Caixin Online: The basics of Chinese inbound investment deals

By Andrew Ross
BEIJING (
Caixin Online
) — An accelerating number of Chinese companies are engaging in acquisitions and joint ventures in the United States and while it’s generally understood that a large number of other Chinese companies are also considering doing so, many still hesitate.
The first point to note is that the rate of deals is increasing, and is doing so dramatically. A second point is that as a percentage of the total number of deals, small- to medium-size deals make up the majority, although there are a few larger ones, and the buyers are generally not SOEs (state-owned enterprises). Third, the industries of the acquired companies cover a broad range, from technology, apparel, consulting services, auto parts, hotels and many more.

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In 2011, several Chinese companies announced their intentions to enter into deals in the U.S., including Shanghai Pharmaceuticals

, with its publicly stated reasons being to seek new drugs to expand its product line and noting declining overseas prices and a strong Yuan, Bright Food Group, China National Materials Co. (Sinoma)

 and Fosun Group, which stated it is looking at consumer brands. Many Chinese companies are going global in the U.S., more and more will be doing so, and for those Chinese companies for which this makes sense and which proceed to do so, they will be in very good company.
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So what are some of the strategies, procedures and lessons on pitfalls that can be garnered from recent deals?
Perhaps one of the most important points regarding engaging in transactions in the United States is to recall the reaction of many Chinese businesses when foreign companies came to China and sought to dictate that deals in China be done in the same manner as in those companies’ respective homelands. This generated ill feelings and often did and can easily result in failure in a deal. The same is true in the United States. Companies from many different countries make acquisitions in the U.S. all the time, and one of the accepted norms is that the deal will be done in “U.S. style.”
While not successful on occasion, the advisor for the U.S. company looking to be sold (especially a “hot” company) may seek to create an auction for the company, thus seeking to maximize the price and otherwise obtain the most favorable terms. Even if they do not succeed in doing this, they will generally seek to have the process move as rapidly as possible. Prospective buyers who are unwilling to follow an auction process when established or move too slowly are simply left behind. An important aspect in dealing with this is to be prepared. This means having done industry and market analysis in advance so as to be able to readily determine one’s interest and willingness to devote the necessary resources to explore the deal, and have ready or be able to quickly assemble a team of qualified Chinese and U.S. advisors.

Clinton calls U.N. veto on Syria a ‘travesty’

U.S. Secretary of State Clinton called the veto by Russia and China of the U.N. resolution on Syria a “travesty” as Syria’s President Bashar al-Assad attended mosque service. (Video: Reuters/Photo: Getty Images)

Many U.S. businessmen object to the alleged slow deal pace of foreign businessmen (and not just Chinese), thus often giving U.S. buyers an advantage. Timing delays are, of course, a tactic to be considered; however they should only be used as deemed appropriate, such as to express reservations or concerns so as to try and enhance one’s bargaining position. However, a buyer should not allow its perceived slowness to cost it a deal it otherwise wants.
While most people properly say “a deal is not done until it is done,” in many U.S. negotiations the same often is not true of individual issues. Once an issue is resolved, it is generally not renegotiated absent special circumstances. A party which acts contrary to this undercuts its counter-party’s trust in it.
There is great significance in the U.S. placed on the transaction contract, as each party seeks to maximize its benefits and protections. As a general rule, legal counsel for a U.S. party, will seek as much protection for its client and clarity in the terms of an agreement as possible. This can be especially important for a buyer or investor. This often means lengthy detailed contracts, and also emphasizes the need for the parties to make decisions relatively quickly with respect to the many points involved. In fact, one view is that many U.S. business persons and their lawyers will only encourage ambiguity in an agreement if they think that addressing the ambiguity in the negotiations would result in it being resolved contrary to their interests or if they think they will have greater negotiating leverage on the point once the agreement is signed or the deal is consummated.
By having a contract be as detailed and precise as possible, the likelihood of a dispute is reduced. This is augmented by the fact that in the U.S. there is a very substantial body of court rulings and laws which help determine what a particular contractual phrase will mean in a particular context, thus creating even greater potential certainty. Finally, it should be recognized that other than private arbitrators and mediators and the courts — all of which are objective but the last of which is slow — no governmental entity or person such as a governmental bureaucrat plays a meaningful role in resolving contractual disputes.
While concerns abound over the possible legal burdens that Chinese companies face in the U.S., there are many reasons for Chinese companies to go global, and in particular to do so in the United States.
Read this commentary on Caixin Online.

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Andrew Ross is partner and chair of the mergers and acquisitions practice group at Loeb & Loeb LLP. This article is an abridged version of a paper titled, “Acquisitions by Chinese companies in the United States: The case for moving forward now.”

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Verizon Investment Join $8M Round for Skyfire Labs

