Case Blog

In one of my earliest postings in September of ‘07, Global Brands, I wrote: “As we transition to a digital world, managing our brands becomes ever more demanding. Microsoft, which has done wonders with the Windows and Office brands, stumbled as they tried to rebrand Hotmail, IM and Search under the Windows Live brand. I am certain that with their unlimited resources they employed several of the best branding agencies in the business, but they still struggled through this transition. Those of us who come to this with much less in the way of outside assistance must clearly understand that we need brands that can travel globally…All of us in the B2B or B2C space tasked with transitioning to the digital world are looking for the Holy Grail, an umbrella brand that inspires confidence and trust and at the same time can support many vertical channels. Strategy sessions and market tests play an important role in this process. Marketing dollars invested in branding will yield significant returns, although without strong digital brands there is not much chance of survival for print brands, even those with storied histories.”

In the fall of ‘07, my partners at Austin Ventures and I were still in the search mode to find a platform that we could acquire and grow.  It was almost a year later when we zeroed in on the institutional financial sector, with a focus on asset management. In fairly short order, we acquired Asset International, The Trade, and Strategic Insight.

We decided that we would operate under the Asset International name, as it provided a very clear brand and would allow us to add significant brands under the Asset International umbrella. Today we have established a new London office for Strategic Insight to support the Simfund Global database and analytics platform. In the next several months we will open a comparable office in Hong Kong for our expanding client base to support these well-known business intelligence products and services. This client base historically has been composed of mutual fund companies, but recently we have seen it expand in the U.S. to include other business sectors, including private equity firms that have a strong interest in the financial sector.

In addition, this past spring we launched Plan Sponsor Europe out of London. With this very strong retirement-focused brand and its print, online, research reports, and conference components, Plan Sponsor Europe is offering longtime clients like State Street (STT) a known brand to support their defined contribution efforts in the United Kingdom and on the continent. They have reserved our prime real estate, our back cover, to deliver their message for the balance of the year. In ‘11 we will launch Plan Sponsor Asia/Pacific edition. Recently, Global Custodian released its 2010 Prime Brokerage Survey, which received wide coverage in the business press and was quickly established as the standard for this segment of the industry. This brand, along with Strategic Insight, has had a global impact for more than 20 years.

The TRADE expanded its business several years ago by launching The TRADE Asia and this year launched The TRADE Growth Markets. They also expanded their global web presence with www.thetradenews.com. Finally, ai5000, which focuses on the professional information needs of the Chief Investment Officers of the largest global assets owners, launched their Chief Investment Officer Summit (CIOS) in New York and will hold the second summit in London on October 7th and 8th.

We will continue to expand our business by investing in our core brands on a global basis and serving the needs of our client base in the major markets they operate in.

You can learn more about our global brands and how they can assist you build your global market share by going to www.assetinternational.com.

Two weeks ago in my posting, $1 Trillion Dollar Rescue Plan & a Changing of the Guard, I closed with: “This was clearly a historic week on the continent and in the United Kingdom. There is a new determination to deal with the structural issues that have left most of the countries with debt loads that the global bond markets can not support in the long run, and there is a new a resolve by these countries to put themselves on a course that will support sustainable long-term growth. The Obama administration will need to start addressing deficit reduction as well as we approach the November mid-term elections. Those of us in the private equity business will be closely watching the impact of government actions on recovering credit markets.”

Since I wrote that, Treasury Secretary Geithner visited England and Germany on his way back from China and advised them to take action to put the $1 trillion dollar rescue plan into effect. “After two years in which an historic financial crisis seemed to deprive the U.S. of its self-confident global economic leadership, Mr. Geithner signaled a newfound willingness to reassert American authority on the future of the world economy… ‘What Europe should do is implement the program they laid out,’ Mr. Geithner said Wednesday. The basic lesson of financial crises is that you have to come in and act quickly and with force.” (WSJ: May 26, 2010) Then on the 27th China denied it was reviewing its holding of Eurozone debt. “The denial—which followed a Financial Times report Wednesday about the State Administration of Foreign Exchange, an agency that rarely answers questions from the media—highlights China’s awareness of how volatile financial markets have become increasingly sensitive to even hints about how Beijing deploys its enormous foreign reserves.” (WSJ: May 27, 2010)

