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Archive: December, 2012

POSTED: Thursday, December 20, 2012, 1:47 PM

Banks are talking bravely about the economy's growth prospects in 2013, but analysts who sift their data for a living say the signs are weak and most lenders are still more worried about cutting costs than boosting lending that would finance company hiring and growth.

“We look deep into our customers' budgets. Most of them have a growth plan; all of them have a nice capital expenditure budget,” says Chuck Greenberg, who heads Bank of America's lending to “mid-market” companies, with sales of $50 million to $3 billion a year – manufacturers and chemical makers, warehouse and trucking operators, law firms and other professional services – in Pennsylvania, New Jersey and Delaware.

Still, Greenberg tells me new lending has slowed down in recent months – and he's expecting demand will stay weak this winter as businesses hoard cash instead of risking it on hiring workers and soliciting new clients.

POSTED: Thursday, December 20, 2012, 8:35 AM
Toll Brothers said it is seeing some encouraging signs of a housing sector recovery.

Toll Bros. cofounder Bruce E. Toll's BET Investments Inc. says it has agreed to pay investor Sara Gowing's Quaker Group some $37 million for 2 apartment complexes:

- The 150-unit Newtown Place apartments, 31A Cambridge Lane, near the Yardley/Newtown exit from I-95, with rents averaging $1450/month;

- The 80-unit Wynmere Chase apartments, 9 Bridle Lane, Horsham, near the Willow Grove exit on the PA Turnpike, with rents averaging $1340/month.

POSTED: Thursday, December 20, 2012, 5:52 AM

UPDATE: About 1,000 of Motorola Home's 5,000 worldwide engineers, salespeople and support staff are based in Horsham; Arris currently employs 2,100 at its plants. What will happen to them? "We will be evaluating work functions and facilities throughout the organizations as we work through the integration process," Alex Swan, a spokesperson for Arris, told me. "At this point no decisions have been made."  

EARLIER: Arris Group Inc. of Suwanee, Georgia, has agreed to pay Google Inc. $2.05 billion in cash plus $300 million in its own stock for Google's Motorola Home business, including a Horsham factory, labs and offices that makes cable TV set-top boxes and other home data transmission systems for Comcast, Time Warner and other cable TV-based companies. Release here, AP story here.

Although Arris had been named as a likely buyer, the deal and the price, less than some estimates, seems to have surprised investors, with Arris shares trading higher after the announcement late Wednesday. 

POSTED: Wednesday, December 19, 2012, 10:31 AM

EPAM Systems Inc., a Newtown (Bucks County) software engineering company which employs 8,000 engineers, sales and support staff in countries of the former Soviet Union, Europe and North America, says it has purchased Empathy Lab LLC, a Conshohocken digital advertising firm that counts Comcast (and its NBC Universal) and Sony among its clients.

Empathy, cofounded in 2005 by ceo Kevin Labick, also serves the American Red Cross, AIG, MetroPCS, Pep Boys, and TJMaxx, among others.

Publicly-traded EPAM hasn't said what it's paying for Empathy. UPDATE: Dobkin told me he expects the firm will add 20-30 jobs a year. Empathy currently lists 25 vacant engineering, programming, sales and support positions on its hiring list here.

“Our clients are very hungry for these types of services,” Dobkin told me. EPAM sales rose 50 percent in 2010 and again in 2011, and are up around 25 percent so far this year; total 2012 billings are expected to top $400 million, with profits above $50 million.

More than half of EPAM’s business “relates to helping our clients with transferring to new digital platforms adn to the cloud,” Dobkin added. “Clients are demanding digital strategy suppoort and user experience design and capabilities. That’s the main reason we decided to add Empathy to our portoflio of services: they have these capabilities which we can throw out ot all our cleints. And we can leverage each other’s client base.”
As part of EPAM, Empathy will hire “twenty, thirty people a year,” including designers, engineers, programmers, project managers, account managers, business analysts, Dobkin told me. EPAM employs about 350 in the U.S., about half in the Philadelphia area.
“It’s difficult to find good people all around the globe, Dobkin said. “That would be true in New York and Silicon Valley, as well as the Philadelphia area, and interenationally.”
Dobkin is a native of Belarus, a former Soviet republic between Poland and Russia; he cofounded EPAM in 1991. EPAM is 40 percent owned by Russia Partners, an investment group owned by New York-based Siguler & Guff. The Fidelity mutaul fund group of Boston and Dobkin are also major shareholders.
POSTED: Tuesday, December 18, 2012, 1:59 PM

"The Sandy Hook tragedy was a watershed event that has raised the national debate on gun control to an unprecedented level," writes buyout investor Cerebrus Capital Management, which is preparing to dump its stock in the company that makes the Bushmaster semiautomatic rifle that was the Newtown, Conn. elementary school shooter's weapon of choice from his mom's arsenal.

"The debate essentially focuses on the balance between public safety and the scope of the Constitutional rights under the Second Amendment...

"We are investors, not statesmen or policy makers. Our role is to make investments on behalf of our clients... It is not our role to take positions, or attempt to shape or influence the gun control policy debate...

POSTED: Tuesday, December 18, 2012, 12:14 PM

By a nearly 2:1 margin, New Jersey's state house has passed an online gambling bill that will likely be approved by the state Senate but faces an uncertain reception by Gov. Chris Christie, writes Brian McGill, gambling analyst at Janney Capital Markets. 

What's at stake?  "This bill would allow ALL forms of gaming that is legal at brick and mortar casinos in Atlantic City. The operators in Atlantic City would have the licenses and the servers would need to be located in Atlantic City," McGill writes in a report to clients.

Industry studies claim "the US could be a $35 billion market when fully built out, if all online gaming was allowed," McGill adds. New Jersey's 9 million people could bet $1 billion of that, or more, "given the income levels and propensity to gamble in the state."

POSTED: Tuesday, December 18, 2012, 11:14 AM

UPDATE 2 pm, includes CEO Christopher Annas' comments.

EARLIER: Meridian Bank, a $422 million-asset, three-branch lender based in Paoli, defied the slow local economy and grown rapidly in the past year, boosting loans by $42 million, drawing $31 million in new deposits, increasing fees for new or expanded services, and hiring 86 workers, bringing total staff to 190, according to its Federal Deposit Insurance Corp. report for Sept. 30, the most recent available.

Unlike Beneficial Bank and other local lenders that depend on old-fashioned lending and deposits -- and have had little growth to show during the slump -- Meridian has expanded in part by offering new services, for example by adding workers from Harleysville National Bank's former mortgage unit, and by acting as a third-party payment processor for both retail merchants and independent sales organizations (ISOs) that process credit card payments for online and other merchants - Meridian's E-Payments Program.

POSTED: Tuesday, December 18, 2012, 10:46 PM

Industrial tool-maker SPX Corp., Charlotte, is trying to raise $4.2 billion to buy Wayne-based industrial pump-maker Gardner Denver, reports Reuters here.

Gardner Denver's then-boss Barry Pennypacker, a St. Joseph's University grad, moved the company here from Quincy, Ill., two years ago because he said he wanted to be closer to customers, my colleague Mike Armstrong reported here.

But Pennypacker left abruptly last summer as activist investor ValueAct Capital (San Francisco/Boston) started accumulating shares. The board brought in Michael M. Larsen, a veteran of Trevose-based GE Water, and went up for sale, see also here.

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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