Services

Private Equity and Venture Capital Advisory firm SCAS Inc. announced today that Managing Partner Samir Chreim will join Boston-based EGNYT as CEO to launch a technology incubator in two countries.

“The newly opened 2,500-sqft business incubator in Beirut will be followed by an identical facility in Cambridge, MA that is meant for enterprises focusing on technology,” said Mr. Chreim, Managing Director.

The incubators will be funded by SCAS and will be managed Samir Chreim, a serial entrepreneur and the founder of over 12 startups. “For many years SCAS Inc. and EGNYT have helped match angel investors and funds and angel with emerging projects. We believe that formalizing and systematizing this relationship will not only boost the number of graduating startups, but will also help us build on what we accomplished over the past 9 years.”

“Having a footprint in two countries not only help us leverage economies of scale, but will also boost cooperation and will help bridge a major gap in technology know-how faced by startups in Middle Eastern countries, and in particular, in Lebanon,” Mr. Chreim added: “Take digital marketing as an example, a key success factor that plays as the determinant for a successful startup. This expertise is almost non-existent in Lebanon. By drawing on the expertise of the Boston location, we can local Beirut startups overcome these challenges.”

Benefits go both ways. For example, Cambridge-based incubator also stands to benefit from having access to a Beirut-based location. “In the age of Unicorns, technology expertise is in high demand and expensive to come by in the US. Therefore, having a Beirut location, US-based startups can benefit by having access to low-cost by hiring or outsourcing to Beirut where labor is cheaper,” said Mr. Chreim.

Beyond seed-stage funding, graduating startups stand to benefit from SCAS services in getting early-stage funding and private equity. SCAS provides startups with investments directly or indirectly by matching them with investors.

By some measures, Barnes & Noble’s retail business may be worth nothing as the overall company is valued at around $863 million and its total enterprise value is about $1.3 billion, according to S&P’s Capital IQ. In fact 2012, Microsoft and Pearson bought a 23 percent chunk of the Barnes & Noble’s Nook division at $1.8 billion valuation. Surely, Barnes & Noble has nearly 700 stores and an e-commerce business, and according to the Wall Street Journal, its chairman Leonard Riggio says he’d buy the retail unit and he would likely need to value the business at about $1 billion, based on multiples tied to its earnings before interest, taxes, depreciation and amortization. That value would include the $338 million in debt, while And Riggio himself is owed $127 million in notes from a 2009 transaction involving the company’s college book stores unit. That would leave a $534 million hole to the total value.

Dropbox last round of funding around early 2012 was conducted at $250 million valuation. Therefore, it is likely that the company is moving towards flotation. Overall, the company has raised a total of $257 million to date. That said, Dropbox is cash-rich and profitably at the moment, perhaps enabling it ample flexibility on when it pulls the trigger on an IPO. Strategically, Dropbox increased its focus on corporate customers closing in on Box as its main competitor. The recently revamped ‘Teams’ feature enables small businesses and managers control over use, thereby increasing the attractiveness of the service to the business segment.

After successful dealing, JPMorgan Chase bought an additional 4.7 percent stake in the London Metal Exchange from the insolvent brokerage MF Global, in a deal valued at $38.9 million. This is according to persons privileged with the information about the deal.
JPMorgan Chase bought MF Global’s holdings in LME via an auction led by the accountancy firm KPMG. The deal is to be announced sometime early next week.
Although JPMorgan purchased the position at a discount, the £25 million deal leaves London Metal Exchange value at about £530 million to £560 million. This is according to the same sources.
To help raise funds to pay off its creditors, MF Global’s Estate will be seeking to sell the remaining parts of the company through a series of sale outlets. However, lawyers representing MF Global in bankruptcy court said that much of the estate’s assets are held in several subsidiaries controlled by different trustees, a thing that will complicate the sell out process.
After the purchase of the 4.7 percent stake, JPMorgan’s stake now stands at 10.9 percent, as it owned 6.2 percent of MF Global previously, making it the biggest shareholder in the company.
JPMorgan purchased 600,000 Group A shares, valued at £25 million and 25,000 Group B shares for £2 million. Group A shares accord the bank voting rights unlike Group B shares, making JPMorgan a recognizable force within the company. Top market player Goldman Sachs holds a 9.5 percent stake in the company, making it London Metal Exchange’s second largest shareholder.
The deal leaves JPMorgan Chase in a very lucrative position; a ripe position that will see the bank benefit from any future sale of large metal marketplace.
In the month of September, London Metal Exchange, which specializes in the trade of minor metals, non-ferrous metal and steel, announced that several acquirers had expressed interest, and that it was juggling its options.
While the firm failed to name potential bidders, marketplace analysts say either the International Exchange or the CME Group could be probable acquirers. The takeover is expected to attract a £1 billion price.
London Metal Exchange has greatly benefitted from rising prices for raw materials and a demand that is growing exponentially. Last year, London Metal Exchange’s trading volumes hit the equivalent of $1.6 trillion, with an everyday average of $46 billion.

