Projo Biz Blog

Providence Equity has investment gain

Providence Equity Partners, the investment firm run by Brown University graduate Jonathan Nelson, scored a huge return from its stake in German cable company Kabel Deutschland, after the company offered an initial public offering.

The market capitalization of Kabel Deutschland is about $5 billion, calculated the Wall Street Journal, giving Providence Equity a gain of about $3 billion.

Providence Equity, based in Providence, has had a controlling stake in Kabel since 2003, when it acquired the cable assets from Deutsche Telekon AG along with partners Goldman Sachs Group and Apax for about $1.7 billion.

In 2006, Providence Equity bought out Goldman and Apax and took an 88 percent ownership stake in Kabel Deutschland.

Kabel is Germany's largest cable company, with nine million subscribers.

18 RI children settle lead-paint lawsuits against landords

PROVIDENCE, R.I. (AP) - Eighteen Rhode Island children poisoned by lead paint have settled lawsuits against their former landlords.

Vincent Greene, a lawyer representing the children, announced the settlements Friday but said the terms were confidential.

Greene says the children who sued were exposed to lead before they were 6 years old and suffered from problems including behavior and motor functions. The children now range in age from 9 to 17.

Greene says most of the 18 children lived in apartments in Providence and Pawtucket.

The state won a 2006 verdict verdict that could have forced three former lead paint companies to spend billions of dollars cleaning contaminated homes in the state. But the state Supreme Court overturned that verdict two years ago.

Limo company buys Pawtucket transportation service

PROVIDENCE, R.I. -- O2 Global Chauffeured Services has acquired All Occasion Transportation, a 20-year veteran of the limousine service industry, company officials announced this month.

Company representatives did not disclose the financial details of the deal that was brokered in January. O2 has been serving the local market for roughly 5 years.

All Occasion Transportation, based in Pawtucket, was founded by Eric Weiner in 1990 while he was a student at Johnson & Wales University. The company has gone from a single car operator to a fleet of limousines, town cars and vans today that make 12,000 trips a year in more than 600 cities.

In a statement, Weiner said it "has been quite a journey. Moving forward, I could not be prouder as I enter this next state of growth as part of the O2 Global family," he said.

Paychecks up for RI manufacturing workers

Manufacturing workers in Rhode Island in February earned an average of $14.40 per hour, up nine cents from January and thirty-one cents from February 2009, according to data from the state Dept. of Labor and Training.

Manufacturing employees worked an average of 37.2 hours per week in February, down eight-tenths of an hour over the month, but up two-tenths of an hour over the year.

Rhode Island's unemployment rate was 12.7 percent in February, unchanged from January.

There are 40,000 Rhode Islanders employed in manufacturing, down 3,200 from a year ago.

Pay of CVS Caremark CEO reduced in 2009

Tom Ryan, president, chief executive and chairman of CVS Caremark Corp., received compensation valued at $14.4 million in 2009, down 17 percent the $17.4 million he received the previous year.

The decline in Ryan's pay was largely due to a decrease in his performance-based cash bonus and stock-based awards, according to an Associated Press calculation of figures disclosed in a regulatory filing.

Woonsocket-based CVS Caremark's profit rose 16 percent in 2009, but the company's Caremark pharmacy benefit management business continued to struggle. In November, the company disclosed billions of dollars in contract losses starting in 2010 and said the pharmacy benefit management unit's profit would fall this year. The head of the unit retired following the disclosure, and Ryan ran the business for about two months before a new president was hired.

Ryan drew a $1.4 million in salary in 2009, the same as in 2008. He also received stock and options valued at $9.3 million on the days they were granted, down 23 percent from similar awards of $11 million in 2008.

Ryan also received a $3.5 million performance-based cash bonus, compared with a $4.6 million bonus the year before.

Ryan received $269,000 in perks, down from $466,000 in 2008. His perks included company contributions to defined contribution plans, use of the company aircraft, home security and other items.

