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“Maximizing Enterprise Value through Balance Sheet Restructuring & Date Certain M&A Process”

November 9, 2009 by Steven R. Gerbsman

Gerbsman Partners has been involved with numerous national and international equity sponsors, senior/junior lenders, investment banks and equipment lessors in the restructuring or termination of various Balance Sheet issues for their portfolio companies. These companies were not necessarily in Crisis, had CASH (in some cases significant CASH) and/or investor groups that were about to provide additional funding. In order stabilize their go forward plan and maximize CASH resources for future growth, there was a specific need to address the Balance Sheet and Contingent Liability issues as soon as possible.

Some of the areas in which Gerbsman Partners has assisted these companies have been in the termination, restructuring and/or reduction of:

  • Prohibitive executory real estate leases, computer and hardware related leases and senior sub-debt obligations – Gerbsman Partners was the “Innovator” in creating strategies to terminate or restructure prohibitive real estate leases, computer and hardware related leases and senior and sub-debt obligations. To date, Gerbsman Partners has terminated or restructured over $790 million of such obligations. These 77 deals were a mixture of both public and private companies, and allowed the restructured company to return to a path of financial viability.
  • Accounts Trade payable obligations – Companies in a crisis, turnaround or restructuring situation typically have accounts and trade payable obligations that become prohibitive for the viability of the company on a go forward basis. Gerbsman Partners has successfully negotiated mutually beneficial restructurings that allowed all parties to maximize enterprise value based on the reality and practicality of the situation.

Date Certain M&A Process

Gerbsman Partners developed its proprietary “Date Certain M&A Process” in 2002. Since that time, the process has evolved into a 6 week plus time frame vehicle for maximizing enterprise and asset value for under-performing venture capital and senior lender backed medical device, life science and technology Intellectual Property based companies. To date, Gerbsman Partners has maximized enterprise and asset value for 60 portfolio companies. A description of this proven process can be reviewed on the Gerbsman Partners website.

About Gerbsman Partners

Gerbsman Partners focuses on maximizing enterprise value for stakeholders and shareholders in under-performing, under-capitalized and under-valued companies and their Intellectual Property. Since 2001, Gerbsman Partners has been involved in maximizing value for 60 Technology, Life Science and Medical Device companies and their Intellectual Property and has restructured/terminated over $790 million of real estate executory contracts and equipment lease/sub-debt obligations. Since inception in 1980, Gerbsman Partners has been involved in over $2.3 billion of financings, restructurings and M&A transactions.

Gerbsman Partners has offices and strategic alliances in Boston, New York, Washington, DC, Alexandria, VA, San Francisco, Europe and Israel.

For additional information please visit Gerbsman Partners website.

Posted in boic, Distressed IP, Intellectual capital, Marketing | Tagged , , | Leave a Comment »

Startup Software Spending Falls to 13-Year Low

November 6, 2009 by Steven R. Gerbsman

Sure the economy is coming back from the slump, but this article from InternetNews brings some hard reality checks.

“Total venture capital spending increased 17 percent in the third quarter to more than $4.8 billion, but investments in privately held software companies fell to its lowest level since 1996.

Thanks mainly to its relatively low initial startup costs and its home run potential in the equities market, the software sector for years has either ranked first or second in total VC spending.

But it fell to No. 3 among investment sectors last quarter, according to the latest MoneyTree Report from PricewaterhouseCoopers LLP and the National Venture Capital Association.”

Biotech firms, which checked in with the most total dollars garnered in the quarter at $905 million, closed 104 deals in the quarter. In the second quarter, biotech upstarts received a total of $947 million—a 4 percent decrease—but the total number of financing rounds closed surged up 16 percent from 90 deals.

Clean technology, which includes companies focused on alternative energy, pollution, recycling and power supplies and conservation was next with $898 million in VC investments, up an impressive 89 percent from the prior quarter.

Software firms did close the most deals in the quarter (128 rounds) but fell to third place in overall investments at $622 million, down 9 percent in both dollars and deal volume from the $680 million and 141 deals closed in the second quarter.

“The third quarter illustrates a gradual and deliberate industry shift towards a longer term venture capital investment strategy,” said Mark Heesen, president of the National Venture Capital Association. “Venture capitalists are becoming increasingly focused on industry sectors which require multiple rounds of financing for an extended time horizon.”

Software’s loss was a boon for the biotech, medical devices and clean technology sectors.”

Read the whole article here.

