Right after the close, Hewlett-Packard Co. (NYSE: HPQ) did actually confirm in a press release that the company was in advanced acquisition talks with IT-sourcing giant Electronic Data Systems Corporation (NYSE: EDS). While it noted that there are no assurances that a deal will be reached, Wall Street took it in good stride.
As traders look to the news covering whether or not EDS will become part of H-P, traders were looking at how to get in the news. As a result, there are many other tech and IT-sourcing companies to look at that other potential players may take an interest in.
If we took the mid-point of the pricing at $12.5 Billion we would have a rough share price of $25.00 per share on EDS. At that rough price, you would have a company that analysts expect to be priced at 18.2 times DEC-2008 earnings and 0.55-times revenue estimates.
Read the full story of "Who Could Be Next" at 247WallSt.com to see which other stocks in IT-outsourcing stocks could be in play.
An interesting fund raise just closed today in the global energy sector. Lime Rock is a private equity firm that focuses on the global energy sector, and it announced today the closing of its fifth Lime Rock Partners fund, Lime Rock Partners V, L.P., with a total $1.4 billion in investor capital commitments.
Lime Rock has four predecessor Lime Rock Partners funds, and Lime Rock Partners V will make what it calls "creative, value-adding, and long-term growth capital investments" in companies in the global energy industry.
This notes that some 78 institutional investors participated in the fund, including leading endowments, foundations, and pension funds, made capital commitments to Lime Rock Partners V. It also says that it did not actively market this fund, as some 91% of capital commitments came from its existing investors.
Lime Rock Partners funds have invested $1.0 billion in 47 energy portfolio companies worldwide, which are primarily in the exploration & production, energy services, and oil service technology sectors. These funds have also realized some $1.7 billion and "continue to hold significant unrealized value in their portfolio company investments."
Lime Rock also manages Lime Rock Resources, a $450 million fund, which directly acquires and operates oil and gas properties in the United States. Lime Rock manages $3.5 billion of private capital for investment in the energy industry.
PurePlay has announced the closing of Series C equity financing round for $15 million. The company claims to be the first and the largest online, legal non-gambling poker site with a record 1 million users and to-date has given away $3 million in cash prizes. The funding will allow PurePlay to increase marketing and expand infrastructure to handle the rapid growth.
Investors include Bay Partners, Ron Conway, James Joaquin, and other Silicon Valley investors. Ron Conway formerly headed Angel Investors LP and is currently an independent angel investor. He wrote "The Godfather of Silicon Valley" and, notably, he sits on the boards for Facebook, Plaxo, Anchor Intelligence, Associated Content and Zappos. He was also an initial investor in Google. James Joaquin funded When.com, presided over OFoto and Xoom and acts as a venture partner at Bridgescale Partners.
Maybe this company doesn't even need the potential regulatory loosening up that has been proposed by Barney Frank.
GodTube has reportedly received a $30 million investment from hedge fund GLG Partners, according to PaidContent. The news came on Sunday, unsurprisingly.
GodTube is a quickly growing Christian online video sharing and social networking website and previously received $2.5 million in funding, some from private investor Norm Miller of Interstate Batteries.
The site now has 2 million users per month and was launched less than a year ago in Dallas. CEO Chris Wyatt formerly acted as an executive producer at CBS.
While $30 million sounds like a massive amount, the costs of broadband make it a normal investment for comparable video sharing sites. Recently, GLG invested in digital media companies Glam Media and Spinvox. This round of funding for GLG Partners is $150 million.
Also according to the article in PaidContent, GLG Partners and GodTube each declined comment on the rumored investment.
The Blackstone Group L P (NYSE:BX) has announced the closing of three newly created collateralized loan obligation funds totaling $1.3 billion. Those CLO's are trading again. These were all created over the past month, and these are just the CLO's that Blackstone participated in.
In March, Blackstone merged its existing CLO group with the team from its newly acquired GSO Capital Partners. This 35 person CLO team has offices in New York and London. The combined CLO group now manages $14 billion across 26 funds in the US and Europe.
This shows a breakdown in the actual amount per CLO, compares it to Q1 and to 2007, and it even puts the lower volume blame now on the lack of AAA rated part needed for each CLO.
Interestingly enough, Blackstone shares are up almost 50% from their post-IPO lows.
Israel Cleantech Ventures (ICV) has closed its capital raise at $75 million, according to Reuters. The original target for the fund focused on clean technology exceeded its target of $60 million and they had to turn away additional investors.
Specifically, the fund will focus on Israel based or related high growth clean technology companies in sectors such as alternative energy, water conservation and purification, emissions reduction, and technologies that allow businesses to operate more efficiently and more environmentally friendly. Funded in 2006, ICV closed its first round of funding, raising $15 million in January 2006. The Globes in Israel reported that this was above target as well.
Funds came from institutional investors as well as family funds in the U.S., Europe, and Israel, such as Robeco Private Equity, a Netherlands-based asset manager, and Piper Jaffray, a U.S. financial institution.
