A Partnership Could Be in the Cards for Pearson and CNBC

With the close of the deal between News Corp and Dow Jones looming ahead, Pearson has taken the initiative to develop a partnership to strengthen The Financial Times, its competitor to Dow Jones’ Wall Street Journal. The top candidate appears to be CNBC, which is owned by NBC Universal (see article in DealBook). To find out if there could be any truth to this rumor, we created an IntellectSpace Knowledge Map that shows the common connections between Pearson and GE, the parent company of NBC Universal.

The first noteworthy relationship we uncovered is between Robin Freestone (Director and CFO of Pearson) and William Castel (Director of GE). The two are connected through Amersham, where Castel was CEO and Freestone was Group Financial Controller before the company was sold to GE in 2004. This connection as past senior executives of Amersham could have lead to talks of a partnership between Pearson and CNBC.

Another connection that could support the rumor is that shared between Patrick Cescau (Director of Pearson) and Carlos X. Gonzalez (Director of GE). Cescau is the Group Chief Executive of Unilever, where Gonzalez was a director until 2005. It is quite possible that the pair maintained contact since Gonzalez’s departure from Unilever, and have since conversed about the possibility of CNBC and Pearson joining forces.

GE’s CEO, Jeffrey R. Immelt, can also be linked to Pearson, further reinforcing the notion that Pearson could partner with CNBC. Along with Andrea Jung (Director of GE), Immelt is a board member of Catalyst, a non-profit organization. Reuben Mark (a Pearson director until 2006) is also a director at Catalyst, and these shared board memberships effectively link GE and Pearson. Although Mark is no longer with Pearson, he is probably still is in contact with current members of Pearson’s board, and still meets regularly with Immelt and Jung for Catalyst meeting, so he was likely asked to provide his input on the potential partnership.

Board Ties May Lead to Deal in Triarc’s Bid for Wendy’s

On Monday, Triarc Companies, which operates the fast food chain Arby’s, expressed an interest in acquiring Wendy’s International (see article at Feed The Bull). Although Wendy’s has yet to respond to the proposed offer, one key connection may seal the deal for Triarc.  After quickly constructing an IntellectSpace Knowledge Map to reveal any connections that may exist between the two firms, we discovered that Peter H. Rothschild is the Chairman of Deerfield Triarc Capital Corp (Triarc’s asset management business) and is also a director at Wendy’s. As a key figure at both companies, we believe Rothschild will be the person who locks this deal up.

Click here for an interactive version of this IntellectSpace Knowledge Map (Internet Explorer browsers only): http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=2ba25b60-3b99-4a80-a8ee-fc126f65e534

MGM Connections to Merrill Lynch Keep United Artists in Business

Merrill Lynch and United Artists are wrapping up a $500 million film financing deal that should have Tom Cruise jumping for joy (see article on DealBook). We created an IntellectSpace Knowledge Map to identify common relationships between Metro-Goldwyn-Mayer Inc (which owns UA) and Merrill Lynch to determine how relationships could have played a role in finalizing this agreement.

The most revealing relationship we discovered was that between Jerome B. York (MGM director) and Armando M. Codina (Merrill Lynch director); they share board seats at GM. This indicates that the two must know each other, which could then influence and facilitate any sort of business activity between MGM and Merrill Lynch.

Another noteworthy connection is shared between Willie Davis and Virgis Colbert, two of Sara Lee Corp’s directors. Colbert is a director at Merrill Lynch, and though Davis is a former director of MGM, he must still have ties to MGM, as he is a current board member of MGM Mirage, which operates a number of Las Vegas resorts and casinos. In conjunction with the connection between York and Codina, Davis’ ties to Colbert may have impacted this generous financing arrangement.

Click here for an interactive version of this IntellectSpace Knowledge Map (Internet Explorer browsers only): http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=3d028132-3ade-4960-9462-0ef12e9d6994

CTIA Links Heads of Verizon and Rural Cellular

Earlier today, Verizon Wireless announced plans to increase its base of wireless customers through the acquisition of Rural Cellular Corp. (see article at Barron’s Online). In order to determine how these two companies got to talking, we quickly put together an IntellectSpace Knowledge Map and revealed the relationship that likely facilitated this latest purchase.

As seen here, Lowell C. McAdam and Richard P. Ekstrand, the heads of Verizon Wireless and Rural Cellular, respectively, are clearly linked through the Cellular Telecommunications & Internet Association (CTIA). McAdam is the Vice-Chairman of CTIA and Ekstrand is a senior director (and former Chairman and Vice-Chairman) of the wireless industry trade organization. Considering that the two of these distinguished professionals each hold the positions of President and CEO at their respective companies, their regular contact through CTIA likely served a key role in this deal.

Click here for an interactive version of this IntellectSpace Knowledge Map (Internet Explorer browsers only): http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=4c89114f-002f-4a3a-b6e8-8e4cee62201b

Microsoft Wins the Advantage with Ties to EA

Microsoft has just inked a deal with Electronic Arts for the rights to advertise in five of the video-game publisher’s top titles. Google was also in the running for the prestigious ad spots, but in the end, Microsoft won the contract (see article from The Seattle Times). A Knowledge Map powered by IntellectSpace reveals the connections Microsoft has to EA that may have given it the advantage.

One person that Microsoft may have turned to for help in winning EA’s favor is Linda J. Srere. Srere is not only a current director at EA, but she is also a board member at aQuantive Inc, which Microsoft acquired in May 2007. This direct connection alone makes a strong case for why EA would choose Microsoft over Google in this deal.

