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  • Alec Baldwin Rumors: Is A Baby On The Way?

    Alec Baldwin is fighting off rumors that his wife Hilaria is pregnant and insists that when it happens, they’ll tell the world when they’re ready.

    In Touch first reported the news, saying that because the couple is so private, they have only shared it with close friends and family.

    “[Hilaria] has not said much to anyone as far as how far along she is,” a source told the magazine. “She is so healthy and a yoga freak, so everyone could tell right away something was different.”

    As with any celebrity baby rumor, everyone is now looking for the slightest change in Hilaria’s physique, but the couple are still adamantly denying the stories.

  • New Ubisoft Game “Osiris” Revealed in Leaked Trailer

    While Ubisoft is busy integrating a new Montreal studio into its operations, the existing Ubisoft Montreal studio is still operating as one of the publisher’s most successful developers. The studio was responsible for classics such as the Prince of Persia series, the Assassin’s Creed series, and last year’s Far Cry 3.

    It’s known that Ubisoft Montreal is currently working on Watch Dogs, one of the most exciting reveals of last year’s E3. Now, a new leaked trailer has revealed the game Osiris.

    The game is set in ancient Egypt, and appears to be a new IP, though it’s not inconceivable that it could be related to the Assassin’s Creed series in some way. The unfinished trailer depicts some early motion capture work being done on the title.

  • Google Science Fair 2013 Now Accepting Submissions

    For the third year, Google is holding an international science fair for teens.

    The Google Science Fair is a partnership between Google, CERN, LEGO, National Geographic, and Scientific American.

    “For the past two years, thousands of students from more than 90 countries have submitted research projects that address some of the most challenging problems we face today. Previous winners tackled issues such as the early diagnosis of breast cancer, improving the experience of listening to music for people with hearing loss and cataloguing the ecosystem found in water. This year we hope to once again inspire scientific exploration among young people and receive even more entries for our third competition,” says Google.

    It’s all about “finding the next generation of scientists and engineers.” And a chance for teens to compete for pretty sweet prizes, too, like a $50,000 scholarship, a trip to the Galapagos, hands-on experiences with CERN, $10,000 cash grant to the winnner’s school, and more.

    The Google Science Fair will be accepting submissions from students aged 13 to 18 until April 30th. In June, Google will select 90 regional finalists (30 from North and South America, 30 from Asia, and 30 from Europe/Africa). Out of those 90, 15 will emerge as finalists and will be jetted to Google HQ in Mountain View.

    On September 23rd, a panel of judges will pick the winners – one in each age category and an overall Grand Prize winner

    You can check out slideshows from all the past winners here.

    If you’re interested, you can head to the Google Science Fair hub to start your project.

  • Minecraft Pocket Edition Version 0.6.0 Should Be Out Soon

    It was reported last week that Mojang was working on a smaller update for Minecraft Pocket Edition that would add a few new features, but its main purpose would be to address a few bugs. Plans change, however, and Mojang has decided to merge update 0.5.1 and 0.6.0 into a single update that will be out soon.

    Mojang’s Jens Bergentsen announced this morning that the next update for Minecraft Pocket Edition – version 0.6.0 – has been submitted for review. That means players should see the update hit the iOS and Android version of the title in the next one to two weeks.

    Here’s all the new additions you can expect from version 0.6.0:

    New features:

  • Signs
  • Armor
  • Baby animals
  • Fancy clouds
  • Improved D-pad
  • Stonecutter for crafting stone blocks
  • Sheep can be colored with dyes
  • New block types: Netherrack, Nether Brick, Block of Quartz with 2 variants (pillar and chiseled), mossy/cracked Smooth Stone Brick variants (creative only), chiseled/smooth Sandstone variants
  • New stairs: Nether Brick, Sandstone, Smooth Stone Brick, Quartz
  • New slabs: Sandstone
  • New item: Nether Brick (smelted from netherrack and crafted into nether brick tile)
  • Upside-down stairs, corner stairs
  • Slabs can be placed in up position (needs testing on small screens)
  • Sand and Gravel are affected by gravity

    • Tweaks:

  • Recipes for crafting slabs give 6 slabs instead of 3 (as in PC version)
  • Nether Reactor spawns Netherrack blocks instead of Obsidian
  • The fog and sky color have changed
  • The Nether Reactor now spawns more items
  • Cows drop Leather

    • Bug fixes:

  • Melons had several bugs where they would spawn too fast and where they shouldn’t

    • As you can see, quite a bit of work went into the latest version of Minecraft’s mobile counterpart. There should be plenty of new content here to keep Minecraft Pocket Edition’s 5 million players satisfied until the next update.

