October 10, 2009
Electrovaya’s journey from a technology development firm to TSX
The Indus Entrepreneurs (TiE), Toronto
Entrepreneur Forum
Presenting
Speaker: Dr. Sankar Das Gupta, Chairman & Chief Executive Officer, Electrovaya Inc.
Case Study: Electrovaya’s journey from a technology development firm to a public company on the TSX as well as its successful funding strategies from various internal and Governmental resources to retain management control
Date: Wednesday, 14th October 2009
Venue: RBC Conference Centre - Auditorium ‘C’, 315 Front Street West, Toronto
Agenda: 6:00pm Reception
6:45 p.m. to 8:00 p.m. Presentation followed by Q&A
Registration (Mandatory & Online Only): https://www.123signup.com/register?id=jsykm (Members: FREE ; Non-Members: CAD25)
President, TiE Toronto Vice- President & Director – Events, TiE Toronto
smadan@tietoronto.org ppatil@tietoronto.org
150, Bloor Street West, Suite 14
Toronto, ON - M5S 2X9 Canada
Ph: 1-416-451-7113, 1-416-964-6253
October 9, 2009
Private equity changing its business model
Some private equity funds are always ahead of the private equity pack. KKR is one to watch as they have been at it longer than most. With new money for private equity rapidly becoming rare, KKR is one of the first private equity funds to redo their business model. Here’s more
KKR continues in its efforts to diversify its business and find new ways to access capital. Over the last two years, KKR has started investing in global infrastructure, beefed up its distressed debt arm and is investing in companies in new ways, including partnering in joint ventures. Most recently, it made a $400 million debt investment in Eastman Kodak. It is also building a capital markets capability, enabling it to access investors directly, cutting out investment bank intermediaries. And it is exploring new deal structures, including allowing investors to put money into deals directly rather than via traditional funds.
KPE's share price has surged from its low of $1.93 earlier this year as markets have recovered, more than quadrupling to $9.43. That gives it a market cap of $1.9 billion, which suggests KKR as a whole is worth $6.3 billion. That, according to Rabo Securities, would be just 6.5 times 2009 estimated earnings. If you buy into KKR's diversification efforts, that could make the shares attractive: Rabo thinks a justifiable blended multiple that takes account of the mix of fees and earnings the new KKR can generate would be 9.6 times, valuing the group at $9.3 billion.
Media needs a good strategist to blow up their assumptions
Magazines and Newspapers are struggling to re-build their business models, starting with the whole relationship between advertiser and editorial content. I read MARK EVANS' terrific essay on the topic and have made a quick comment on the strategy below:
Mark Evens says - Over the past little while, the Toronto Star has been running a series of in-house ads about how newspapers play an important role in delivering the news. Today, for example, there’s a full-page ad that says: “You shouldn’t have to search for clarity or direction”. The ads are creative and they do make you think about how newspapers play a vibrant role in the news ecosystem. But they are dancing around the key issue: the economic model in which newspapers give away all of their online content doesn’t work.
It is becoming obvious newspapers must start charging for their online content. I’m not talking about Great Wall-like pay walls in which every story is buried unless you pay but a variety of user-friendly subscriptions that provide value to readers while providing revenue to newspapers.
I think that maybe markets under the age of 20 could be pulled over to paying online for newspaper content, particularly if it was .01c per day.
Baby Boomers are just never going to pay for newspaper content online personally for a whole host of psychological and social reasons which have been discussed for the past 15 years – ad nauseam. Accept that brutal fact. Once the newspaper publisher accepts that, how else can they do the business model?
First, look at the life blood of the paper – ad revenues. We all know there is a Chinese wall between advertisers and editors. There is your first paradigm shift required – to sell content into aggregators like TD Bank. For current editors, that idea is too much of a shift. Imagine though, if you looked at target market for content. Let’s use Margaret Wente who would be of interest to women Baby Boomers, a great target market.
Second, who are top richest Canadian companies – the big banks. Could you sell Margeret Wente to TD Bank’s Wealth section, who are trying to add value to the day of a Boomer woman?
American Express gets early tickets to AGO and ROM special events. Why couldn’t TD Bank have early editions of The National Post only available to its TD clients? As TD clients log into TD, they would get the online National Post too for free. That would build client loyalty for TD and aggregate a readership for the newspaper, building a new habit of going online to check the bank balance and read the paper.
October 7, 2009
Private Equity seeking smaller deal size
Past valuations of companies partnering with private equity may have been too high and have not given the financial returns expected. Here’s my favourite private equity investor commenting on the current state of the private equity markets. David talks about how the big private equity players are shying away from the mega deals of the past and preferring smaller deals, such as struggling banks. Here's Bloomberg's interview:
Carlyle Group Inc. co-founder David Rubenstein said he expects the private-equity industry to come back and be “stronger than it was just a few years ago” as the recession ends.
Carlyle, the world’s second-largest private-equity firm, bought some companies at prices and debt levels that in hindsight were too high, he said today in a Bloomberg Television interview in Washington.
“We had some companies that didn’t perform as well as we would have liked,” Rubenstein, 60, said. “Generally I think we’re coming back. We’re now investing again. Our companies are in good shape.”
Private-equity managers are seeking to resuscitate a leveraged buyout business crippled by the global credit crisis that began more than two years ago. Carlyle and larger rival Blackstone Group LP are eschewing public-to-private buyouts of more than $10 billion that characterized the 2006 and 2007 peak in favor of smaller deals for targets such as struggling banks.
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