Business Blog: Hoover’s Business Insight Zone

Welcome to the May edition of the Hoover’s Index. The Hoover’s Index provides insight on which companies are being watched most closely by the sales, marketing, and business development professionals who make up a large part of Hoover’s audience. Each month, I offer comments on some of the most interesting stories and trends turned up by the unique ranking system of the Hoover’s Index.

Kinetic Concepts
Kinetic Concepts isn’t a household name, but its products could be a lifesaver if you find yourself in the hospital. The company makes several different categories of medical devices, most of which aid in wound care. Its vacuum assisted closure products create areas of negative pressure around wounds to help them heal faster. The company also makes specialized tables, beds, and wheelchairs to improve the care of patients who weigh between 300 and 1,000 pounds. Kinetic Concepts made the news in April when it agreed to buy LifeCell Corporation for $1.7 billion. LifeCell makes materials used for skin grafts in various types of reconstructive surgery and in some urologic and gynecological procedures. The idea behind the deal is for the combined company to expand its offerings of biosurgical products.

Manitowoc
If you’d like a frosty beverage to wash down your meal, Manitowoc would be glad to accommodate you. The company manufactures ice-making and beverage-dispensing equipment, as well as other refrigerating products used in foodservice settings. Befitting its origins a century ago as a shipbuilder, the company also makes construction cranes, and still operates shipyards that build, service, and repair commercial and military ships. Despite its long history of successful acquisitions, Manitowoc may now find itself in the role of jilted suitor. In April, the company agreed to acquire its UK-based foodservice rival Enodis plc for about $2 billion. (The two companies had also talked about a tie-up in the second half of 2006, but never came to terms.) Early in May, however, industrial conglomerate Illinois Tool Works trumped Manitowoc’s bid for Enodis with a competing offer of $2.3 billion.

First Solar
No doubt First Solar would love to become the first name in solar power. Instead of using standard polysilicon technology in its solar-power modules, the company uses a thin-film technology that it touts as cheaper than typical photovoltaic cells. To date First Solar has relied heavily on half a dozen utility customers in Germany, but that’s worked out fine, since Germany has been building out its solar infrastructure in a big way. The company increased sales ten-fold between 2004 and 2006, then nearly quadrupled them again in 2007 alone. This growth has been rapid enough that First Solar has added production plants in Germany and Malaysia to its original factory in Ohio. This spring’s record-breaking ascent for oil prices has made well-established solar players like First Solar into market darlings.

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Welcome to the April edition of the Hoover’s Index. The Hoover’s Index provides insight on which companies are being watched most closely by the sales, marketing, and business development professionals who make up a large part of Hoover’s audience. Each month, I offer comments on some of the most interesting stories and trends turned up by the unique ranking system of the Hoover’s Index.

VISA
Visa isn’t just “everywhere you want to be” — it saved the IPO market during the first quarter of 2008 when it posted the largest IPO in history. In the midst of tumultuous economic times, the credit-card giant debuted on the Big Board with an offering in the neighborhood of $18 billion. Possibly even more stunning: the company’s shares have climbed even more since the IPO. Unfortunately, Visa’s performance can’t be considered any kind of a bellwether for other companies wanting to do an IPO, simply because there are no potential IPO makers on the horizon who enjoy the brand recognition that Visa does.

Bear Stearns
Even a few weeks ago, supporters the redoubtable Wall Street firm were saying “Bear is doing fine — nothing to worry about.” But after the bank’s abrupt collapse and humiliating lowball buyout deal with JPMorgan, some regulators have now moved onto the stage of “What did Bear know and when did it know it?” The company has become the biggest and worst victim of mortgage-based insecurity in the worldwide securities markets, and its erstwhile leader, Jimmy Cayne, now faces a ignominious (if wealthy) retirement. Perhaps he’ll console himself with more golf and bridge.

The Carlyle Group
So apparently the cabal that rules the world* The Carlyle Group doesn’t walk on water. In March it was forced to fold up the tents of its affiliate Carlyle Capital, which had invested heavily in mortgages. Given current market conditions, even the fact that those mortgages were triple-A-rated didn’t help: the parent company extended a $150 million lifeline of credit to the affiliate, but Carlyle Capital’s creditors began liquidating its assets anyway. The Carlyle Group made its name in no small part because of the super-duper-heavy hitters it employed, including George H. W. Bush, John Major, James Baker, and Frank Carlucci. But public suspicions about the Group’s closed-door deals has led it to remake its management board and create more transparency in its dealings.

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* I kid. Yes, Carlyle has always had lots of ultra-connected ex-politicos in its stable, but I think the rumors of its Svengali-like hold on policy makers in Washington, London, etc. has been wildly overblown. But then, I’m pretty much allergic to conspiracy theories.

