Swedish Cable Company Com Hem Raises $853 Million in Initial Public Offering.

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BrokerDealer.com/blog update courtesy of extracts from today’s NYT DealBook

LONDON – The Swedish cable company Com Hem Holding said on Tuesday that it raised 5.67 billion Swedish kronor, or about $853 million, in its initial public offering on the Nasdaq OMXStockholm exchange.

Com Hem, which was acquired by the private equity firm BC Partners in 2011, priced its offering at 58 kronor a share, giving it a market capitalization of 11.5 billion kronor. Shares of Com Hem rose 8.8 percent, to 63.10 kronor, in trading in Stockholm on Tuesday morning.

Com Hem is the largest cable company in Sweden, with around 1.8 million connected households. It could receive additional proceeds of up to 567 million kronor if an overallotment of shares in the offering is fully exercised.

BC Partners, which did not sell shares in the I.P.O., remains the company’s largest investor, with a 50 percent stake. It would hold a 47.7 percent stake if the additional allotment were sold.

“With the support of our new shareholders, we are in a strong position to move forward and to grow our business,” Anders Nilsson, the Com Hem chief executive, said.

Com Hem plans to use the proceeds to reduce debt and to give it more financial flexibility.

The I.P.O. comes at a time of consolidation in Europe’s telecommunications industry.

Vodafone of Britain, Telefónica of Spain and other large players have announced acquisitions in the last 18 months as Europe’s largest carriers bolster their offerings by purchasing cable and fixed-line assets to complement their mobile networks.

Com Hem, founded in 1983, also provides broadband and telephone services. It was spun out of Sweden’s former telecommunications monopoly and counts 39 percent of all households in the country as customers.

The company posted net revenue of 4.4 billion Swedish kronor in fiscal year 2013 and employs about 950 people.

The full article can be found at NYT DealBook.

Amid the Crazy Enterprise Valuations, Google Finds a Steal of a Deal: Entrepreneurs and Bankers Take Heed; A BrokerDealer.com Blog

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BrokerDealer.com thanks Connecticut’s JLC Group for below extract.

How to differentiate your disruptive and innovative company from the rest? Have your chief cheerleader (presumably your CEO) make an epic statement in which your entire company and your constituents can continuously hang their hats on..  The following is a classic example:

“We think we are going to fundamentally change humanity’s understanding of the economic landscape on a daily basis.” Skybox co-founder Dan Berkenstock

The above words from an entrepreneur whose offering is seemingly perceived to be something simple: satellite technology.

If you are an aspiring tech czar in the capital raising mode, a brand enhancement specialist, a brokerdealer or venture capitalist doing due diligence, or a mere investment banker who is working with an advanced-stage company whose execs are also looking to you to help ‘craft the value proposition” to investors, your target audience will always be more inspired when you perspire passion to the point where its dripping from your pores.

The context of the above quote is in connection with a very compelling piece written by WSJ reporter Christopher Mims in his aptly-titled column “KEYWORDS”

Hyperlink above will bring you to the June 16 WSJ article: The story itself is not merely about enterprise valuation techniques and not only about the next great technology innovation, the story transcends borders for those who can read in between the lines..

China Surpasses U.S. as Largest Corporate Debt Issuer

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BrokerDealer.com/blog update courtesy of extracts from today’s NYT DealBook.

HONG KONG — China has overtaken the United States as the world’s biggest issuer of corporate debt, despite worsening cash flow at Chinese companies since the financial crisis, according to a report released Monday by Standard & Poor’s.

In a study that highlights the rising risk to the global economy posed by China’s informal shadow banking sector, Standard & Poor’s, the ratings agency, found that China’s nonfinancial companies had total outstanding bank loans and bonds worth $14.2 trillion at the end of last year, compared with $13.1 trillion in the United States. Moreover, S.&P. expects strong growth in new borrowing and the need to refinance existing debt will push China’s corporate debt levels to more than $20 trillion by the end of 2018, accounting for a third of worldwide corporate borrowing.

S.&P. estimated that one-quarter to one-third of China’s corporate debt is sourced from the country’s shadow banking sector, a murky world of nonbank lending that caters to borrowers who would otherwise struggle to secure financing.

