Put two big pharmaceutical companies together and people notice, but two large benefits consulting firms …?

Well, I only noticed this billion-dollar deal because one of the consulting firms is Towers, Perrin, Forster & Crosby Inc., which was founded in Philadelphia in 1934.

Now based in Stamford, Conn., Towers Perrin is one of those “quiet giants” in Philadelphia business circles. It’s been a major tenant in the Centre Square office building at 1500 Market St. since 1975. And that office remains its biggest, employing 1,016 people, or 16 percent of its total workforce.

Towers Perrin is quiet, for one thing, because it’s a private company. But while Philadelphians frequent the convenience stores of the privately held Wawa and the concession stands at arenas run by privately owned Aramark, they are largely unaware of how Towers Perrin may intersect their lives.

Towers Perrin’s game is providing management consulting services, which means it employs lots of actuaries, risk managers, and employee benefits and insurance professionals.

On Sunday, Towers Perrin agreed to merge with the publicly held Watson Wyatt Worldwide Inc. in a transaction valued at about $3.5 billion. The resulting organization will be called Towers Watson & Co. and have annual revenues of more than $3 billion.

Watson Wyatt, of Arlington, Va., is the bigger firm with 7,700 employees worldwide, including offices in Berwyn and Philadelphia.

Where’s the exit?

James Bullard, president of the Federal Reserve Bank of St. Louis, will speak in Philadelphia Tuesday about the central bank’s “exit strategies” from the emergency lending programs that have helped rescue the U.S. economy.

It should be a timely lecture, coming soon after Bullard’s counterpart at the Dallas Fed told Bloomberg News on Friday that such strategies are “not ready to be articulated” until the “appropriate time.”

Let’s hope today’s more appropriate.

Amid the too-evident wreckage of capitalism's "creative destruction," signs of business creation continue to show up.

Three new companies won acceptance last week to the business incubator at Drexel University's LeBow College of Business.

An annual competition for admittance to the incubator had already brought 32 companies under the roof of Drexel's Baiada Center for Entrepreneurship since 2003.

The center's Web site lists 15 current residents of the incubator, such as Renaissance Scientific L.L.C., a competition winner two years ago that is developing a microbe- and sperm-killing condom lubricant effective against HIV and other sexually transmitted diseases.

Some of the rest ultimately failed, and eight have hatched from incubation, said Baiada Center director Mark Loschiavo.

This year's winners are:

Stabiliz Orthopaedics, whose organizing team of M.B.A. students - including Doug Cerynik, the director of research in orthopedic surgery at Drexel's medical school - are developing bone fasteners using bio-absorbable materials;

Ranter, a social-networking tool that one of its principals, 27-year-old M.B.A. student Brad Welch, calls a "stripped down application" for texting groups through a cell phone chat window;

Konnect.me, a new run at the concept of business-to-business Web portals.

Each won a modest pot of seed money - Stabiliz Orthopaedics got the most, at $12,000 - along with space in the incubator, and access to mentoring and other support services there.

While they're not ignoring the recession, "I don't see them moping around," Loschiavo said of denizens of the incubator.

"From the entrepreneurs' perspective, they see the economy as just one of the many variables that they have to deal with, . . . one more challenge to overcome," the director said.

"It's going to be more difficult to raise funds in this economy," said Brian Schneck, 24, the other principal of the Ranter texting tool. "The good thing, development costs these days are very low."

He and Welch expect to have a beta version of their would-be Twitter-killer in three months.

Mike Armstrong is away. Contact Reid Kanaley at 215-854-5114 or rkanaley@phillynews.com.

Brian Ruby doesn't want you to take this the wrong way, but the recession has been good to him - or at least to his high-tech startup company, so far.

"This has been the absolute best time for us," Ruby, 25, said yesterday before the ribbon-cutting at his nine-person firm, Carbon Nanoprobes Inc., on Phoenixville Pike in East Whiteland, Chester County.

Because of the recession, Ruby said, he's been able to cut deals "that a year and a half ago we never would have been able to afford, and nobody would have funded."

Ruby's entrepreneurial tale begins in 2002 at Columbia University, where he studied engineering and came up with a system for making teeny-weenie structures called carbon nanoprobes.

In excess of $4 million later - money that Ruby said he raised from institutional and angel investors - he is ready to make and market nanoprobes. Researchers use them in the tips of multi-million-dollar atomic microscopes, where they act like little fingers reading the braille code of molecules used in medicines, computer chips, fabric coatings and solar cells.

"A few million dollars and a dozen patents later, we're actually pursuing the marketplace now," Ruby said.

