Wednesday, May 6, 2015

POSTED: Tuesday, May 5, 2015, 1:09 PM

Philadelphia construction manager P. Agnes and contractors have started scratching the ground at 33rd & Chestnut on Drexel's campus for construction of The Study at University City, a 212-key hotel developed by developer Paul McGowan's company, Hospitality 3.

Study at University City builds on McGowan's 2008 hostel, the 124-room Study at Yale, up in New Haven. The Drexel hotel's architect is DIGSAU, Philadelphia. Drexel president John Fry is trying to boost enrollment from the low 20,000s to the mid-30,000s, and build a high-rise neighborhood to lure more corporate employers and retailers to campus. More on Study at University City from Drexel here.

Joseph N. DiStefano @ 1:09 PM  Permalink | 0 comments
POSTED: Tuesday, May 5, 2015, 12:23 PM

PTC, a Needham, Mass. company that's assembling a portfolio of Internet of Things sensor-communications software and systems, says it has agreed to buy Wayne-based ColdLight Solutions LLC and its Neuron automatic analytics platform for $105 million. The deal follows PTC's 2014 acquisition of Exton-based ThingWorx, whose systems process user data from "smart connected products," for $112 million (plus a possible $18 million bonus).

ColdLight, founded by ex-Electronic Ink COO Ryan Caplan and serial tech founder Eric Smith, reports just $2 million in quarterly software subscription sales; the price, many times yearly sales, let alone profits, is a sign of high investor interest in "IoT". (ThingWorx wasn't profitable when PTC took it out last year.) ColdLight is backed by Intel Capital and Kayne Anderson Capital Advisors LP. ColdLight raised $10 million from investors in 2013. 

NEW: A person familiar with the company told me ColdLight was valued after that deal at around $30 million, and projected $10 million in annual software-as-a-service sales, implying an expected 50%+ annual growth to get to today's price.  ColdLight registered 23 current and former employees in its retirement plan last year. The companies didn't immediately respond to calls seeking comment on whether they plan to combine operations and whether Philadelphia-area workers will more likely be hired, or cut, in the near future.

Joseph N. DiStefano @ 12:23 PM  Permalink | 0 comments
POSTED: Tuesday, May 5, 2015, 9:39 AM

(Updated:) Hill International, the New York Stock Exchange-traded construction-project and risk management company that plans to move its headquarters to Philadelphia (at $29/sf) from Marlton N.J. ($26/sf), says its board unanimously rejected a $5.50/share takeover offer from DC Capital Partners LLC, Alexandria, Va. DC hoped to combine Hill with Michael Baker International, a Pittsburgh firm DC bought in 2013, and reduce Hill's reliance on big but sometimes volatile projects in the Middle East.

Hill shares rose toward $5. The deal is premium priced by recent standards: Shares have traded below $4 on disappointing sales and profits, as new deals with clients including NYC Transit, NJ Turnpike, GSA and Abu Dhabi National Oil Co. failed to fully replace lost growth from stalled Hill contracts in war-torn Iraq and Libya. (Hill says most of its Mideast business is in more stable countries like Saudi Arabia and Abu Dhabi.) 

But the offer "substantially undervalues HIll's common stock" and its prospects for growth, Hill chief executive David Richter, son of founder Irvin Richter, told Campbell in a return letter today. In a separate statement to investors, Richter called DC's offer "grossly inadequate." Hill shares were above $7 last Spring, and $19.30 at the stock's 2009 high. The company is fighting the prospect of a hostile takeover by flooding its capital base with new non-trading shares, which Richter told investors will counter DC's "coercive short-term tactics."  

Joseph N. DiStefano @ 9:39 AM  Permalink | 0 comments
POSTED: Monday, May 4, 2015, 4:22 PM

NJ Gov. Chris Christie today declined to sign Senate Bill 2430, which would have expanded reporting of millions of dollars in annual fees paid by the state's chronically underfunded state and local government pension system to private firms that invest the money and provide more detail on their political contributions. 

"I agree it is important to disclose the fees... so that we can identify where our success in private investments is greatest," Christie said in a statement. "However," he added, "many of the premiere fund managers may elect not to continue a relationship with the State if their confidential fee arrangements will be made public," which could lead to "suboptimal returns."