Gregory B. Maffei is another director at EA who probably gave Microsoft his vote - Microsoft employed Maffei for seven years, where he last served as Senior Vice President and CFO until 2000. As Maffei can offer a wealth of insider information about this past experience, EA probably felt a greater degree of confidence in going with Microsoft instead of Google.

And Meffei and Srere aren’t the only directors with ties to Microsoft. Vivek Paul, (another EA board member), probably knows Ashok Ganguly through Wipro Ltd. Even though Ganguly is only a director at Microsoft India, simply knowing someone affiliated with Microsoft may have been enough for Srere to vote in favor of the company as opposed to Google.

With all of the connections that EA has to Microsoft, it comes as no surprise who won the lucrative digital advertising contract.

Click here for an interactive version of this IntellectSpace Knowledge Map (Internet Explorer browsers only): http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=827e2c75-3b3e-4a23-8fd1-1eacc4fd55ab

Medtronic Aquires Kyphon With Noteworthy Connections

Medtronic Inc recently announced its intent to acquire Kyphon Inc for just $3.9 billion (see article from DealBook). An IntellectSpace Knowledge Map presenting the ties between the companies allows us to investigate how common connections may have motivated this deal.   

As shown on the Knowledge Map, John T. Treace (Kyphon’s Chairman) can be directly linked back to Medtronic, as he served as President until 2000 - after the company’s merger with Xomed. As Treace joined Kyphon soon after his departure from Medtronic, he likely played a significant role in bringing the companies together.

The Knowledge Map also shows connections through American Medical Systems linking a number of former Medtronic executives to Elizabeth H. Weatherman, a Kyphon board member who left her post as director at AMS earlier this year. It’s possible that prior to her departure at AMS, Weatherman may have had conversations with these former Medtronic executives about the possibility of a partnership between Kyphon and Medtronics.

One last notable relationship that may have influenced Medtronic’s interest in Kyphon is that shared between William A. Hawkins (President, COO and board member of Medtronic) and Bradley W. Paddock(VP at Kyphon); both are linked to Ethicon Endo Surgery, a division of Johnson & Johnson. As President of the company until 1997, Hawkins may have known Paddock, who held management positions in sales between 1996 and 1999. This relationship then could have helped to build the foundation of the present communications about joining Medtronic and Kyphon.

Click here for an interactive version of this IntellectSpace Knowledge Map (Internet Explorer browsers only): http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=2e8daa1a-8f5c-4aad-86d3-2005fffe2344

Connections Motivate Buffett to Invest in Kraft

Warren Buffett, the head of Berkshire Hathaway Inc, is the latest major investor to claim a stake in Kraft Foods. We decided to map Buffet’s ties to Kraft to see what may have motivated this newest investment decision, beyond, of course, the peer pressure he might have felt from Carl C. Icahn and Nelson Peltz (see related article at BloggingStocks).

This IntellectSpace Knowledge Map displays the common connections through various companies and people that Buffett has to Kraft Foods. One key relationship revealed was Buffett’s relationship with Marla C Gottschalk, who now serves as the CEO of Pampered Chef (a Berkshire Hathaway company). Gottschalk spent more than a decade at Kraft, most recently as Senior Vice President, Financial Planning and Investor Relations, and it’s likely that Buffet recognized and appreciated this source of extensive insider experience/knowledge.  Gottschalk could have either put in a good word for Kraft or may even be involved with part of Kraft’s future plans.

In case Buffett still had reservations about making a committment, he could turn to some of the contacts he may have made through Coca-Cola or Gillette. Before its acquisition by Proctor & Gamble, Buffett sat of the board of directors of Gillette with Roger K. Deromedi and James L. Kilts, who, until recently, were senior executives at Kraft along with Mark M. Leckie, another Gillette executive. If he faced the predicament of whether or not he should invest a small fortune in Kraft, it probably wouldn’t have been too difficult to turn to any one of these people for an informed second opinion.

Click here for an interactive version of this IntellectSpace Knowledge Map (Internet Explorer browsers only): http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=386c002c-c244-47ce-a193-b770ca1e868a

TXU’s Ties to KKR and TPG May Disappoint Franklin Resources

One of TXU’s major shareholders, Franklin Resources, is publicly fighting the proposed buyout of the company by Kohlberg Kravis Roberts and Texas Pacific Group, on the grounds of an inadequate bid (See related article at DealBook). Franklin appears to be gearing up for a stand-off, however, the strong ties between TXU and KKR/TPG may not allow the opposition to make much headway. The IntellectSpace Knowledge Maps shown here illustrates TXU’s strong connections to its prospective buyers.

This first Knowledge Map, taken from a previous analysis (See article) displays the connections between TXU and KKR. The links run deep, including shared board memberships through Gillette Co. (now owned by Proctor & Gamble) by Lawrence E. Fouraker, an advisor and former TXU director of TXU, and Henry Kravis, a KKR co-founder, director, and senior partner. The Knowledge Map also displays some additional relationships that may leveraged in this deal, including members of Business Roundtable and affiliations to Harvard Business School.

Click here for an interactive version of this IntellectSpace Knowledge Map (Internet Explorer browsers only): http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=7813416e-6678-48de-8ff3-3753200492d3

This next Knowledge Map shows the connections that TXU has to Texas Pacific Group. Like those with KKR, the companies share a number of strong ties that may have contributed to the acquisition. One of the more significant links is between Leonard H. Roberts, a TXU director and Gary M. Kusin, a special advisor to TPG. The two can be connected through Radio Shack Corporation, where Roberts was previously the Chairman and CEO and Kusin was a director. Their time at Radio Shack overlapped, so we can be quite sure that they knew each other.

