In Reel Time

2010.44 The Web is dead? Is Wired right or just good at headlines?

I’ll go with the headline option as the other point is nuanced.

The article in question starts with “Who’s to blame?” Chris Anderson takes the ” us” argument with Michael Wolff blaming “them”. The title on the cover, asking whether the Web is dead, is clearly an attention getter, but the related articles are very thoughtful.

What points stuck with me – for those who haven’t read the article (and those who did and may want to discuss related thoughts). I’ll break my argument up by discussing Anderson’s points first….

2010.43 Business valuation: the intangibles

Business valuation is – at its core – essentially numbers driven and many models exist. For indications of value, we can look at comparable company valuations either based on the price of publicly traded stock (adding a premium for liquidity) or a recent fundraising valuation for a similar company. We can use a discounted cash flow model, looking at future expectations of a company’s free cash flow and applying an appropriate discount rate. LBO (leveraged buyout) models, liquidation analysis and industry parameters (number of stores, etc.) can also be analyzed. All of the resulting valuation numbers or ranges can then be aggregated and a reasonable valuation based on the range can be estimated.

The models above are somewhat driven by company projections of future results; as is valuation. A company growing quickly and more profitably will be perceived as having a higher value than will a slower growth (and less profitable) one. Yet, valuation indications are only as good as initial assumptions and projections are often wrong. They also don’t add in surprise events…

2010.42 ESOP: an alternative to a traditional company sale or outside investment

An ESOP is a tax qualified retirement plan in which the ESOP becomes a shareholder of the company and also provides retirement benefits to employees. Unlike most retirement plans it can borrow money to buy company stock while also providing tax benefits to business owners selling stock to the plan. Essentially, in a leveraged ESOP the ESOP or its corporate sponsor borrows money and provides the lender with a guarantee that it will make contributions to the trust enabling the trust to pay back the loan on schedule….

2010.41 LAVA Los Angeles Venture Capitalist Breakfast

Earlier today I was at the Skirball Center listening to a panel of (thankfully) outspoken and even blunt venture capitalists: Jim Andelman of Rincon Venture Partners; Kevin Jacques of Palomar Ventures; Klaus Koch of Vicente Capital Partners; Sumant Mandal of Clearstone Venture Partners; and Mark Suster of GRP Partners. Stephen Hughes of Silicon Valley Bank and Scott Alderton of Stubbs Alderton & Markiles moderated. I won’t attribute remarks to an individual unless it pertains to a difference in their fund or distinctive (and perhaps not universal) viewpoint.

Among the opening questions was one that got to the heart of the matter…

2010.40 Stress in Hollywood and recent media services developments

Stress in the media services food chain, as indicated by news out of Technicolor, Grass Valley, Eastman Kodak, Ascent Media…

2010.39 Francisco Partners makes firm offer for Grass Valley Broadcast business

In January 2009 Technicolor announced that it would spin off its Grass Valley business in its entirety. 18 months later, in July 2010 Francisco Partners has made a binding offer for the broadcast business only, and Technicolor intends to divest the transmission and head-end units separately.

Grass Valley’s broadcast business is a leading provider of video creation and video management equipment for broadcasters and teleproduction companies…

2010.38 Carl Icahn Sues Lions Gate and Rechesky over Debt to Equity Deal: Why Good Advisors Matter When Contemplating M&A

The ten-day truce between Carl Icahn and Lions Gate management is very clearly over.

Icahn has let it be known that he doesn’t support the merger discussions between Lions Gate and MGM….

2010.37 Imax to partner with Laser Light Engines

IMAX, which specializes in immersive motion picture technologies, recently signed a deal with Laser Light Engines for development of high brightness technology systems exclusively for IMAX digital theatre systems.

Under the terms of the agreement, IMAX will make an equity investment (of undisclosed amount) in Laser Light Engines; who in turn will develop a custom version of its laser light technology for exclusive use in IMAX digital projection systems. Laser Light Engines will also…

2010.36 RealD IPO prices at $16, stock closes Friday at $19.50

Following up on our two prior posts on this subject (April 20 and June 30), we now report on the consummation of RealD’s IPO.

At Friday’s closing price of $19.50, the valuation of RealD is a cool $1 billion…

2010.35 Different M&A bidder types; as demonstrated in recent content library-related announcements: Miramax, Lions Gate, MGM, EMI and the Weinstein Company.

A slew of recent media-related deals and announcements has me wondering. Blogs have reported that Colony Capital is teaming up with Ronald Tutor to buy Miramax. While Colony is known as a real estate private equity fund, it started out buying distressed assets during the S&L crash.