Keane Buys Trican’s US Division in a $247 Million Deal

Despite the precipitous drop in oil prices, the Keane Group will purchase the US division of a Canadian oil field services company in a bid to grow the company.

James Stewart, CEO of Keane, said that the purchase will more than double the size of the small oil field company.

Last month the two companies, Keane and Trican Well Services, a pressure pumping business based in Calgary, announced that they were in advanced negotiations discussing purchase. The final agreement features Keane paying $200 million in cash for Trican, plus a 10 percent stake in the shares of Keane Group Holdings. The total value of the deal equals $247 million. The deal should be finalized by the middle of March.

“We’ve been a small, well-capitalized completion services company,” Stewart said. “And now is a good time to consolidate. We’re in a unique position … to potentially roll up more companies.”

The finalization of the deal will allow Keane improved access in the Eagle Ford Shale in South Texas and some of Oklahoma and Kansas. It will also allow Keane a stronger presence in the Permian Basin in West Texas and the Bakken Shale in North Dakota.

“As the market rebounds, we’ll be well positioned,” Stewart said, emphasizing the importance of the  “untapped potential” still remaining in the Permian.

Ted Virtue and M&A in 2016

investmentWhat should financiers be looking for in middle market trends this year? How does 2016 shape up vis-à-vis the M&A market? Ted Virtue, CEO of MidOcean Partners, “an American private equity firm specializing in middle market companies” among other investment areas, leans toward “under-levered” and “under-globalized brands at his firm,” as a general behavioral trend.

But what are other experts in the M&A industry saying is likely for 2016? According to a recent article in The Middle Market, it is important to look at trends from 2015 to get a feel of how 2016 is going to pan out. Low interest rates were a real driver last year and thus for lending purposes, seek out business development companies to look into private markets.

Internationally, it is thought that investors will be moving to Southeast Asia (and away from stagnating China). In America the election should also be watched to look at who will cut “favorable tax treatment of carried interest.” In addition, it is important to note that this will be “the first full year that the Association for Corporate Growth will be monitoring issues like tax on debt interest payments and the designation of joint employer status from its new Washington, D.C., office.”

The Rugged Rugby of Geoff Richards

Savannah's Katie Thomen tackling Lauren "Speedy" Buslinger Raleigh Venom vs. Savannah. Photo by By kelseye
Savannah’s Katie Thomen tackling Lauren “Speedy” Buslinger Raleigh Venom vs. Savannah. Photo by By kelseye

Rugby is a form of football (not soccer) most popularly played in countries throughout the British Commonwealth. First developed at the Rugby School in Warwickshire in the 1830s, it became widespread and popular in the mid-19th century. Today there are two main types of Rugby played; rugby league and rugby union. These two forms of the game are quite similar, but they diverge with different sets of rules.

Geoff Richards is a former rugby union player and also served as a coach. In 2006 Geoff Richards was England Women’s Rugby coach when he challenged New Zealand in the last game of the IRB Rugby World Cup. The match took place at the Commonwealth Stadium in Edmonton, Canada.

This match was incredibly a deja vu of a game that took place four years earlier, in 2002. That tournament finale ended with a score of 19-9, the Black Ferns taking the championship. Sadly, the Red Roses of England did not have even one victory over their arch rivals from New Zealand since their win in 2001 at Auckland’s North Harbour Stadium.
Geoff Richards said this about the upcoming game:

“This is our best and strongest squad and certainly a very exciting team. We are solid up-front and we have a lot of pace in the backs.

“There’s a very positive mood in the camp, from the players all the way through to the management team, but this is going to be our toughest challenge yet.

“To beat the Black Ferns, primary source of possession is crucial and also how we defend. The battle up-front is where most games are won and lost so if we can really put pressure on them and get into their faces then let’s see how they handle things under pressure.”

State Street to Open Office in Copenhagen

State Street Headquarters. Photo by Garrett A. Wollman
State Street Headquarters. Photo by Garrett A. Wollman

State Street, the world’s third largest investment manager and second largest custodian, is planning on opening a new office in Copenhagen. The current amount of AUM is estimated at 190,000 billion kroner. ($21.877 trillion)

“We have been operating in the Nordic countries for 20 years and we already have several customers in the market, but we have never had a local presence,” said Oliver Berger, the head of State Street’s solutions for shareholders in Europe, Middle East and Africa.