    Unfortunately, not everybody will be able to enjoy this latest update. Mojang announced that this latest version of Minecraft Pocket Edition is dropping support for Android 2.1 and 2.2. You’re going to need Android 2.3 or higher now to play the latest version. Older versions of the game will still work on older versions of Android though.

  • Cat With Eyebrows Gains Thousands Of Instagram Followers

    “Cat with eyebrows” is exactly what is sounds like: an adorable white cat with eyebrow-like markings on his forehead. And while that’s pretty much his sole claim to fame, Sam the cat has garnered thousands of Instagram followers…almost 6,500, to be exact.

    People love cats, it’s no secret. Cats have pretty much ruled the internet over the past few years as they take over memes, funny videos, and adorable pictures for the express purpose of making your day a little brighter. Sam is no exception; with his curious markings, he looks perpetually surprised, and every photo of him is made a little better because of it.

    I’m pretty sure he could get away with murder in my house and it would be impossible to stay mad at him.

    cat with eyebrows

    cat with eyebrows

    cat with eyebrows

  • Delivering on the Promise of Private-Public Partnerships

    The numbers are staggering: 884 million people do not have access to safe drinking water, and 2.6 billion people — over half of the developing world’s population — lack access to basic sanitation. Unilever believes these are basic human rights. As a business that operates in many of the countries where these needs are most evident and pressing, we must help ensure those rights are realized.

    Through the Unilever Sustainable Living Plan — our strategy for sustainable, equitable growth, tied to 50+ time-bound targets — we have made a commitment to improving the health and wellbeing of one billion people, through access to sanitation, hygiene, safe drinking water and adequate nutrition. And we are unapologetic about the fact that improving people’s livelihoods will also enable us to grow our business.

    But we are under no illusions that we can do this alone.

    To tackle threats to the future health and wellbeing of people in need, businesses must partner with governments and NGOs, lending their skills, resources, and reach.

    We have found that choosing the right partner allows us to amplify our message and impact. We may sell products and have offices in a country, but a local NGO will likely have more insight into the problems facing a particular neighborhood; or a locally-operating international nongovernmental organization may have the physical presence of volunteers across a region; or perhaps a local government is already delivering a community outreach programmer that we can support and grow.

    There is no value in duplicating efforts; we’d rather work with others and bring our skills and resources to bear in achieving a shared goal.

    A couple of our programs illustrate this well:

    • To add to the scale and reach of our own programs that promote handwashing with soap, we partner with UNICEF, the Millennium Village Project, Population Services International (PSI) and national governments. And within each country we support many local charities and NGOs to deliver behavior-change programs that educate mothers and children about how to stop the spread of easily-preventable diseases such as diarrhea.
    • Through the Unilever Foundation, also in partnership with PSI and jointly with Facebook, we created Waterworks™, a not-for-profit program that provides safe clean drinking water to communities in need. Currently running as a pilot in Bhopal, India, Waterworks™ operates as a Facebook Timeline application, through which people can make donations to support Waterworkers who visit their local communities to distribute PureIt water purifiers and sachets to families in need, as well as provide education about the importance of clean drinking water. The Waterworkers, who are themselves part of the community, also receive an income that helps them improve their livelihoods.

    In both programs, the partnerships draw on the respective expertise of each player and we come together to deliver results at a scale that we would not have been able to deliver individually. Importantly, these collaborations have also taught (and re-taught) us some valuable lessons about what we can bring to and get from partnerships:

    Find the right partner: Successful partnerships should draw on the marketing, consumer understanding and expertise of the private sector; and the reach, resources and scale from the public sector. There are many effective NGOs and government organisations to work with; some are large and have wide reach across countries, some are small and specialized in serving very specific communities. Find the one that has the expertise and experience in the particular field that you are aiming to influence. Don’t be afraid to work with more than one partner; equally, don’t stretch your resources too thinly by trying to work with everyone in the field.