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Posted January 26, 2012
Skyfire Labs, a leader in mobile video optimization and cloud solutions for mobility, today announced it has raised $8 million in its Series C financing. Verizon Investments LLC, a subsidiary of Verizon Communications Inc. participated in the round, alongside current investors Matrix Partners, Trinity Ventures, and Lightspeed Venture Partners. Verizon’s investment was arranged by Verizon Ventures, which seeks promising entrepreneurial companies that complement Verizon networks and service platforms. Skyfire will use the funds to meet the demands of its growing list of wireless operator customers through increased engineering, sales and support resources, and also to expand into European and Asian markets.
“Wireless operators around the world are facing an explosion in mobile data on their networks, driven largely by mobile video,” said Andrew Verhalen, general partner at Matrix Partners. “Skyfire is well positioned with solutions for operators that can expand network capacity by over 25 percent, as well as generate incremental revenue.”
“Skyfire is poised to expand globally in 2012 after winning deployments with two tier-one operators in North America, and adding world-class international executive talent,” added Larry Orr, general partner at Trinity Ventures.
Concurrent with this latest financing, Skyfire has announced a new European footprint. John Rintoul has been named vice president of sales for Skyfire’s newly-opened EMEA office, based in London. Rintoul previously led sales with the Vodafone account for Cisco’s Mobile Internet Technology Group, and prior to that, was a sales executive at Starent Networks, Juniper Networks, and Kagoor Networks. Skyfire also announces Scott Boehmer has been named vice president of sales for Americas. Boehmer previously was vice president of sales for SEVEN networks, and a product executive at Sprint. Both regional leads will now report to Skyfire’s SVP Global Sales, Jason Guesman.
“Skyfire’s Rocket Optimizer product is delivering an average of 60 percent savings for operators on video bandwidth,” said Jeff Glueck, CEO of Skyfire. “We welcome the participation of Verizon, which is renowned for its network planning sophistication.”
Rocket Optimizer 2.0, the latest iteration of Skyfire’s powerful carrier-grade network video and data optimization platform, was launched in October 2011. With mobile video demand expected to rise steeply over the next three years, Rocket 2.0 aims to help carriers solve capacity issues linked to the rapid rise of mobile video streaming. The solution offers real-time optimization of mobile video to enable smoother streaming, and can be applied to specific cell towers or backhaul regions as soon as congestion is detected. Rocket Optimizer 2.0 also offers the broadest support for video formats, including the world’s first instant MP4 optimization (which comprises more than 50 percent of today’s mobile video, including most HTML5 and iOS video). By leveraging cloud computing power, Skyfire’s solution is highly cost effective to scale on both 3G and 4G LTE networks.
Full details about the Rocket 2.0 platform can be found here: http://www.skyfire.com/en/for-operators.
Skyfire also offers the Rocket Toolbar product line, a fully customizable web-based operator portal embedded in the default browser of new smartphones. The Rocket Toolbar adds value for users on every page of the Internet by making browsing more social, facilitating app discovery, m-commerce, and quick access to news updates. The Rocket Toolbar has been selected by a tier one North American carrier for upcoming deployment, and is in numerous trials across the U.S. and Europe.
Full details about the Rocket Toolbar platform can be found here:
http://www.skyfire.com/en/for-operators/rocke….
Skyfire will continue to maintain its consumer app business as a showcase and laboratory for its technology. Skyfire apps across Apple iOS® and Google Android® devices have been downloaded by over 12 million users.
To learn more about Skyfire, visit: http://www.skyfire.com.
About Lightspeed Venture Partners
Lightspeed Venture Partners is a leading global venture capital firm with over $2 billion of committed capital under management. Lightspeed’s investment professionals and advisors are located in Silicon Valley, China, India and Israel. Over the past two decades, the Lightspeed team has backed more than 150 companies, many of which have become leaders in their respective markets, including Blue Nile, Brocade, Calista, Ciena, DoubleClick, eHealth, Galileo Technology, Growth Networks, Informatica, Kiva Software, LightLogic, Maker Communications, Metasolv, Openwave, Quantum Effect Devices, Riverbed, Sirocco, Virsa Systems and Waveset.
About Matrix Partners
Matrix Partners is a premier venture capital firm that has generated outstanding returns for more than three decades. By focusing on early-stage investments and emphasizing long-term relationships with entrepreneurs, the firm has delivered several of the industry’s top performing funds of all time. Matrix Partners has offices in Cambridge and Waltham, MA; New York, NY; Palo Alto, CA; Mumbai, India; and Beijing and Shanghai, China. Matrix Partners has invested in several game-changing, industry-leading businesses such as Apple Computer, Gilt Groupe, JBoss, Netezza, Phone.com, Polyvore, Starent Networks, Sycamore Networks, Veritas, Zendesk, and Zong.
About Trinity Ventures
Founded in 1986, Trinity Ventures is an early stage venture capital firm dedicated to partnering with passionate entrepreneurs to transform revolutionary ideas into reality. With over $1 billion under management, Trinity Ventures believes in personal engagement, mutual respect and goal alignment with the entrepreneurs. Trinity focuses on early stage and seed technology investments with particular emphasis on social shopping and entertainment, cloud computing, mobility, and internet infrastructure areas.
Trinity Ventures has invested in such leading companies as Aruba Networks, 21Vianet, Blue Nile, LoopNet, Photobucket, SciQuest, Starbucks, BeachMint, Infoblox, Trion Worlds and Zulily.
About Verizon Ventures
Verizon Ventures arranges investments in promising entrepreneurial companies to drive innovation in Verizon Communications Inc. The portfolio arranged by Verizon Ventures focuses on new products, technologies, applications and services that complement Verizon networks, service platforms and distribution channels. Deal size ranges from seed capital to $5 million depending on the needs and opportunities. Verizon Ventures often arranges investments with other venture firms and strategic partners.
About Skyfire:
Skyfire is dedicated to leveraging the power of cloud computing to improve radically the mobile Internet experience for both Operators and Consumers. Skyfire’s solutions provide game-changing cost savings, better end-user experiences, and compelling incremental revenue opportunities. Skyfire was recently recognized as no. 4 on Light Reading’s 2011 Startups to Watch list; and by OnMobile as a Top 100 Private Company. As both a laboratory and showcase for new capabilities, Skyfire has honed its technology through a variety of consumer apps, which have more than 12 million downloads to date.
Skyfire is based in Mountain View, Calif., in the heart of Silicon Valley.

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EntreMed Secures $10 Million Financing