Another relationship to support TXU’s ties to TPG also includes Lawrence Fouraker, who was mentioned above as being linked to KKR. Fouraker was a longtime director at General Electric, and likely knew TPG’s founder and managing partner, William Price III. Price served at Vice President, Strategic Planning and Business Development at GE during the time that Fouraker was a board member. If the two had maintained contact since the time they were both at GE, the relationship may have come into play when planning this latest acquisition.

A final connection shown on the Knowledge Map links TXU to TPG through Royal Dutch Shell PLC. TXU’s Chairman and CEO, C. John Wilder, and Jack E. Little, a TXU director, both held senior executive positions at Shell at the time when Stephen M. Wood was Vice President of a Shell subsidiary. Wood was previously the head of Kraton Polymers until 2004, when the company was purchased by TPG. The acquisition of Kraton would have put Wood in direct contact with Texas PacificGroup’s leadership team, opening up the opportunity to form relationships and offer input, especially considering his connection to TXU’s top decision makers.

Click here for an interactive version of this IntellectSpace Knowledge Map (Internet Explorer browsers only): http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=0bdb3b17-a320-43d6-8748-ceffa46fa6da

Based on these impressive connections linking TXU to its buyers, Franklin Resources may have its work cut out in leading efforts to renegotiate the terms of the acquisition. The benefits that come with being closely associated to begin with may outweigh the need to risk the deal by demanding a higher offer.

Bausch & Lomb Takes its Pick Between American Medical Optics and Warburg Pincus

Bausch & Lomb is presently considering two generous buyout offers from Advanced Medical Optics Inc. and Warburg Pincus. In a NewsVisual article published on May 17, 2007 (See article), we mapped the connections between Bausch & Lomb and Warburg Pincus and found a number of significant ties that validates the preference Bausch & Lomb seems to have for the private equity firm as a buyer. Despite Advanced Medical’s claim of presenting a superior offer, Bausch & Lomb continues to favor Warburg Pincus. To get to the bottom of Bausch & Lomb’s rationale in the deal, we decided to create an IntellectSpace Knowledge Map illustrating its connections to Advanced Medical, to then compare to our May 17 findings of its ties to Warburg Pincus.

This first Knowledge Map of Bausch & Lomb’s links to Advanced Medical certainly yields numerous connections. Robert F. Gallagher, who was a vice president of Bausch & Lomb until 2001, now serves as Senior Vice President, Chief Accounting Officer and Controller at Advanced Medical. His current senior financial position likely has him heavily involved in the planning process of acquiring Bausch & Lomb, and no doubt he is drawing on his past experience and connections to the company to facilitate a deal.

Another relationship that may bring these companies together exists through IntraLase Corp, which was acquired by Advanced Medical earlier this year. Franklin T. Jepson was at Bausch & Lomb for 16 years until 1999, most recently serving as Corporate Vice President of Communications and Investor Relations. His long tenure at the company probably resulted in various relationships with current Bausch & Lomb leadership members that continue to be maintained today.  Jepson can be linked to Robert J. Palmisano and William J. Link, who are both current members of the board at Advanced Medical. Link is a director and Palmisano is the Chairman and former CEO of IntraLase, where Jepson served as Vice President of Investor Relations and Corporate Communications after his departure from Bausch & Lomb. Though Jepson is no longer with Intralase, his time spent at the company alongside Palmisano and Link may have allowed for discussion of a potential partnership between Advanced Medical and Bausch & Lomb.

Click here for an interactive version of this IntellectSpace Knowledge Map (Internet Explorer browsers only): http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=4caaa0ff-ce26-4062-a535-09effaeb86ca

Even though Warburg Pincus is presently holding Bausch & Lomb’s favor, American Medical may still be able to maintain interest with yet another relationship. Diane Harris, another veteran executive at Bausch & Lomb, having served from 1981 to 1996 and various positions including Vice President of Corporate Development, can be connected to American Medical through Flowserve Corp. Harris presently sits on the board with James O. Rollans, American Medical’s presiding director. Based on their shared directorships at Flowserve, the two are bound to know each other, and acquisition discussions could have easily gotten back to a number of contacts that Harris has at Bausch & Lomb.

A final connection worth mentioning may be between Catherine M. Burzik, a Bauch & Lomb director and Christopher Chavez, who sits on the board at Advanced Medical. Both are connected to Kodak and Johnson & Johnson; each having served in several leadership positions. Since they both have histories two mutual companies, it is quite possible that they know each other, which could then influence a deal. 

The ties from American Medical and Bausch & Lomb are evident, especially considering the numerous past connections that exist through companies like Johnson & Johnson, Novartis, and Allergen, from which American Medical spun-off in 2002. If this is the case, why does Bausch & Lomb continue to be so interested in Warburg Pincus, which American Medical claims presented a lesser takeover offer? As with many corporate deals, the answer may lie in common connections.    

Click here for an interactive version of this IntellectSpace Knowledge Map (Internet Explorer browsers only): http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=45e33a61-d518-4400-8aff-2fe87a2769f2

As seen in this next Knowledge Map between Bausch & Lomb and Warburg Pincus, the companies show solid connections through shared board memberships and equity holdings. Some of these connections can be considered to be stronger than those presented in the previous map because they are between current members of either company (See full article).

If Bausch & Lomb chooses quality over quantity in terms of its connections to the companies, then we predict that unless Advanced Medical proposes a larger bid, Warburg Pincus will emerge the winner.

