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Tom Taulli
California - http://taulli.com

Tom Taulli is the author of various books on finance, including The Complete M&A Handbook (Random House) and Investing in IPO's (Bloomberg Press). In addition to his writing, Mr. Taulli has appeared on high-profile television venues such as CNN, CNBC and Bloomberg TV, and has been quoted in the various print media sources such as the Wall Street Journal, USA Today and LA Times.

Back in the summer of 2007, Apollo Management LP struck a typical private equity buyout. The deal called for paying $6.5 billion for Huntsman (NYSE: HUN), a chemicals company. In fact, the deal provided lots of synergy since Apollo already controlled a variety of similar businesses (through an entity called Hexion).

Well, of course, this was the peak of the private equity boom – and the credit markets began to unwind fairly quickly. What's more, the fundamentals of Huntsman started to weaken.

As a result, Apollo tried to extricate itself from the deal. And this meant a tough litigation fight.

Of course, this can be pretty a dicey thing. That is, the Delaware court ruled against Apollo and there was an order to get the deal done.

Yet again, this was bad news for Apollo (which has other faltering deals, such as Linens 'N Things). Actually, some of the top private equity firms have been taking some major hits lately, such as the TPG Group with its Washington Mutual (NYSE: WM) disaster.

So, to deal with the court ruling, Apollo has agreed to pony up $540 million to close the Huntsman transaction. Interestingly enough, Apollo has also agreed to give up its lucrative fees (amounting to $100 million or so).

This means that Huntsman should be on firm footing (especially in terms of its solvency). And, something else: the banks on the deal – which include Credit Suisse and Deutsche Bank – will have to raise the necessary funding, which will likely mean losing several billion on the transaction.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website

With virtually no IPOs, tech companies have little choice but to sell out. Just take a look at MessageLabs, which has agreed to a $695 million deal from Symantec (NASDAQ: SYMC).

The main focus of MessageLabs is on securing email and messaging. OK, this is not particularly exciting – or groundbreaking. However, the company had the foresight to build a web-based platform, which is certainly attractive to customers.

Symantec has been trying to build its own web-based systems but this has proven difficult. So, why not buy up some operators in the space?

Over the past year, MessageLabs has generated $145 million in revenues, which is a 20% growth rate. Thus, the transaction comes to 4.8X trailing revenues. Compared to just a year ago, this is a fairly cheap deal. For example, Google (NASDAQ: GOOG) paid 9X revenues for Postini (a leading messaging security company).

In other words, it looks like the global slowdown is taking a toll on scrappy tech companies and providing some nice opportunities for bigger players.

According to Paul Roberts, who is a senior analyst of the enterprise security practice at the 451 Group:

"As Symantec points out, software sales are growing in the single digits, appliance sales in the teens and services in the range of 20% or more. Shelling out for MessageLabs shows that Symantec is in a hurry to tap into that higher growth for services, but has doubts about its ability to get there with SPN, Brightmail, IMLogic and whatever else it has in-house. Consider this: Symantec's SPN is hosted from a single datacenter in the US; MessageLabs has 14 located worldwide. Sure, Symantec's still playing catch-up, but its huge channel and sales force, coupled with the failure of players like Google to execute within the enterprise space, gives it the opportunity to jump to the head of the pack in security SaaS all the same."

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website

Over the past few years, the software industry has undergone substantial consolidation. So far, it has worked to keep margins strong.

But the strategy is not fool-proof, especially with a likely global recession on the horizon.

Well, this is now the concern of major software players like SAP (NYSE: SAP). In fact, this week the company's shares plunged 13% to $39.68 on a gloomy earnings warning.

Going into Q3, SAP forecasts software revenues to come in at a range of $2.66 billion to $2.67 billion, up about 13% over the past year. However, in July the company thought the growth rate would be 24% to 27%.

Simply put, customers are skittish – and are also having difficulties getting financing or paying on existing contracts. Even if they want software to improve productivity, there is likely not enough juice to launch new projects.