Hoover’s Index

Welcome to the March edition of the Hoover’s Index. The Hoover’s Index provides insight on which companies are being watched most closely by the sales, marketing, and business development professionals who make up a large portion of Hoover’s customers. Each month, I offer commentary on some of the most interesting stories and trends turned up by the unique ranking system of the Hoover’s Index.

Saturn
The Saturn make was born with the promise of being “A Different Kind of Car Company.” For a while, that seemed to be the real message of the Tennessee-based unit of GM. These days, though, the original message of labor harmony and low-key sales tactics has been diluted, both because GM has changed the way it brands and makes Saturns, and because GM (along with the rest of the U.S. car industry) has faced so many other very public problems. These days, Saturn is trying to win the attention of U.S. consumers with hybrid-engine versions of its Vue and Aura models — but only in limited areas and with limited availability.

Genesco
Genesco’s venerable Johnston & Murphy brand may have shod every U.S. president since Millard Fillmore, but the company’s recent struggle with Finish Line has hardly been statesmanlike. In 2007, Finish Line agreed to pay about $1.5 billion for Genesco — but that was before Genesco turned in disappointing financial results. In an increasingly complicated tangle of legal maneuvers, Finish Line rescinded its offer, Genesco successfully sued to force Finish Line to complete the takeover, and then Finish Line’s investment banker UBS sued Finish Line to avoid fulfilling its obligation to fund the highly-leveraged deal. Under the terms of the settlement agreement reached this month, Finish Line will pay Genesco $175 million in cash and issue 12% of its common stock to Genesco.

Sharper Image
Starting in the 1980s, the monthly catalogs of The Sharper Image became the modern equivalent of the old “wish book” catalogs of Sears — at least for gadget-loving consumers. In recent years, though, the product mix and retail strategy of Sharper Image have lost a lot of appeal with consumers, who seem to be tired of the massage chairs, radio-controlled cars, air purifiers, and other electrical gizmos that have been the company’s stock in trade. The latest, harshest evidence of the company’s slide is its recent entry into Chapter 11 bankruptcy protection. The new Sharper Image CEO, turnaround specialist Robert Conway, has promised to stem the damage.

[Programming note: while we make some improvements to the Hoover’s Index and its dedicated page, we’ll be running posts here talking about some of the interesting companies from the top of the monthly list.]

Performance Food
Performance Food may not be a household name, but the food and foodservice distributor topped our most recent Hoover’s Index after Blackstone Group and Wellspring Capital Management agreed to take it private in a deal worth $1.3 billion. The private equity firms plan to combine Performance Food with Vistar, which owns Roma Food Enterprises and supplies many Italian restaurants around the country. Despite its relative obscurity, the Virginia-based Performance Food is the #3 broadline foodservice distributor in the US (behind SYSCO and U.S. Foodservice); it supplies about 41,000 restaurants, schools, and hospitals across the Eastern and Southern US. Performance Food’s top customers include Cracker Barrel, Outback Steakhouse, and T.G.I. Friday’s.

Quebecor
Stop the presses! Canadian media company Quebecor made the wrong sort of news in January, when its Quebecor World unit — one of the world’s largest commercial printers — filed for bankruptcy protection. Quebecor World accounts for more than two-thirds of its parent company’s revenues; Quebecor’s other businesses include cable TV (Vidéotron), newspaper publishing (Sun Media), and French-language TV broadcasting (TVA). Quebecor World, which specializes in printing magazines and retail inserts, maintains more than 115 printing facilities, primarily in the North America, but also in Europe, South America, and India. Before it filed for bankruptcy, the company had tried to negotiate a huge bailout package, but to no avail.

Weatherford International
The long run-up of crude-oil prices over the past few years has cast a brighter spotlight on companies throughout the oil and gas industry, including services companies like Weatherford International. The firm, which brings in more than $6.5 billion in annual revenue, supplies a wide range of equipment and services used during oil and gas drilling. Weatherford also provides pipeline services and contract land drilling services. The company’s multi-year program of acquisitions and divestments have paid off in a big way: in January it reported outstanding results for the last quarter of 2007, when it enjoyed strong performance in the Eastern Hemisphere (especially Europe and West Africa), where Weatherford has aggressively expanded its operations.

Garmin and TomTom are in a bidding match to buy the digital mapping outfit Tele Atlas.

Tele Atlas to review TomTom’s sweetened bid

Dutch digital map company Tele Atlas, which is at the centre of a bidding war between navigation device makers Garmin and TomTom, said on Wednesday it would review TomTom’s revised offer.

Tele Atlas said in a statement it had received the intended bid from TomTom, raised to 30 euros per Tele Atlas share from a previous 21.25 euros, valuing the company at about 2.9 billion euros ($4.2 billion).