Connections Make Sirius and XM Eager to Merge

In an effort to gain final approval for a merger, Sirius Satellite Radio and XM Satellite Radio announced new changes to their subscription services. The major concern by regulators is that a merger would effectively leave only one satellite radio company in operation, which wouldn’t bode well in preserving consumer choice (See Media Biz ).

To achieve a greater degree of understanding as to why Sirius and XM are so quick to partner up in the first place, we decided to revisit the Knowledge Map of their common connections from our March 7, 2007 article, published during the initial merger buzz (See article ). The map below shows numerous connections between the satellite radio companies that may be tied to their eventual decision to partner.

Two of Sirius’s top figures, Joseph P. Clayton, Chairman of the Board and James E. Meyer, the President of Operations and Sales, are linked to XM Director Eddy W. Hartenstein through the Thomson Corporation. Hartenstein, is a board member of Thomson, and it is likely that he knows Clayton and Meyer, from when they were senior executives at Thomson. The link between the Sirius and XM boards through Thomson, as illustrated in the Knowledge Map, possibly played a role in influencing talk of combining the companies.

Another central entity connecting Sirius and XM is PanAmSat Corp. Prior to its acquisition by Intelsat in 2005, Hartenstein and Jack Shaw, another XM director, were members of PanAmSat’s board of directors. During that time, Adrienne Elizabeth Calderone, Sirius’s Senior Vice President and Controller, held similar executive positions at PanAmSat. And it doesn’t stop there - Siruis’s founder, Martine A Rothblatt, also happens to be the founder of PanAmSat. Based on these connections, it is very likely that the four had been in contact, with relationships that may have continued even after the acquisition by Intelsat. Lastly, not only is Rothblatt a founder of Sirius and PanAmSat, but she also helped launch WorldSpace Inc., where XM Chairman and former CEO Gary Parsons was a director until late 2006.

In our view, ties through Thomson, PanAmSat, and WorldSpace are likely at work. Conversation between Sirius and XM leaders was likely taking place for years, ultimately leading to the strategizing of the partnership that the companies are pushing for today.

Click here for an interactive version of this IntellectSpace Knowledge Map (Internet Explorer browsers only): http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=2c7c5132-4764-479d-a80c-f0370dd7b12a

Boards Tie Transocean and GlobalSantaFe

The mega-company that would be formed in a merger between the oil drilling companies Transocean Inc and GlobalSantaFe Corp will undoubtedly drive competitors to follow suit in order to remain competitive. An IntellectSpace Knowledge Map exposes the common connections between the two that may have served to join forces.

A relationship between key individuals J. Michael Talbert (Transocean’s Chairman) and John L. Whitmore (a director at GlobalSantaFe) strikes us as the most compelling relationship that got these two oil drillers together; both are longtime directors of El Paso Corp. In light of Transocean’s recent bid for GlobalSantaFe, the subject of some of their latest discussions may have been a merger. Many other former Transocean directors have also served as directors of El Paso, so they may have been invited to partake on these discussions as well.

Another connection that may have helped push the companies into an agreement is shared between GlobalSantaFe Chairman Robert E. Rose and Transocean director and former Chairman Victor Grijalva - both are currently directors of the American Petroleum Institute.  And to seal the deal, a third set of relationships between Robert Rose (GlobalSantaFe Chairman), Kristian Siem (a Transocean director), and Steven Webster (founder of Transocean) is uncovered by this IntellectSpace Knowledge Map. All three are connected through Grey Wolf Inc., with Rose and Webster as current directors of Grey Wolf and Siem serving on the board from 1995 to 2000. Rose and Siem's memberships with Grey Wolf did not overlap; however, Webster served with both of them. Though Webster no longer holds a formal position at Transocean, as founder, it's probable that Webster maintains relationships with those currently running the company, especially with Siem, who he also knew through Grey Wolf.

In sum, there are probably only a few people at the helm of the these conversations, but many people who should no longer be involved are likely to be asked to throw in their two cents, as their relationships with the key players may still be intact.

We look forward to revealing the relationships that will be leveraged by other oil drilling companies to counter this partnership in the near term.

Click here for an interactive version of this IntellectSpace Knowledge Map:

http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=6c34e7da-9a01-4807-90d4-362dc3a2ad63

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Director Connections Support Nokia’s Rumored Acquisition of Tellabs

The recent activity of Tellabs stock has led to rumors that a takeover of the telecommunications supplier is in the works. Heading the list of potentially interested buyers is Nokia, in a joint venture with Seimens, which is said to be willing to pay $7 billion for Tellabs (See article at TheStreet.com). In mapping the common connections between Tellabs and Nokia, we were able to identify a major relationship to have possibly sparked the initial talk of an acquisition. It is the presence of this relationship that may also be what solidifies the deal between the companies in the end.

The connection to be recognized is shared between Frank Ianna and Daniel R. Hesse, former top executives at AT&T Inc. With Ianna now a director at Tellabs and Hesse a director at Nokia, the two are likely to have drawn from their past executive relationship at AT&T in creating interest of an acquisition with their respective boards. Based on this strong connection, the rumors of a purchase of Tellabs by Nokia may soon be reality.

Click here for an interactive version of this IntellectSpace Knowledge Map:

http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=14f3d073-9460-4098-aa07-a04686ce7a12

(Internet Explorer browsers only)

HP Purchase of Opsware May be Tied to Palm

In a press release issued today, Hewlett Packard announced its intent to purchase Opsware Inc. for about $1.6 billion. An IntellectSpace Knowledge Map takes a closer look into how common connections may have impacted this bid.