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Posted January 23, 2012
ROCKVILLE, Md. — EntreMed, Inc. (Nasdaq: ENMD), a clinical-stage pharmaceutical company developing therapeutics for the treatment of cancer, announced today that it has secured $10 million in financing with strategic accredited investors, including IDG-Accel China Growth Fund II L.P., Emerging Technology Partners, LLC, and Dr. Tak W. Mak, Director of The Campbell Family Institute for Cancer Research.
The Company entered into purchase agreements with the investors, pursuant to which the Company has agreed to issue and sell to the investors convertible notes in the aggregate principal amount of $10 million. The investors also will be issued warrants covering a number of shares of common stock equal to 20% of the principal amount of the notes, divided by $1.15. The warrants are exercisable at $1.40 per share. The closing of the transaction is anticipated to occur on or about January 27, 2012 upon the satisfaction of certain conditions.
At the closing, IDG and ETP have the right to designate in the aggregate two members of the Company’s Board of Directors. In addition, it is expected that the Company will select an interim Chief Executive Officer.
Subject to the approval of the Company’s stockholders at the 2012 stockholder meeting, the notes will automatically and immediately convert into shares of common stock and the warrants will become exercisable. The notes have a maturity date of August 31, 2012, bear an interest rate of 6% and will convert at a conversion price of $1.15 per share. The conversion price reflects the 10-day average closing sale price ending on January 20, 2012. The notes are not convertible, and the warrants are not exercisable, prior to receiving stockholder approval. If stockholder approval is not obtained, the Company will be required to pay liquidated damages to the note purchasers equal to an aggregate of $1.2 million.
“We are very pleased to have the support from a group of knowledgeable investors and the validation of the potential of ENMD-2076. The proceeds from the notes will allow the Company to accelerate and expand its research and development activities, fund additional trials, initiatives and long term strategic plans,” said Michael M. Tarnow, the Company’s Executive Chairman.
After deducting transaction fees and expenses, the net proceeds to the Company will be approximately$9.3 million. The convertible notes, the warrants and the common stock into which the notes and warrants are convertible have not been registered under the Securities Act of 1933, as amended (the “Act”) and applicable state securities laws, but have been offered and sold in the United States pursuant to applicable exemptions from registration requirements under the Act and applicable state securities laws. This press release does not and shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities, nor shall there be any sale of the securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any state.
About ENMD-2076
ENMD-2076 is an orally-active, Aurora A/angiogenic kinase inhibitor with a unique kinase selectivity profile and multiple mechanisms of action. ENMD-2076 has been shown to inhibit a distinct profile of angiogenic tyrosine kinase targets in addition to the Aurora A kinase. Aurora kinases are key regulators of mitosis (cell division), and are often over-expressed in human cancers. ENMD-2076 also targets the VEGFR, Flt-3 and FGFR3 kinases which have been shown to play important roles in the pathology of several cancers. ENMD-2076 has shown promising activity in Phase 1 clinical trials in solid tumor cancers, leukemia, and multiple myeloma. ENMD-2076 is currently in a Phase 2 trial for ovarian cancer, and preclinical and clinical activities are ongoing in assessing the compound’s applicability for other forms of cancer.
About EntreMed
EntreMed, Inc. is a clinical-stage pharmaceutical company committed to developing ENMD-2076, a selective angiogenic kinase inhibitor, for the treatment of cancer. ENMD-2076 is currently in a multi-center Phase 2 study in ovarian cancer and in several Phase 1 studies in solid tumors, multiple myeloma, and leukemia. Additional information about EntreMed is available on the Company’s web site at www.entremed.com and in various filings with the Securities and Exchange Commission (the SEC).
About IDG-Accel Fund
IDG-Accel Fund is a private equity investment fund focused on investment in various sectors and is managed by IDG Capital Partners, a leading investment management team in China with over 18-years of investment experience and industry knowledge.

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Everest offers college financial aid forum

Beacon-News Staff January 10, 2012 6:38PM

NORTH AURORA — Everest College in North Aurora is sponsoring a financial aid informational session Wednesday, open to anyone wanting to learn more about handling the costs of a college education.
Students under 18 must bring a parent or legal guardian.
Everest College experts will present a primer on navigating the world of financial aid. Presenters will explain different types of loans and grants, FAFSFA, who is eligible for aid, and how to apply.
The forum is scheduled for 6:30 to 8:30 p.m. at the college, 150 S. Lincolnway, Suite 100. For information, call 630-896-2140 or visit www.everest.edu.

© 2011 Sun-Times Media, LLC. All rights reserved. This material may not be copied or distributed without permission. For more information about reprints and permissions, visit www.suntimesreprints.com. To order a reprint of this article, click here

 

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Cabinet approves financial decrees

The cabinet meeting has approved issuing of four financial decrees relating to acquiring loans for rebuilding the country and flood prevention, Atchaporn Charuchinda, secretary general of the Council of State, said on Tuesday.
The four proposals were put forward by the strategic committees for rehabilitation and future development and for setting up a water resource management system.
They are needed to help restore the confidence of Thai and foreign investors and to ensure the prevention of a recurrence of the floods in the long term, Mr Atchaporn said.
The Council of State must give advice to the cabinet on whether the issuance of bills and decrees is constitutional. It was not clear why the announcement was made by the Council of State and not the cabinet spokesman.
They decrees relate to the management debt owed by the Financial Institutions Development Fund (FIDF),  empower the Bank of Thailand to provide 300 billion baht for low interest soft loans for flood affected manufacturers, allow the Ministry of Finance to seek 350 billion baht in loans for financing projects to rebuild the country, and establishment of a 50 billion baht insurance fund.
“The restoration of investors’ confidence, the rehabilitation and rebuilding the nation and preventing flooding of  future projects must be rapidly started and therefore the issuance of these four decrees is necessary,” said Mr Atchaporn.
The secretary general of the cabinet would submit these financial decrees to His Majesty the King for royal endorsement, he added.

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Banking on Market Share

Sterling Financial Corp.

Parent of Sterling Savings Bank.
• FOUNDING: 1983.
• HEADQUARTERS: Spokane.
• ASSETS (as of 9/30/11): $9.18 billion.
• EARNINGS, 3RD QUARTER 2011: $11.3 million.
• BRANCHES: 177 in Washington, Oregon, Idaho, Montana and California; one each in Clark and Skamania counties.
• EMPLOYEES: 2,500.
• INFORMATION:Sterling Financial Corporation.

First Independent Financial Group

Parent of First Independent Bank.
• FOUNDING: 1910 (as Ridgefield State Bank) .
• HEADQUARTERS: Vancouver.
• ASSETS (as of 9/30/11): $792 million.
• EARNINGS, 3RD QUARTER 2011: $2.2 million.
• BRANCHES: 14 in Clark and Skamania counties; two offices in Oregon.
• EMPLOYEES: 245.
• INFORMATION: First Independent.