Global e-commerce and online payments platform eBay Inc. on Monday announced plans to acquire a New York start-up called Hunch Inc. This is according to a post published on Michael Arrington’s blog, Uncrunched.com.
Michael is the brains and soul behind TechCrunch, a popular web publication. He is also a general partner at CrunchFund. EBay Inc. anticipates acquiring Hunch Inc. technological and human-skill resources in a deal valued at about $80 million.
The San Jose-based EBay, which lists on NASDAQ as EBAY, will be looking forward to use Hunch’s recommendation technology to improve its own e-commerce recommendations. Hunch top-range recommendation service fully runs on a patented prediction technology christened “Taste Graph”.
Hunch’s technology allows the user to make and discover great recommendations based on the user’s specific tastes. Hunch goal is to create a taste graph that connects each person on the internet with his or her affinity for every entity may it be a car, camera, book or anything else on the web.
“We are engaging consumers in innovative ways and attracting top technologists to shape the future of commerce,” said Mark Carges, Chief Tech Officer and Senior Vice President, Global Products, Marketplaces in a press release released by eBay on Monday. “With Hunch, we’re adding new capabilities to personalizing the shopping experience on eBay to the individual relevant tastes and interests of our customers. We expect Hunch’s technologies to benefit eBay shoppers as they browse and buy, and new ways to connect the right products with the right customers.” He added.
Since it was commissioned in 2008, Hunch Inc. has raised an approximate $20 million in funding. The company was founded by Chris Dixon, a contributing writer at TechCrunch, Tom Pinckney, Matt Gattis and advisor Caterina Fake. After the acquisition, eBay’s management will be expecting Chris to lead a 50-person recommendations team put together by and for eBay. In addition, he is to open, run and grow an office in New York.
Firms backing the deal include General Catalyst Partners, which runs operations from an office in Palo Alto, Silicon Valley-based angle fund SV Angel, as well as Menlo Park-based Bessemer Venture Partners and Khosla Ventures.

LinkedIn investors and executives will be seeking to sell more than 6.7 million shares valued at around $500 million, only 5 months after its blockbuster IPO in May this year. This is according to a regulatory filing with the U.S. Securities and Exchange Commission.

According to the filings, Bain Capital, LinkedIn’s top investor, will be looking to unload its entire stake in the company. Bain holds about 4%, or 3.7 million shares, of stock at LinkedIn. Sources have it that Bain Capital facilitated a $53-million investing round in 2008 that left LinkedIn valued at $1 billion. Since then, Bain has been a top investor in the professional networking company.

The sale will go down this coming week after LinkedIn’s IPO 180-day “lockup” expires on Sunday. The “lockup” agreement is meant to preclude company’s insiders from rushing to sell their stakes. In the markets, it is common for executives and investors to sell their stakes immediately after a lockup.

LinkedIn’s was the biggest initial public offering for an internet company since Google’s IPO in 2004. This past month, the company announced that it would offer an extra $100 million in stock to feed growth. The sale will involve around 1.3 million shares, the company said on Tuesday. The date of the sale has not been set.

LinkedIn’s move to sell additional shares will cause doubling of the number of shares in the market. Previously, the company has benefitted from the limited number of shares. by limiting the number of shares offered through an IPO makes shares scarce, which tends to escalate the value of stocks.