“This means that as much as 10 percent of global corporate debt is exposed to the risk of a contraction in China’s informal banking sector,” the S.&P. analysts wrote in their report. They estimate China’s shadow banking sector debt at $4 trillion to $5 trillion.

China largely avoided the fallout from the 2008 global financial crisis by going on a tremendous credit binge. Officials ordered the country’s state-dominated banks to increase lending, in many cases to infrastructure or vanity projects that have since proved economically unfeasible. Local government borrowing surged, in the form of both bank loans and bonds, to about $3 trillion at the end of last June, according to an official audit released in December.

At the same time, the proliferation of shadow banking in China has helped the nation’s corporate debt balloon on an even greater scale than that of government debt or household borrowings. This raises concerns because, even as their total borrowings increase, the ability of Chinese companies to make interest payments and to repay bank loans and bond principal is declining.

The S.&P. analysts compared cash flow and leverage data on 8,500 global companies to measure credit risk during the past five years. They found that in 2009, Chinese companies were the least risky when compared with their counterparts in Europe, the United States, Latin America and the rest of Asia. By 2013, however, the credit that Chinese companies enjoyed had deteriorated, and they had become the riskiest borrowers globally.

The full article can be found at NYT DealBook.

 

Grocery Delivery Service Instacart Raises $44 Million

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BrokerDealer.com/blog update courtesy of extracts from today’s NYT DealBook.

Companies like Uber and Airbnb have prospered by allowing people to sell their services to strangers on a smartphone-powered network.

Now venture capitalists are betting that a young start-up can use that principle to achieve success in the grocery business.

Instacart, a two-year-old grocery delivery company, announced a $44 million round of financing on Monday led by Andreessen Horowitz. Three venture capital firms that previously invested in the company, Sequoia Capital, Khosla Ventures and Canaan Partners, participated in the latest round.

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The company, which is based in San Francisco, lets customers shop online from grocery stores in their area. The orders are filled by other people who have signed up to be shoppers and who receive a cut of the delivery fees. Information about a store’s inventory comes from store managers and from the shoppers. The company says it can have groceries delivered within an hour.

Jeff Jordan, a partner at Andreessen Horowitz, said he was attracted to Instacart because it was a “people marketplace.” He said the company had an advantage over other grocery delivery services, including FreshDirect, because it did not rely on warehouses, trucks or other capital-intensive infrastructure.

“Grocery is the single largest category of retail in the United States and is virtually undigitized at this point,” Mr. Jordan said in an interview. “There is an enormous opportunity if someone can figure it out.”

The founder of Instacart, Apoorva Mehta, previously worked at Amazon in the “fulfillment” division, which oversees the delivery of orders from warehouses to customers. After starting in San Francisco, Instacart has expanded to 10 cities across the country, Mr. Mehta said.

The full article can be found at NYT DealBook.

Boston Deal Firm Nears Pact to Buy Stake in Hedge Fund Titan

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Brokerdealer.com blog news extract courtesy of the Wall Street Journal.

A Boston investment firm is nearing a deal to buy a stake in hedge-fund giant D.E. Shaw Group for more than $500 million from the estate of Lehman Brothers Holdings Inc., according to a person familiar with the matter.

Affiliated Managers Group Inc. AMG +0.25% has bid for the 20% stake in a deal that would value D.E. Shaw at more than $2 billion. An agreement in principle has been reached but a final deal isn’t imminent and could still fall apart, according to people familiar with the matter.

D.E. Shaw, based in New York, manages about $32 billion and is known for its quantitative-trading strategies. Lehman Brothers, the investment bank that collapsed in 2008, paid between $750 million and $800 million for the stake in 2007, part of a wave of activity before the financial crisis by banks looking to buy their way into the hedge-fund business.

Investment groups have raised billions of dollars recently to buy minority stakes in hedge funds, prompting some in the industry to question whether the market is frothy.

The deals are a way for stakeholders to profit from hedge-funds’ management fees and performance, and buyers see more opportunity as banks have pulled back to adapt to stricter capital rules on managing capital and risk.

Hedge-fund clients don’t always like the deals, worried they are a way for managers to cash out. But managers and stake buyers say the sales are often structured to ensure that managers remain active, can help motivate employees if they creates a more attractive incentive structure and can increase the long-term odds a firm will endure beyond its founder’s involvement.

For the full story, please visit the Wall St. Journal article.