Engineering

Capital Calls: TikTok’s Beltway visit

30 Jan 2023

Concise views on global finance: The social media app’s CEO Shou Zi Chew is going in front of a U.S. Congressional committee. But it’s leaders outside of Washington that Chew needs to convince.

Capital Calls: AI out-buzzes the blockchain

27 Jan 2023

Concise views on global finance: Digital publishing outfit BuzzFeed’s stock surges in part because it’s using AI to help create content. But investors’ excitement is likely to be short-lived.

Capital Calls: ABB, Italian budget

21 Nov 2022

Concise views on global finance: The $57 bln Swiss engineering group is selling a minority stake in its car charging unit, as a fallback to volatile IPO markets; premier Giorgia Meloni’s hard-right government targets a budget deficit of 4.5% of GDP in 2023.

Rolls-Royce showcases flexible pay’s ups and downs

22 Jun 2022

The $9 bln UK engineer is offering its staff a one-off payment to match soaring inflation, instead of a bigger salary hike. The flexibility works for employers, and lump sums are worth more to lower-paid employees. But workers have to trust bosses to give similar help next year.

Oil-field services miss brief chance to make hay

20 Apr 2022

Baker Hughes’ first-quarter earnings disappointed due to cost pressures and a fading Russian business. Growing demand for liquefied natural gas might benefit the company and its peers. But the reasons that business will thrive are the same ones that are reducing the appeal of fossil fuels.

Rolls-Royce nuclear plans piggyback green success

9 Nov 2021

The UK engineer and partners are pumping 195 mln pounds into a unit to build small commercial reactors. As with wind and solar, the British government is helping by promising to buy the plants’ electricity. It should mean a lucrative side hobby for the group run by Warren East.

Faurecia’s German car-parts deal has firm chassis

16 Aug 2021

The French automotive supplier edged out its rivals with a 6.7 bln euro bid for Lippstadt-based Hella. Annual savings worth 15% of its target’s R&D and marketing costs justify the outlay on their own. Any sort of sales boost would amount to go-faster stripes and alloy wheels.

UK defence buyout tests government poker hand

16 Aug 2021

Private equity-backed Cobham is offering a 63% premium for rival Ultra Electronics. To get Britain’s approval for the 2.6 bln pound deal, it will make commitments on jobs and research. If those pledges are robust, owner Advent will have to work hard to earn a good return.

UK plc’s latest sale is far from on the cheap

2 Aug 2021

Ohio-based engineer Parker-Hannifin is buying British rival Meggitt for 7 bln pounds including debt. The 70% premium and promises to keep UK jobs point to measly long-term returns. UK investors’ complaints about opportunistic foreign raiders look less and less credible.

Shareholders exposed by British defence raid

23 Jul 2021

Some UK investors complain private equity buyers are stealing listed groups. A mooted 2.6 bln pound bid for Ultra Electronics by Advent-owned Cobham suggests otherwise. The buyer needs chunky cost savings to make it work. A 62% premium implies the market misjudged Ultra’s value.

Capital Calls: China’s bank reserves

9 Jul 2021

Concise views on global finance: Beijing released more cash into its financial system as growth slows.

Capital Calls: Infrastructure, Doximity, Deliveroo

24 Jun 2021

Concise views on global finance: President Biden’s $1 trln bipartisan plan for U.S. infrastructure is a feat of political engineering. Meanwhile, medical-themed social network Doximity finds riches in niches, and UK delivery outfit Deliveroo serves up a favorable court ruling.

Bain discount auto IPO is cheap for a reason

25 May 2021

The private equity firm is listing French car parts seller PHE to raise 450 mln euros to pay down debt and prep for M&A. Europe’s fragmented after-sales market is due an overhaul. The jalopy-like multiple reflects uncertain growth and the threat from cheap-to-run electric motors.

Babcock CEO’s reset comes with valuation upside

9 Apr 2021

David Lockwood may soon unveil a writedown at the 1 bln pound UK engineering group, which is also saddled with heavy debt. Those concerns obscure the relatively promising trend of UK defence spending. Lockwood’s CV offers hope of a cleanup – and significantly higher share price.

Capital Calls: Elon Musk, LeBron James

1 Apr 2021

Concise views on global finance in the Covid-19 era: Endeavor, Ari Emanuel’s entertainment group, is hoping the Tesla boss’s stardust will help a second attempt at an IPO; the basketball star’s stake in the Red Sox is a foil to Steve Cohen’s Mets deal.

UK engineer bets that buyers will pay dual premium

2 Mar 2021

Renishaw’s two octogenarian creators want to use their 53% stake to sell to an entity that keeps its “heritage and culture”. That might deter private equity, while the engineer’s 5 bln pound-plus valuation is beyond domestic trade buyers. That could mean a pretty short shortlist.

Corona Capital: Music deals

26 Jan 2021

Concise views on the pandemic’s corporate and financial fallout: Warner Music may take a stake in the music business owned by Saudi Arabian Prince Alwaleed bin Talal.

Corona Capital: M&A boost, Purell

22 Jan 2021

Concise views on the pandemic’s corporate and financial fallout: Goldman Sachs, JPMorgan and other banks collectively reaped billions in fees related to advice on transactions with the expectation the money will keep rolling in; hand sanitizer makers hope good habits linger.

UK plc puts its money where Rolls-Royce’s mouth is

1 Oct 2020

Boris Johnson’s government is backstopping the struggling jet-engine maker with nearly 1 bln pounds in loan guarantees. Yet the support hinges on shareholders coughing up double that. It’s a reasonable way to prop up a vital British business while minimising taxpayers’ exposure.

Rolls-Royce repair job has 18-month warranty

29 Sep 2020

The UK jet engine maker wants to raise 2.5 bln pounds from existing and new investors, including sovereign funds. That should keep it aloft even if the airlines that use its kit have a bad 2021. Beyond that, a slow recovery could mean more financial warning lights.