In the waning summer days of 2010, Sterling Financial Corp. was fighting for its very survival. The corporate parent of Sterling Savings Bank, based in Spokane and operating in five states, had lost $1 billion in the previous 18 months, and almost 14 percent of its loans were in trouble. Its stock had steadily declined since early 2008 and was hovering at around 65 cents per share. In those dark days for the nation’s financial institutions, Sterling stood a good chance of joining Washington Mutual and the Bank of Clark County on the industry’s trash heap.
The bank had been propped up by a $303 million infusion of federal bailout money in December 2008, but government regulators demanded that it raise another $725 million from private investors.
“They were on the verge of destruction,” said Tom Hayes, a principal in investment banking firm D.A. Davidson & Co. based in Great Falls, Mont.
Less than 18 months later, Sterling’s deal to purchase the banking assets of Vancouver-based First Independent Bank signaled its return as an aggressive player in the banking industry’s fight for market share. The deal, announced in November and expected to close before April 1, will put an end to one of the nation’s last family-owned banks. It will make Sterling, which now has a small local presence with just one Clark County branch, into one of Southwest Washington’s largest banks and signal its larger role in the Portland metropolitan area market.
The Firstenburg family, owners of 101-year-old First Independent and major philanthropists for community charities, will not disappear from the local scene. First Independent President Jeanne Firstenburg will become Sterling’s Southwest Washington market president. The Firstenburg family will hold on to some of their bank’s assets, through a private company managing a portfolio of loans not included in the deal, as well as the First Independent headquarters building in downtown Vancouver. Sterling says it will keep all of First Independent’s branches and move forward on First Independent’s project of opening a downtown Portland branch.
Hayes, who keeps tabs on Northwest banks for financial services firm D.A. Davidson, admitted to some surprise that Sterling moved into expansion mode so soon after its close brush with disaster. “Not only did they come back, but now they are able to go on the offensive,” Hayes says. “I don’t think anybody thought they would be able to do this so quickly.”

Back from the abyss

By the end of 2010, Sterling had pulled itself back from the abyss by drawing in big-name private equity investors and aggressively whacking away at a mountain of bad real estate loans. But its survival came at a cost to taxpayers who had pitched in the $303 million through the Troubled Assets Relief Program, or TARP. It found major investors willing to buy stock at 20 cents a share, then orchestrated what is called
a reverse stock split to drive up its per-share price so its stock could remain listed on the New York stock exchange.
When the dust settled, the U.S. Treasury, which owns about 10 percent of the bank’s stock, was among the investors suffering large losses. The government-owned stock is valued at around $90 million, said Greg Seibly, Sterling Financial Corp. president and chief financial officer. Seibly doesn’t know when the Treasury will cash out its shares, but acknowledged that the government is unlikely to get a full return on its investment in Sterling.
“The goal of (Sterling’s) management and board was to salvage the organization,” said Seibly, noting that he was not involved in the bank’s decision to seek government funding. “Had Sterling failed, the cost would have been far greater.”
Sterling’s survival strategy stands in contrast to First Independent’s playbook during the financial crisis. First Independent reported nearly $32 million in losses in 2009. The bleeding would have continued had not the Firstenburg family purchased some loans to manage through a family-owned company, reducing ongoing losses and allowing the bank to shrink the size of its troubled loan portfolio. The family also contributed some $28 million in cash and real estate to get their bank through the crisis. First Independent took no TARP funding.
Under the deal, still subject to state and federal regulatory approval, Sterling will initially pay $8 million. It will make an additional $17 million payment after eight months, based on the bank’s financial performance and its ability to retain customers. The Firstenburg family keeps $49 million of existing loans and $34 million of real estate and other assets.
Sterling’s acquisition of First Independent also gives it the legal authority in Washington to administer trust accounts, a service that will help it attract customers with high net worth. First Independent has $450 million in assets under management in its trust and wealth management business.
Sterling officials say they’re on track to meet with First Independent employees this month about their professional futures. Seibly said last week that no decisions have been made about staffing needs once Sterling takes control, although executive and back-office employees are likely to be most affected by the change in ownership. Staff reductions will create vacancies in the Firstenburg-owned First Independent Plaza at a time when downtown Vancouver’s office market is glutted with empty space.

Not a big surprise

The November announcement that Sterling would purchase the core pieces of First Independent wasn’t entirely a surprise to business community leaders or observers of the Firstenburg family. Although Scott and Jeff Firstenburg, grandsons of the bank’s founder, worked for First Independent, there were no signs that they were being groomed to run the bank. Jeanne Firstenburg, daughter-in-law of bank founder E.W. “Ed” Firstenburg and stepmother to Scott and Jeff, had been tossing broad public hints that a sale was one of the options being considered by the family. A business broker had been putting out feelers to other banks about their possible interest in First Independent.
Those close to the family say the sale would have been unimaginable during E.W. Firstenburg’s lifetime. He purchased the Ridgefield State Bank in 1936 and turned in into First Independent, and didn’t finally retire until 69 years later, in 2005. His died in 2010 at age 97.
First Independent’s sale raises questions about its purchaser’s philanthropic role. Sterling enjoys a strong reputation in Spokane for public involvement and civic contributions, and Clark County’s charities are hoping the bank will continue the strong traditions of First Independent and the Firstenburg family.
“We’re obviously in kind of wait-and-see mode,” said Richard Melching, president of the Community Foundation of Southwest Washington, an organization that the late E.W. Firstenburg, the family scion, helped launch in 1984. “Any time you change the status quo, it’s bound to raise some questions. All the right things have been said.”
Certainly, Sterling’s decision to retain Jeanne Firstenburg in a top position was in part a recognition of the strong bonds between the family and Clark County’s civic leadership.
Bank officials say the job description is still under discussion, but Sterling took a similar approach when it purchased Sonoma Bank in Northern California in 2007 and hired its president to serve as a market president for that region. Said Seibly: “We will be very active and engaged in Vancouver.”
Both Seibly and Jeanne Firstenburg say that the two banks share a community-oriented focus that should appeal to First Independent customers. But Sterling is vastly larger, with $9.18 billion in assets and 177 depository branches in five states, to First Independent’s $792 million in assets and 14 branches in Oregon and Washington. In Clark County, where First Independent is second in deposits only to JP Morgan Chase, Sterling will move immediately to a dominant market position — if it holds onto most of its customers.
Riverview Community Bank, the county’s last locally owned bank, is marketing aggressively for First Independent customers, as are newly resurgent credit unions feeding off anti-Wall Street sentiment.
Kim Capeloto, Riverview’s executive vice president for marketing and operations, said Riverview welcomes the competition from Sterling.
“Having said that, we are headquartered and located in Vancouver, Washington, and as a result, money deposited by our clients stays local,” he said. “Your money stays local, helping your neighbors.”
Seibly defines “local” more broadly. “Vancouver and Spokane are located in the same state,” he said. “This isn’t as if an institution from New York is coming in.
“What Vancouver needs is strong financial institutions. Washington needs strong financial institutions.”
Just a few years back, “strong” was not a word many would have associated with Sterling. Seibly, who joined Sterling in 2007, became CEO of Sterling Financial Corporation during an October 2009 management shake-up. Sterling had accepted the government’s TARP money in December 2008, but it was still bleeding cash. It’s losses for 2009 reached $855 million, with most of that coming in the year’s last two quarters.
The bank missed a December 2009 deadline set by federal and state regulators to raise $300 million in new capital. But then the pieces started falling into place. By the following August, Sterling had secured the required $725 million in private financing, including $171 million each from the Thomas H. Lee Partners and Warburg Pincus Private Equity X investment firms. Those investments took the form of stock purchased at 20 cents per share, well below the sale price at that time. With those stock investments, each firm secured 22.6 percent ownership in the bank.
Before long, Sterling faced another critical deadline. If its stock didn’t climb to more than $1 per share by Dec. 7, 2010, it would be de-listed on Wall Street. For investors, the 1-for-66 reverse stock split Nov. 18, 2010, drove up the value of a single share while drastically reducing the number of shares an investor owned. Sterling’s shares have climbed steadily since the split. The two equity firms each now own 24.9 percent of stock, the maximum allowed without additional regulatory hurdles.
Hayes, of D.A. Davidson, said Sterling is positioning itself well for competing against both regional and national banks once the economy finally improves.
“When the market turns, there are going to be a lot of people competing for the same acquisitions and same customers, he said. “They’ll tell you they’re competing against the big banks, but as they get larger they’ll be competing against each other as well.”
Ashley Swanson provided research for this story.