In spite of all of these efforts, the global equity markets were pummeled in May. “Between the ‘Flash Crash’ and angst over the worsening crisis in Europe, stocks suffered a dismal May, posting their worst decline for the month since Franklin Roosevelt was in the White House.” (WSJ: May 29, 2010) To further contribute to the slide, Fitch announced that they were downgrading Spain’s credit rating. (FT: May 28, 2010) What does this new religion about reducing deficits as a percentage of GDP mean going forward? I turned to Bill Gross’ June Investment Outlook letter, “Three Will Get You Two (or) Two Will Get You Three.” (Pimco) “So the developing predicament is becoming more obvious to Shakespeare’s ‘lenders and borrowers be,’ ” Gross writes. “Fiscal tightening and budget conservatism may have come too late for Greece and its global lookalikes. Continued deficit spending may be an exorbitant privilege extended to only a few. Caught in the middle are many developed countries that likely face New Normal growth rates and a continued bumpy journey toward that destination. Investors must respect this rather tortuous journey in the months and years ahead for what it is: A deleveraging process based upon too much debt and too little growth to service it. No longer will ‘two get you three’ in the investment world. Not 1,000%, but 4-6% annualized returns for a diversified portfolio of stocks and bonds is the likely outcome. And be careful — sometimes ‘three gets you two.’ ”

On a more positive industry note, the conference and exhibition business is showing signs of life after a very difficult ‘09. Informa, which derives almost 50% of its global revenues from events and training business, is a candidate “for promotion in next month’s Footsie index reshuffle.” (FT: May 25, 2010)

We are also enjoying a strong recovery in our events business at Asset International. On May 20th and 21st, ai5000 Editor-in-Chief Kip McDaniel produced our first Chief Investment Officer Summit (CIOS) in New York City. The event received high marks from all the attendees and sponsors. Our featured dinner speaker was Nassim Nicholas Taleb, best-selling author of The Black Swan, which has just been released in a second edition with a new section, “On Robustness and Fragility.” I highly recommend that this book gets added to your summer reading list.

We will hold our second CIOS event of the year in London on October 7th and 8th and once again Nassim Taleb will be the featured speaker and will explain how Black Swan events result in the market volatility we are experiencing.

As we headed to JFK early on Monday morning for our BA flight to London, we learned that over the weekend the Eurozone leaders had fashioned a rescue plan that went well beyond Greece and assured the world that Spain and Portugal would not be the next dominoes to fall. Shortly thereafter both countries announced new austerity moves to further assure the world debt markets that they were serious about bringing down their debt levels as a percentage of GDP. The I.M.F. and the U.S. Federal Reserve contributed in their own way to further assure the world markets. By the time we landed in London on Monday evening the world’s stock markets had rallied for their biggest one-day gain in over a year.  As the European leaders went home, the Euro remained under pressure and by the weekend had fallen to an 18-month low — below $1.25 to the EU €1. The world markets remained concerned that the new austerity measures imposed on the PIIGS (Portugal, Ireland, Italy, Greece & Spain) could lead to another recession in Europe while the world slowly recovers from the Great Recession. (NY Times: May 14, 2010)

Against this backdrop, when we retired on Monday evening Prime Minister Gordon Brown was still clinging to the hope that he could derail the discussions between the Liberal Democrats and the Conservatives by entering into discussions with the Liberal Democrats on forming a Labour-led coalition.  While Mary Claire and I were out to dinner with friends late on Tuesday evening, it became clear that Labour’s 13-year run had come to an end. The next day Gordon Brown tendered his resignation to the Queen and a swift transition began with David Cameron meeting with the Queen and then quickly moving into 10 Downing Street as the new prime minister. The Conservatives and their new allies, the Liberal Democrats led by Nick Clegg, quickly announced to the country that they had formed the first coalition government since Winston Churchill’s coalition government during the darkest hours of World War II.  Labour will have a new leader, but Gordon Brown will retain a seat in Parliament. Nick Clegg has become David Cameron’s deputy and at their first cabinet meeting announced their own set of austerity measures to deal with the large deficit that grew out of the Great Recession. The Pound Sterling strengthened versus the Euro as the week unfolded.