The series of connections involving Palm Inc. seem to be the most influential relationships connecting HP and Opsware.  Richard Todd Bradley and Satjiv S. Chahil are both not only senior executives at HP, but also have past executive ties to Palm Inc. During the time that Bradley and Chahil were affiliated with Palm Inc., Michael J. Homer (an Opsware director) and Bruce W. Dunlevie (holder of more than 10% of Opsware shares), were and continue to serve as Palm directors. Because of these strong ties to Palm Inc., the four are very likely to have known each other. In turn, these relationships might have played a significant role in affecting HP’s  purchase of Opsware Inc.

Click here for an interactive version of this IntellectSpace Knowledge Map:

http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=1a0592b1-68e7-4b98-a460-6d3f3d479bd0

(Internet Explorer browsers only)

Relationships Let Cerberus Set Terms in Purchase of United Rentals

Cerberus Capital’s purchase of United Rentals is being considered a steal. At a price of $34.50 per share, slightly higher than United Rentals’ Friday closing price, the private equity investment firm is getting a nice deal for the equipment rental company (See article on bloggingbuyouts). The IntellectSpace Knowledge Map below displays the connections between Cerberus Capital and United Rentals, revealing how previously existing relationships between the two may have led to this acquisition.

There are a number of ties that are likely to have had a large impact on Cerberus Capital’s interest in United Rentals. The primary link is shared with Cerberus Capital’s Chairman, John Snow, and certain significant individuals at United Rentals. Snow is a former board member of U.S. Steel Corp., a company that has shares numerous past and present executives with United Rentals. Wayland R. Hicks, the recently retired CEO and current Vice-Chairman of United Rentals served as President and COO of U.S. Steel during the time that Snow was a board member. As key decision-makers at their respective companies, it’s possible that Snow and Hicks drew on their connection from U.S. Steel to shape this deal.

Click here for an interactive version of this IntellectSpace Knowledge Map:

http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=349cfda3-edc9-4bfd-848b-7f1f51164e24

(Internet Explorer browsers only)

An obscure connection that could have played a meaningful role in this deal is one shared between United Rentals and one of Cerberus Capital’s portfolio companies, NewPage. Mark A. Suwyn, NewPage’s Chairman and CEO, is also shown to be a director of United Rentals. As head of a Cerberus company, Suwyn is likely in close contact with Cerberus Capital’s leadership team, allowing them easy access to information about United Rentals’ workings.

We predict these strong ties will facilitate a smooth closing process for these two companies.

PNC and Sterling Linked Through Lima

In light of the recent wave of bank consolidations to hit the Northeast, NewsVisual decided to investigate how common connections played a role in one of the major partnerships that occurred, so we decided to look at the connections between PNC Financial Services Group and Sterling Financial. A survey of this IntellectSpace Knowledge Map exposes a multitude of ties that may have brought these two together. From these, there is one particular person who presents himself as being the major cause of PNC’s purchase of Sterling - Tito L. Lima, Sterling Financial's current CFO who, previously served as CFO of PNC.

As CFO and Treasurer of the acquired company, Lima had to be instrumental in this latest deal. More than a decade at PNC must have given him extensive knowledge of the company’s inner workings, which would give Sterling a huge incentive to follow through on this consolidation.

Click here for an interactive version of this IntellectSpace Knowledge Map:

http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=da081733-db2a-4cb5-ae4d-b429740cbdf9 (Only available with Internet Explorer Browsers)

Capellas Works Connections to Land New Job

Michael D. Capellas is once again on the move. This respected corporate head, infamous for keeping his employment contracts short and sweet, has just been named the CEO of First Data Corporation. In the interest of understanding how Capellas ended up at First Data Corp, we decided to first take a close look at Capellas' executive history, and then determine how some of these connections may have been useful in helping Capellas land this latest gig.

Click here for an interactive version of this IntellectSpace Knowledge Map: http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=22ef0913-575b-49c1-b965-a220883ef440 (Internet Explorer browsers only)

After quickly mapping Capellas executive history, we then decided to map his common connections with KKR to see what relationships may have been leveraged to make this current assignment come to fruition. 

Click here for an interactive version of this Knowledge Map:

http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=fc9cb89d-2620-4e5f-9100-04320f2fa792
(Internet Explorer browsers only)

One of the strongest relationships shown on the Knowledge Map is shared between Capellas and Edwin L. Artzt, through Verizon Communications. Capellas was previously the Chairman and CEO of MCI Inc., and Artzt was a director and Chairman of strategic issues at GTE. Verizon purchased MCI and GTE around the same time, increasing the likelihood that Capellas and Artzt, senior leadership at company, had shared some meaningful contact. Artzt is currently a senior advisor at Kohlberg Kravis & Roberts, the parent firm of First Data, and it’s quite possible that because of their prior association, Artzt put in a good word for Capellas or otherwise may have played a role in bringing him into the KKR portfolio company.

Another noteworthy connection is that between Capellas and Deryck C. Maughan. Capellas is a current director Cisco Systems Inc., which happens to be one of the companies that Maughan has served as a board member. Since Maughan is presently a managing director of KKR (and Chairman of KKR Asia), it is possible that Maughan has maintained relationships with some of the current board members at Cisco, and leveraged those relationships to approach Capellas.

A final tie that may have sealed the deal in this appointment is Capellas’ tie to Michael E. Marks through Schlumberger. For a person who usually doesn’t work for a company for more than a couple years, Capellas’ fifteen years at Schlumberger is extremely significant. He held several senior management positions at the company during his time there between 1981 and 1996, making it very likely that he keeps up with some key individuals that are still at Schlumberger. Marks, a director at Schlumberger, is also a director at KKR, leading to yet another connection to support Capellas’ appointment at First Data.