With rumors of bankruptcy swirling, the shares of Hartford Financial Services Group Inc (NYSE: HIG) have plunged over the past few weeks. Hey, if AIG (NYSE: AIG) can implode, why not the others?

Well, the death of Hartford has been greatly exaggerated. Today, the company announced that it received a $2.5 billion capital infusion from Allianz, a mega German financial firm. Despite today's huge drops in the markets, Hartford's shares spiked 16% to $31.88.

The deal is certainly beneficial to Allianz, which gets preferred stock (that converts to common shares at $31 a piece) as well as junior subordinated debentures (there are also warrants to buy $1.75 billion of Hartford at $25.32). Yet, it's still a nice boost for Hartford.

Essentially, Hartford has an extensive portfolio of investments, which have suffered declines (it looks like the recent carnage in hedge funds was a big contributor). In fact, the company believes that there will be a Q3 loss of $8.50 to $8.80 per share.

But, with the capital infusion, Hartford should weather the storm – as well as be positioned to deal with possible credit downgrades (there will be $3.5 billion in excess capital). What's more, there may be opportunities to capitalize on the wreckage. After all, AIG is preparing to sell a large number of assets.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website

According to a report from the 451 Group, the third quarter was horrible for tech M&A. With the financial crisis, it's tough to get buyers interested in deals.

But, today we got some relief; that is, eBay (NASDAQ: EBAY) agreed to shell out $820 million in cash for Bill Me Later. In fact, the company also paid $390 million for bilbasen.dk, which is a leading classifieds operator in Denmark.

At the same time, eBay plans to slash 10% of the workforce (amounting to about 1,000 employees). With an impending global recession, the environment is likely to be pretty bad for consumer platforms.

Thus, with the Bill Me Later transaction, there may be some traction -- especially with the PayPal business. But again, eBay will need to demonstrate skill with integration (which can be particularly tough in the tech world). Besides, eBay's M&A track record has been spotty, specially since its Skype deal.

Bill Me Later will certainly be costly. While the company is growing quickly, its revenue is only $150 million. Besides, the deal will dilute eBay's 2009 earnings by 6 cents to 13 cents per share. Also, might the credit crunch result in some problems for Bill Me Later?

More importantly, eBay announced that revenue will be at the low end of its forecast for Q3. In other words, the company realizes it needs to make some big moves to keep up the momentum.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website

While the credit crunch is making it difficult for businesses to get credit, there may be other reasons you've had trouble getting the line of credit you need. For one thing, you may not be taking steps to build a credit history for your business.

By establishing business credit, you may be able to get larger loan amounts and better rates. What's more, it could be easier to find good suppliers and vendors – as well as to snag customers.

So how do you establish business credit:? Well, here are some steps:

Create a credit profile: Perhaps the top credit agency for small businesses is Dun & Bradstreet (NYSE: DNB). Basically, you complete a credit profile with them through service called the CreditBuilder; you then get a DUNS number, which is what third-parties will request when they do a credit check. All in all, the process is pretty easy.

Keep in mind that it's important to periodically update the file. An incomplete file is often a red flag.

The third quarter was an absolute nightmare for many hedge fund managers. In fact, they have the tough job of writing letters to shareholders explaining the chaos in the financial markets.

Perhaps one of the most interesting missives comes from the chief of TPG-Axon Capital Management LP, Dinakar Singh. He was a former big-shot trader at Goldman Sachs (NYSE: GS).

Since starting his fund in 2005, he has racked up market-beating returns. However, September was downright horrible. In fact, for 2008, TPG-Axon is down 20%, which Singh calls "unacceptable."

According to him, the global financial system is undergoing an inflection point as the U.S.'s dominance wanes. But, many investors have had the misconception that the U.S. and world economies had been decoupled.

Instead, the global financial system is highly interconnected. Moreover, there is the disproportionate impact from high-velocity investors (basically, hedge funds). As the market turned quickly, there was a massive unwinding of positions, which has exacerbated the situation and damaged the U.S. financial system. Unfortunately, it's going to take awhile to heal things.