Christie did not cite any examples of "premiere" fund managers who are afraid to have their fees disclosed, and a state Treasury spokesman didn't provide examples. 

Joseph N. DiStefano @ 4:22 PM  Permalink | 0 comments
POSTED: Monday, May 4, 2015, 4:02 PM

Egan-Jones Ratings Corp. has followed proxy advisory fims Institutional Shareholder Servcies (ISS) and Glass Lewis & Co. in urging DuPont Co. shareholders to vote for billionaire activist Nelson Peltz to win election to the DuPont board over company-backed incumbents in a contested election May 13.

Egan-Jones has joined ISS in also endorsing former GE Capital executive John Myers, a Peltz ally. Egan-Jones has also gone further, by recommending votes for the other two Peltz-backed insurgent candidates, Arthur B. Winkleblack and Robert J. Zatta. 

Writes Egan-Jones re DuPont: "While we note that as shown in the Egan-Jones Ratings Corporate Stewardship & Compensation Analysis Report the overall rating for this company is "GOOD” (http://comprtg.com) we are concerned that the dissident thesis is correct and while current macro-economic conditions and lower feedstock pricing have allowed this company to produce a decent shareholder return despite high administrative costs and other failures and that there is ample opportunity for far better returns.

Joseph N. DiStefano @ 4:02 PM  Permalink | 0 comments
POSTED: Monday, May 4, 2015, 12:45 PM

Philadelphia real estate tax revenues slipped to $981 million in the three months ended March 31, from $991 million in early 2014 and just over $1 billion in 2013, says elected Philadelphia city controller Alan Butkowitz (corrected) in a report today. 55% of real estate tax money goes to the city public school system, which has limited taxing authority and is otherwise dependent on city and state payments. 

Under that formula, schools collected $541 million from the tax so far this year; city government got the other $440 million. Most real estate taxes are collected during the first quarter. According to Butkowitz, the school faces a budget shortfall of $25 million due to lower real estate tax collections this year. 

Why the drop, if housing prices and construction in neighborhoods surrounding Center City and the universities keeps rising? "The City hasn’t indicated a reason as to why the real estate collections are down," controller spokesman Brian Dries told me. "Last year when the collections dropped during the same quarter, the City attributed it to the backlog in assessment appeals from the Actual Value Initiative." Still backlogged? Butkowitz wants to know more. 

Joseph N. DiStefano @ 12:45 PM  Permalink | 0 comments
POSTED: Monday, May 4, 2015, 12:05 PM

A string of large U.S. data centers "are being shopped" by owners including AT&T and Verizon, reports analyst Kevin Smithen at Macquarie Research. Verizon is looking to raise cash from its modern Terramark systems, while keeping its cloud infrastructure business. But, other than Terramark, Verizon and AT&T data assets are mostly "outdated legacy facilities" that modern center operators aren't likely to want, Smithen added.

Separately, Telx Group, one of the major private data center providers, is For Sale by owners Berkshire Partners and ARBY Partners, with 20 data centers on offer at $2 billion. Cervalis Holidngs LLC and its 4 data centers has agreed to be acquired by publicly-traded CyrusOne (CONE) for $400 million. And Carlyle Group is cashing out part of its interest in CorSite Ralty (COR), Smithen says.

Amazon Web Services (AWS)'s large capability has become both a stimulant and "an emerging threat" for data center operators, Smithen concludes. 

Joseph N. DiStefano @ 12:05 PM  Permalink | 0 comments
POSTED: Monday, May 4, 2015, 11:34 AM

(Revised) Less than two years after opening a Philadelphia office, Avison Young, a Toronto-based company that calls itself "the fastest-growing commercial real estate service provider in the world," has taken over a local project-management competitor, Remington Group, and its Wayne headquarters. Terms of the deal weren't disclosed.

"Project management is integral to us," along with design and construction servcies, David Fahey, Avison Young's Philadelphia-based principal and managing director, told me. "Remington was Number One on our target list." Remington founder William Connor will report to him.

"We are taking what was Remington to the next level, bringing Avison Young services to where our reach will be much broader," Connor told me. "For full service companies like Avison, project management is a key resource to be able to offer their clients."

Joseph N. DiStefano @ 11:34 AM  Permalink | 0 comments
About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

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