who watches it besides myself. In fact, I’ve been calling it a “guilty pleasure” all this time.

Sci Fi has some good news for us fans of Ghost Hunters, giving the show another 13 episodes for this season. They’ve also decided to give Destination Truth another seven episodes.

GH has gotten a lot better these past couple of seasons (it’s currently in its fourth season), getting rid of all of the hokey drama that I’m near certain drove lead hunter Jason Hawes crazy. Viewers didn’t want to see that crap; we wanted more of the supernatural and the science. These guys film in my neck of the woods of New England all the time, and I’m dying to get to ride along some day to report back on what it’s like. Some day …

Share This

Share This

Filed under: Management, Engagements, Investments

Mark Mobius, one that I consider a seer and leading pioneer among emerging market fund managers, has stated he’s in speaks for private equity investment in Iraq. According to Reuters (and others), he’s getting closer to plunking funds down into Iraq.

He said various small manufacturing and food companies that are worth looking at to provide investments. If Mobius invests in Iraq, his investment group will be one of a few companies to invest in Iraq projects since the U.S. invasion. One brave investor, Godvig-Capital Management, has a hedge fund called the Babylon Fund that focuses on Iraq.

Mr. Mobius manages approximately $40 billion in emerging market assets through Templeton Asset Management, a part of Franklin Resources Inc. (NYSE: BEN). He is in the process of developing a $300 million fund for emerging markets.

Mobius is the one who has been coined with the term “Invest when there’s blood in the streets.” Well, that means he sees many opportunities in Iraq.

Jon Ogg is a producer and editor of the Special Situation newsletter and the “10 Stocks Under $10″ weekly newsletter for 247Wallst.com.

Share This

Share This

Filed under: Deals, Management, Raising money, Apax Partners, Bain Capital, Private equity industry, Investments, Value and lack thereof

An article by South-African based Business Report summarizes private equity trends this year amidst the crunched credit markets and slowing U.S. Economy. While it isn’t exactly 2007 or 2006, the numbers are still impressive.

According a Private Equity Intelligence Study cited in the article, in the first three months of 2008, private equity funds have raised $163.5 billion.

Last year, leveraged buyouts tripled the $73 billion posted in the same period this year. This article is also confirming what we have started seeing in many such private equity trends for the begin of 2008, as it notes that leveraged buyouts are being replaced with distressed debt. That’s amounting to $40 billion being raised by 31 firms so far. For example, Bain Capital’s hefty $13.5 billion fund targets distressed debt, as well as venture and property.

Share This

Share This

Filed under: Management, Raising money, Venture capital industry, Private equity industry, Investments

IndexAtlas has announced the launch of the $50 million Art Industry Fund, an alternative private equity fund targeting only businesses that serve the art industry.

This will include such operations as auction houses, advisory services, financial and security firms, software and media companies. Each investment is intended to last four years and will range from $3 to $8 million. The fund is expected to shut by December 31, 2009.

CEO and founder of IndexAtlas, Sergey Skaterschikov, believes the fund will generate an IRR of 35% and bases his investing strategy on his book, “Skate’s Art Investment Handbook.” Skaterschikov established IndexAtlas in 2001 and manages $400 million in fully invested funds and has advised on $2.4 billion in transactions.

There have been many such reports in here showing how there has been a convergence of private equity and venture capital. If this isn’t a prime example of that, then nothing else is.

If I didn’t know superior, it almost sounds a lot like a Sotheby’s (NYSE: BID) incubator fund, although it’s not.

Share This

Share This

Filed under: Management, The Blackstone Group, KKR, The Carlyle Group, Apax Partners, Bain Capital, Permira, Private equity industry, Investments, Value and lack thereof, Public or private?

If you’ve ever wondered why so many low-P/E ratio technology companies haven’t been gobbled up, there’s a really good explanation: R&D, leverage, and volatility.

Business Week just ran a great cover story titled “When a Buyout Goes Bad” for this week’s magazine. The case in hand is the old private equity buyout of Freescale, which was the chip business from Motorola Inc. (NYSE: MOT). This speaks about a company that was turned around from the edge of the cliff by a great tech leader who created a great stock again. Then the $17.6 billion buyout came from a group led by The Blackstone Group (NYSE: BX), Carlyle Group, and Permira Advisers. This buyout came after being in a competing bid from a consortium led by KKR, Bain Capital, Apax Partners, and Silver Lake Partners.

Last year the company’s revenues fell 10% while the chip sector revenues grew by 5%, then Motorola announced a spin-off or sale of its handset business, and then there is the issue of the $9.5 billion in debt that was clumped on top of the company to get the private equity buyout done.

Unless you’re selling transistors and capacitors or just plain Jane DRAM, technology companies require heavy R&D commitments. This is why historically technology companies used to come public back before the 1990’s “get rich from tech stock option awards” became the norm. The record-keeping changes required investor backers of a different group to mark down 15% of their $7 Billion stake as well. In fact, it notes that it is having a hard time ponying up the $1.2 billion for R&D and $400 million for capital expenditures needed for Freescale. And now there are inventory problems.