Avaya's Connections Could Lead to Consideration of New Bid

Avaya Inc. is set to be acquired by Texas Pacific Group and Silver Lake Partners, though the agreement conditions still leave it up for grabs until July 24, should a more lucrative offer present itself (see related article on DealBook). Avaya reported last week that a number of parties have expressed some real interest in a buyout, but is being secretive as to whom those interested companies may be.

As we previously published in a June 4 article connecting Avaya to its current named buyers (see article), relationship capital proves to be a significant factor in determining major corporate partnerships. By generating an IntellectSpace Knowledge Map of the telecom giant, we can take a closer look at its board members who will ultimately make the decision as to who gets to make the final claim. This Knowledge Map displays the current directors of Avaya, as well as their current board memberships with other companies. These ties could have a considerable impact on its acquisition, as well as future dealings.

As clearly shown in this first Knowledge Map, nearly all of Avaya’s directors are each members of the board of at least one other company. In most cases, concurrent directorships with other businesses number four or more. Philip A. Odeen, Avaya’s non-executive chairman, presently has board memberships with companies that include AES Corp., Convergys, and Reynolds & Reynolds. Other directors, namely Paula Stern, Richard F. Wallman, and Mark Leslie, are also shown to have abundant ties through board memberships that may all serve to strengthen Avaya. Ties to common entities between two people can lead to interactions and partnerships that go beyond the boardroom and into greater corporate agreements.

Click here for an interactive version of this IntellectSpace Knowledge Map:

http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=01759a1f-3cf0-4569-bb97-db310c5ae943

What is left to be considered is whether or not any of these aforementioned links are greater with one of Avaya’s prospective new buyers as opposed to with Texas Pacific and Silver Lake Partners. As shown in this next set of Knowledge Maps, the ties to TPG and Silver Lake are substantial, particularly in the form of shared board memberships. These strong connections are likely what aided Avaya in accepting their bid above the rest and also could potentially keep the company from breaking the agreement to be acquired by a competitor.

For interactive versions of these Knowledge Maps, point your Internet Explorer browsers to the following URLs: 

Silver Lake Capital - Avaya:  http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=5c893b11-9337-4104-a7cb-51564c6ebc5d

Texas Pacific Group - Avaya: http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=abb93a7c-2777-434e-b172-da8b9d27ea74

Rejection Can’t Stop Merger Buzz Between Nestle and Pepsi

Despite the fact that Nestle is trying to make it clear that a partnership with PepsiCo Inc. is not going to happen, talk of a future agreement continues to circulate. The official concern is that PepsiCo’s reliance on its snacks and sodas may not be reflective of the nutrition conscience image that Nestle is trying to present to its consumers. This deal may appear to be dead and buried, however, a closer look into the common connections between the two companies suggests that a second attempt by Pepsi to join Nestle is not unrealistic.

The IntellectSpace Knowledge Map shown below displays the significant relationships that exist between certain members of Nestle and PepsiCo’s corporate leadership teams. The connections are numerous and the relationships may soon be taken advantage of to change Nestle’s mind. One relationship that may come into play is the relationship shared between Gunter K. Blobel and Arthur C. Martinez, board members of Nestle and PepsiCo, respectively. As seen on the Knowledge Map, both currently sit on the board of International Flavors & Fragrances Inc. This association could potentially lead to the two discussing PepsiCo and Nestle partnership strategies during downtime at the next IFF board meeting.

IntellectSpace’s mapping abilities also allow past relationships to be recognized. Peter Braebeck-Letmathe, Nestle’s Chairman and Chief Executive Officer, presently sits on the board of Credit Suisse and was the company’s Vice-Chairman from 2000 to 2005. When observing the Knowledge Map, we see that Daniel Vasella, who is a director of PepsiCo, was once a director of Credit Suisse. Though Vasella left the Credit Suisse board in 2003, he served at the same time with Braebeck-Letmathe, giving the pair a solid connection. Both individuals are also members of the World Economic Forum, further strengthening this relationship. Between their ties to Credit Suisse and the World Economic Forum, along with the concrete link between Blobel and Martinez, it’s not out of the question that a new agreement between Nestle and PepsiCo is in the works. 

Click here for an interactive version of this IntellectSpace Knowledge Map: 

http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=eb16e1d7-061a-4326-b49f-61ec28004899

(Only available in Internet Explorer browsers)

Ties to Goldman Give Apollo the Advantage

The latest trend for private equity firms is to go public. Apollo Management is seeking to bypass the typical time consuming process of making an initial public offering to quickly get shares of its stock to eager buyers. This means fast cash without the wait. Making this alternative method possible is Goldman Sachs, which has opened its GSTrUG markets to Apollo, where a limited number of shares can be sold before the IPO process has been completed, giving Apollo a valuable head start against is competitors  (See the related Financial Times article).

This move by Goldman proves very convenient for Apollo in its latest endeavor. An IntellectSpace Knowledge Map of the two entities reveals that the common connections between the two go as far back as grad school. At least five of Apollo’s senior executives received their MBA’s from Harvard Business School, which also happens to be the institution at which a number of Goldman’s past and current corporate heads received their degrees or even served as members of the faculty. Similar relationships are also present at Yale, Columbia, Stanford, Berkeley, and Duke universities. School ties can remain strong throughout the years, especially between former students and their mentors, which can later turn into professional ties. With as many educational connections as there are between Apollo and Goldman, these school ties could be the ultimate connector for these two financial juggernauts.