Berger says State Street hopes to tap into the huge amount of savings in the Nordic countries, with an estimated 9,442 billion kroner. Since State Street is one of the largest equity funds in the world, they could create an anonymous private equity index based on customer data and use it to compete with local banks such as Danske Bank, Nordea and SEB.

State Street is the second oldest financial institution in the United States, founded in 1792 with its international headquarters in Boston, Massachusetts.

Marc Lasry’s Economic Expectations

 

Marc Lasry
Marc Lasry

Marc Lasry, co-founder of Avenue Capital Group, has a positive outlook for his firm and funds this year.

According to Bloomberg, 2011 proved a challenging year for Avenue, but one of its investments is still going strong: European vice.

“An earlier European fund that invested more than $2.6 billion in pubs, casinos and other beaten-down assets has generated average annualized returns of 19.3 percent since it began in May 2008, ranking it in the top 25 percent of its peers, according to research group Preqin Ltd.,” Bloomberg wrote.

Learn About Finance from Halloween Candy

candy_5_by_silvermoonlight217-d3k9u89Not only is Halloween a great day for kids and their dentists, it also presents a wonderful opportunity to teach the next generation about managing money.

Many people don’t realize that Halloween is often and expensive occasion for families. The National Retailer Federation says that consumers will most likely spend almost $7 billion on all the trappings of a “proper” Halloween. Into the budget go items such as decorations, costumes, and candy. Even pets sometimes get costumes- to the tune of $350 million. The NRF says that each shopper will spend an average of $74 on the holiday.

Don’t despair. Get your kids in on the planning, and you can teach them some great lessons about watching where their money is going.

1.    Comparison shopping- using great apps like ShopSavvy or RedLaser, or by simply comparing prices on-line and in stores, children can learn that there is often a great deal of variance in what stores charge for their goods.

2.    Never pay retail- watch for specials, reduced-price sales and other events that can slash prices way down.

3.    Buying in bulk- stores like Sam’s Club or Costco discount items when purchased in larger quantities. This is a great way to buy all the candy you need.

4.    Delayed gratification- one great lesson to impart to children is the importance of not acting impulsively, especially when it comes to spending money. If you see something you like, but don’t really need, wait a day or two, or even longer, and see if its appeal hasn’t faded. This is a great way to save lots of money.

You can decide ahead of time with your children how much money you think a reasonable amount to spend on Halloween, and curb spending to match your budget. This is a great lesson in the value of hard-earned dollars versus the frivolous nature of a holiday like Halloween.

International Fellowship of Christians and Jews

peaceSince 1983, when the International Fellowship of Christians and Jews was founded, nearly a billion dollars have been raised to help Jewish communities across the globe. The majority of the aid comes from Christians around the world, especially the United States.

With the generous support of Christians, IFCJ has become one of the largest organizations anywhere in the world that supports Israel and its neediest people. IFCJ is also the largest non-profit philanthropic organization in Israel.

The main goals of IFCJ are to promote understanding and reconciliation between the Jewish and Christian communities while at the same time binging humanitarian aid to Israel’s neediest communities and Jewish communities outside of Israel who are at risk.

The IFCJ has more than two million people backing up the work that they do, raising over $140 million each year in support of that work. There are offices in Chicago, Jerusalem, Toronto, and Seoul, South Korea, giving the IFCJ a truly global reach.

In order to promote better understanding between Christians and Jews throughout the world IFCJ broadcasts radio programs on 3,745 radio stations reaching over 24.6 million listeners every week. There is also television programming, and a strong presence on social media such as Facebook, YouTube and Twitter. Stand for Israel is an advocacy group with a Facebook following of almost 1 million people, supporting Israel’s right to peace and security.

IFCJ is the most prominent organization around the world that promotes understanding and good relations between Jews and Christians. Every day, it seeks to create an atmosphere of cooperation, understanding, and support between two great communities of faith.

GE Moving 500 Jobs Abroad for Lack of US Credit Financing

Export-Import-BankGeneral Electric Company announced that it will be forced to move about 500 jobs overseas due to the withholding of credit financing from the US Export-Import Bank. The giant corporation will instead seek out export financing from agencies in France, Hungary and China, which means they will have to set up shop in those countries, and hire workers there.

Saying that the agency distributes corporate welfare, the Republican-controlled Congress has refused to continue funding the US Export-Import Bank. Congress allowed the agency’s charter to expire on July 1st, and since that time the federal credit bank stopped issuing new loans.