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Tatas’ unlikely golden goose

When Tata Motors acquired Jaguar Land Rover, it was pilloried for poor judgement. Now, JLR is a roaring success.

Alongside his warning last week that Tata Group expansion plans would have to be tempered by the troubled global environment, Mr Ratan Tata noted that in its drive to take heed of risks, it shouldn’t lose out on good opportunities.
Four years ago, the “good” opportunity that the company didn’t pass up provoked much tut-tutting. When Tata Motors first took Jaguar Land Rover off Ford’s hands for $2.3 billion in 2008, many asked: how could a company known for commercial vehicles and cheap cars, and for whom there were no obvious synergies in the acquisition, do any better than a gargantuan of the global auto world, which had pumped billions into the iconic brand?
Those that didn’t tut then, certainly did a few months later, when the financial crisis struck and sales at JLR plunged. Even worse, Tata Motors had taken out a $3-billion bridge loan to finance the acquisition, and struggled to refinance its debts, which remained firmly high. Attempts to secure financial support from the British government failed, forcing the Tata Group to pump its own funds into the company.
In March 2009, Tata Motors posted a Rs 25.1 billion loss for the year. “Troublesome trophy” declared the Financial Times, adding that it “raised questions about the wisdom of fast-growing companies from emerging markets acquiring their developed-world counterparts in struggling sectors.”
Those “questions” have now been turned on their head: far from being a trophy, JLR survived the crisis to become the biggest earnings contributor to Tata Motors, something that has continued — and is expected to continue — through this second round of the crisis.
For the year ending March, Umesh Karne at BRICS Securities expects JLR to make a net profit of Rs 71 billion, against a group profit of Rs 79.5 billion, with sales up 14 per cent, and a further rise of 8 per cent the following year.

Turnaround factors

JLR seems to be preparing itself for such an upbeat scenario. The threatened closure of one of its British plants never happened; the company has since announced plans to expand the workforce at its Solihull plant, and build an engine factory near the city of Wolverhampton, a move that will gradually reduce its dependence on Ford engines. It’s in talks over a joint venture in China.
It’s easy to look for one reason for this remarkable turnaround, but there are a number of answers. Firstly, Tata Motors wasn’t afraid to seek external assistance, bringing in KPMG and Roland Berger Strategy Consultants to design a turnaround for the immediate, medium and short term. In 2009, the company unveiled a business plan, which involved aggressive cost cutting (reducing employee numbers, more efficient IT systems and marketing spend), changes to cash flow management, and a multi-year plan for product launches.
Luckily, there was lots of room for improvement. Ian Fletcher, an automotive analyst at IHS Global Insight, who worked for JLR under Ford, argues that the American firm had a “feast and famine” approach, lavishing cash on JLR at points, while starving it of investment at others. Cash was often directed in unhelpful ways, such as a Jaguar F1 programme.
“If you want to make a profit don’t put millions into racing it round a car track,” Mr Fletcher says. “You need to build a car that people want and charge what you can get away with.”

Restoring ‘Cool’

Building a coveted car also proved challenging in the Ford years: its launch of the X-Type — which was known to some in the industry as a “Ford Mondeo with a pretty frock” — was just one example, while others such as the “S” type were seen as overly retro, and unappealing to audiences below the age of 50. (By contrast BMW and Mercedes were able to attract mid to late 30s buyers too).
Under Tata, the XF and XJ updates did much to restore the company’s “cool” reputation while the launch of the Discovery in 2009 proved timely for the recovery. Tata Motors’ pledge to pump 1.5 billion pounds a year up until 2014, into a total of 40 new product actions — including new vehicles, and updates — has added to that credibility and created a buzz (rumours that it was considering expanding its Halewood plant had observers asking whether it could mean a new compact Jaguar was on the cards).
Part of the problem in the past was too much interference from Ford: something that Tata Motors has reversed. Tata brought in (and retained from Ford days) senior engineers and management, with many years of experience, particularly in the German industry, pretty much leaving them to their own devices, but with the assurance of having the sizable resources and support of the Tata Group behind them.
The CX-16 concept car that wowed audiences at the Frankfurt auto show last year was a case in point. “10 years ago, something with such cutting-edge technology would have been left on the drawing board,” says Mr Fletcher.

