Archive: October, 2012
Aramark, the Philadelphia-based food service and work clothes company owned by longtime chairman Joseph Neubauer and a group of corporate buyout funds, says it has spun off Seamless (formerly Seamless Web), its New York-based online takeout ordering service, to its owners. Brief statement here.
Aramark bought Seamless in 2005. Last year Aramark sold a $50 mlllion interest in the company to Spectrum Equity Investors in June 2011. Besides its online service, Seamless has collected a lot of data on customers, including the revelation that, alone among the 7 largest US metro areas, Philadelphians' favorite takeout order is pizza. (Item corrected)
Target price: $2.5 million. For Sale: 50+-year-old community center, 27,000 sq ft, with gym, indoor swimming pool, fitness center, offices, dance studios, classrooms, on nearly 2 acres, with parking.
It's the old Main Line YMCA, 100 St. George's Road, Ardmore, walking distance to the Paoli Local and Suburban Square, the world's first suburban shopping mall (check it out in the Guiness book) with its upper-middle-end chain stores (Trader Joe's, J. Crew, Apple), and the Lancaster Ave. business district.
John Susanin, who shares the listing and Adam Gillespie of Philadelphia's own SSH Real Estate, says they'll be contacting interested bidders soliciting offers later this year. The Y is supposed to move to its new grounds in Haverford Township in September.
Penn State's credit rating on nearly $900 million it owes investors has been cut to Aa2 from Aa1 by Moody's Investors Service "in anticipation of the substantial financial impact on the university from the ultimate cost of future settlements and possible judgments, stemming from sexual abuse claims made by victims of convicted former assistant football coach, Gerald Sandusky," Moody's said today.
Total damages to the 84,000-student Penn State system are still unknown; state and federal criminal investigations may be pending, according to Moody's.
"The rating action also reflects governance and institutional culture challenges facing the university," the report added. Penn State's own investigation of the Sandusky mess shows the state-affiliated school has been "highly dependent on a few senior managers operating with inadequate board oversight."
There are two kinds of giant companies: The kind that makes deals with other giant companies and preserve fat profit margins at customers' expense, and the kind that embraces free market competition.
At least that's what Charlie Ergen, boss at Dish Network, tells Bloomberg News in this article (cited by Todd Juenger of Bernstein & Co. in a report to clients today). Excerpt:
"Dish won’t partner with Verizon, even if it’s “smart business” because the largest U.S. wireless provider struck a deal to market products from rival cable companies, including Philadelphia-based Comcast Corp. and New York-based Time Warner Cable Inc., Ergen said," according to Bloomberg.
Moody's Investors Service has cut the credit rating on $1.5 billion borrowed by West Chester University, Cheney State University, and the 12 other Pennsylvania State System of Higher Education colleges to Aa3, from Aa2.
The state colleges face "weakening state support" under Gov. Tom Corbett, along with "declining enrollment" -- fulltime students dropped below 107,000 this fall, from 112,000 a year ago -- along with "weak" applications from feeder high schools, especially in economically depressed Western Pennsylvania. Moody's also cites "political limitations on the system's ability to raise tuition and fees, and challenges in reducing expenditures" under current labor contracts.
The schools also face "very large and growing liability" for unfunded pensions and healthcare promised retired professors and other staff, along with the Commonwealth of Pennsylvania's credit rating downgrade last July, which left the state rating at Aa2.
Safeguard Scientifics chief financial officer Stephen J. Zarrilli, 51, will replace Peter Boni, 67, as chief executive of the Wayne-based company, which invests in small tech firms, effective next May, Safeguard said in this statement.
Zarrilli is a veteran officer of a string of tech companies Safeguard has backed since the 1990s, when it was still run by founder Warren "Pete" Musser. Musser had spread capital through a variety of industries since the 1950s; Boni reorganized Safeguard's holdings to focus on biotech and software firms.
According to Safeguard, Boni oversaw new investments totalling $315 million in "two dozen high-growth situations," and collected $643 million on the firm's behalf by selling successful firms to buyers including Oracle, Eli Lilly, Shire Pharmaceuticals, McKesson and GE Healthcare while reducing debt and building cash for future investments.
"Industrial machinery maker Gardner Denver Inc (GDI.N) is exploring a sale and has drawn initial interest from several major private equity firms, according to people familiar with the matter, in a deal that would top $3 billion," reports Reuters here.
The report follows the sudden resignation in July of Gardner Denver boss Barry Pennypacker, who had moved the company headquarters to suburban Philadelphia, after activist investor ValueAct Capital bought a stake, as I reported here.
(Adds comments from bosses of both firms) BDO USA LLP, a Chicago-based corporate accounting and business consulting firm, says it is acquiring Philadelphia accountants Asher & Co. Ltd. and taking on the firm's 10 partners and more than 100 staff.
BDO already employs around 60 in Philadelphia, including partners who formerly worked at Smart & Co. and other former Philadelphia-area firms. Asher boss Joseph Beach will remain with BDO. The partner-owned firms declined to talk about financial terms of the deal. Beach said there won't be job cuts.
The firms have until now competed for Philadelphia-area business from across the street -- BDO at 1800 Market, Asher at 1801. "We want to all be under one roof," but haven't yet worked out who will move, Beach told me.