Yet, Singh is optimistic and thinks there are some compelling investment opportunities. While he did not name any companies, he did provide some key themes. For example, he likes valuations in China and Japan. Furthermore, he likes quality financials as well as U.S. manufacturing and heavy goods companies.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website.

Over the past few years, some of the big players in tech – such as Oracle Corporation (Nasdaq: ORCL), SAP (AG) (NYSE: SAP) and Microsoft Corporation (Nasdaq: MSFT) – have been been aggressive with M&A. Even after the dot-com bust, there is still a lot of excess capacity in the tech world.

However, according to a report from the 451 Group, it looks like the recent instability in the financial markets is taking a toll on things. After all, Lehman Brothers no longer exists and other major investment banks have radically changed their business models, such as Morgan Stanley (NYSE: MS) and Goldman Sachs Group, Inc. (NYSE: GS).

Looking at Q3, the dollar-value of tech deals plunged by a third to $37 billion. In fact, there were only six deals in excess of $1 billion.

Then again, with the tight credit squeeze, it's exceedingly difficult to get deals done. For instance, there were only 12 leveraged buyouts in Q3, which compares to 36 in the same period a year ago.

Of course, the financial shakeout has made many tech targets attractive. But, the problem is that the mega corporate buyers have also seen sharp reductions in market caps. And if the US economy continues to deteriorate, it's likely to cut into tech spending, making things even worse for dealmaking.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website

Venture capitalists (VCs) are supposed to take the long view of things. Even fast-growing companies like Cisco (NASDAQ: CSCO) and Google (NASDAQ: GOOG) can take awhile to get traction. Of course, it's worth the wait as the returns can be staggering.

But there's now a big problem for VCs: even if their portfolio companies are doing well, there are few opportunities to cash out. Simply put, the key exit markets – IPOs and mergers & acquisitions – are in deep freeze.

Just take a look at the latest statistics from Dow Jones VentureSource. For Q3, VCs got only $4.75 billion in exits from IPOs and M&A deals. This represents a 66% plunge from the same period a year ago.

Interestingly enough, the only VC-backed company to go public in Q3 was Rackspace Hosting (NASDAQ: RAX), and this deal was fairly lackluster.

In fact, at the current pace, it appears that this year will be the worst for IPOs and M&A deals – that is, since the dot-com bust.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website

In 1997, Greg Gianforte started a new-fangled software company called Right Now (NASDAQ: RNOW) to help companies improve customer relationships. It proved to be great timing, since the internet was just beginning its surge.

Over the years, I've had a chance to talk to Greg, who always has great insights for entrepreneurs. Now he has a new book: Eight to Great: Eight Steps to Delivering an Exceptional Customer Experience.

It's a quick read, easy to understand and has lots of case studies focusing on companies like eHarmony, TomTom, Nikon, and so on.

The theme of the book is straightforward: "providing an excellent customer experience -- the sum total of a customer's interactions with an organization -- can be the single best way to set your company apart from the competitors."

OK, so what are some of the things you can do to help improve customer service?

In short order, the shareholders of Washington Mutual (NYSE: WM) have lost billions. A tier-1 private equity investor, TPG, has lost $1.3 billion on the company. And, unfortunately, thousands of WaMu employees have lost their jobs.

However, there are some winners. For example, there are the short sellers. JP Morgan (NYSE: JPM) is also likely to do well since the firm bought WaMu's assets for a mere $1.9 billion.

But there appears to be yet another interesting beneficiary: Alan Fishman. He is WaMu's CEO, who took the top job 18 days ago.

As should be no surprise, he signed a juicy contract: a $7.5 million signing bonus and a lump-sum payment for severance that comes to $6.15 million. In other words, if he leaves the company, he'll walk away with $13.65 million.

That's a pretty good deal in light of the fact that WaMu is the biggest bank collapse ever.

Moreover, I suppose it is yet further evidence of why Americans have low regard for the financial system. And despite huge bailouts, it's probably a good bet that little will change.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website