Friday, February 12, 2016

POSTED: Wednesday, February 10, 2016, 2:52 PM
The RevZilla bike stands as the main greeter in the RevZilla lobby located at 4020 S. 26th St., in Philadelphia, Pa. (Jessie Fox / Philly.com)

RevZilla founders Anthony Bucci, Matt Kull, and Nick Auger, who started the 200-person, Navy Yard-based online motorcycle accessories firm in a Center City garage eight years ago, say they have combined their ownership interests with JW Childs, the investment firm that owns the California-based Cycle Gear stores chain, into a new holding company that will operate both firms.

RevZilla and Cycle Gear aren't merging; the companies will continue to manage online and chain store retail, respectively, the RevZilla founders say in a statement here. See also their FAQ. More soon.

POSTED: Wednesday, February 10, 2016, 1:42 PM
The Ridley Park plant where Boeing assembles its V-22 Osprey aircraft. (MICHAEL S. WIRTZ / Staff Photographer)

(Adds comment from Boeing) President Obama's 2017 budget includes funding for just 16 new V-22 Osprey ships to get built for the Marines at Boeing's Ridley Township war helicopter factory, which employs around 5,000 (corrected), making it the Philadelphia area's largest military contracting plant. The Pentagon's 2013 procurement contract called for 18.See the Navy's new procurement schedule in the  budget here.

Will the tighter budget cost local  jobs? "The president’s budget request is the first step in a long process that will ultimately set the fiscal 2017 Defense Department budget. When all is said and done later in the year, we don’t expect to see a negative impact on the Philadelphia site," Boeing spokesman Jim Condelles told me.

You can bet U.S. Rep. Patrick Meehan, R-Delaware County, like his predecessors in that job, will labor to prevent the assembly lines from going slack. He put out a quick statement, praising Boeing's union workers and the vertical take-off and landing craft: “The V-22 Osprey has proven itself to be one of the most versatile aircraft in the Pentagon’s inventory. Marine commanders will tell you that the Osprey gives them unprecedented ability to move troops and material around the battlefield...

POSTED: Wednesday, February 10, 2016, 10:01 AM
Wawa is raising the minimum hourly wage it pays store workers to $10. (AP Photo)

Wawa, the regionally-popular food-and-fuel quick-stop chain which employs 25,000 at stores in the greater Philadelphia, Washington, Tampa and Orlando areas, used new data analytics to figure out how to get more of its newly-hired workers to stick around at least a year: By plunging them into the job with more hours in their first weeks. That reversed the chain's earlier go-slow approach, acording to business-software maker SAP.

SAP, whose US headquarters is in Newtown Square, close to Wawa's Media home, says Wawa wanted to reduce its 57% one-year quit rate for new hires. Wawa's tech people applied SAP's SuccessFactors Workforce Analytics database programs to run "predictive explorations across three key areas for Wawa -- employee flight risk, manager performance and career paths."

Wawa store managers had a practice of limiting initial work assignments to one day a week, and adding hours slowly, "because the jobs can be tough and they wanted to avoid overwhelming new hires." But the SuccessFactors data surprised Wawa by showing "a strong [negative] correlation between turnover rate and the hours an employee worked... The amount of hours worked was a greater indicator of flight than the age of employees or the community where they worked...

POSTED: Tuesday, February 9, 2016, 3:45 PM

Marc Lederman, partners with Michael DiPiano and the team at NewSpring Capital in Radnor, one of the Philadelphia area's largest stand-alone private-equity investors, brings us up to speed on the firm's recent expansion and prospects:

You know us: we are very operationally-oriented. Skip Maner is here, formerly of Inverness Graham, and TL Ventures. Jim Ashton, who was CEO of SunGard Financial for five years, and headed Premier before SunGard acquired them. 

We are north of $1.5 billion [assets under management]. It took us 10 years to grow from $90 million to $500 million, 5 years after that to get to $1 billion, less than 2 years to get to $1.5 billion.  

POSTED: Tuesday, February 9, 2016, 1:50 PM

Russ Koesterich, global chief investment strategist at BlackRock Inc., the world's largest money manager with $4.6 trillion in client cash, was in town last week to front the Chamber of Commerce's annual Economic Outlook breakfast and discussions. He sat for a few minutes to tell what he says these days when he's holding big clients' hands.

Will China's slump hurt America?  The big issue with China is less about growth. It's more about what isn't known. How fast is the deceleration? Faster than they are saying. There's a lot of uncertainty about their debt.

Now this is not affecting the U.S. economy very much by itself. The big issue is China, Russia, Brazil, all slowing down. Brazil and Russia are contracting. What does that mean for how fast the glocal economy can grow? In their (recent growth period) they racked up huge debt.

POSTED: Tuesday, February 9, 2016, 8:36 AM

Three-year-old, Philadelphia-based MissionOG says it has completed raising its first fund, for $35 million, to invest in "early and growth stage B2B focused technology companies" and "technology-based business services companies with enterprise distribution" in payments, software, and media/content.

Portfolio companies to date include Factor Trust, Pay4Later, Journey Sales, Behalf, and Philadelphia-based Cloudamize, Cloudmine, PeopleLinx and OneTwoSee, among others. More on MissionOG here.

The new money will be invested in "additional world-class companies," promises Gene Lockhart, the veteran credit card executive who is MissionOG's chairman and managing partner. Lockhart's managing partners include veteran Philadelphia tech company builders George Krautzel (ITtoolbox) and Andy Newcomb (Ecount).  The firm has a satellite office in New York.

POSTED: Monday, February 8, 2016, 4:21 PM
The Vanguard Group is based in Malvern. (DAVID SWANSON / File Photo)

(Updated) If the IRS agrees with David Danon, the former Vanguard Group tax lawyer who says the company sets aside billions in a "contingency reserve" that ought to be taxed (or credited to investors), and sets its fund service charges artificially low to avoid income tax liability: How much might Vanguard have to pay? And will that affect Vanguard shareholders?

1) In his essay, "Too Big to Tax?", and in this paid-expert report for Danon, University of Michigan Law School Prof. and tax scholar Reuven Avi-Yonah last year argued the company could owe $35 billion in U.S. income taxes and penalties. He finds this by comparing Vanguard fees to average mutual-fund industry fees as calculated by Morningstar Inc. That fed scare headlines in corners of the online financial media, asking if Vanguard could survive such charges. (My column on Avi-Yonah's report here.)

2) In a December post, "Not So Fast," University of Chicago law school assistant professor Daniel Hemel dug deeper into Morningstar data and sub-categorized fees by fund type, noting how much cheaper the index funds that account for a disproportionate part of Vanguard's funds are typically priced, by Vanguard's rivals, too. He estimated Vanguard could owe, tops, $10 billion in back taxes and fees. He expected Vanguard might have to raise fees modestly, but would survive.

POSTED: Monday, February 8, 2016, 1:13 PM
The Villanova Wildcats mascot during the second round of the 2015 NCAA men's tournament on March 19, 2015, in Pittsburgh. (Photo by Justin K. Aller/Getty Images)

Villanova University's team sports group says it has hired Fox Sports to replace IMG Worldwide as "the exclusive sales and marketing representative" for the 24 Wildcats varsity sports teams. Fox is looking for a general manager and staff to be "embedded in Villanova's athletic department," which would focus on finding more ways to raise more money. Villanova athletes play kids from other schools in the Big East Conference.

Fox Sports College Properties has set up Villanova Sports Properties to handle "radio, corporate hospitality, in-venue signage, social media integration, promotional activities, and intellectual property rights, as well as other mutually agreed upon inventory." Fox already holds TV and multimedia rights for the Big East Conference and its basketball teams are already shown on Fox Sports media.

The deal "goes well beyond a traditional multimedia rights partnership and will help Villanova promote and support, not only our flagship basketball program, but all of our sports and support services,” Villanova athletic director Mark Jackson said in a statement.

About this blog

PhillyDeals posts interviews, drafts and updates that Joseph N. DiStefano writes alongside his Sunday and Monday columns and ongoing articles about Philadelphia-area business.

DiStefano studied economics, history and a little engineering at Penn. He taught writing and research at St. Joe’s. He has written for the Inquirer since 1989, except when he left a few times to work at Bloomberg and elsewhere. He wrote the book Comcasted, and raised six kids with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, 215.854.5194, @PhillyJoeD. Read his blog posts at http://www.philly.com/PhillyDeals and his Inquirer columns at http://www.philly.com/philly/columnists/joseph-distefano/. Bloomberg posts his items at NH BLG_PHILLYDEAL.

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

Joseph N. DiStefano
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