The fund has completed seven investments, including Aqwise (waste water treatment), CellEra (fuel cells), Citrine Renewable Energy (landfill biogas treatment), Emefcy (energy production from wastewater), Metrolight (energy efficient lighting), Project Better Place (electric vehicle infrastructure), and Pythagoras Solar (solar energy).
Jon Ogg is an editor and producer for the Special Situation newsletter for 247WallSt.com.
According to a report from the Ernst & Young's quarterly US IPO Pipeline Report, IPO activity is flattening as companies are waiting and watching to market to make their move. While that observation is obvious as a heart attack, there are some rather good details that may lead to help determine good IPO's versus bad IPO's in that report.
In the first quarter of 2008, 90 IPOs sat in the pipeline, the same amount as the last quarter of 2007. New registration was stable across the quarters, but the slide is still downward sequentially. In January there were 10 while February and March saw only 6 and 7, respectively. While the amount the registrations represent grew this quarter compared to last, $16.8 billion up to $17.3 billion, the numbers slowed toward the end of the quarter. It seems pre-IPO companies are holding tight and watching the market.
As expected, first quarter 2008 weakened compared to the first quarter in 2007. In the first quarter of 2007, 103 deals waited in the pipeline compared to 90 in 2008. In 2007, the registrants represented $22.8 billion compared to $17.3 billion in 2007. The average deal size also dropped, down to $192 million from $221 million. The largest deal in 2007, The Blackstone Group L.P. (NYSE: BX) reached $4.0 billion while in first quarter 2008, the largest was American Water Works at $1.6 billion. Visa Inc. (NYSE:V) was left off because of an end of quarter and for size issues as 'one of a kind.' Companies are also sitting in the pipeline much longer, 163 days on average compared to 113 in 2007.
Technology takes up the bulk of the pipeline with 26 registrants and $3.3 billion in dollar amount, up from $2.8 in fourth quarter 2007. Technology attracts foreign issuers with four out of five foreign issuers in the technology sector. While technology went up first quarter 2008, oil and gas dropped 60% from $5.3 billion fourth quarter 2007 to $1.9 billion. Biotech accounts for a solid 12 registrants and pharmaceuticals tally 11. California leads on a state-to-state basis, filing 16.7% of the total filings at 15. Texas and New York followed with 11 and 8, respectively.
Also according to the report... Patience and confidence are likely to ebb by June, but if you're a good company with solid business plans, practices and proven results, opportunities still await you in the markets.
In one of the biggest technology-related IPOs this year, website and IT system hosting company Rackspace Inc. late Friday filed to raise up to $400 million on the NYSE.
The company previously sought to raise $42 million in an IPO in 2001, but withdrew it in the wake of the tech market meltdown. Rackspace reported 2007 profits of $18 million on net revenue of $362 million. In 2006, it earned $20 million on net revenues of $224 million.
The offering, which will be conducted via auction, would represent a rare IPO exit for a host of investors that have backed Rackspace during its eight-year history. Norwest Venture Partners owns 16.2% of the company, while Sequoia Capital owns 11.6%. Chairman and former CEO Graham Weston is the largest shareholder, with 23.9% of the company's equity. Goldman, Sachs & Co., Credit Suisse, Merrill Lynch & Co. and W.R. Hambrecht & Co. are underwriting the offering.
Vinum Capital Management has announced the launch of a $250 million fund targeting the California and west coast wine industry, Vinum Capital Partners I, LP. The fund will focus on mid-size premium and super-premium wine properties that produce 20,000 to 150,000 cases per year.
The California-based company plans to acquire wine companies, grow and expand them, and ultimately sell the assets in this industry that receives relatively little attention from equity investors. Vinum put together a solid team with significant experience in the wine industry, totaling $1 billion in winery-related transactions.
I"ll say one thing after reading this new -- every worker in private equity probably wants to get hired by this fund.
Investment partners for the fund include Justin Faggioli, former COO of Ravenswood, Scott Setrakian, former Director of Golden State Vineyards and an M&A and financing expert, G. Craig Vachon.
The portfolio management team for the fund lists Bill Foster from Beringer, Jonathan Pey from Robert Mondavi and Fosters Wine Estates, Doug Rogers from Gallo, Southcorp, and Brown-Forman Wines, and Bob Steinhauer from Beringer.
If you have kept up with the wine, beer, and spirits industry, you'll get the significance of this as both Beringer and Mondavi are formerly public companies. Fosters acquired Beringer earlier this decade. Constellation Brands (NYSE: STZ) also acquired Robert Mondavi.
Quaker BioVentures closed its second fund that focuses on life science companies in the Mid-Atlantic region at $420 million, beating a target of $120 million.
The first fund closed for $280 million and invested in 24 companies. The fund has been successful, with Amicus Pharmaceuticals going public last May, while Eximias and MedMark were each acquired in spring of 2006. BioRexis Pharmaceutical Corp. and Precision Therapeutics are pending acquisitions.