LinkedIn shares garnered as high as $109.97 in July before falling to the lower $70 range a month later. On Tuesday, the shares slumped by 4.6 percent to close at $74.86.

Chief Executive Officer Jeff Weiner and Chief Financial Officer Steve Sordello are each offloading 10 percent of their stakes. Sources within the company said that the two agreed to a 90-day waiting period before selling more shares.

LinkedIn co-founder and current Chairman, Reid Hoffman agreed to the condition. However, he is not selling any shares. Currently, his stake in the California-based company is valued at more than $1 billion.

LinkedIn posted its first loss as a public company in the third quarter even as revenues doubled. To expand its offerings to its more than 135 million members the world over, the company immensely increased spending. It specializes in networking professionals from all the four corners of the globe.

Tuesday this week, Nippon Metal Industry and Nisshin Steel announced plans to merge in a business deal that would form the second-biggest stainless steel mill in Japan.

Both companies will have a market capitalization of $1.6 billion after the deal, expected to go down before 12th October, is completed. Nisshin already owns a 5 % stake in Nippon and is valued at $1.4 billion.

Though the firms failed to provide specifics on the deal, they said that a holding company would be formed to run the new combined business. The deal comes at a time when both Nisshin and Nippon are faced with weak demand in their local market as well as growing competition from international equals.

“The business environment of stainless steel industry has been going through drastic changes in recent years,” said a statement released by Nisshin Steel. “The companies believe that it is indispensable for them to further tighten their relationship.”

The announcement was further met with negative reactions from the markets in Tokyo. By the close of trading, Nisshin stock price had slumped by 6.9 %, and Nippon Metal’s share lost 6.4%.

Persons privileged with the information about the deal said that it is the largest amalgamation in the steel industry. At the beginning of the year, Sumitomo Metal Industries and Nippon Steel announced an analogous deal to form the world’s second-largest steel maker valued at $24.5 billion.

Rising costs for raw materials; coking coal and iron ore used in the making of steel have led to global merging in the steel industry as firms seek to cut down on operation costs.

To facilitate the construction of an oil refinery plant, Sinochem Corp. plans to pile up around 35 billion in Yuan, a figure that stands at $5.5 billion at the current exchange rates. Sinochem’s IPO, if successful, will be China’s sixth biggest IPO this year.

According to data posted on Ministry of Environmental Protection’s website, Sinochem Corp., China’s largest chemical products supplier plans to sell about 26.5 billion shares in an initial public offering in Shanghai. Proceeds from the IPO will be used to erect a 241,000 barrel-per-day, or a 12 million metric ton-per-day oil refinery plant in Fujian.

Data put together by news website Bloomberg shows that several companies in China have raised as much as $37 billion in IPOs this year, a figure doubling one recorded in Hong Kong. According to Bloomberg data, Sinochem Corp.’s IPO comes a few days shy of a month after Sinohydro Group Ltd., China’s largest constructor of hydroelectric dams, piled up 13.5 billion Yuan in what was China’s biggest IPO of 2011.

Sandy Mehta, CEO at Hong Kong-based Value Investment Principals Ltd. said that this move would open up floodgates for more IPOs. “Chinese stocks are very cheap in terms of valuation, and the bearishness on economy and banks is very undone. China has now stopped tightening.” He added.

To tame inflation that threatened to suffocate its economy, China curbed bank lending by raising interest rates. All the same, this essential move did not stop Shanghai Composite Index from losing 11 percent this year. In similar fashion, Sinohydro Group Ltd. slumped 6.8 % since it started trading on the 18th of October.

Industrial output grew at a snail’s pace while home sales fell fall even as inflation cooled off throughout the month of October. In relation to this, a survey conducted by Bloomberg showed that majority of economists in China expected that the country would loosen monetary or fiscal policy without lowering interest rates.

According to its website, the Beijing-based Sinochem is the fourth-largest oil company in China. To boot, it has assets in real estate and agriculture. Last year, the company recorded a 9.1 billion Yuan in profits sheared off from 335.5 billion Yuan of gross revenues.