    Understand your audience: We’ve been in emerging markets for over 100 years, offering products aimed at the bottom of the pyramid as much as for wealthier consumers. We understand consumers and cater to the needs of those less affluent — from fortified margarine that help fulfill the nutritional requirements of people on a limited diet; to sachets that offer affordable access to well-known brands. And our insight is not limited to products. For instance, we also have Project Shakti: a rural distribution system run primarily in India, which currently employs more than 45,000 underprivileged rural women — Shakti Ammas, or ‘strength mothers’ — who are invited to become direct-to-consumer sales distributors in very small rural villages. We drew on our experience with the Shakti women to inform the Waterworks project that we are currently running with PSI.

    Make it incremental: A partnership shouldn’t replace or replicate existing programs. Instead, focus on identifying new approaches or amplifying and extending the scale of proven programs. Be open to change, adapt and grow a partnership — it’s only through stretching goals that you will be able to make progress.

    Empower the partnership: A senior executive must champion the partnership to ensure that the longer term goals survive the inevitable internal distractions and new priorities that arise in any business. At Unilever, each of our key partnerships is overseen by a dedicated global team that works jointly with a designated champion within each key country — and, depending on the programs, with local brand teams. Importantly, I oversee all our partnerships — and as a member of the executive board, I update my colleagues at the top table on the progress of the various projects.

    We have big ambitions for our business, and for our consumers around the world. These ambitions are shared by many, and it’s only sensible that we all work together to make a difference.

    Follow the Scaling Social Impact insight center on Twitter @ScalingSocial and register to stay informed and give us feedback.

    Scaling Social Impact
    Insights from HBR and the Bridgespan Group

  • Crunchyroll Adds Eric Feng to Advisory Board

    Anime and Asian content streaming service Crunchyroll Inc. has added Eric Feng, former CTO of Hulu, to its advisory board. On the advisory board Feng joins James Hong and Jim Young of HOTorNOT, Naval Ravikant of AngelList, David Chao of DCM, and Max Levchin of Slide and PayPal.

    PRESS RELEASE
    Crunchyroll, Inc., the leading Anime and Asian content streaming service, announced today that Eric Feng, former CTO of Hulu, has joined the Crunchyroll Advisory Board to help fuel continued growth for the already booming global video streaming service. With more than nine million registered users worldwide and over one hundred thousand premium subscribers, Crunchyroll is innovating how vertical content is consumed and monetized.

    Feng brings years of cutting-edge and entrepreneurial experience from various video technology sectors to Crunchyroll. As CTO of Hulu, Feng helped to grow the company into the #2 U.S. video site in only three years, touting more than 43 million monthly unique viewers, 920 million monthly streams, 200 content providers and over 400 advertisers. Feng also was a Partner at Kleiner Perkins Caufield & Byers where he was an investor and served as the tech advisor to former Vice President Al Gore. In 2011, Feng founded Erly, a social networking platform funded by Kleiner Perkins, that focused on organizing and sharing personal content. Erly was acquired in 2012 by Airtime.

    Feng joins other Silicon Valley luminaries on Crunchyroll’s Advisory Board, including James Hong and Jim Young of HOTorNOT, Naval Ravikant of AngelList, David Chao of DCM, and Max Levchin of Slide and PayPal.

    “I am honored to welcome Eric as an advisor,” says Crunchyroll CEO and Founder Kun Gao. “Eric has contributed strategically and tactically to the success of many companies through his insight and leadership. That experience, combined with his unique understanding of streaming media and user experience, will be invaluable to Crunchyroll as we tackle the vision of bringing unique and differentiated channel content experiences to the masses.”

    “I am thrilled to join the Crunchyroll Advisory Board,” said Eric Feng. “Crunchyroll has experienced impressive growth by delivering a world class service for its customers. We share a passion for transforming media with technology and I look forward to helping Crunchyroll continue on its ambitious mission.”