Ruby, who hails from Westchester County, New York, said he picked Pennsylvania after being courted by state officials attempting to lure high-tech ventures - specifically in his case with the deal of a $500,000 investment as part of the Pennsylvania Initiative for Nanotechnology.

He picked the Chester County address for its proximity to the region's pharmaceutical corridor, and for the deal he was able to get on the real estate.

Profit, Ruby insisted yesterday, "is a very near-term occurrence."

"I'm no Marie Antoinette," he said, refering to the headless French royal's alleged quip about letting the poor eat cake if they couldn't afford bread. He understands the hardships the economic downturn has caused, and yet, "I'm not a complainer about the recession."

Mike Armstrong is away. Contact Reid Kanaley at 215-854-5114 or rkanaley@phillynews.com.

Our annual look at the region's Top 100 businesses is out today and in many ways reflects the struggles firms have faced as the overall economy shuddered to a halt.

The report takes the measure of local businesses in several categories - market capitalization, CEO pay, employment, total return on investment - to provide snapshots of the corporate landscape from different angles.

A look at the list of companies ranked by total return (on Page 31 of the printed version of the special section, and at http://go.philly.com/top100) is revealing.

Total return is the growth or shrinkage of an investment, including dividends and changes in the company's share price.

By that measure, only a dozen of the 100 public companies on the list had positive results for the 12 months ended June 8.

And the top five provide examples of what it has taken in this harsh climate to impress investors:

1. Republic First Bancorp Inc., of Philadelphia,which is merging with the former Commerce Bank of Pennsylvania to become Metro Bank, returned 64.6 percent in the year ended June 8. The Metro Bank combination is backed by Commerce Bancorp Inc. founder Vernon Hill and led by former Commerce executives hoping to repeat the magic of the old Commerce's growth.

2. Dorman Products Inc., maker of 92,000 low-cost aftermarket auto parts, returned 50.4 percent. In an era that has seen new-car sales evaporate and automakers nationalized, the notion is that people increasingly need parts to patch up the old wagon.

(Philadelphia-based The Pep Boys - Manny, Moe & Jack came in at No. 10. Though its one-year return was just 2.3 percent, it was one of the golden dozen.)

3. J&J Snack Foods Corp. is the maker of snacks including soft pretzels - one of the region's signature comfort foods. Its one-year return was 37.5 percent. (Another regional comfort food contenter, Tasty Baking Co. of Philadelphia, was No. 6 on our list.)

4 Lannett Co. Inc., a maker of generic drugs, returned 26.7 percent for the year ended June 8. In calendar year 2008, Lannett shares climbed 62 percent as the company added new products and consumerism and health-care providers sought low-cost drug alternatives.

5 Destination Maternity Corp., the maternity clothing retailer, returned 19.3 percent as investors figured babies might be more predictable than the economy.

Mike Armstrong is away. Contact Reid Kanaley at 215-854-5114 or rkanaley@phillynews.com.

It’s not surprising that executives who once ran a health-care company called Leprechaun L.L.C. would pick an unusual name for their next venture.

But Blood, Sweat & Capital L.L.C.?

Daniel C. Lyons, one of the four partners in the new private-equity firm, said he wasn’t sure who actually came up with the whimsical name. It was the winner from a contest the partners held among their friends and associates.

Their business plan is more serious: funding new health-care services companies. Rather than backing the next diabetes drug, Blood, Sweat & Capital is looking to capitalize on opportunities that the national debate over health reform will spawn.

Lyons said he expects to back new ideas championed by the nurses, allied health professionals and doctors on the front lines of a health-care system often criticized for its inefficiency and cost.

“They see the pain in the health-care system,” he said.

Blood, Sweat & Capital is a virtual company, with Lyons, based in Wayne, its only tie to the Philadelphia area. He retired recently after 14 years as an executive at Independence Blue Cross.

Most recently, Lyons was president and CEO of Veridign Health Solutions, a for-profit subsidiary in Center City that provides “back-office” services to insurers and health plans offering Medicare Advantage insurance coverage.

Based in New York, David Bach, who is CEO of Blood, Sweat & Capital, founded Leprechaun, also focused on Medicare Advantage plans. The other partners - Patrick Aberle in Fort Worth, Texas, and Michael Duffy in the San Francisco area - worked at Leprechaun, which was bought by XLHealth, of Baltimore, in 2007.

Lyons said the partners will use their own capital, but would not say how much they have committed. They intend to invest in the seed-stage range, from $50,000 to $250,000.

