Lincoln Investment Planning Inc., a Wyncote-based broker-dealer that claims $9 billion in managed assets and a total of $24 billion in advisory and managed funds, says that investor Lovell Minnick Partners, which has offices in Radnor and in El Segundo, Calif., has bought a 20% stake. With Lovell Minnick's backing, "we're large enough now that we can buy larger practices," Ed Forst, Lincoln's President and CEO, told me.
"We have a very strong balance sheet; we have no need for an investment of this kind. But we need to accelerate: There is going to be way more opportunities to do more transactions" buying other advisory firms, as regulatory and tech and security costs rise, Forst added. "Those who can move quickly will do much better than those not capable of moving quickly," he said. "So many people need advice to save for retiirement, for college, for financial security. There aren't enough professionals providing it. That's what we do."
Lincoln, which has 300 staff supporting a network of 800 financial advisors in 35 states, wouldn't say how much Lovell Minnick invested. Lovell Minnick says it invests at least $20 million in each of its target financial-services companies. It's an investor in TriState Capital Bank, a business lender with offices in Pittsburgh, Villanova and Lawrenceville, along with other lenders and broker-dealers.
Stock prices are high, employment is up, and investment bankers are frantically whispering blockbuster deals, in hopes they could still score a few fat paydays before the Fed boosts interest rates and acquisitions start to get a bit more expensive, after so many years of cheap money:
1) MOBILE -- Today's German financial news rumor that Comcast has talked to Deutsche Telecom about buying T-Mobile -- which Comcast people have been quick to discount, noting they can more easily resell Verizon mobile service -- follows yesterday's speculative Trefis report that Comcast might buy Sprint.
Sounds familiar to Kevin Smithen, telecom analyst at Macquarie, which owns Philadelphia-based Delaware Investments: "Comcast (is) the best strategic partner for T-Mo, long term," since Comcast could give T-Mobile the mobile-video streaming it will need to make its wifi competive. "We think a deal with Comcast in the low to mid $40s (a share)" works for Deutsche. But Smithen's also skeptic this will close just now, "given Comcast's focus on its wifi rollout and the recent FCC defeat on TWC." Comcast could still move soon -- if it's worried about "the risk of falling behind in the convergence game" -- and if Deutsche sees Comcast as a fitting partner.
(SEC has approved DuPont's Chemours spin-off. More in my column in the Philadelphia Inquirer, June 22, here.) Earlier: Pollution-related liabilities from DuPont Co. operations in West Virginia, New Jersey and other states, may require more money than the assets DuPont has set aside to cover possible costs as these "performance-chemical" manufacturing facilities are spun off into a new company, Chemours, according to this letter sent to the Securities and Exchange Commission by Keep Your Promises DuPont, a community activist group that monitors DuPont contamination and remediation in Parkersburg, W. Va.
Keep Your Promises focuses particularly on toxic chemicals left over from the production of Teflon, DuPont's flexible, tough material, at plants in the Ohio River Valley near Parkersburg. Teflon was invented at DuPont's Chambers Works in Salem County, a more-than-two-square-mile complex at the east end of the Delaware Memorial Bridge, with long-documented air, ground and water contamination issues, see EPA summary here. EPA fine for Deepwater air pollution last winter here. DuPont's Edge Moor, Delaware, titanium-dioxide plant is among the other local facilities moving to Chemours. EPA summary report for Edge Moor here.
SEC filing on Chemours spinoff here: wherein DuPont ackowledges but does not detail environmental liabilities, and references additional info in other DuPont filings. -- Asked about Keep Your Promise's concerns, and whether Chemours will have the money to fix damages from former DuPont sites, DuPont spokesman Daniel A. Turner sent me this statement: “DuPont and Chemours remain committed to continuing to fulfill all of their environmental and legal obligations in accordance with existing local, state and federal regulatory guidelines."
Pennsylvania today closed its three-weeks-long sale of bonds worth $1.242425 billion. That borrowed money will be used for capital projects and to repay old debt. Borrowers charged the state an effective interest rate of 3.113217%, through underwriter BofA Merrill Lynch, which underbid Barclays, Citi, JPMorgan and Morgan Stanley for the sale.
Is that a good rate? It's a savings, if you compare it to the 4.25% to 5% rates the Commowealth was paying on old bonds the sale partly refinanced, notes Jeffrey Sheridan, a spokesman for Gov. Tom Wolf. That saving works out to $7.4 million a year, over the expected 12 year life of the issue; or $73.4 million in all, if you discount the total to present value.