Other relationships worth a taking a closer look involve those professionals of both companies who are members of the Council on Foreign Relations. Adam M. Aron, the head of World Leisure Partners, a consulting company that holds Apollo as its primary client, and Joshua Harris, a founding Senior Partner of the private equity giant, are both members of the Council of Foreign Relations along with five past and current members of Goldman’s leadership team. Because of these direct links to the council, we can realistically assume that these individuals have had some degree of association with each other.

In displaying not only business ties, but also non-corporate links to educational institutions and organizations, IntellectSpace’s Knowledge Maps allow another side of the story to be seen. As demonstrated here, when these two seemingly unrelated entities have their common connections mapped, they share numerous ties that create valuable insight into what may be behind Goldman’s willingness to comply with Apollo’s unusual investment tactics.

Click here for an interactive version of this IntellectSpace Knowledge Map:

http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=92775b5a-1d0b-42b0-8882-df1c9578ac25 (Only available with Internet Explorer browsers)

Safeway and Rumored Buyer Sears Corp. Share Past Connections

Changing trading patterns over the last couple weeks have led to some pondering that Safeway Inc. may be considering a buyer. The rumored shopper at the moment appears to be Sears Holding Corp., headed by its chairman, Edward S. Lampert. Since official word from either camp regarding the possibility of a transaction has yet to be made, the buzz remains in its early stages. Regardless, we decided to create an IntellectSpace Knowledge Map displaying the relationships between Sears and Safeway in the hopes that by creating a visual map of certain connections, a greater degree of insight may be achieved as to the definitiveness of a prospective acquisition.

Based on the Knowledge Map seen here, a number of relationships exist between certain individuals of either company, primarily through shared board memberships and business connections with outside companies. However, since the majority of these relationships exist only with past members of Sears and Safeway, it is difficult to say for certain whether or not these contacts will factor in on this potential partnership. One relationship pictured on the Knowledge Map that may make an impact in this deal is that shared between Sears chairman Lampert and Robert I. Macdonnell, a longtime director at Safeway. Both were previous members of the board at Autozone Inc., suggesting a likely crossing of paths. Because each presently hold senior leadership positions at Safeway and Sears, their past board connection from Autozone could have some influence on the outcome of this possible corporate purchase.

Despite the lack of current associations, the rumor is worth keeping up with as interactions between existing and former board members and executives are not unusual. Knowledge Maps let us see how even a past connections can play roles in shaping future business activities.

http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=b33671a5-1b68-44ed-8bb5-963fa28548c3(Internet Explorer browsers only)

Carl Icahn’s Connections: The Root of His Investing Power

Billionaire investor Carl C. Icahn has been making some news lately. Icahn, whose purchase offer was rejected on Monday by Lear Corp., yet still stands to make a respectable $25 million from the failed attempt, certainly can be referred to as one of the most powerful individual investors today. Sparked by his recent high-profile financing decisions, NewsVisual decided to take a closer look at Icahn by creating an IntellectSpace Knowledge Map to display his key connections.

The Knowledge Map below shows that Icahn has strong financial and leadership ties to numerous entities. Those companies in which he claims beneficial ownership include Cyberonics Inc., National Energy Group Inc., and Lear Corp., among others. No less impressive are his past and current board positions. American Railcar Industries Inc., Blockbuster, and Imclone Systems Incorporated are a just a few companies of which he is currently an active member of the board, though as illustrated by our Knowledge Map, this is only the tip of the iceberg when trying to add up all of his past and present corporate links. For those trying to keep up with Icahn’s latest and upcoming investment actions, IntellectSpace’s Knowledge Mapping abilities serve as a valuable tool for staying on top of his constantly changing connections.

Click here for an interactive version of this IntellectSpace Knowledge Map:

http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=0809b6dd-50f2-4fd6-8616-56f977d0e2cb>

(Only available in Internet Explorer browsers)

Family Ties May be Deciding Factor in News Corp’s Bid for Dow Jones

Tensions are high as News Corporation awaits a verdict from the Bancrofts regarding the sale of Dow Jones, parent company of the Wall Street Journal. The family, and in particular Christopher Bancroft, has expressed public concern over the possible tarnishing of the Wall Street Journal’s journalistic credibility if sold to Rupert Murdoch’s News Corp. We created an IntellectSpace Knowledge Map of the Bancroft family’s ties to Dow Jones, and it looks like they have more to be worried about in this deal than the journal’s integrity. Three members of the Bancroft family currently sit on the Dow Jones board: Christopher Bancroft, the unofficial leader of the pack, and his cousins Elizabeth Steel and Leslie Hill. The Bancroft board members along with other shareholders within the family have a significant controlling stake in the company, which could potentially lead to a final decision based more on family loyalty than business alone.

http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=35d53794-f10f-4ef2-a013-ed5b9dfeeef7 (Internet Explorer Browsers only)

The rest of the Dow Jones board isn’t necessarily behind the Bancrofts when it comes to this deal. In this next Knowledge Map, first published on May 1, 2007 (Click here to read article), we see that strong ties exist between the boards of News Corp and Dow Jones, with a number of members of either company currently serving or having served together on the boards of outside companies.

It will be interesting to see whether or not these common board relationships are strong enough to convince the Bancrofts to let go of Dow Jones.

What to do with AOL: Time Warner and Yahoo! Heads Talk Business

On the heels of last week's Allen & Company media conference, many analysts are trying to figure out what the next strategic move is by Time Warner Inc.'s Chief Executive Officer, Richard Parsons. Observers noticed that Parsons spent a great deal of time at the conference consorting with Terry Semel, Yahoo's Chairman and former CEO, who recently stepped down from his executive position in June (DealBook). The private discussions have led some to wonder if a partnership is in the works between Yahoo and AOL, which was acquired by Time Warner in 2000 and hasn't proved as strategic an asset as originally anticipated.