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Keep Your Hands Inside the Coaster, We Are At The Top Of The Second Hill

November 5, 2009 by Robert Tillman

Here is an interresting observation from Pravda.

“It is becoming more and more evident, to the astute observer of realistic economics, that the second dip in the “W” global recession is coming up quickly. This is of course, identical to what took place between the 1929 collapse and the 1931 final landing. The world economy fell hard, bounced high and than fell into a deep black hole, that it took it thirty years to climb out of. This time will be worse, at least for the Anglos and more specifically the Americans.

The signs are everywhere: massive government stimulus (read money printing) whose only obvious effects have been on the stock markets around the world (again, just like in 1930), continued increases in global unemployment and thus a collapse in global goods demand, instability and a free fall in the shipping indexes. That is correct, it is not just the Baltic Dry Index, which is once again in a free fall, now that the Chinese have stopped hording iron ore, but also the various other indexes, including Chinese ones.

That is a sign of real doom, not only for China, but for many others. The fact that containers of goods are not moving out of China, in September and October, regardless that the Chinese stimulus has kept its factories producing as if nothing is wrong, means that the holiday shopping season will be empty and hallow, just like the Anglo mantra of recovery. Sure, France and Germany are out of recession and Russia and Italy are both heading out too, but that is because they have done the exact opposite of the Anglos, by cutting taxes, controlling spending, putting down real hard infrastructural investments and projects without tying them in courts and hearings for years, cutting regulations while avoiding nationalizations, in other words the smart moves vs the Anglos dumb ones. The Anglos, specifically America and England and to a lesser degree, Canada, have done the opposite on all accounts, regardless of warnings. No amount of Hopy-Changy media Zombies will change the inevitable out come.”

Read the full article here.

Posted in Board Of Intellectual Capital, boic, Economy | Tagged , , , | Leave a Comment »

Warren Buffett, American Railroad Barron

November 4, 2009 by Steven R. Gerbsman

Here is an interrestig article on Warren Buffet from Deal Zone.

“Following in the greatest of capitalist traditions, the Oracle of Omaha announced plans to buy up the shares he doesn’t already own in one of the country’s biggest railroads, Burlington Northern Santa Fe. And in an egalitarian, if unexpected, move, he said he would split his Class B stock to the tune of 50-to-1, making it possible for just about anyone to own Berkshire Hathaway’s traditionally lofty shares.

The railroad purchase is a bet on the future of America, Buffett said, and it’s his biggest acquisition ever. It values the railroad at $34 billion, and the price of $100 a share is a premium of nearly 32 percent. The premium vaults the railroad into the top spot by market cap, surpassing Union Pacific.

Buffett also owns stakes in other railroads, so it will be interesting to see if his move stirs any antitrust comments from Washington. Idiomatically, there is something profoundly rural in the Americana of Buffett’s latest bet; much more so than Berkshire Hathaway’s mainstay insurance business.”

Read the full article here.

Posted in Board Of Intellectual Capital, boic, Economy, Investments, Market research, Strategy | Tagged , , , , , , , , | Leave a Comment »

UBS sees 15% M&A rebound next year

November 3, 2009 by Steven R. Gerbsman

Here is some good market analysis from The Reuters Blog – Dealzone.

“Like SocGen before them, UBS strategists are looking forward to a pickup in M&A next year.

“We expect 2009 to mark the trough in global M&A transactions and for activity to pick up in 2010 and beyond. For FY2010, globally we expect M&A activity in the region of $2.5-2.7trl, an increase of 15% on current annualised run rate for 2009 and close to levels last seen in mid 2004-05. The biggest driver of an increase in activity is likely to be the increase in risk appetite in equity markets and in the boardroom, a return to earnings growth and profitability by World Inc and a backlog of pending asset disposals.”

“Credit conditions are also supportive and we expect private equity and bank lending to pick up at some point next year.”

“We do think investors can take advantage of the growing interest in M&A as the likelihood of deals gets priced into stocks. The average take-out premium historically has been 30-40%, much of which is earned around the announcement of a deal. Merger arbitrage post bid announcement has earned a levered IRR around of 9% this year.”

“Despite a 27% decline in global M&A activity in 2009, deal volumes in Asia remained strong. At the current run rate, 2009 activity in the region will be up on 2008, taking APAC’s share of global M&A to 25%, from 6% in 1995. A meaningful pick-up in global activity in 2010 will require a rebound from trough deal volumes this year in the Americas and Europe.”

Read the full story here.

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