GE contends that the United States is the only major economy in the world that does not offer foreign credit financing, and that will force companies to look elsewhere for credit, forcing them to also move operations overseas.

At the moment GE says they are in the midst of bids on projects around the world valued at about $11 billion. However, their customers need guaranteed financing from an ECA or else they will not be allowed to submit a bid.

“Our customers rely on export credit agencies, like U.S. Ex-Im, to finance their critical power projects,” said Jeff Connelly, vice president for GE Power & Water.

He would like to see Congress continue to fund the Ex-Im bank.

“While our preference is to continue producing power generation equipment in our best U.S. factories, without customer access to the U.S. Ex-Im bank, we have no choice but to move our work to places that will offer export credit financing of these projects.”

VTOL Jet Project Crowdsourcing $50 Million

XTI-2In exchange for equity in their company, the founders of XTI Aircraft are inviting venture capital, private equity, and high net worth investors to fund the development and production of the TriFan 600, a business jet that will be able to take off and land like a helicopter.

The Denver-based aerospace start-up company is looking to raise about $50 million through a crowdsourcing campaign they launched this past Tuesday. XTI was founded in 2009 by David Brody, who was the former chairman and chief executive officer of AVX Aircraft. Brody developed and patented the idea for this innovative business jet.

The crowdsourcing campaign was launched under new rules established by the US Securities and Exchange Commission in March, 2015. The company’s financing policy will allow accredited as well as non-accredited investors to invest in XTI Aircraft by reserving non-binding equity in the company.

“We fully expect that investors, especially crowdfunders and those with an interest in aviation, will be drawn to the idea of having their own ‘Kitty Hawk’ moment by being part of a truly new aircraft program that will change flight as we know it,” the company said.

The TriFan 600 has been in development for over two years. It is hopefully going to be the first commercially certified long-range, high-speed, vertical take-off and landing aircraft. The company says it has reduced risk by using already proven technologies for its design. Launch time for the plane will be decided after the project meets certain financing milestones.

Big Business Sure to Benefit from Iran Nuclear Deal

The ministers of foreign affairs and other officials from the P5+1 countries, the European Union and Iran while announcing the framework of a Comprehensive agreement on the Iranian nuclear programme. Hailong Wu of China, Laurent Fabius of France, Frank-Walter Steinmeier of Germany, Federica Mogherini of the European Union, Javad Zarif of Iran, an unidentified official of Russia, Philip Hammond of the United Kingdom and John Kerry of the United States in the "Forum Rolex" auditorium of the EPFL Learning Centre, Écublens-Lausanne, Switzerland on 2 April 2015.
The ministers of foreign affairs and other officials from the P5+1 countries, the European Union and Iran while announcing the framework of a Comprehensive agreement on the Iranian nuclear programme. Hailong Wu of China, Laurent Fabius of France, Frank-Walter Steinmeier of Germany, Federica Mogherini of the European Union, Javad Zarif of Iran, an unidentified official of Russia, Philip Hammond of the United Kingdom and John Kerry of the United States in the “Forum Rolex” auditorium of the EPFL Learning Centre, Écublens-Lausanne, Switzerland on 2 April 2015.

The nuclear agreement carved out by Iran, the United States and five other world powers, if ratified, will lift an international embargo on Iran that will benefit not only the people of Iran economically, but some major corporations.

Iran has the fourth largest crude oil reserves in the world, and the second largest natural gas reserves. For the past several years this treasure has been largely unavailable due to the international embargo which was placed on Iran due to its illegal development of a nuclear weapons capability. A signed and sealed agreement will open these vast stores of resources to the world market, benefiting the corporations that do business in energy-related niches.

“Most likely European and Asian energy companies will see an increase in business—so companies like Total and Shell,” said Alireza Nader, senior international policy analyst at the Rand Corporation. “For American energy companies, it’s going to be tougher for them to go back in Iran.”

US companies are likely to avoid doing business in Iran for political reasons; companies don’t want to be associated with an extremist Islamic dictatorship, and will most likely stay away.

Tankers and oilfield services are also going to reap rewards from the opening of the Iranian economy. Chris Wetherbee, an analyst at Citi Research, said the embargo lift is a “net positive” for international tanker companies. Iran’s own aging fleet simply will not be able to compete, especially with additional energy supplies on the market. Investors agree: Scorpio Tankers and Navios Maritime Acquisition stocks both rose on Tuesday.