MacFadyen: Taking Notes
August 20, 2009
I was on the SEC’s litigation website and ran across charges against Brantley Capital Management’s Robert Pinkas, who allegedly overstated the value of the firm’s equity and debt investments in Flight Options International and Disposable Products Co.
I’ve heard on occasion private equity limited partners argue that more firms should charge advisory fees on a fair value basis, as opposed to a cost basis. Just a hunch, but if more groups took that approach you’d see a lot more cases like this.
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Kadant Inc. adopted a succession plan that will see Jonathan Painter appointed as the CEO and director in early 2010. Painter, until last year, oversaw the company’s M&A activity and was responsible for its acquisition of The Johnson Corp. Most recently he headed Kadant’s fiberline business.
The appointment supports the idea that M&A provides a fertile proving ground for the C suite, as it tests an executive’s vision, management and capabilities in handling a budget.
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General Employment Enterprises signed an LOI to acquire temporary staffing company On-Site Services. Can’t help but notice the irony of a staffing company consolidating the market a few months after it trimmed its branch locations from eight offices to three. One would think they'd be able to help the departed find work.
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Triumph Group just boosted its revolving credit facility, bumping it up to $485 million from $370 million, and extending the maturity out to January, 2013. This won’t help the refi cliff, which peaks in 2013, but it could be a good sign for the M&A market in the near term. The designer and manufacturer of aircraft components identified future acquisitions as a possible destination for the funds.
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There are usually two signs of impending deal activity. The obvious one is the capital. The other, which can be overlooked, is personnel. Isle of Capri Casinos recently brought on board Eric Hausler as an SVP and head of strategic initiatives. Hausler previously oversaw M&A at Trump Entertainment Resorts, and has an investment banking background with stints at Bear Stearns and Susquehanna International Group.
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