M&A’s in New York

Lots of business movement in New York.  Here we look at AppNexus and Health Plus Management.

Having earned a reputation as “one of the hottest names in the ad tech industry” following its 2014 $1.2 billion VC valuation, it was hardly surprising that it was going to go to the next level of being sucked up by a major corporation or going public.  In this case it is AT&T which reaps the benefit in its alleged purchase deal worth approximately $1.6 billion.    The idea behind this purchase is AT&Ts bringing AppNexus into its newly created advertising and analytics business.  The move is also indicative of AT&Ts recognition of the importance of voluminous customer data to more effectively sell adds in various formats.

Moving to a completely different industry we learn of the recent plans by Health Plus Management LLC to purchase Advanced PMR Management.  According to CEO and founder of Health Plus, Stuart Blumberg:

“Advanced PMR epitomizes stellar services and consummate patient care. We are thrilled to take on management and support of APMR and we expect tremendous success in working together to develop APMR into a strong, multi-specialty, platform for best in class rehab care in NJ.”

This move will create the environment for Health Plus’s development of a presence in New Jersey, in a way that it has done since its establishment almost two-and-a-half decades ago.

 

Moving to Manhattan

While people often steer clear from New York City and its environs for business headquarters, that might be changing.  One example is Discovery Communications, a Maryland-based operation that will be moving to Manhattan in the latter part of 2019. Having just signed on a new transaction (the purchase of Scripps Networks Interactive for $12 billion) it is seemingly now taking its business to the next level by centralizing its headquarters.

And it’s not just businesses.  Leisure is getting an upgrade too with the new Pier 17 in Lower Manhattan is looking to become one of the top summer destination spots for locals and visitors alike. The reason Executive Chef at Heinken Riverdeck David Kornell set up shop there was because he had an idea about all the people docking from the boats and ships and figured it would make a great choice for a global menu.

Right now the rest of Pier 17 remains under construction but it won’t be long until its graced with a variety of eateries and stores, including one by David Chang (founder of Momofuku) and Jean-Georges Vongerichten’s food hall.

 

 

 

Environmental Enhancement

The clean energy movement in New York is buzzing.  The state is set to put $250 million toward increasing the amount of Electric Vehicles (EV) on the road. In collaboration with the New York Power Authority, EVolveNY will be the guiding force behind the dispensation of funds.  Governor Cuomo said:

“New York has an incredible opportunity to move the needle on greenhouse gas reduction and get more electronic vehicles on the road by building more charging stations to ensure New Yorkers can drive them from one end of the state to the other. With the NYPA EVolve NY initiative, we are making a significant move to make driving an electric car a viable choice and an affordable option that can make significant strides in cleaning the air for all New Yorkers.”

Electrification is being supported in other US states as well. For example, $1.3 billion is being spread over California, New Jersey and New York to invest into changing stations and other expenses connected to electrification.

Benefits of Running a Business in NYC

While Silicon Valley has for many years been the preferred choice of location for business development and operation, it seems that New York City is now being propelled as a great alternative.  According to a recent article in Business Insider by Zoë Bernard, here are some of the reasons why:

  1. One of the world centers for fashion and finance
  2. Fantastic pool of talent
  3. Venture capital environment with the likes of Hercules Capital, Insight Venture Partners and BetaWorks.
  4. Startup scene there has a real sense of community spirit with mentorship programs such as Oceans.
  5. Female founders have traditionally done well in NYC.
  6. Quite simply, because it is anywhere but Silicon Valley and that alone gives it an edge.

In addition, just looking at real estate transactions in the area over the last few years one can see the improvement in living and working conditions in NYC.  For example, a decade ago, it was not at all easy to get financing for mortgages due to the fiscal crisis.  But now, according to 3 World Trade Center developer Larry Silverstein, that has all changed.  With 40 percent occupancy already, he pointed out that “these buildings never stay empty for long.” And corporations will want to go there since they “need technology and you can only get technology in brand-new buildings.”

Furthermore, as Alexandros Washburn said, every time there’s a crisis with New York, it bounces back, concluding that: “Every time it’s comes back with a better balance, more richness in the types of buildings that are here, the types of open spaces.”

Hedge Fund Reality: Death or Revitalization?

Eighteen months ago, finance experts believed the hedge fund industry was losing power as a global player in the finance world.  So much so that according to Tabby Kinder, the Hedge Fund Standards Board was “debating a name change in an effort to distance itself from a term that [had] become increasingly contentious.”

But that was last year. A lot can change in 12 months and today the hedge fund industry is bouncing back.  Rob Copeland wrote in a WSJ article:

“The average hedge fund is up 5.4% … while stock-focused hedge funds have gained 8.31%, [and] Standard & Poor’s 500 rose 11.9% including dividends, while the traditional 60-40 split of stocks and bonds would have earned 8.9%.”

Looking more closely at the winners in this hedge fund revitalization we see New York hedge fund Brahman Capital.  Copeland explains the story of Brahman Capital Corp’s rise of its “big bet on hedge-fund favorite Valeant Pharmaceuticals” that initially plummeted, resulting in Brahman’s own fall with investors taking their money out.  But then Brahman came back, selling the stock “and with what is now $3.8 billion of remaining cash pivoted to new ideas…[Today], Brahman’s main fund is up 17%.”

Copeland’s conclusion that “the gloom that had beset hedge funds [a couple of years ago] is [now] lifting and even giving way to outright optimism.”  Indeed, according to Pacific Alternative Asset Management Co partner Alper Ince, “it just feels better” and if Brahman Capital’s example is anything to go by, Ince’s words lead us to believe that the reality of hedge funds today is closer to revitalization than a near demise.

 

Caribbean Week New York

New York City has a substantial Caribbean-American residency.  As such, the Caribbean Week New York that begins tomorrow is very well-received and attended.

Organized by the Caribbean Tourism Organization (CTO), this is a great bolster to the economy with the attraction of VIPs, diplomats and others to the city to enjoy the free Revival for the Caribbean affair.  It will take place in Manhattan’s Financial District at 225 Liberty Street in the Meredith Global Corp’s 5th floor auditorium.

Programs include: “Revival for the Caribbean,” “Rum & Rhythm Benefit and Auction,” “Celebrity Chef Program” and more.

Growth of NY Economy

According to Xinhua News Agency, this month New York encountered a substantial growth in its business activity.  There was an increase to 20.1 points for its main index number, with the general business conditions index surpassed expectations by of 15.5.

In terms of people’s level of satisfaction/happiness at the office it was hard to tell as 40 percent claimed conditions had improved throughout May but 20 percent said they had worsened. There are more employees though with the index for the number going up to 8.7

The index for number of employees edged up three points to 8.7, with a drop in hours for the average workweek.  Perhaps even more importantly, there has been an increase in optimism for the next six months.

New York State, Taxes, Money

New York’s Environmental Protection Fund has made $350,000 available to supplement protection Hudson River’s natural resources.  This money – delegated by the DEC Hudson River Estuary Program – will be used to enhance water quality; counter flooding; conserve wildlife habitat.

in an effort to protect annual tax levy increases, the New York property-tax cap (that was implemented 7 years ago) puts a 2 percent cap/rate of inflation (whichever is lower) on taxes.  How does this impact us now?  For the 2018-19 academic year, average school districts cap is around 2.9 percent thanks to the exemptions with around 98 percent of districts being compliant.

According to NY Association of School Business Officials Executive Director Michael Borges:

“Although school districts have a higher cap this year than last, higher health and pension costs, coupled with economic instability due to federal policy changes, create an uncertain fiscal picture for school districts. Stable, adequate and equitable state funding is more important than ever.”