This was clearly a historic week on the continent and in the United Kingdom. There is a new determination to deal with the structural issues that have left most of the countries with debt loads that the global bond markets can not support in the long run, and there is a new a resolve by these countries to put themselves on a course that will support sustainable long-term growth. The Obama administration will need to start addressing deficit reduction as well as we approach the November mid-term elections. Those of us in the private equity business will be closely watching the impact of government actions on recovering credit markets.

Mary Claire and I have flown to Dublin for the weekend and will return to New York on Monday evening.

The recent news in New York has been positive for the institutional financial services sector. Two weeks ago Bank of America (BAC) surprised most analysts by announcing that they had worked out an agreement to pay back the $45B of TARP funds they needed to carry them through the Great Recession. Greg Curl, one of the internal candidates to take over from Ken Lewis as CEO, negotiated the arrangements with the government. Shortly after the announcement Bank of America sold new shares, which gave them the capital base they needed to pay back the Treasury. It is becoming clear that the government will get their desired return on the TARP funds, as they predicted. The Merrill Lynch acquisition by Bank of America is starting to look better each quarter as trading profits improve dramatically. Citigroup (C) and Wells Fargo (WFC) remain the two money center banks that have not yet repaid the TARP funds, but they are inching closer to an agreement each week.

I flew to London on Wednesday to spend time with our two U.K. subsidiaries, Global Custodian and The Trade. I found the overall mood to be positive and The City looking very festive for the holiday season. I was greeted, though, by headlines in the Financial Times that Chancellor Darling was imposing a new 50% tax on bankers’ bonuses to be paid by the institutions. Prime Minister Gordon Brown was able to quickly get the support of the French President Sarkozy, while the Germans demurred. It seems like we will have to live for a while with the idea of taxing an industry in recovery from the worst downturn since the Great Depression.

Finally, on the media side of the equation, Springer Science & Business Media was sold, not to a strategic buyer like Informa, who had been evaluating a deal, but to EQT, a Swedish private equity firm controlled by the Wallenberg family and GIC, Singapore’s sovereign wealth fund. (Telegraph, 12/11/09) The sale was driven by Candover’s and Cinven’s need to exit this investment, with loans coming due next year. Derk Haank, a former colleague at Reed Elsevier and a very able publisher, will continue as CEO. This deal is another sign that the private equity media market is starting to emerge from a very slow ‘09, with leverage returning to the market.

This Thursday when we sit down to Thanksgiving dinner with our family and friends the majority of us will be thankful for surviving the Great Recession and seeing a very challenging year for the global economy come to an end. While we are cautious in our outlook for 2010, we know that the first and second quarters will show significant growth over ‘09, when we were still in free fall.  Earlier this week, Treasury Secretary Tim Geithner appeared on Capitol Hill before a Joint Economic Committee hearing and discussed winding down the TARP program. In a “sometimes contentious” hearing he made the point that the economy is in much better shape than when the Obama administration took office in January. (NY Times 11/20/09)  In spite of Representative Kevin Brady, a Texas Republican, calling on him to resign because the economy “was such a mess,” Geithner held his ground that there has been significant improvement.

As we move into 2010, I would like to see President Obama and his administration focus on job creation. With the unemployment rate over 10 percent and forecast by most economists to remain there for all of next year, we will not see sustainable growth until we move toward a significantly lower unemployment rate. This will require a more open and trusting relationship with the business community and a more realistic approach to tax policy at a time when the economy remains under pressure. As we move toward the mid-term elections next November, job creation and unemployment will be the key issues.

We are starting to see signs of the private equity market coming to life in the media and business information sectors. During the first week of November, IMS Health (RX), the leader in providing “market intelligence to the pharmaceutical and healthcare industries,” announced that its board had entered into a definitive agreement to be acquired by TPG and the CPP Investment Board. (IMS Press Room 11/5/2009) Goldman Sachs (GS) will provide the debt financing to take IMS private.  The total value of the transaction will be $5.2B and represents a significant premium for the public shareholders.