On the other hand, the 3.11% investors demanded Pennsylvania pay is 0.83% more expensive than the benchmark AAA rate paid by high-credit-rating states like neighboring Delaware. And it's a jump from the 0.49% premium on Pennsylvania debt earlier this year, and 0.3% last year; which means bond buyers' perceptions of Pennsylvania's financial future are moving in the wrong direction. The sale cost taxpayers $5.5 million more a year, compared to the spread investors demanded just last winter -- or $10.3 million more a year, vs. what Pennsylvania would pay if its credit was as good as Delaware's, or other top-rated states.
"At some point, you got to step aside," Wells Fargo analyst Jonathan G. Reeder told Aqua America CEO Nicholas DeBenedictis at the company's May 6 shareholder meeting, after the company's final delay naming a a successor to 23-year CEO Nick DeBenedictis, who, at 69, is older than each of his board members (including retired CEOs of other Philly companies). DeBenedictis said the search took longer because so many utility experts applied for his job.
Last week the company named the new boss -- and it was the guy in the next office: Aqua tapped executive vice president Christopher Franklin, a longtime DeBenedictis protege. Like DeBenedictis, Franklin worked in government and Chamber of Commerce jobs before joining Aqua.
"You had said you were going external, and now you filled it internal?" shareholder Robert Costello, head of Costello Asset Management, Huntingdon Valley, asked in the investor call after the news. "We were looking at internal and external candidates," DeBenedictis said. "Sorry for any misunderstanding you may have had."
Turnover at Janney Montgomery Scott's investment banking unit, culminating with the departure of capital markets chief Jordie Maine and yesterday's firing of 40 stock analysts, traders and institutional salespeople and the bank's retreat from some non-East Coast offices, has bank-watchers wondering whether owner Penn Mutual Life Insurance Co. is clearing the decks and dressing Janney's remaining businesses, which employ 1,800 -- including 500 at its Philadelphia headquarters -- for a possible sale or merger of the capital-markets group and/or the firm's money-maker, its network of 800 financial advisers in offices along the East Coast.
Latest departure: Tom Kozlik, a Janney municipal bond analyst named to Institutional Investor's 2014 All-America Fixed-Income Research Team for Municipal Strategy, has left to join PNC. The recent streamlining followed investment bank turnover and cuts earlier this year, frustrating Pennsylvania's hope that an $11 million grant to help Janney move across Market St. in 2011 would spark financial job growth in Center City Philadelphia.
Who would buy Janney, if Penn Mutual would sell? Stifel & Co. (which has acquired the former Keefe Bruyette & Woods, Stern Agee, Thomas Weisel, and other regional or specialized brokerages in the last couple years) "has approached Penn Mutual (to buy Janney), and I believe that offer still stands," a former Janney executive told me. "Stifel has been on a buying binge," an ex-Janney stock analyst agreed. "Stifel is the aggregator of regional financial advisory firms," says another departed Janney manager.
Janney Montgomery Scott, the Philadelphia-based brokerage and investment bank, has stopped its coverage of consumer and technology businesses, letting go another group of stock analysts, trading and sales pros. Mark Kalinowski (restaurants, including long-running coverage of McDonald's and other chains), Shawn Milne (Internet), Eric Tracy (footwear and apparel) and Adrienne Yih (retail) are among the analysts whose Janney online profiles disappeared after a meeting this morning. Also allied staff in Philadelphia, Boston, San Francisco and other locations.
UPDATE: Janney let 40 people go today, CEO Tim Scheve said in a statement confirming the cuts. "We are in a highly competitive business. We must perform exceptionally in the areas in which we choose to compete," which will now be financial institutions, energy and other infrastructure, and healthcare.
The firm employs around 1,800, including around 500 in Philadelphia. "The firm will cease research coverage and banking in both the Consumer and Technology industry groups," Scheve said in the statement. Janney will focus operations on its strengths: "deep retail distribution along the East Coast, institutional distribution, broad investment banking capabilities, differentiated research, and a diversified fixed income platform," Scheve added.
Aldi, the German-owned discount grocer that is reopening 30 of the 66 former Bottom Dollar stores in the Philadelphia area and nearby markets, says it plans to hire 350 employees to staff stores and warehouses in the region. The company will host hiring fairs June 24, both at 9 a.m.-6 p.m., at Lehigh Valley Mall (Aldi has a warehouse nearby) and also at 1205 McDade Blvd., Collingdale, Delaware County. Store locations noted here. Aldi agreed to pay $15 million for the Bottom Dollar locations last year and had previously urged Bottom Dollar workers to apply.
Aldi says it pays store associates $11.25 an hour, rising to $15.25 "when performing manager duties," plus "full health insurance benefits and dental coverage" and a retirement savings and investment plan. The store requires high school diplomas/GEDs, for workers to be "available to work anytime" 6 a.m.-11 p.m. any day, to be strong enough to lift 45-pound boxes, and to pass drug screening and background checks. More at www.ALDIstorejobs.com/events.