    About Crunchyroll, Inc. Crunchyroll is a leading global video network and developer of social media applications for Japanese anime and Asian media. Through applications like Crunchyroll for iPhone, iPad, Android, Playstation(R)3, Xbox LIVE(R), TV, set-top boxes, affiliate websites and its own streaming website, Crunchyroll delivers over 20,000 episodes and 10,000 hours of officially-licensed content from leading Asian media producers direct to consumers.

    Crunchyroll has offices in San Francisco, Calif. and Tokyo, Japan, and is a member of the Association of Japanese Animations (AJA) and Licensing International Merchandisers’ Association (LIMA). Officially launched in 2009, Crunchyroll is funded by leading venture capital firm, Venrock, Japanese entertainment giant TV TOKYO, digital publishing leader Bitway and a group of angel investors representing some of the brightest and most successful entrepreneurs in Silicon Valley.

  • Ridgemont Equity Partners with Unitex Oil & Gas

    Middle market buyout shop Ridgemont Equity Partners has partnered with Unitex Oil and Gas, and closed the acquisition of oil assets in Scurry County, Texas. Unitex was formed to acquire and develop producing properties in the Permian Basin. The financial terms of the Scurry County transaction were not disclosed.

    PRESS RELEASE
    Ridgemont Equity Partners, a middle market buyout and growth equity firm, today announced the formation of a new partnership with Unitex Oil and Gas’ management team and the closing of the partnership’s first acquisition of conventional oil assets in Scurry County, Texas. Unitex was formed to acquire and develop producing properties in the Permian Basin. The financial terms of the Scurry County transaction were not disclosed.

    Unitex was founded by David Wilson in 2003 and is headquartered in Midland, Texas. The company seeks to create value through optimizing operations and increasing production through workovers and the drillbit. The company will target acquisitions in and around the Midland Basin. The Scurry County acquisition fits well with the company’s history and focus.

    “Ridgemont is delighted to partner with David and his team,” said John Shimp, a Partner at Ridgemont. “Unitex brings the right skill set and the attention required to improve the performance of the mature oil fields it hopes to acquire.”

    “I am excited to partner with Ridgemont and grow Unitex’s assets with their financial backing,” said David Wilson, the CEO of Unitex. “Ridgemont shares management’s vision for the company. I look forward to continuing to leverage their knowledge and support.”

    K&L Gates LLP and King & Spalding LLP acted as legal advisors to Ridgemont.

    About Unitex:

    Unitex Oil and Gas (“Unitex”) is an upstream exploration and production company located in Midland, Texas, led by David Wilson. Since 2003, the company has been investing in and improving the production of conventional oil assets in the Permian Basin. www.unitexoilandgas.com

    About Ridgemont Equity Partners:

    Ridgemont Equity Partners is a Charlotte-based private equity firm that specializes in middle market buyout and growth equity investments. Since 1993, the principals of Ridgemont have invested over $3 billion in more than 110 companies. The firm focuses on investments of $25 million to $75 million in industries in which it has deep expertise, including basic industries and services, energy, healthcare, and telecommunications/media/technology.

  • Clairvest Group Exits PEER 1 Network Enterprises

    Clairvest Group Inc. has exited PEER 1 Network Enterprises Inc., selling the company to Cogeco Cable Inc. In August 2009, Clairvest invested $25.2 million in PEER 1. Under terms of the sale, Clairvest received sale proceeds of $79.5 million which took Clairvest’s total proceeds over the investment’s life to $81 million, which equates to 3.2 times invested capital and an internal rate of return of 40%.

    PRESS RELEASE

    Pursuant to a statement released on December 21, 2012, Clairvest Group Inc. CA:CVG +1.25% and Clairvest Equity Partners III Limited Partnership (“CEP III”, collectively “Clairvest”) announced today the sale of their common shares of PEER 1 Network Enterprises Inc. (“PEER 1″) to Cogeco Cable Inc. (“Cogeco Cable”).