The second fund has already invested in five companies including Argolyn BioScience, Diasome Pharmaceuticals, EKR Therapeutics, Optherion, and Transave. Quaker's partners for the fund include Sherrill Neff, Brenda Gavin, Richard Kollender, Ira Lubert, Adele Cirone Oliva and Dr. Matthew Rieke. The limited partners for the second fund have not been disclosed, however, Thomson Reuters reported that the Pennsylvania Public School Employees' Retirement System and the Pennsylvania State Employees' Retirement System have invested.
A report inthe Financial Times says that Merrill Lynch & Co. Inc. (NYSE: MER) is holding talks with TPG about forming closer ties. This may include the possibility of the private equity firm investing in Merrill Lynch if the investment bank needs more capital. John Thain met with key executives from TPG according to the report.
The companies have apparently been in discussions since last fall. One affiliate had offered to put in as much as $3 billion into Merrill Lynch. Merrill Lynch raised some $12+ billion in funds elsewhere for different terms.
What is interesting here is that the article notes that TPG doesn't want to appear too close to Merrill Lynch, because of the appearance of being too close to a competitor.
The company has also raised additional funds this month by selling fixed income and preferred securities.
John Thain's suspenders and belt might be a little tighter since he went on record saying Merrill Lynch will not need any more capital.
Warburg Pincus has recently announced the closing of a $15 billion global private equity fund, Warburg Pincus Private Equity X. Many existing investors increased funds to WP X and includes various investors such as public and private pension funds, endowments, and global financial institutions such as Washington State Investment Board and GE Asset Management.
Warburg Pincus currently manages over $35 billion in assets globally. The global fund will focus on businesses in any growth stage in core industries in North America, Europe, and Asia. The company invests across geographies, industries, and business growth stages from a single global fund, always with a focus on growing businesses and growing regions.
They have significant experience in consumer and retail, energy, financial services, healthcare, life sciences, industrial, technology, media and telecommunications. Typically, Warburg provides funding for the creation of business or to expand them where long run growth and sustainability is a central factor.
Morgan Stanley (NYSE: MS) looks like they are getting busy on the private equity side, while others are not.
The investment banking, brokerage, and private equity firm plans to launch a private equity unit in India May 1, using funds from its Asia-specific private equity fund for $1.5 billion that closed last year. Reutershas reported that the unit will be managed by Aluri Srinivasa Rao. Previously, he worked at ICICI Venture of ICICI Bank, India's No. 2 lender. Morgan Stanley already has an investment bank and an asset management firm in operation in India, and the private equity growth in India is a response to India's rapid economic growth and opportunities. The report also noted that The State Bank of India reportedly is in talks with multiple foreign firms to start private equity funds in India.
Morgan Stanley's real estate fund, Special Situations Fund III, completed its third offering in a report by MarketWatch raising $2.5 billion. Most funding came from foreign investors. The completion of this fund brings the total Special Situation funding to $5.9 billion.
Raising "funds" isn't necessarily the same as entering deals, but generally the latter follows suit for a portion of the funds.
Pride International (NYSE: PDE), a provider of contract drilling services to oil and gas exploration and production companies, is recently up $2.58 to $42.99.
PDE was notified by SeaDrill of an approximate 9.9% position in PDE. Goldman says, "PDE would be a good fit for SeaDrill – reiterate conviction Buy."
PDE announced the lowering the threshold level of beneficial ownership of the company's common stock that would trigger a rights plan from 15 to 10%. WTI Crude Futures are up 1.61% to $119.37 according to Bloomberg. PDE call option volume of 30,068 contracts compares to put volume of 8,622 contracts. PDE May option implied volatility of 47 is above its 26-week average of 37 according to Track Data
MA& Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.
After Citigroup (NYSE: C) and Merrill Lynch (NYSE: MER) reported earnings, there was at least some hope that the worst was behind the banking and brokerage industries. But that may not be true. Over the weekend Royal Bank of Scotland (NYSE: RBS) said it might have to raise $12 billion. Then there is today's news from big Midwestern bank National City Corp. (NYSE: NCC).
NCC will probably announce that it has raised over $6 billion. According to The Wall Street Journal, "the Cleveland-based regional bank was hammering out final terms of the transaction with a group of investors led by Corsair Capital LLC, a New York private-equity group."
Current NCC stockholders will be beaten to death. The new capital will come in at $5 a share. The stock trades at over $8 now. NCC's 52-week high is over $38.
The news is another example of how management at banks doomed their shareholders. Financial companies took on huge amounts of subprime-backed paper. The investments looked safe, but, on closer examination, they carried great risks if the housing market began to falter. The underlying assumption was that home prices would move up forever and that mortgages had been granted to consumers at reasonable rates. Both of those assumptions were wrong.
When something looks too good to be true, it usually is.
Douglas A. McIntyre is an editor at 247wallst.com.
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In one of the biggest technology-related IPOs this year, website and IT system hosting company Rackspace Inc. late Friday filed to raise up to $400 million on the NYSE. 
Vinum Capital Management has announced 
Pride International