For me personally, I am not all that surprised that Freescale was a temporary success. One night right shortly before Freescale was spun-off by Motorola, I was flying from Austin to Chicago. I spoke to two workers that stated they were low level managers for Freescale. When they called the company “Free-Fall” and told me about some of their pension or retirement issues and stock option plans getting blended up (not for the superior, at all), it left a bad taste in my mouth. Then when this one went private with that much debt and knowing what comm-chip R&D percentages of revenue were, I thought the billionaires were drinking too much of the cool-aid.

You should read that article as it puts it well into context. This is why niche technology companies generally end up being acquired by other niche technology companies or by more massive tech companies that are competitors or that can complement each other. In mid to late-2006 you started seeing the private equity frenzy go into overdrive.

If you want good news or the silver lining, I do actually have some. I think that there will be another wave of public technology companies that get acquired. But the buyers will nearly all be LARGER public technology companies. Private equity and technology can mix, but the deals need to be smaller deals with less leverage and in companies that require less R&D.

Share This

Share This

Filed under: Management, Movers and shakers, Engagements, Private equity industry

Private equity firm Behrman Capital has announced that General Peter Pace, retired USMC and former Joint Chiefs of Staff Chairman, took the role as Operating Partner with the firm. General Pace was also named as Chairman of the Board to Pelican Products, an advanced lighting systems and valuable equipment case manufacturer. He will also direct ILC Industries, Inc., a company that provides defense electronics (of course the defense angle).

Grant Behrman of the firm noted that General Pace has forty years tenure in the Marines and then as Chairman of the Joint Chiefs of Staff. Pace graduated from the U.S. Naval Academy and has an MBA from George Washington University.

Behrman Capital is a private equity investment firm with more than $2 billion of capital under management and it invests in management buyouts, leveraged “buildups” and recapitalizations of established growth companies. If you look through the private equity firm’s portfolio companies, you can see why having a former general and Joint Chiefs of Staff Chairman would be a good thing.

Share This

Share This

Filed under: Management, Shareholders, Value and lack thereof, Public or private?

After the Captaris Inc. (Nasdaq: CAPA) rejection of a $4.75 per share buyout offer from private-equity firm Vector Capital, the deal has been killed and has been responded to in a formal letter. This merger was noted as having represented a 36% premium.

Vector Capital sent a letter to the Captaris Board of Directors emphasizing their disappointment and surprise at the rejection despite the approval by major shareholders for the transaction. The letter also made very clear that Vector’s $4.75 offer and other terms have since expired and should not be considered in Captaris’ search for superior offers.

By now we have gotten used to deals blowing up on the larger companies. But the market cap on this deal is only $110 million. The problem is that Captaris has recently traded over $6.00.

The Board of Directors would have potentially faced a shareholder revolt or suit had they approved this deal. That doesn’t mean anything is going to be that much better, but sometimes companies can’t fold just because they’ve an offer.

Share This

Share This

Filed under: Options, Management, Investments

Trane (NYSE: TT) is recently trading down to $45 range. Ingersoll-Rand (NYSE: IR) announced the purchase of Trane for $36.50 per share in cash and 0.23 shares of IR per share of TT on Dec. 17, 2007. The deal is expected to close in the second quarter.

The premium spread stays tight at approximately 2%. TT call option volume of 94 contracts compares to put volume of 2,225 contracts. TT April and May option implied volatility of 37 is above its 26-week average of 17 according to Track Data, suggesting big price movement.

M&A Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Share This

Share This

Filed under: Deals, Management, The Blackstone Group, GS Capital Partners

If you are getting sick of private equity mergers blowing, it might be interesting to take a look at several private equity buyouts that look like they will actually close. After looking through some of the mergers out there, there are several deals in the pending category that don’t have much failure risk. Maybe there is no sure thing, but these look like they may actually close:

Covad Communications Group Inc. (AMEX: DVW) up over 2% to $0.97, with $1.02 buyout price. This is one I’ve noted before after speaking with both Covad and with Platinum Equity. This one is close to a sure thing after it cleared reviews today.

Getty Images Inc. (NYSE: GYI) was trading at $31.98 versus its $34.00 buyout offer. I’ve noted that Getty is being sued over the process or the price, but in all honesty shareholders that look at today’s world will know what superior shape this will be as a private company. This was our ideal “industry de-merger” call in 2007. Either way, shareholders should feel lucky that Hellman Friedman wants it at all.

Performance Food Group Co. (NASDAQ: PFGC) was up $0.31 to $32.82 late in the day, and the buyout price of $34.50 is still more than 5% above today’s prices. Its anti-trust review period has passed this week in the buyout by affiliates of The Blackstone Group and a minority interest held by a private investment fund affiliated with Wellspring Capital Management LLC. Shareholders still have to approve the deal. But on the private equity firm side getting the deal shut for a food distribution group shouldn’t see too many “material changes in business” excuses.

The good news is that most of the giant multi-billion club deals that were on shaky ground have come unraveled already. The bad news is that credit is tighter and many bankers and private equity executives have a bad taste in their mouth right now.

Share This

Share This