By creating an IntellectSpace Knowledge Map, we were able to find some interesting connections between Parsons and Semel that suggests that these meetings between the two at the conference may not have been so random. In fact, the Knowledge Map shows that the Yahoo Chairman and former CEO actually has strong ties to Time Warner - Samel previously served as Chairman of the Board and Co-Chief Executive Officer of its Warner Bros. division.

Parsons and Semel may try to capitalize on this relationship when attempting to strike a deal to determine the fate of AOL.

http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=ef9fbc86-f1cc-4cb0-bc71-d174739ca161

IHOP’s Bold Purchase of Applebee's Results from Key Connections

In light of the current industry slump for the mid-priced restaurant industry, IHOP made a bold move today in its $2.1 billion dollar purchase of Applebee’s International Inc. The acquisition leaves some scratching their heads as to why IHOP would be interested in the company, with its estimated $155 million of debt. IHOP’s current Chairperson and Chief Executive Officer, Julia A. Stewart, may have the answer to this question, as she previously played a significant role at Applebee’s International as President of its Domestic Division.

Stewart’s past executive connections to Applebee’s, as illustrated below in this IntellectSpace Knowledge Map, offer insight as to why IHOP may have decided to follow through with this decidedly risky purchase. The application of IHOP’s successful franchise model combined with Jill Stewart’s experience at Applebee’s will hopefully be enough to make this a worthwhile acquisition.

Another relationship that could have influenced the outcome of this deal is that between two former executives at Walt Disney Co.  Thomas G. Conforti, IHOP’s current Chief Financial Officer and Treasurer, and John C. Cywinski, Applebee’s International Inc.’s Executive Vice President and Chief Marketing Officer, both held leadership positions with Disney in the late 1990’s.

Based on the relationships shown with the IntellectSpace Knowledge Map, Applebee’s International’s ability to find a buyer in IHOP is likely to have been the result of some of these key connections. 

http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=26710438-b4d5-43f2-9d32-105af2314545

Energizer to Acquire Playtex for $1.16 Bn

After mapping the common connections between Energizer and Playtex, it becomes clear that board member connections may have played a key role in bringing these two companies together. While the boards of both companies unanimously approved of the deal, taking a closer look at the IntellectSpace Knowledge Map points to David Hoover (Board Member of Energizer) and Herbert Baum (Lead Director of Playtex) as the probable key influencers of this deal. Baum has served as Chairman at the National Food Processors Association, and Hoover is currently a board member of the NFPA.

http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=39ed397c-d89c-4cc5-a9de-ed9a769b42a6 (Internet Explorer browsers only)

KKR & Morgan Stanley Have Strong Ties

After reading about how Goldman Sachs and JP Morgan were left out of both the Blackstone and KKR IPOs, we decided to see what types of relationships KKR has with Morgan Stanley that prevented GS and JPM from getting a piece of the second PE IPO pie.  Alas, Morgan Stanley has some very strong ties with KKR, making it incredibly difficult (if not impossible) to win the mandate.  Below is the IntellectSpace Knowledge Map that we built:

http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=e043c74b-f543-4b1f-9f56-7bdc06644ce0

There are many noteworthy relationships in this IntellectSpace Knowledge Map.  To begin with, John Mack (Morgan Stanley's current Chairman and CEO) was a Director of KKR until as recently as April of 2005 (and may even still sit on KKR's board).  This relationship is strong enough to secure the deal, but in case it wasn't strong enough, take a look at the relationships surrounding Borden Capital.  Robert Kidder (a MS Board Member) was a founder of Borden Capital and served as Chairman and CEO from 1995 to 2003, and KKR Directors Henry Kravis, Brian Carroll, Clifton Robbins, and Adam Clammer (who also used to work in Morgan Stanley's M&A department) also sit on the Board of Borden Capital.  Henry Kravis is also a member of the Council on Foreign Relations, an organization where Laura Tyson (MS Board Member) is a Board Member.

Goldman and JP Morgan never had a fair shot at the deal - Morgan Stanley's relationships with KKR were just too strong.

Visual Map: Blackstone Acquisition of Hilton Hotels

Senior leadership likely led the merger discussions of Private Equity giant Blackstone and Hilton Hotels - the largest hotel group in the world by number of rooms.  After running several Common Connection analyses with IntellectSpace FN ( www.intellectspace.com), it became clear that it couldn't have been difficult to get the two of these leadership teams in a serious merger discussion.

Below is the first Knowledge Map in our analysis - visually mapping the common connections between the two firms:

http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=6dc8bcc6-61a3-493c-be9d-9fa8ea9d6005

Viewing the Knowledge Map quickly shows that John Notter (Hilton Hotel's Board Member) and Hamilton James (Vice-Chairman of Blackstone) shared board seats at Credit Suise First Boston, and could have helped to spur discussions.  To take a closer look at their connection with one another, we created another Knowledge Map to identify all of the connections of these two individuals:

http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=2647706e-d839-45dc-bef8-2f508ff6e202

Having a feeling that Hamilton James (the imminent leader of Blackstone) was intimately involved in these discussions, we then mapped his common connections with Hilton Hotel's CEO and Co-Chairman - Stephen Bollenbach. 

Below is the IntellectSpace Knowledge Map that visually maps the common connections between these two powerful individuals: