Category Archives: Companies

Apollo Global Management Buying Phillips for $1.5 Billion

Companies, News, , ,

While $1.5 billion might seem like a lot of money, it isn’t when compared to the original offer made by a Chinese consortium last year for the Dutch conglomerate Philips NV: $2.8 billion.

So what got between Philips and about $1.3 billion? A secretive US-government interagency group known as the CFIUS- Committee on Foreign Investment in the US. The group examines global deals and assesses their risk value in terms of national security.

Philips was ready to sell about an 80 percent stake in its LED lighting unit whose entire worth was estimated to be close to $3.3 billion. But after the CRIUS raised some questions about some unspecified issues, the deal was dropped.

Now there is a new deal. It will be selling the same 80 percent of the unit to a New York private equity firm, Apollo Global Management.  Apollo will pay $1.5 billion, almost half of what the Chinese deal was worth. After the CFIUS gave the Chinese deal a thumbs down, the pool of possible buyers shrunk drastically, helping to push the price way down. Philips Chief Executive Frans van Houten said it is highly unlikely the CFIUS will question this deal, since Apollo is based in the US.

All the ‘Coffee’ in China: Starbucks Moving East

China, Companies, , ,

Starbucks, the giant coffee purveyor, is planning on adding an additional 12,000 stores to their existing 25,000 within the next five years. Luckily for people who like to see other stores besides those that sell coffee, not all of the additional 12,000 are going to be in Manhattan. As a matter of fact, only half are going to be built in either the US or China.

But if you really do like coffee and were even slightly worried that you might need to walk more than 30 seconds from wherever you may be to get your mandatory Caramel Brulée Latte, you can rest at ease now. As CEO Howard Schultz puts it:

“These are the early days of the growth and development of the company. If Starbucks was a 20-chapter book, I still think we’re in chapter 4 or 5.”

“Demand is there, and our ability to deploy capital and get the return on invested capital is very strong,” Starbucks President and COO Kevin Johnson said.

The fabulously successful company discussed their business plans at an investor day even in New York City last week. Schultz reassured his shareholders that:

“Our core business has never been stronger in the U.S. and around the world.”

Starbucks has its eye on the enormous potential market in China.

“Not only will China one day be bigger than the U.S., but our business in China will demonstrate that we will be one of the…most significant winners in terms of a Western consumer brand,” he said.

Businesses: Reduce Energy Costs

Companies, Economy, ,

How can the hospitality industry in the US reduce energy costs without negatively impacting the service they provide? Is it possible for hotels, motels and others to provide heat, air-conditioning, spa services, WiFi, etc., all while reducing their operating expenses?

Diversegy, a subsidiary of Genie Energy, works with clients of all shapes and sizes in this industry by providing the tools, services and training to its energy professionals to help these businesses reduce energy overhead costs.

Diversegy offers the complete package, given its knowledge of all aspects of the energy supply chain.  In addition to being consultants, they have supply-side procurement, solar and efficiency expertise in-house. For all those in the hospitality industry – from small B&Bs to medium-sized hotels and large establishments – Diversegy can offer the most efficient solutions vis-à-vis the purchase of energy.

With the assistance of the expertise of Diversegy staff, hotel managers can spend more time focusing on how to ensure the best service is provided to their guests.  A huge amount of energy is required in such establishments; Diversegy helps to reduce costs in these areas.  Once costs are reduced, profits increase, monies of which can be put toward capital improvements or investments that will ultimately attract more guests.

A Fascinating Move in the Aerospace Industry

Communications, Companies, , ,

In a fascinating move, the aerospace industry have been looking to 3D printing technology, also known as additive manufacturing. What has typically required welding together 20 parts, for instance, can now require the use of printing just one. Many industry giants like Lockheed Martin and Honeywell are using additively manufactured components into their designs. GE Aviation has recently invested $70 million in their Auburn, Alabama factory to make 3D printed fuel nozzles for their LEAP jet engine.

As Greg Morris, who is leading the additive manufacturing team for GE Aviation in Cincinnati Ohio explained to Business Insider about their situation, “We get five times the durability. We have a lighter-weight fuel nozzle. And we frankly have a fuel nozzle that operates in an environment more effectively and more efficiently than previous fuel nozzles.”

As a leading expert in the aerospace industry, Elio Moti Sonnenfeld, explained, “These technologies are transforming what we have always known was possible and making the impossible seem possible.”

In another example, Belgian aerospace company Sonaca has accounted that they are creating a partnership with France based Fives-Michelin Additive Solutions (FMAS) to both develop and produce 3D printing titanium parts that would be used for the aerospace industry.

For this specific situation, the goal for Sonaca and FMAS is to combine Sonaca’s aerospace experience with the additive manufacturing skills that Fives-Michelin has. As Bernard Delvaux, the CEO of Sonaca said “We are extremely happy to work with Fives Michelin Additive Solutions. Their reputation in AM and the performance of their machines, backed up by several years of industrial practical application, is a remarkable asset.”

Experts in the aerospace industry have explained the impact of these partnerships. As Elio Moti Sonnenfeld explains, “With the ability to create certified 3D printed titanium aerospace parts, the companies hope that they can offer clients a location where they can design, manufacture, engineer and certify production parts.”

Additive manufacturing technologies have become a location of great interest for aerospace companies. Elio Moti Sonnenfeld explains that 3D printing can offer aerospace companies a way to produce end-use parts that is both cost effective and time efficient.

In total, additive manufacturing now represents a $3 billion slice of overall manufacturing output. Greg Morris is predicting that the number will soar as high as $100 billion in the coming years.

 

 

Unilever Buying Seventh Generation Green Products Brand

Companies, News, , , ,

Unilever PLC, the European consumer products powerhouse, agreed to purchase Seventh Generation Inc, maker of environment-friendly detergents and household cleansers, for $700 million.

The London-based giant, known for its popular brands such as Dove soaps and Axe deodorants, is looking to gain a toe hold into the growing market for “natural” cleaning products. Unilever had been in preliminary talks with a different company, Jessica Alba’s Honest Co. Actress Alba’s company claims to avoid any harsh chemicals in its cleaning products. Honest Co’s asking price was $1 billion, but the deal seems to have fallen through and is unlikely to happen.

Seventh Generation was founded in 1988 and is based in Vermont. The company has been growing steadily, and had sales of over $200 million last year. In 2007 an investment deal valued the company at $100 million.

“We look at this as having a multiplier effect for our business,” said Seventh Generation Chief Executive John Replogle, who will stay on to run the company. “We always aspired to be a billion-dollar brand. We see this as a springboard as opposed to throwing in the towel.”