The Associated Press formula is designed to isolate the value the company's board placed on the executive's total compensation package during the last fiscal year. It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.

The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission, which reflect the size of the accounting charge taken for the executive's compensation in the previous fiscal year.

The drugstore chain's annual profit grew to $3.7 billion, or $2.55 per share. Revenue rose 13 percent to $98.73 billion from $87.47 billion. Shares of the Woonsocket, R.I., company rose 12 percent during the year.

Some R.I. flood victims eligible for prompt jobless aid

Workers laid off because of the recent flooding in Rhode Island may obtain unemployment benefits a week earlier than usual if their employers apply for a special waiver, the state Department of Labor and Training said Thursday.

There is normally a one-week waiting period before payment of jobless benefits can begin. But state law allows the waiting period to be waived if a worker's unemployment is caused by a natural disaster or state of emergency, the agency said.

Sandra M. Powell, the agency's director, said in a statement, "The department is taking a proactive approach, so that our staff can help minimize the financial impact this kind of event can have on local businesses and their employees."

Newport Chamber opposes LNG proposal

The directors of the Newport County Chamber of Commerce voted unanimously to object to Hess Corp.'s s proposed plan to build an Liquefied Natural Gas berth in Mount Hope Bay.

The vote was based on research that showed that increased tanker activity will have a substantial negative impact on the economy of Newport County and Rhode Island, particularly to the state's hospitality, marine trades and defense industries.

In June 2006, the Newport County Chamber of Commerce and the Rhode Island Turnpike and Bridge Authority commissioned an Impact Study by Ninigret Partners to examine the overall impact LNG tankers would have on Narragansett Bay.

The Chamber said findings of the study, "LNG Transit through East Passage: Potential Impact on Aquidneck Island Development," are valid now as the number of vessel transits are the same as the first Hess proposal. The proposal would also have an unforeseeable impact on other economic systems and future projects within Narragansett Bay, the Chamber said.

IRS office in Providence, RI, to open two more Saturdays

The Internal Revenue Service will soon offer more Saturday service ahead of the April 15 tax-filing deadline.

The agency will open its walk-in center at 380 Westminster St., Providence, on March 27 and April 10 from 9 a.m. to 2 p.m.

IRS walk-in sites typically operate only weekdays, but the agency is opening some of its locations -- including the Providence office -- on March 27 and April 10 to offer service to those who cannot visit during usual business hours, IRS spokeswoman Peggy Riley said.

Pawtucket, RI, lures manufacturing companies from Providence

PAWTUCKET, R.I. -- Visual Creations, manufacturer of store fixtures and merchandise display units, is relocating from Providence to the Narragansett Industrial Park here, enabling the company to expand and create 75 temporary jobs needed on future projects.

The company is moving from a multilevel facility to a 160,000-square -foot, single-story building at 500 Narragansett Drive, formally occupied by Honeywell Inc.

Vision Creations recently purchased Providence Wire Creations, also in Providence, which will relocate as well. The move brings 125 permanent employees together under on roof, said company president Jay Long.

Vision Creations acquired the Pawtucket site last December for $2.3 million, Long said.

Mayor John E. Doyle will introduce the company and describe its impact on the city at an 11 a.m. news conference at city hall Thursday.

"The bleak economy and record-high unemployment demands that local communities make every attempt to encourage business expansion," Doyle said in a statement.

Herb Weiss, the city's economic and cultural affairs officer, said the relocation will bring business to local retailers, restaurants and gas stations on Newport Avenue and the city's Darlington section.

He said that the company's current location, a mill building, was inefficient for the type of manufacturing it does. There were things unique to Rhode Island and Pawtucket -- the buildings are cheaper and the bulk of the company's work force lives here -- that made the company stay in the state.

"These are two Massachusetts residents that own businesses in Rhode Island. They were tire-kicking in North Attleboro and in Seekonk," Weiss said, refering to the owners of Vision Creations and Wire Creations. "Ultimately what made the difference to keep it in the state, even in a bad economy, was the dream building."