Sinochem’s parent company, the Sinochem Group Ltd., is also parent to several other listed companies including Sinofert Holdings Ltd., Sinochem International Corp., and Far East Horizon Ltd.

In related news, China Railway Materials Commercial Co. also has plans to raise over 14.7 billion Yuan in an IPO, funds that will be used to finance several of its projects. This is in accordance to a statement from the company posted yesterday on the Ministry of Environmental Protection’s website.

Delphi Automotive Plc will be seeking to raise as much as $578 million in its IPO. Persons with access to this knowledge say that the benefit will push the company’s worth to about $7.88 billion. Delphi Automotive was formerly under General Motors Co.

According to a filing with the U.S. Securities and Exchange Commission, the company is to sell 24.1 million shares at $22 to $24 a share. The filing also has it that Paulson & Co., a hedge fund run by John Paulson, will be expected to sell 20.6 million shares, the largest stake in the company.

Turbulence in the automobile industry and global markets has not discouraged Delphi from hosting its IPO. This third quarter only, several companies including Wilbur Ross’s International Automotive Components Group have cancelled their IPOs valued at $8.9 billion. Wilbur postponed his company’s IPO to January 2012.

The Michigan-based Delphi will start marketing to investors this week, according to sources privileged with the information. The shares are expected to start trading come 17th of November. According to one of the sources, Delphi, which is registered in Gillingham, U.K., planned to offer more than $1 billion in shares.

According to the filing, Delphi Automotive Plc will have an outstanding 328.2 million shares. Working with $23, the average share price, the company would be worth around $7.55 billion.

The Option of Overallotment

Selling shareholders will also seek to sell over 3.61 million shares at $22 – $24 a piece during the IPO.

Delphi Automotive is one of the largest auto-parts company in the U.S. It escaped bankruptcy in late 2009 to become a more profitable, self-sustained and rapidly growing auto-parts Company. The company benefited from the recovery in the U.S Auto Industry as evinced by GM and Tesla Motor Inc. IPOs held last year. The turbulence in global markets has since dealt GM shares a 36-percent loss. The same has driven down Tesla Motors Inc.’s shares by 33 %.

The Delphi IPO will be led by JPMorgan Chase & Co. and Goldman Sachs Group Inc. The shares will go up on the stock market under the symbol “DLPH”.

The review site, Yelp Inc., is said to have chosen heavyweights Goldman Sachs Group Inc and Citigroup Inc to lead its IPO come 2012. That is according to two persons familiar with the deal.

The sources, however, pointed out that the San Francisco-based Yelp has not settled on the number of shares it will offer. According to Wall Street Journal, which also reported Yelp’s plan to host an IPO earlier this year, the company will be worth at about $2 billion after the initial public offering.

As the stock market gets swamped, Yelp has differentiated itself from Groupon Inc. by scaling back a foray into the deal-of-the-day business. In an August interview, vice-president of corporate communications, Vince Sollitto, said that the company moved around 15 salespersons from Yelp Deals to other fields of business. He also added that the number of deals users receive via email is likely to remain the same.

This past week, top daily-deal site Groupon piled up $700 million its IPO. It was the biggest U.S. initial public offering by an internet company since Google’s IPO in 2004.

Andrea Rachman, Mark Costiglio and Stephanie Ichinose; spokespersons for Goldman Sachs, Citigroup and Yelp in that order, all declined to comment for the deal is yet to be formalized.

Yelp’s IPO will be an ideal opportunity to lift returns at Elevation Partners, a private equity unit that has Bono, the U2 singer, and Roger McNamee as part of its investment team. Last year, California-based Menlo Park bought 20% stake, valued at $100 million, in Yelp. The success of the IPO would mean a $2-billion valuation for Yelp, something that would subsequently leave Elevation’s stake at around $400 million. Elevation Partners also has stake valued at about $1.2 billion in Facebook Inc, the company behind popular social-network Facebook.com. Additionally, Elevation is an investor in Palm Inc-now part of HP- and real-estate firm, Move Inc.

The date of the offering as well as details such as the symbol Yelp will trade under are yet to be revealed.