IMS was founded in 1954 and was acquired in 1981 by Dun & Bradstreet (DNB). It was later spun out of D&B as a separate NYSE company. Several years ago, VNU, later renamed Nielsen, announced plans to take over IMS and reunite A.C. Nielsen and IMS, which had both been spun out of D&B, but the shareholders revolted over the poor performance.  Management was forced out and eventually VNU was taken private by five large private equity players and now operates privately as Nielsen.  This transaction when completed will represent the largest leveraged buyout of ‘09. (WSJ 11/06/09)

I will close with some wine tips to accompany your Turkey Dinner!

Blankiet
This small winery is an inspired producer of outstanding wines. The 2006 Rive Droite is a Saint-Emilion styled, limited production (only several hundred cases) wine that will complement your meal and not overwhelm it. www.blankiet.com

Kistler
I just received my fall shipment of Kistler Chardonnay and Pinot Noir. The ‘07 Pinot Noir Sonoma Coast (RP 91-93) would be an excellent choice for Thanksgiving dinner. www.kistlervineyards.com

Merryvale
A more value-oriented selection would be Merryvale’s ‘07 Pinot Noir, Carneros. This is one of my longtime favorites to visit in Napa. www.merryvale.com

Miguel Mendoza Malbec, Reserva
This 2006 Malbec is for those of you looking for something different that also provides great value. This wine retails for under $20 and can be found at Sherry-Lehmann online or at their Park Avenue retail store.  www.sherry-lehmann.com

Mary Claire and I are headed to Boston to have dinner with our family and our car will be filled with the wines listed above. Happy Thanksgiving!

This is a guest blog post by Jason Cassidy, Asset International’s Senior Vice President of Strategy and Development.

By Jason Cassidy

In the past few weeks we have seen the busiest IPO market all year with IPOs from high-growth companies like A123 Systems in the alternative energy sector and Shanda Games in the Chinese gaming sector. More recently, Blackstone Group announced it would take some of its investments public. Private equity and venture capital firms finally have a public exit alternative again. At the same time, we have also seen some large strategic deals like Xerox and Abbott Laboratories acquiring large companies, and even in an out-of-favor sector like newspapers Gannett was able to take on debt in its recent bond deal. Thus, the M&A market for large corporations with access to cash seems to be open again.

At first glance, the availability of exits and acquisition demand from large strategics may mean that higher valuations will follow. Add to these new demands the pent-up supply of companies looking for an exit, one might expect a flood of deals to hit the market. In addition to providing current exit potential, the IPO market opening gives venture investors in high-growth sectors and private equity investors with a focus on larger companies a reason to invest again. Add to that strategics with cash and a need to acquire to boost growth, and the world seems right again for deals.

The one area we may still have to wait to return is private equity deals for smaller, lower growth companies without the prospect of an IPO exit. With the debt markets still somewhat expensive and less generous, PE investors may not be able to see their way to strong returns yet. However, this too will open up soon and we will be back to strong deal flow across the board (with perhaps a bit more conservative leverage for a little while at least).

About Jason Cassidy, Asset International’s Senior Vice President of Strategy and Development.

Prior to joining Asset International, Mr. Cassidy was Vice President of website solutions for Register.com, where he oversaw sales, operations, customer service, marketing and product management with the primary focus on small business customers. Previously, as Vice President of Reed Business Information, he was actively involved in global strategy and development, including M&A initiatives and international development, and managed a portfolio of websites. Mr. Cassidy earned an M.B.A. from Duke Fuqua School of Business (2007) and an A.B. from Harvard University (1998). Originally from Boston, he and his family reside in Staten Island, New York.

In my last posting, I wrote about what the B2B industry will look like as it emerges in ’10 and ’11 from the deep recession (B2B Media Business on the Recovery: A Sneak Preview). While I am certain that we are now in a recovery cycle, economists, pundits and others are still debating where we are with regard to the recession ending and the recovery beginning.

When the history of this recession is written after all the data points are recorded, I believe that the 2nd quarter of ’09 is where we will officially mark the start of the recovery. As we close July it is difficult to see the recovery beginning because the summer months are traditionally slow months for the economy. This is particularly true for the media business. However, I am confident that September-December will confirm that we have started to see a fading recession in our rearview mirror and accelerating growth before us. It will be ’10 and ’11 before we know how strong and sustained the growth cycle will be, but it will certainly provide for a more robust deal market, as private equity firms and strategic investors begin again to redefine their portfolios.

Understanding the impact of this recession may be difficult at this point, but one benchmark that I will use to gauge the depth of the recession is Microsoft’s (MSFT) earnings announcement last week, where for the first time since they went public in the mid ’80s a year-over-year decline in revenues was recorded.

As we enter August, the Yankees and the Red Sox, the greatest rivalry in sports, are fully engaged, with the Yankees holding a slim 2 1/2 game lead over the Red Sox, in spite of having lost all eight head-to-head games this season. On Saturday I went to the new Yankee Stadium for the first time. I was delighted to see that the design of the field and the fabled facade give a sense of still being in the old stadium, while the comfortable seats and new amenities and restaurants remind you that this is a new experience. Sitting six rows behind home plate offered a wonderful vantage point, in spite of the Yankees losing to the last-place Oakland A’s after having won eight straight after the All Star break.

Finally, every golfer over 50 I met this week was feeling Tom Watson’s disappointment at having come so close, at age 59, to winning one more British Open, only to see his hopes evaporate on the 18th hole and then lose in a playoff to Stewart Cink, who is in his mid-30’s and realized his first major victory.  If you are looking for an interesting golf book to read, I would recommend “Are You Kidding Me?: The Story of Rocco Mediate’s Extraordinary Battle with Tiger Woods at the US Open” by Rocco Mediate & John Feinstein  Publisher: Little, Brown & Company.

At the start of this long Memorial Day weekend, it is clear that with spring we saw some “green shoots” and sensed that we had most likely touched bottom in this deep recession in February or March. Confidence has slowly returned with regards to our financial system and the strongest banks are in the midst of negotiating with Treasury Secretary Geithner on when they can repay the TARP funds. Our credit system has slowly defrosted as well. As we move toward summer, we will start to hear more and more about possible debt swaps, done at significant discounts, from overleveraged private equity deals that have survived but are still searching for a way forward. While my focus is on the media sector, this process has started across all sectors of the economy.

Back in October, I wrote in A Family’s & an Industry’s Conundrum about the depressed newspaper industry, with a focus on the New York Times Company (NYT) and the McClatchy Company (MNI), both family controlled, longtime publishers. Since that time both of them have seen their fortunes worsen as the advertising free fall from November to February left both of them in significantly worse financial shape than they were in the early fall.

McClatchy announced earlier in the week that they are pursuing a debt swap at a significant discount. (WSJ May 22, 2009) They have asked bondholders of $1.15B of their debt to take equity stakes that equate to a range of $.18-$.33 on the dollar, varying by issues they hold and how quickly they agree to the terms. If they are successful, McClatchy could lower its debt load by as much as $500M and, most importantly, gain three years to repay the bonds that currently come due in 2011. Together with the significant cutbacks in fixed costs they have already made, this “reset” could give them the breathing room they need to reinvent their news franchises across the country.

While radio appeared to be surviving as a medium better than the newspaper sector, the deepening recession showed us that this was not the case. Last year in a much-publicized deal, Bain Capital LLC and Thomas H. Lee Partners LP finally took Clear Channel, a public company controlled by the Mays family, private. The deal was protracted, and in the end the company went private at a slightly reduced price per share with a debt load of $22B, compared to its $5.9B debt load when it operated as a public company. Clear Channel’s radio business experienced a 22% decline in advertising revenue in the first quarter of ‘09. (WSJ May 11, 2009) As part of their effort to reduce costs, they have had significant layoffs and suspended their 401K matching contribution. This has been a common response to the current recession by overleveraged companies across all sectors. Nevin Adams, editor-in-chief of PlanSponsor, has chronicled many of these 401K matching contribution suspensions in his daily, NewsDash. It has been widely reported in the business press that the two private equity sponsors are now trying to negotiate a debt swap to avoid violating loan covenants later in the year. The New York Post reported that the initial proposal has been rejected by two of the senior lenders. (NY Post May 22, 2009)

At the end of the day, I sense that both of these debt swaps will get done with some modifications. As the economic recovery takes place, both businesses will have bought some time to move from an analog to a digital strategy that will allow them to survive, although as much less dominant national players then they were prior to this recession. Advertising dollars are starting to be spent again, and we should not lose sight of the fact that Google emerged dramatically from the last recession. There is tremendous leverage in the advertising/marketing spend, but yesterday’s dominant players do not always emerge as the tomorrow’s leaders.

I spent most of last week in London, where Gordon Brown’s government remains under pressure from the Tories to call for a new election. The expense scandal that engulfed the House of Commons while I was there certainly has not strengthened Labour’s hand to resist. Just as we saw the Democrats and President Obama take over from eight years of Republican control of the White House, I sense that the Tories’ time is near after more then 10 years of Labour’s dominance during the Blair years and the current Brown term.

I have noticed during the past two recessions, where I have had a unique window into both the U.S. and UK advertising markets, that British companies do not move to cut their marketing spend as dramatically as their U.S. counterparts. I trust that this serves them well during the recovery, where the strongest companies can gain very profitable market share. There is a lesson for U.S. marketers in this strategy.

Before we turn to opportunities, I need to do a mea culpa on my pick of Louisville to go all the way after they trounced Arizona. They unexpectedly ran into the Motown favorite, Tom Izzo’s Michigan State Spartans. Detroit needed some magic and the team from 90 miles away in Lansing answered the call. The idea of Louisville playing in an all-Big East final faded away and we found Michigan State facing North Carolina in the final. The Spartan dream ended quickly at the hands of Ty Lawson and Tyler Hansbrough.  Coach Roy Williams took President Obama’s call after the game, congratulating Williams and his team and also thanking him for vindicating Obama’s pick of UNC to win the tournament. I will defer to the nation’s #1 fan when next year’s brackets are released.

Turning to the Masters this past Sunday, we saw a “final within a final.” With Tiger Woods and Phil Mickelson trailing the leaders by a significant margin when the third round ended on Saturday, they were paired together for the final round on Sunday. With the crowds and the cameras following them on Sunday they found magic, with Mickelson tying a course record 30 on the front 9 and Tiger gradually bringing the leaders within reach. This was the first Act of a very enjoyable play. On the back 9 in Act II, we realized that Tiger and Phil were going to fall short, as the magic faded and they gave back several strokes and Kenny Perry had the Green Jacket within reach. Then the unthinkable happened: a very consistent golfer trying to sit on a lead bogeyed both 17 and 18 to find himself in a three-way tie. The final Act was a sudden-death play-off between Perry, Angel Cabrera and Chad Campbell. Cabrera had stayed close all day, and when Perry left the door open Cabrera was not going to be denied. He walked off with the Green Jacket and his second major championship, having won the US Open in ‘07 at Oakmont.

The media market has significant opportunities in ‘09, but they are not all obvious and they are very different than they have been in the recent past. Across the various sectors there are companies that were overleveraged, and in this advertising tsunami they do not have the cash flow to meet their debt obligations. Many of them have excellent brands and are well positioned within their sector for a rebound as the economy improves. They will need to be recapitalized, though, in order to survive. With strategic investors on the sidelines waiting for the storm to pass, the opportunity will fall, once again, to the private equity investors who have dry powder and recognize the upside potential. It will also fall to some of the lenders, who will find themselves trading their debt for equity.  This opportunity may even exist for some of the overleveraged newspaper properties that have strong brands, community support and a digital strategy for the future.

Yesterday Goldman Sachs (GS) made two important announcements. First they are going to raise capital in the public markets to be the first major financial institution to repay the TARP funds to the government. I trust that many more will follow over the next several quarters. I sense that this demonstrates that we have touched bottom and we are at the beginning of a recovery, although on any given day it does not feel that way. The financial stocks rallied on this news. Goldman Sachs also announced that they are in the process of closing a $5.5B fund to buy private equity investments at a discount in the secondary market. The GS Vintage Fund V (WSJ 4/13/09) will be the largest secondary fund raised to date. Many pension funds and endowments that need liquidity are now open to selling their positions in this asset class at a discount. Again, for the savvy investor, this is a time of opportunity.

Finally, if you go to www.assetinternational.com and click on AI’s 5000 you will find the opening pages of, “Harvard Has a Cold,” by Kristopher McDaniel. He chronicles why Harvard, earlier this year, tried to sell some of its private equity holdings in the secondary market. This is the type of in-depth, quality reporting and analysis that you will find in this digital publication when it launches in early June.

On Thursday March 12th in the Wall Street Journal, Peter Lattman wrote,  “The LBO is dead. Long live the EBO” (WSJ, “Lacking Leverage, Firms Embrace EBOs”).  In the article he quoted Scott Nuttall, a partner at KKR speaking at a private equity conference, “Opportunities abound right now. You don’t need to use leverage to buy companies when they’re trading at a 50% discount to their historic average multiples.”

The appeal of the EBO for the seller is there is not the risk of a transaction failing to close because of the credit markets. In the same article, an October deal by Advent was cited. Advent paid all cash for a card-processing business, later renamed Monext. This was a $260M transaction. “We were able to provide certainty, which is a scarce commodity these days,” according to  Advent’s Stephen Hoffmeister.

In the media space we will see more EBOs than LBOs this year — if deals are going to get done. The EBO does carry some risk for the private equity firm, though. In order for these deals to be successful in the long run, there needs to be realistic price expectations  on the part of the sellers and their advisers.

Earlier this week, Bill Cohan’s new book, “House of Cards: A Tale of Hubris and Wretched Excess on Wall Street,” was published by Doubleday.  The initial reviews have all been outstanding. Bill has clearly made the transition from investment banker to established author. This story of Bear Stearns’ demise, together with his first book, “The Last Tycoons,” has established him as a force to be reckoned with on Wall Street.

Later this afternoon, “Selection Sunday” will provide answers for the March Madness field of 65. There are always disappointments for the schools on the bubble, but on Monday morning the NIT selection extends their season.

Several readers have asked for some new wine recommendations to carry them from winter to spring. Here are several new ones from northern California that provide both value and very good quality.

Steel Plow Syrah
Landmark Vineyards consistently produces quality wines that represent real value. Most of their releases are priced between $20 and $40. One of my recent favorites is their ‘06 Steel Plow Syrah, which can be purchased on their website for $30.  I have had it several times recently in restaurants and find it to have depth. It is perfect when paired with a short rib on a winter evening.  The Wine Spectator recently rated it a 94 (WS 94). www.landmarkwine.com

Anagram
I was recently introduced to Rich Moran by my friend and former publishing colleague Stewart Alsop. Rich is a partner at the venerable venture capital firm Venrock. Rich and his wife Carol collaborate on producing limited (600 cases per year) Bordeaux-style blends, named Anagram. Their vineyard is located in Knights Valley. I ordered a mixed case of their ‘04, ‘05 and ‘06 releases. When we returned late on Friday night to New York City from Blackhawk, we opened the ‘04 Anagram with our favorite pizzas from Una Pizza Napoletana (www.unapizza.com). I was impressed with the balance, the wonderful nose and the nuances of this release. I could not find a review from either the Wine Advocate or the Wine Spectator, but I rated it an 89-90. At an average price of $40 this represents excellent value. Please let Rich or Carol know when you order that you have read this blog entry. Small wineries need viral, word-of-mouth marketing. It is nice to see someone from our industry have as many varied interests, all of which Rich does successfully. While Stewart introduced us, Rich and I must thank Tom Peterson of El Dorado Ventures for pointing out to us that we shared a passion for wine.
www.moranmanor.com

Lucia Chardonnay, Lucia Pinot Noir
This is another brand from Pisoni Vineyards. The current releases include the ‘07 Lucia Chardonnay, $40 and the ‘07 Lucia Pinot Noir, $40.  It also includes the Gary’s Vineyard release for $50. I am just ordering this weekend, but since their introduction several years ago, all of the Lucia releases have represented excellent quality and value. www.luciavineyards.com