Wednesday, April 1, 2015

POSTED: Tuesday, March 31, 2015, 2:55 PM

Shares of Citizens Financial Group are up 13 percent since the bank's initial public stock offering (IPO) on the New York Stock Exchange last September. That beats the KBW Index of big-bank stocks, which has been flat, as bank profits have been squeezed by low interest rates.

Last Wednesday, Citizens sold a second chunk of shares, at $23.75 a share, and has since moved above $24, as mutual funds joined last fall's hedge funds among Citizens' lead investors.

Citizens, a Rhode Island company which locally operates the Philadelphia area's third-largest bank branch (after Wells Fargo and PNC) and naming right sto the Phillies stadium, is a "turnaround" story, says Bruce Van Saun, the New Jersey native who serves as Citizens' chief executive officer. Rising share values shows "our strategy is working, and investors want to own the stock," he told me, citing two quarters as a public company posting higher profits.

POSTED: Tuesday, March 31, 2015, 8:36 AM

Comcast CFO Michael Angelakis will be CEO of a new investment company "that will focus on investing in and operating growth-oriented companies, both domestically and internationally," Comcast boss Brian Roberts said today in this statement. Comcast will invest up to $4 billion in Angelakis' venture. Angelakis, a veteran investor who was a principal at Providence Equity Partners, will invest another $40 million. UPDATE: Read Bob Fernandez's story in the Inquirer here. 

For now, Angelakis "will remain in his current role as CFO and making sure there is a smooth transition when a new replacement is found," spokesman John Demming told me. "He is going to be fully engaged in his current role and will continue his day-to-day work, close the Time Warner Cable transaction after regulatory approval is received, and begin the integration process with Time Warner Cable and the related transactions. After a new CFO is appointed, he will become a Senior Advisor to Comcast. He is also going to help Brian recruit a new CFO." 

Roberts credited Angelakis with laying groundwork for Comcast's planned purchase of Time Warner Cable. The company's moves into programming (including NBC Universal) and Internet and smartphone-based services creates many opportunities for start-ups and partner companies, and Comcast and senior officials have a history of investing in those firms and other emerging tech companies, both through affilates such as Comcast Ventures, and directly. Comcast's founding CFO, Julian Brodsky, made millions through well-timed investments in Internet Capital Group during the bubble and has remained active as an investor. 

POSTED: Monday, March 30, 2015, 4:47 PM

Each time the DuPont Co. sells or spins off a business, it leaves DuPont's century-old monolithic headquarters above the Hotel du Pont on central Wilmington's Rodney Square, to settle in some other community. Drugmaker Endo International, spun off by DuPont and Merck in 1997, left Wilmington for Malvern, though for tax and legal purposes it's now based in Ireland. Invista, the textile business that brought us nylon and much more, has been owned since 2007 by Koch Bros. Industries and based in Wichita, with a research lab in Newark, Del.

DuPont's latest round of reorganization will create more global headquarters. Where will they go?

Axalta Coating Systems, spun off in 2013, is currently headquartered in Brandywine Realty Trust's Commerce Plaza at 2001 Market St. in Center City, with regional HQ in Glen Mills. "We are here, this is our global headquarters, we have decorated this as our home," Axalta spokesman Matt Winokur told me, citing the two-story Color Wall the company has painted along the stairway between the 35th and 36th floors at Commerce Square.

POSTED: Monday, March 30, 2015, 1:30 PM

Berry & Homer, which prints ads on fabric to wrap around vehicles and buildings, is leaving its home in Philadelpha's Port Richmond for new quarters in Pennsauken, after New Jersey approved a $3.14 million, 10-year tax incentive so the firm can buy the building for $1.3 million.

The 27,000 square foot warehouse Berry & Homer is taking over, at 7150 Westfield Ave. was used most recently to store Camden County voting machines, says broker Ian Richman, who closed the deal with colleague Marc Isdaner of Colloers International. They represented the seller, Bloom Organization. Berry & Homer chief executive Joe Thompson wasn't immediately available for comment. Berry & Homer is leaving its old address, 2035 Richmond St.