Pawtucket has more than 70 mills throughout the city and a large industrial park, roughly 100 acres straddling Pawtucket and East Providence.

"When manufacturers are leaving the state, and going overseas, we are very glad to keep a manufacturing company...within our city," Weiss said. "Pawtucket is still a place for manufacturing to come. We have plenty of building stock for people who need that kind of space."

RI Internet company buys Chicago company

Towerstream (TWER:Nasdaq), an Internet service provider based in Middletown, said on Tuesday it acquired Sparkplug Communications Inc. for $1.6 million in cash and common stock.

Towerstream will acquire Sparkplug Communications business assets operating in Chicago, Illinois and Nashville, Tennessee including all customer contracts, network infrastructure, and related assets.

The acquisition is expected to close by the end of the second quarter.

West Warwick company reports increased profits, sales

Astro-Med, Inc., in West Warwick, reported fourth quarter net income of $1.7 million, or 23 cents per share, compared with $263,000, or four cents per share, in the fourth quarter of last year.

Sales were $16.3 million for the quarter that ended January 31, up from $15.6 million in the year-ago period .

Astro-Med's directors raised the quarterly dividend by one cent a share to seven cents a share, payable on April 2 to shareholders on March 19.

A proposal to tie annual increases in the minimum wage to a federal cost-of-living index is scheduled for a vote Wednesday in a Rhode Island Senate committee.

The Senate Committee on Labor is set to vote on the proposal by Sen. Leonidas P. Raptakis (D-Coventry) to set yearly increases based on the Consumer Price Index for urban wage earners and clerical workers for the Northeast region, as determined by the U.S. Department of Labor.

The maximum annual increase would be capped at percent (calculated to the nearest increment of five cents).

The bill would call for the minimum wage increase to take effect on January 1, 2011, and on the first day of every year thereafter. It would also require the Department of Labor and Training to notify all Rhode Island employers of any increase by mail at least 45 days prior to its effective date.

The Committee on Labor will meet in Room 310 of the State House, beginning at 3:30 p.m.

New England tops in compensation costs

New England's compensation costs of an average of $33.67 per hour worked in December were the highest of nine regions in the U.S., according to data released Tuesday by the U.S. Bureau of Labor Statistics.

The average cost measures private industry employer expenses for wages, salaries and employee benefits.

Of the $33.67, $23.25 went for wages and salaries and $10.41 was comprised of benefits such as Social Security, health insurance, and paid vacation. The highest cost benefits were health insurance at $2.32, Social security and Medicare at $1.97, and vacation paid leave at $1.26 per hour worked.

The lowest compensation costs in the U.S. were reported in the East South Central regional at $21.02 an hour

The average among all regions in the U.S. was $27.42 per hour worked.

Analyst says Alexion is an acquisition target

Alexion Pharmaceuticals Inc., the Connecticut biotech company with an operation in Smithfield, is a potential acquistion target for large drugmakers seeking new products, according to Goldman Sachs Group.

"We expect the pace of mergers and acquisitions in biotech to accelerate," analysts led by Jessica Li wrote in a note to clients.

Li's team added Alexion to Goldman's "Conviction List" after analysts predicted positive clinical data on Alexion's Soliris blood-disorder medicine this year may add $300 million in sales potential.

"We believe Alexion is an attractive potential acquisition target given its superior growth profile and potential upside from new drug applications," they wrote. "

Alexion (ALXN:Nasdaq), based in Chesire, Conn., is completing a $116-million drug production plant in Smithfield.

Profits slip at Capital Properties

Capital Properties Inc., of East Providence, on Monday reported net income of $1.4 million, or 22 cents a share, for the year that ended Dec. 31, 2009, compared with $1.6 million, or 24 cents a share, in the year-earlier period.

Capital Properties leases real estate in downtown Providence and operates a petroleum storage facility in East Providence.