Niche focus

The trouble with Ford’s approach was that it understood and applied volume manufacturing, but not the global niche marketing and product that JLR needed to be successful, and which Tata Motors embraced through its hands-off approach, says Professor Peter Cooke, Professor of Automotive Management at Buckingham University.
“Fundamentally, Jaguar and Land Rover have to be global niche products,” he says. Now each product is targeted at specific niche audiences, such as the high-spending city dweller in the case of the Range Rover Evoque, the petit SUV, 15,000 of which have been sold since its launch in September.
As a result, Tata seems to be pushing demand in all the right directions: China is now JLR’s third largest and fastest growing market, accounting for around 16 per cent of sales, while demand in Russia, Brazil and India continues to grow.
Overall, with the investment from Tata Motors, JLR was able to position itself in the right space, just in time for the upswing that came in 2009. It is not the only luxury branded car to be doing well: Bentley saw sales rise 37 per cent in 2011, again driven by China, and is preparing for further growth with plans to expand its range.
There are, of course, challenges: currency movements, which have in the past worked well for JLR’s profitability, have hurt it in recent months, with the appreciation of the pound against the dollar. As a result, JLR profits for the quarter ending in September fell 2.1 per cent. Moreover, the financial climate will make the quality and timing of its 40 product actions all the more important.
The success of JLR doesn’t make or break the case for acquisitions of distressed foreign companies (There is only so much a company can do in the face of unremittingly weakened demand, as has been the case with Tata Steel’s European operations). But it does go to show, bad timing is often overrated. After all, had it waited a few months more, Tata Motors would never have secured the financing to acquire the company that has turned out to be its golden goose.
blfeedback@thehindu.co.in
(This article was published on January 8, 2012)

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New Payday Advance Loans Survey Announced By USAPaydayForever.com

While European Stock Markets Go Up A Little Bit, USAPaydayForever.com Announces Payday Advance Loans Survey. They Want To Measure New Customer Experience
(PRWEB) January 03, 2012
Recently at Yahoo news, a financial article explained that while many stock exchanges are closed, some European exchanges had risen lightly. This article stated, “Germany’s DAX, which fell 14.7 percent last year, rose 1.4 percent Monday to 5981.79, while the French CAC-40, which ended 2011 17 percent lower, climbed 0.6 percent to 3,179.17. Stocks fell in South Korea and closed flat in Taiwan.” USAPaydayForever.com thought that this might not necessarily indicate better things to come for world economies. They mentioned that they would continue their payday advance loans promotional campaign this year. They said they would start the year off with a survey, especially considering their recent report of a record number of applications last year.
USAPaydayForever.com continued to express they felt it to be necessary to continue with their payday advance loans promotional campaign this year, regardless of any recent positive news. This is their reasoning for putting out a payday advance loans survey. Such a survey would be used to determine not only customer satisfaction. It would also be used to figure out why people are getting payday advance loans, and how they use them.
Concerning the news about Europeans stocks, as well as their new survey, USAPaydayForever.com has released a statement. This statement said, “We feel it’s important to find out how our customers feel about our payday advance loans. Not only that, but we think it’s important to find out their reasons for using our services, and how they use them. This is especially true whenever we hear reports of positive economic news anywhere in the world. We want to know what kinds of things our customers use our payday advance loans for, if they are using them properly, and how they view them in general.”
About USAPaydayForever.com – USAPaydayForever.com is an online company that helps consumers to find and obtain payday advance loans online. For more information about USAPaydayForever.com, visit their website at http://www.usapaydayforever.com
###
Lehi Drew
http://articlesearchenginemarketing.com/
435-714-0482
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Intervale Capital Raises $63M for Private Equity Fund – cbl

More Topics:
Posted January 3, 2012

Charles Cherington

By Bill Murphy
CAMBRIDGE, Mass. – Intervale Capital has raised $63 million, or about 18 percent of a $350 million private equity fund, from seven investors, according to an SEC filing.
Principals named in the filing by the Cambridge-based fund that focuses on investments in energy firms are:
· Managing partner Charles Cherington; and
· Partner Erich Horsley.
The company said it would pay an affiliate up to $2 million from the proceeds towards annual management fee. It also expects to pay a sales commission of up to $157,500.
Currently, Intervale Capital manages a $280 million private equity fund that invests in oilfield service and manufacturing companies. It has investments in 10 companies.
Reg D filing: http://tinyurl.com/6vvzyje
Also, at citybizlist see:
Intervale Capital Signs Office Lease in Cambridge, MA
Intervale Capital Promotes Erich Horsley to Partner
Bios from Intervale Capital site:
Charles Cherington
Managing Partner
Charles co-founded Intervale Capital to build on the success of Cherington Capital, a private equity firm focused on investments in middle market energy companies. Prior to founding Cherington Capital, Charles co-founded a smaller fund which also focused on middle market buyouts. Charles has over fifteen years of private equity experience.
Before launching his first fund, Charles spent several years as a vice president at the Vietnam Fund, a British private equity fund. Charles also worked for CS First Boston in New York and Vietnam.
Charles earned an M.B.A., with honors, from the University of Chicago and a B.A. in History from Wesleyan University.
Erich Horsley
Partner
Erich started his private equity career in 1998, and has focused exclusively on buyouts of middle-market companies. Erich served as a Principal at Watermill Ventures, a private equity group based in Waltham, MA. He also served as a Vice President at a Boston-based private equity firm with $1.4 billion under management. Erich has spent most of his private equity career executing transactions and overseeing growth in industrial and energy-related businesses.
Erich was a Financial Analyst in the Corporate Finance Department of Morgan Stanley in New York and in Frankfurt, Germany from 1994 to 1996.
Erich received his B.A. in Psychology and English, with honors, from Harvard College and his M.B.A. from Harvard Business School.

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Jacob Ballas to invest Rs 200 cr in Religare Finvest

New Delhi, Jan 3: Private equity fund Jacob Ballas has announced that it has agreed to invest Rs 200 crore in Religare Finvest Ltd, an MSME-focussed non-banking financial services arm of Religare Enterprises.
“The capital infusion will be in the form of compulsory convertible preference shares and would be the second equity investment in Reliance Finvest Ltd (RFL) in quick succession after Avigo Capital invested Rs 150 crore in November 2011,” the company said in a statement released yesterday.
“We are pleased to announce this capital infusion by Jacob Ballas in Religare Finvest Ltd,” Religare Enterprises’ Group CEO Shachindra Nath said.
The PE funding is expected to help the company meet its growing capital requirements.
Jacob Ballas Fund is advised by Jacob Ballas Capital India Private Ltd, a leading private equity advisor with a 19-member team, advising three India-focused Mauritius based private equity funds.
Investors in the Funds comprise predominantly leading international institutions such as insurance companies, sovereign wealth funds, pension funds, banks, funds of funds as well as reputed international family investment offices.
The Funds have generated ten liquidity events from its portfolio including full and partial exits.
Mr Nath said the investment (by Jacob Ballas) is not only an external endorsement of the operating model but also demonstrates that despite macro headwinds in challenging times there are value seeking investors for fundamentally strong business models.
“This move also positions us well to capitalise on the existing business opportunities while delivering superlative value for all our stakeholders. We welcome Jacob Ballas to the Religare family,” Mr Nath added.
Religare Finvest provides debt capital to MSMEs (micro, small and medium enterprises) in form of loans against property, working capital loans, loans against plant and machinery, vehicles and construction equipments and loan against marketable securities.
The company has more than 25,000 MSME accounts and its loan book stood at Rs 11,380 crore as on September 30, 2011. (UNI)
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Breaking into travel journalism: advice from the experts

Jill Starley-Grainger is a freelance journalist specialising in ethical and luxury travel
Use your blog to showcase to editors what you can do: They would want to see that you can write well-crafted, engaging copy, that you can sniff out good angles and that you are dedicated enough to have stuck with the blog for more than a few posts. Once you start getting commissions chances are your blog will slide. If you are getting paid travel writing gigs, then your time for unpaid work will rapidly diminish. But until you get those paid commissions, a blog is a good, easy starting point. As for getting followers, don’t worry about that. Focus on well-crafted, insightful travel journalism, perhaps with a niche angle, such as ‘travelling with a baby’ or ‘all about Germany’, and if your writing is up to scratch, people will follow you. Trying to SEO the heck out of your copy will only make it seem stilted.
You need to be able to dig out the angles the travel guides don’t cover: So many people think that because they are passionate about travel and can string a sentence together, that qualifies them to be a travel journalist. It doesn’t. You need to understand how to dig out facts – and to determine that they are facts – and how to find hidden gems and insider info. If it’s already in a guidebook, what are you adding to it? And you need to know how to write. I really can’t stress that enough. It’s a skill and not everyone has it, but so many people think they do. But you can learn it.
Travel journalism is hard work and the pay isn’t always great either: Forget fantasies of being sent round the world on an assignment with a huge commission, all expenses paid, and having endless days lolling on the beach or people-watching in cafes. Very few publications pay freelancers’ travel expenses (and getting a full-time writing or editing job on a major travel publication is just not going to happen until you have years of experience, and even then, chances are slim). Take a sample 1,000 word feature. If you are lucky and have years of experience, you might be commissioned to write a 1,000-word travel feature for a major publication. You will need to spend around a day crafting the pitch that wins the commission in the first place, three to five days working out your itinerary and arranging accommodation and so on. Another three to five days on the trip. Then at least two to four days writing the article to a standard high enough for this type of publication. If you are lucky, for this, you will be paid £400.
If you are pitching unusual destinations, make sure you’ve got a good angle: Breaking in by going to less popular locations – this is a tricky one. On the one hand, going somewhere unusual definitely gives you an edge. On the other hand, it’s hard to commission those features. The fact is, most people want to read about destinations they actually want to go to or are interested in. Hence the huge number of articles on France, Italy and so on. This is because it is these types of articles that sell papers and magazines.
On the other hand, people do like reading about unusual destinations, so while editors might not have as much scope to commission those places, if you pitch a good angle for one of them, then when they do come to commission a quirky one, your pitch might just be in the back of their mind. But do not pitch just a general ‘guide’ to an unusual destination. You still need an angle, whether it’s Baku’s beach scene or skiing in Iraq.
Emily Mathieson is Word of Mouth editor at Condé Nast Traveller
Demonstrating your knowledge and understanding of the magazine will endear you to an editor: The simple best way to get your writing published (and get paid for it) is to actually read the publication you’re pitching to. I am constantly surprised by how many people send me ideas that are clearly not relevant to the section I edit, or to Condé Nast Traveller in general (no, we don’t review youth hostels). If someone begins a pitch by clearly demonstrating their knowledge and understanding of the magazine, I am always more likely to read on.
Pitches which paraphrase press releases won’t be welcome. Keep it short, sweet and to the point. But PLEASE don’t just paraphrase a press release. It’s likely I’ll already have seen it, and why would I pay someone to do something I could do myself?
Include a signature at the bottom of your e-mail with your specialisms. I find it really helpful if writers have a signature at the bottom of their e-mail telling me about them, the specialisms and where they live (and it’s also often helpful if you can remind me at the beginning of an email who you are too). This will often jog my memory, or help me decide why a particular person is suitable for a certain piece.
Amanda Statham is travel editor of Cosmopolitan and You & Your Wedding magazines
A potted guide to pitching:
- Keep it short – no travel editor has half an hour to wade through 10 pages of pitch.
- Know the publication – I’m always being offered pieces for my Cosmopolitan travel news page. There isn’t a Cosmo travel news page…
- Check to see what the publication has covered recently; if it has covered your story or specific place, don’t pitch.
- If you refer the travel editor to your personal website, make sure it works and is up-to-date.
- Have an original hook; amazingly, backpacking around Thailand has been covered before.

