rda

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.

Private equity powerhouse, The Carlyle Group, has more than 500 investment professionals across 21 countries. Of course, some of them are corporate luminaries like Louis Gerstner.

Well, after being the chairman of Carlyle since 2003, he is now departing -- his last day will be September 30th. Although, he will remain as a Senior Advisor to the firm.

Gerstner has had a stellar career. In 1993, he took the challenge of becoming IBM's (NYSE: IBM) chairman. At the time, the company was crumbling.

Despite not having much tech experience, Gerstner set forth an ambitious strategy that not only saved IBM but returned the company to greatness. He even wrote a book about his experience in a book called Who Says Elephants Can't Dance?: Leading a Great Enterprise through Dramatic Change, which is definitely worth reading.

Before his tenure at IBM, Gerstner was the CEO of RJR Nabisco, where he had to deal with the debt-load from a mega leveraged buyout (from KKR). He was also the president of American Express (NYSE: AXP) and a director of management at McKinsey & Co., Inc.

While at Carlyle, Gerstner made a big impact. He helped globalize the firm as well as diversify the investment base. As of now, Carlyle manages about $75 billion in assets across 57 funds and controls a portfolio that has aggregate revenues of $87 billion.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Starting a business can take months -- and can be expensive. Also, it's tough to anticipate some of the problems you'll run into. That's why buying a business can be a good alternative.

So where do you get financing? One approach is to get a Small Business Administration loan.

Basically, this is like any other business loan. However, the main difference is that the loan is guaranteed up to 85% from the SBA, which is a federal program. Because of this, there are usually advantages versus conventional loans, such as:

• Longer terms (10 years for the business, and 25 years if there is real estate involved).
• Lower interest rates (prime rate plus 2.25% to 2.75%)
• Lower down payments (20% to 30% or so). In fact, the down payment also includes seller financing.

OK, what does it take to get such a loan? Let's take a look.

For the most part, the Cadence Design Systems (NASDAQ: CDNS) unsolicited offer for Mentor Graphics (NASDAQ: MENT) was a smart move (both companies are leaders in semiconductor design software). This transaction would be a critical part of consolidation in the industry.

However, on Friday, Cadence decided to drop its $1.6 billion bid. As a result, the shares of Mentor plunged 25%.

What happened here? Well, according to Cadence, it looks like the board of Mentor didn't want to open its books (although, Mentor disputes this). Another issue is antitrust. Oh, and with the credit crunch, it's still pretty tough getting financing.

Perhaps the big problem is the slowing economy, which is putting pressure on the semiconductor industry. After all, Cadence posted weak Q2 results, and the outlook looks dismal.

Whatever the reasons, Wall Street likes the result. On the news, Cadence's share increased 6.7%.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

GSTrue, which is operated by Goldman Sachs (NYSE: GS), is a new-fangled marketplace to trade privately-held interests. One of its high-profile listings is Apollo Management LP., a top-tier private equity firm.

Unfortunately, the shares have lost more than 40% over the past year. Of course, this has been the treatment for many other private equity players because of the severe credit crunch.

According to the latest quarterly report, Apollo suffered a loss of $96 million, compared to a net profit of $144 million in the same period a year ago. The internal rate of return (IRR) fell from 42% to 21% over the quarter.

Moreover, Apollo is involved in litigation on its botched deal for Huntsman Corp (NYSE: HUN). And there was a 20% write down on the investment in Harrah's.

Despite all this, Apollo still appears to be on track for an IPO – to be listed on the New York Stock Exchange. Don't expect it to be easy.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

John W. Nichols, who is the co-founder of Devon Energy (NYSE: DVN), died recently. He was 93.

As should be no surprise, his life provides many lessons for budding entrepreneurs. Interestingly enough, his innovations were not necessarily about creating new products. Instead, he was an innovator of finance.

Nichols started his career as an accountant and audited the financials for oil companies. Leveraging this experience, he started an oil company in 1941. With sky-high income taxes, Nichols structured innovative financial vehicles to minimize the bite from Uncle Sam. For example, he was the first to register a public oil & gas drilling fund with the Securities and Exchange Commission.

And it was a hit -- he attracted large sums of capital from wealthy individuals (even Hollywood stars like Barbara Stanwick).

No doubt, Nichols biggest feat was the creation of Devon. He formed the venture in 1971 with the help of his son, a lawyer.

The financial innovation didn't stop as Nichols developed the so-called royalty fund, which became a standard in the oil industry.

It was also a big spur for growth. After all, Devon is today a $43 billion company.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

For the most part, the IPO market has been horrible this year. In fact, according to a report from Reuters, only three IT (information technology) companies have gone public this year.

Despite this, web-hosting company Rackspace (NYSE: RAX) still went ahead with its IPO this week. And, it was pretty bad for investors. On its opening day, the stock price plunged 20% to $10. Ironically enough, Wall Street was hoping that the Rackspace deal would help spark the IPO market.

After all, Rackspace is a great company. Keep in mind that its investor roster includes biggies like Norwest Venture Partners and Sequoia Capital.

Moreover, unlike other upstart tech IPOs, Rackspace has a strong history of profitability. In Q1, net income was $5.4 million. Rackspace is also growing at a torrid pace, with Q1 revenues at $119.6 million, up from $75.2 million in the same period a year ago. There are 33,000 customers.

However, Rackspace must deal with tough competitors, such as IBM (NYSE: IBM), AT&T (NYSE: T) and even Amazon.com (NASDAQ: AMZN), which offers a variety of cloud-computing services. Furthermore, the slowing economy may put pressure on IT budgets, which could be a problem for Rackspace going forward.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

In Q2, NetSuite's revenues surged 43% to $36.6 million, a 7% sequential increase. In fact, NetSuite added more than 400 customers in the quarter. Although there was a net loss of $3.1 million, or $0.05 per share, SAP has made recent moves to increase its pricing.

Essentially, NetSuite focuses on the mid-market customer. Keep in mind that there are more than five million of them in the U.S. And, for the most part, the market is fragmented and unpenetrated.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.