So many companies have gotten state aid to move to Camden that the former factory city is running out of suitable small-business industrial sites, and vacant locations in Pennsauken are also filling up, Richman told me. Grow New Jersey tax credits, like the ones given to Berry & Homer, have been used to lure Cooper Health, Holtec International, Philadelphia 76ers and Subaru of America operations from nearby locations into the City of Camden. The program has also benefited sites in Pennsauken directly by attracting a string of smaller companies to qualified properties, Richman added.

POSTED: Monday, March 30, 2015, 12:52 PM

Death, taxes, and tax-law changes: Hre's what's different this year, say the bean-counters at Global Tax Management (GTM), Radnor. Theyve listed a string of U.S. and Pennsylvania business-tax-law revisions for the just-passed corporate deadline:

The federal Tax Law Extenders Bill (also known as H.R. 5771, "Tax Increase Prevention Act") expanded and extended a string of federal tax breaks; while Pennsylvania has changed the way it taxes businesses with income from more than one state, and clamped down on the use of Delaware holding companies to avoid taxes on patents, trademarks and other intellectual properties. Highlights:

 1) Research & Development Credits - These tax breaks, based on a company's research spending under IRS guidelines, can save "significant dollars" for companies developing new products. The credits, which cut companies' federal income tax liability "on a dollar-for-dollar basis," have been extended through 2014. Companies should be "continually tracking, recording, and retaining contemporaneous documentation supporting research-related expenditures," according to Kevin Wilkes, Senior Tax Manager at GTM. 
 2) Bonus Depreciation Deduction - Taxpayers can deduct half the cost of assets acquired between the start of 2005 and the end of 2014. Compare this deduction to Section 179 depreciation, which applies to fewer purchases.
 3) 100 Percent Exclusion of Stock Gains - Congress has agreed to exclude stock gains for the owners of small-business stock acquired in 2014, "dramatically reducing their tax liabilities."  
 4) Built-in Gains Tax for S Corporations - The IRS used to tax gains on shares of personal S-corporations for 10 years after they were converted from standard C-corporations, to discourage owners from reorganizing jus tto avoid taxes. But conferted firms that show value gains in 2011-14 don't have to pay the tax if at least five earlier tax years preceded the 2014 gain.
 5) Reduced Tax Liabilities for Multinationals - The IRS used to tax dividends, interests, rents and royalties transferred between foreign units of U.S. companies, including "personal holding companies." Now, in some cases Congress's "look-thru rule" allows companies to make these transfers tax-free for 2014, says GTM President Dave Laurinaitis. "This rule can significantly reduce a U.S. multinational conglomerate’s tax liability." 
 6) Pennsylvania multi-state income tax apportioning: Since 2014, "services revenue is now allocated to Pennsylvania if the service is delivered to a location within Pennsylvania," GTM says. Businesses deriving th significant services revenue, this legal change could significantly modify their Pennsylvania taxable income,” said Chau Tran, newly appointed director of GTM’s State & Local Tax Practice Team.
 "Services revenue is now allocated to Pennsylvania if the service is delivered to a location in Pennsylvania...   Businesses (deriving) significant revenue from services delivered to Pennsylvania customers should be mindful that their Pennsylvania tax liabilities could materially increase... The opposite could be true of businesses that derive relatively little revenue from services delivered to customers located in Pennsylvania."
 7) “Delaware Holding Companies” - Delaware doesn't tax "passive income" from patents, trademarks and other intellectual property. Big companies have long organized Delaware subsidiaries to collect intellectual property fees from locations in other states, reducing income taxes. But since Jan. 1, Pennsylvania is, generally, disallowing some "intercompany expenses attributable to intangible assets."  Warns GTM: "Corporate groups with intangible assets housed within Delaware Holding Companies should be aware that the tax liability associated with such a structure is about to increase significantly."