Pat Riddell is the editor of National Geographic Traveller (UK)
Twitter can help your industry knowledge and give you ideas for pitches: Follow journalists, editors, newspapers and magazines but also follow travel blogs, tourist boards, airlines, tour operators, attractions, museums, hotel groups and so on. The more you know about travel and how it ‘works’, the better. Which destinations will be talked about in 2013, where are the new air routes, what are the new attractions… these are the pitches for the future. And by establishing a Twitter presence you can make a name for yourself as well as boosting traffic to your blog – or indeed titles you’ve written for.
Glen Mutel is the editor of ABTA Magazine and a regular columnist and contributor for National Geographic Traveller
Different approaches suit different titles: For trade titles such as ABTA Magazine, we’ve already got a fair idea of the destinations we want to cover over the next six to 12 months. So, unlike other titles, we don’t necessarily want budding writers to pitch us specific angles. Instead, I’d much sooner be sent a short email, detailing where a writer has been and where they know, with links to previous examples of their work. This last bit is absolutely crucial. Many travel editors will already have a list of writers that they rely on and it can be hard to get them to try new people. I’ve learned to turn a deaf ear when writers tell me they’ve written for the nationals, because it’s so seldom a guarantee they can write. I’d much sooner they show me specific examples of their work – proof they can put words in a readable order. If they can do that, there’s a good chance I’ll try them out with a general destination feature. Then, a few pieces down the line, I’ll start accepting ideas from them.
Postgraduate courses can equip you with everything you need: I don’t think the type of degree is necessarily that important. Earlier this year we were looking to fill the deputy editor position, and I don’t think we looked to hard at the type of degree. What mattered more was whether there was some type of postgraduate qualification – it needn’t be an MA. There are several shorter postgraduate schemes that can equip you with everything you need (I did a three-month course with PMA).
Peter Grunert is the editor of Lonely Planet Magazine
A particular specialism might give you an advantage: I definitely believe it’s a good idea to build a rapport with a commissioning editor before sending them a pitch. They will need to know that you share a wavelength and will also want to see evidence of the quality of your writing – ideally, writing that would suit their publication. I also feel that anyone with a specialism has an advantage. Are you based in a particularly interesting location? Can you bring fascinating travel insights from the point of view of someone who has great knowledge of art, motoring, history, sports and so on?
Check out all the advice from the live Q&A here.
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MGIC Investment, Verizon, Kodak: After-Hours Trading

NEW YORK (TheStreet) –Shares of MGIC Investment(MTG) sank in late trades on Friday after the financial holding company gave a $200 million cash infusion to its private mortgage insurance operation, Mortgage Guaranty Insurance Corporation (MGIC).
“The additional capital contribution is an important step in enabling the company to further support its policyholders and the US housing market by continuing to write new insurance on a nationwide basis,” Curt Culver, CEO and chairman of MGIC and its parent company MGIC Investment, said in a statement. The $200 million capital infusion allows MGIC to meet regulatory capital requirements in Wisconsin, according to the statement, and MGIC remains an eligible insurer for both Fannie Mae and Freddie Mac. The stock slid 15% in after-hours trading on volume of more than 143,000 according to Nasdaq.com, shedding 54 cents from its share price, to $3.19.

Verizon

Shares of Verizon(VZ) saw activity in the extended session after the telecommunications company announced late in the trading day that it would not institute a $2 fee for online and telephone payments. On Thursday, Verizon outlined plans to begin charging the $2 fee to consumers, but an immediate backlash from consumers forced Verizon to back down. “At Verizon, we take great care to listen to our customers. Based on their input, we believe the best path forward is to encourage customers to take advantage of the best and most efficient options, eliminating the need to institute the fee at this time,” Dan Mead, president and CEO at Verizon, said in a statement. Verizon is not the first company to back down this year from a proposed service fee after customer outrage. Bank of America(BAC) made a similar move earlier in the year when customers objected to a planned $5 monthly debit fee. Verizon shares remained unchanged at $40.12 on volume of more than 244,000.

Eastman Kodak

Shares of Eastman Kodak(EK) fell in late trading after the company announced Laura Tyson, a professor at the Walter A. Haas School of Business at the University of California, Berkeley and a member of President Obama’s Council on Jobs and Competitiveness, resigned from the board of directors without disclosing a reason. Kodak has been on bankruptcy watch since the fall when reports surfaced that the company had hired restructuring advisors. Kodak has denied that it will seek bankruptcy protection. Kodak shares declined 3% to 63 cents on light volume of 16,000 shares.
– Written by Kaitlyn Kiernan in New York. >To contact the writer of this article, click here: Kaitlyn Kiernan To follow the writer on Twitter, go to @Kaitlyn_Kiernan.>To order reprints of this article, click here: Reprints

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TaskRabbit raises $17.8 million in financing round

TaskRabbit has crossed one more errand off its startup to-do list.
The San Francisco company, which lets users hire people in their neighborhood to perform a variety of tasks, said Tuesday that it has raised $17.8 million in a new financing round.
LightSpeed Venture Partners led the round. Other new investors included Allen & Co. and the Tornante Co., the investment firm led by former Walt Disney Co. CEO Michael Eisner. Previous investors – including Shasta Ventures, First Round Capital and Baseline Ventures – also participated.
Justin Caldbeck, managing director at LightSpeed, is joining the 2-year-old startup’s board.
“We’re excited to have led this investment in TaskRabbit, as they continue to redefine the way people manage their daily activities and tasks – everything from grocery shopping to laundry to moving help to blog design,” Caldbeck said in a statement.
On TaskRabbit, users post their errands – delivering cupcakes, say, or delivering and assembling furniture from Ikea – and post the price they’re willing to pay to see it done. At that point, TaskRabbit’s contractors, which the company vets and chooses from among thousands of applicants, bid on the job. Task Rabbit takes a percentage of the job as its fee. The company calls it “service networking” and says that it has already encouraged hundreds of people to become part- or full-time entrepreneurs.
In May, TaskRabbit said it had raised $5 million in a Series A round. Since then, the number of tasks posted on the site has tripled, and so has revenue, the company said.
TaskRabbit’s total funding is now almost $25 million. The company said that the new funding would fuel its expansion efforts to other cities. The company is now in six locales – San Francisco, Los Angeles, Orange County, Boston, New York and Chicago – and plans to expand to others soon.
This article appeared on page D – 2 of the San Francisco Chronicle


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