Top Dragon

The team of students behind Stabiliz Orthopaedics won Drexel University’s 10th annual Baiada Incubator Competition earlier this month. The medical-device maker gets rent-free space in the campus business incubator for a year, $12,000 in seed capital, and $35,000 in in-kind support, such as legal advice and brand positioning.

After the Obama administration last week announced its plan to overhaul financial regulation, the Office of Thrift Supervision is living on borrowed time.

It’s the only one of several bank regulators that would be eliminated as part of an effort to create a new National Bank Supervisor. And the OTS has been criticized by legislators for lax examinations that led to the failure of IndyMac Bancorp Inc. and Washington Mutual Inc.

But the OTS continues to walk its beat and dish out some loan justice, as a small Burlington County savings bank knows full well.

Roebling Bank entered into a supervisory agreement with the OTS on June 17. Under it, the bank can’t make nonresidential real estate loans, commercial loans, construction loans, and loans secured by non-owner-occupied residential property.

The subsidiary of Roebling Financial Corp. Inc. also must adopt a plan to reduce its concentrations in a variety of types of loans, including non-residential real estate.

The restrictions were imposed in response to “concerns raised by the Bank’s most recent” examination by the OTS, Roebling said in a filing with the Securities and Exchange Commission.

Roebling, with five offices in Burlington County, had total assets of $171.9 million as of March 31. In its most recent financial statements, the bank noted that non-performing loans were $5.9 million, or 4.85 percent of total loans as of March 31. That was a big increase from the $922,000, or 0.83 percent, as of Sept. 30.

According to a note in the financial statements, about $4.7 million of the increase was attributable to four loans, including a $1.7 million participation in a condominium construction loan that was considered delinquent.

A phone call yesterday to Roebling Bank CEO Frank J. Travea III was not returned.

Roebling is not the only South Jersey bank operating under a supervisory agreement. Delanco Federal Savings Bank has been doing just that since Dec. 17, 2007.

Under that agreement, Delanco agreed to refrain from making, investing in, purchasing, or modifying any commercial loan without the prior OK by the OTS.

All supervisory agreements remain in effect until the OTS chooses to modify, suspend, or terminate them.

College commencements are largely over, the graduation cards have been opened, and now the hard part:

Finding a job during a time of rising unemployment.

Last week, Campus Philly held what it called an Opportunity Fair on the St. Joseph’s University campus that attracted 825 grads to network and meet representatives from 45 companies that had openings for jobs or internships.

This week, a smaller event caught my eye, called “Getting the Kids Off the Payroll.” The June 25th workshop, being presented by the executive search firm Salveson Stetson Group, is geared toward helping college graduates and their parents apply strategies to find the doors that might open into the work world.

The Radnor firm normally places executives in six-figure positions at Fortune 500 firms and nonprofit organizations. However, many Salveson Stetson clients have been mentioning their frustration over their sons’ and daughters’ stalled job searches.

John F. Salveson could relate, because the two most recent college graduates from his household didn’t know how to begin either.

Few people in their 20s know how the career game works, and colleges and universities don’t do a good job preparing them for it, Salveson said. Often, parents haven’t looked for a job in a long time and don’t know how to help their kids.

Now the event’s sold-out - 25 families will participate - but I asked Salveson what’s the No. 1 thing he’ll impress on them. “This is a contact sport,” he said.

By that, he means building contacts in-person, not electronically through social media networks or texting. He doesn’t believe those tools will get you a job.

Instead, grads must focus on what they want to do, and what kind of company they want to do it for, Salveson said. They shouldn’t be searching for open jobs, but learning as much as they can about the field they want to pursue.

You do that by trying to get meetings in the offices of people at the companies in that industry and asking lots of questions. How do you get that first meeting? It could start with a referral by a parent to one of their friends or colleagues. That’s how someone begins to build relationships in a network that will lead to opportunities at some point.

Yes, the job market is gloomy, but you can’t let your mindset be that way, Salveson advised. Building a network is not a linear process, but it’s the kind of effort that will help you find the internships and job openings before they’re advertised.

Salveson’s children are gainfully employed. His daughter, Kate, now 24, works in recruitment for a health-care company in Kennett Square. His son, Peter, now 26, does market research for a publishing firm.

Obviously, who you know can be important. But connections alone won’t get you the job, Salveson said. That’s up to the grads, their knowledge, their enthusiasm and their initiative.

Legally speaking

The National Institutes of Health has awarded Woodcock Washburn L.L.P., the Philadelphia intellectual property law firm, two 10-year contracts worth as much as $314 million.

One contract to provide legal services in the field of biotechnology amounts to up to $199.5 million. The other, for chemistry, is for up to $114.5 million.