POSTED: Monday, March 30, 2015, 12:00 PM
A Save-A-Lot store in St. Louis, Missouri, U.S., on Thursday, May 20, 2010. Photo: Peter Newcomb (Bloomberg)

Discount grocer Save-A-Lot plans five new Philadelphia-area stores. The chain has found two new locations in North Philly, at 7th and Lehigh and 5th and Allegheny; another on Knights Road in the Northeast; and one each in Norristown and Lindenwold.  Save-A-Lot is also adding stores in Bridgeton, N.J., and Lebanon, Pa., says broker Metro Commercial Real Estate, whose broker Michael Murray found the locations.

Save-A-Lot operates 1,300 U.S. stores including at least 10 in Philadelpha and its closest South Jersey suburbs. Of the new stores, the city locations are each around 17,000 sqare feet; Norristown is larger, at 19,500 sf; Lebanon is the smallest of the group at 15,000 sf. Save-A-Lot is owned by U.S. grocery holdings giant SuperValu Inc. (a former owner of Acme Markets, which is now co-owned by Cerebrus Capital, Philadelphia's Lubert-Adler Partners and other investors). 

Separately, rival Aldi's said last week it is converting 30 stores of the former Bottom Dollar chain, including 14 in Philadelpha and its suburbs. Aldi's, owned by a branch of Germany's Albrecht grocery family (another branch owns Trader Joe's), bought 66 Bottom Dollar stores for $15 million last year as they were shut down by their owner, Europe's Delhaize Group. Delhaize had opened the Bottom Dollar stores in Pennsylvania, New Jersey and Ohio in 2009-14, hoping to cash in on the U.S. recession that drove shoppers to hunt for bargains. 

POSTED: Friday, March 27, 2015, 12:20 PM

Discount grocer Aldi says it will reopen 30 of the 66 former Bottom Dollar stores it took over in Pennsylvania, South Jersey and northeast Ohio after past owner Delhaize Group shut Bottom Dollar last year. 5 ex-Bottom Dollar stores in Philadelphia and 14 in the suburbs will reopen; 4 of Bottom Dollar's Philadelphia stores will stay shut, along with 13 in the suburbs. 

Aldi, an Illinois-based U.S. arm of Germany's Albrecht family grocery conglomerate, said in 2013 it planned to spend $3 billion adding 650 new stores and 10,000 store, warehouse and office staff by 2018, bringing its total to almost 2,000 stores. The company "will continue working with" 36 ex-Bottom Dollar communities where it doesn't plan new stores "to ensure a new transition," Aldi CEO Jason Hart said in a statement. 

Hart added that Aldi pays "generous compensation that is higher than those of other grocery retailers in the market," plus "full health benefits" for workers who put in over 25 hours a week. The company advertises $11.25 an hour for starting clerks, and says it will have a hiring fair in Abington on Monday March 30. The company lacks a worker pension plan but does offer a worker-paid 401(k) retirement investment plan. Aldi plans to reopen these ex-Bottom Dollar stores: (lists follow)

POSTED: Thursday, March 26, 2015, 4:31 PM

Philadelphia International Advisors, a 13-year-old, $1.7 billion-asset Center City-based investment firm for pension plans and other large investors, will close at the end of June, Joe Langella, director of managed accounts, confirmed to me in an email.

The shutdown "is related to the decision by Founder and President Andrew Williams to retire for health reasons," according to Pensions & Investments magazine's daily online-subscriber edition, citing the City of Sarasota Firefighters' Pension Board, which was informed of the shutdown earlier this week.

PIA managed $3 billion when Williams and his colleagues separated from Glenmede Trust to form PIA in 2002. PIA's quantitative investor group has moved to Segall Bryant & Hamill Investment Counsel, a Chicago firm.  

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 or 215 854 5194.

Joseph N. DiStefano
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