If you haven’t been following this story, it has everything to do with Nokia’s recent agreement to shell out $8.1 billion (an amount that Nokia keeps in its checkbook for just such contingencies) to buy NAVTEQ — which has built the biggest digital mapping database and which competes head-to-head with Tele Atlas.

Conveniently enough, NAVTEQ topped our latest Hoover’s Index list, so we profiled it in both text and video on our Hoover’s Index page.

Garmin in particular doesn’t want to be put over a barrel by a NAVTEQ-owning Nokia. The cell-phone giant could make life difficult for the GPS device maker, especially since (a) Garmin currently pays to use the NAVTEQ database in its own navigational devices, and (b) Nokia has been introducing GPS-enabled phones that could eat up a chunk of Garmin’s turf.

What’s at stake in the future: more and better interactive wireless location-driven applications. At the moment, it’s easy to have your Garmin device or Nokia smartphone to show you the map for a particular address. In the future, it will be much easier to get an answer to fuzzier questions along the lines of, “Hey, we’re here in Minneapolis for the conference, and we want Chinese food — where can we get Chinese food around here?”

The beneficiaries: NAVTEQ and Tele Atlas, of course. Their products have value to begin with, but any product will command a higher premium when it has a very particular value to certain bidders. It’s a nice place to be in, if you happen to have a giant mapping database in your hip pocket.

Check out our updated Hoover’s Index page for October. You can find more information on Acer, Saturn, Quiksilver, and Windstream there, take a look at the broader list of companies that are getting the most attention from Hoover’s users, and even watch a video of me giving more context on this month’s list.

Many thanks to Peter Partheymuller for his typically witty posts here last week while I was away on vacation. I’m working my way back into the flow of things, so the pulse of this blog may be less steady for a couple of days. Look for more on what’s happening in the IPO market (you have seen our new IPO Scorecard, yes?), the Hoover’s Index (ditto?), and the mercenary-capitalist end of the Harry Potter empire.

It’s dominating the news today, and it will be dominating my thoughts come the morrow, since I’m scheduled to appear on CNBC’s “Morning Call” program at a little after 10 a.m. Central time to discuss the Blackstone IPO. For now, some high-level thoughts:

• Messrs. Schwartzman, Peterson, et al. will make out just fine, and the deal’s underwriters should do well, too (even if they’re not getting paid as much as usual).
• I’m hardly an investment adviser, so please don’t take this as gospel, but secondary investors — i.e. folks like you and me who could get in on this IPO tomorrow or later — are unlikely to reap big rewards from the deal.
• A few other private equity firms might follow suit and offer a portion of themselves to the public. Likely candidates: KKR, TPG, Carlyle.
• I don’t expect a wave of IPOs from smaller players in the private equity business, especially if Congress changes the way these firms’ proceeds are taxed.

More on this tomorrow. Please tune in to see me!

Please pardon the programming interruption — the BIZ blog has been on a short hiatus while yours truly took a family vacation.  Now I’m logging in from Denver, at the annual meeting of the Special Libraries Association.  The SLA audience includes many Hoover’s power users, which is great for those of us staffing the Hoover’s exhibitor booth; these folks are also great for me to talk to one-on-one, because many of the librarians share my information-junkie ways.  (As you’ll figure out from reading Hoover’s company overviews, or from reading the Bizmology blog, many of my Hoover’s editorial colleagues fall into this same category.)

During my week of vacation, I mostly avoided the news, so here are some of the themes that struck me when I caught up on my business reading with fresh eyes:

• No one knows how high the stock market will go, or quite what to make of it.  Major indexes, including the NYSE and the S&P 500, have been setting records by the day, but there is also a steady stream of mixed signals from major economic indicators (housing starts, IPO activity, employment rates, corporate earnings, etc.).
• Green anything continues to make the news.  Folks within the environmental community have been remarking over and over that mainstream conversations on climate change, pollution, water use, etc. have changed fundamentally, even within the past year.  These days, they say, the mainstream question isn’t whether to do something about these problems (or whether these problems exist at all), but how, how much, and how soon to address them.
• Maybe you’ve heard something about these cats in the private equity world?  Here’s a bulletin:  despite the gargantuan sums of money they’ve already spent this year, they’re not nearly tapped out.  Likely next big buyout:  Avaya.

More commentary on these issues and more as I settle back into the saddle, first here in Denver and then back at Hoover’s Galactic HQ in Austin.

First you’ve got your China, which is ubiquitous in the business news these days, and then you’ve got your Blackstone, which has been soaring in our Hoover’s Index rankings, month after month.

In strategy shift, China to buy a stake in Blackstone

China is looking for something besides U.S. Treasury bills to invest in. Especially considering its imminent IPO, Blackstone looks to be about as blue-chip as it comes these days. Could be a marriage made in financial heaven.