Woodcock Washburn, which has been a contractor for NIH since 2002, was one of just three law firms to have been awarded both contracts.

Annual Meetings

This week’s shareholder meetings:

* Armstrong World Industries, Tyco Electronics Ltd. (Monday.)

* Orthovita (Tuesday.)

* Astea International, Pep Boys — Manny, Moe & Jack (Wednesday.)

* Charming Shoppes (Thursday.)
 

After losing its board seat last week, Terence W. Edwards has stepped down as president and CEO of PHH Corp.

The Mount Laurel residential mortgage originator said today that George J. Kilroy has been named acting CEO and president and James O. Egan the new chairman. All changes took effect on June 17.

Kilroy, 61, had been president and CEO of PHH Arval, the company's fleet management services business.

Edwards, 53, will remain an advisor to PHH for up to six months. The company said the board has begun a search for a permanent CEO and will consider internal and external candidates.

PHH faced a proxy battle waged by its largest shareholder, Pennant Capital Management L.L.C., this spring. Two of Pennant's candidates were elected to the PHH board at the annual shareholder's meeting on June 10. Both Edwards and PHH's nonexecutive chairman, A.B. Krongard, were defeated.

Pennant has been pushing for changes at PHH, which lost $254 million, or $4.68 per share, on revenues of $2.06 billion last year. In trading early Friday, PHH shares were up 79 cents at $17.33.

In 2008, Pfizer Inc. was hunting for a big acquisition and targeted Wyeth.

But after meeting with Pfizer’s CEO one year ago today, Wyeth’s Bernard Poussot did not exactly embrace the idea of combining with the world’s biggest drug company.

How do I know? Those details and more are contained in a document filed with the Securities and Exchange Commission yesterday about Pfizer’s $68 billion acquisition of Wyeth, which employs 4,700 in our area.

Wyeth shareholders will gather at the Hyatt in Morristown, N.J., on July 20 to vote on Pfizer’s offer. If they approve it (and there’s no reason to suspect they won’t), Wyeth shareholders will get $33 in cash and 0.985 of a share of Pfizer common stock for every share of Wyeth they own.

As the proxy statement makes clear, that price is lower than Pfizer’s first offer for Wyeth. But that’s what a global financial crisis will do sometimes. You could also read it as the price of Wyeth’s playing hard to get.

What follows is my summary of the proxy’s blow-by-blow account of how this mega-merger occurred.

On June 26, after conferring with his board of directors, Poussot called Pfizer CEO Jeffrey Kindler to say that Wyeth wanted to remain independent and wasn’t interested in talking any further about a deal.

But in the high-stakes mergers and acquisitions game, “no” doesn’t usually mean “no.”

Pfizer huddled with its financial advisers, Goldman Sachs and Merrill Lynch, and conjured up a cash-and-stock offer for Wyeth that was worth $53 per share - $34.50 in cash and $18.50 in Pfizer stock. On Sept. 9, Kindler met with Poussot again and made his proposal.

A week later, Poussot, who’d been CEO of Wyeth for less than a year, turned down the offer, saying that it undervalued his company. But Kindler persisted, and asked to meet again on Oct. 14.

Note the timing of the meetings. On Sept. 15, Lehman Bros. failed, and waves of panic rocked world markets. The S&P 500 index fell 18.5 percent between Sept. 9 and Oct. 14. Wyeth shares sank 17.8 percent to $33.50.

Suddenly, $53 doesn’t look so bad if you’re Wyeth, but a little rich if you’re Pfizer.

So Pfizer backtracks, saying recent events made its Sept. 9 offer not in its own best interests. How about $46? Wyeth says “no” again.

The value of something is generally what someone is willing to pay for it. Faced with an offer now lower than the first, Wyeth now ponders whether another company might be willing to buy it, and asks its own advisers, Morgan Stanley and Evercore Group, for guidance.

However, a credit crisis makes it difficult to raise mountains of debt, unless you have the balance sheet of Pfizer. Few private-equity buyers were in a position to stir the pot. And given Pfizer’s position at the top of the pharmaceutical industry, how many strategic buyers could outduel it?

By mid-December, “Company X” calls on Wyeth with an offer that might be in the mid-$40s. The proxy statement doesn’t identify the drug company that makes the offer, but it drops the idea by Christmas. Wyeth now realizes that no one will trump Pfizer’s offer.

After Pfizer sweetens its deal to $47.50, Wyeth begins to negotiate the best price and terms it can get. On Jan. 25, seven months after the whole dance began, Wyeth agrees to be bought for $50.33 per share.