    In August 2009, Clairvest invested $25.2 million in PEER 1. Under terms of the sale, Clairvest received sale proceeds of $79.5 million which took Clairvest’s total proceeds over the investment’s life to $81 million, which equates to 3.2 times invested capital and an internal rate of return (“IRR”) of 40%. Consistent with its beneficial ownership, Clairvest Group Inc. realized 25% of this amount, or $20.3 million, compared to the September 30th carrying value of $14.7 million.

    “When we were looking to invest in the IT infrastructure industry, PEER 1 was by far our first choice based on its financial metrics, scale, profitability and management,” said Ken Rotman, Co-CEO of Clairvest. “The financial return achieved on this investment is a tribute to the Company’s management team who has done an outstanding job at strategically growing PEER 1 to become one of the leading companies in its market.”

    Since Clairvest made its investment, PEER 1 embarked upon an aggressive capital investment program. Over the past two years, the company completed the construction of two flagship data centres in Toronto and the UK. Significant investment in human capital and physical infrastructure in the UK improved PEER 1′s market position and enabled it to purchase a UK competitor in July 2012. This acquisition moved PEER 1 to one of the market leaders in the UK.

    “We appreciate the support provided by Clairvest over the past three and a half years,” commented Fabio Banducci, CEO of PEER 1. “The addition of Clairvest to our shareholder base and board of directors was an important part of the overall upgrade to our organization.”

    “PEER 1 is a great example of an internet infrastructure provider that continues to innovate and move upmarket, thereby reaping the benefits of a high quality customer base,” said Mitch Green, Principal and IT Services domain lead for Clairvest. “PEER 1′s management does a terrific job of investing resources into projects that enhance the service offering and produce sound economic results, which make it an attractive strategic acquisition for Cogeco Cable. We wish this outstanding group continued success in the years to come,” added Mr. Green.

    About Clairvest

    Clairvest Group Inc. is a private equity management firm which invests its own capital, and that of third parties through the Clairvest Equity Partners limited partnerships, in businesses that have the potential to generate superior returns. In addition to providing financing, Clairvest contributes strategic expertise and execution ability to support the growth and development of its investee partners. Clairvest realizes value through investment returns and the eventual disposition of its investments.

    Photo courtesy of Shutterstock.

  • Insight Venture Partners Promotes Ryan Hinkle

    Insight Venture Partners has promoted Ryan Hinkle to Managing Director. Hinkle joined the firm in 2003, and has led investments in companies including PluralSight and SmartSheet.

    PRESS RELEASE
    Insight Venture Partners, a leading growth investor in global SaaS-based software, e-Commerce, Internet and data-service companies, is pleased to announce the promotion of Ryan Hinkle to Managing Director. This formalizes the leadership role Ryan has played in the past 24 months and recognizes his contribution to Insight since he joined the firm in 2003.

    “Ryan has engaged in a core investment role at Insight over the past decade and will continue to provide outstanding leadership in his new role as a managing director,” said Deven Parekh, managing director at Insight Venture Partners. “He becomes our eleventh managing director and will support the firm’s growth through our next decade.”

    Ryan has led investments globally in Internet, e-Commerce, infrastructure and application software companies. His 16 investments to date comprise flexible financing structures in growth equity, leverage buyouts, growth buyouts, and platform roll-ups, while his track record includes three exits: Argus Software (acquired by Altus Group Ltd), Football Fanatics (acquired by GSI Commerce, now eBay) and Punch! Software (acquired by Navarre Corporation).

    In 2012, Ryan invested in three companies: Branding Brand (a mobile applications platform for retailers), PluralSight (high-quality online training for hardcore technology developers), and SmartSheet (a SaaS-based project management and collaboration application). These investments join Ryan’s existing investments in AdColony, ECi Solutions and Ozsale, where he is a member of the Board of Directors. Ryan also has worked on sourcing and investing in Chegg, Fanatics, Hayneedle, Kony Solutions, Newegg, Syncsort and Twitter. Ryan works closely with the executives at these companies and has stepped in as deputy CFO on several occasions.

    At Insight, Ryan is a key manager of the Analyst program, with responsibility for recruiting, training, and mentoring new team members.

    About Insight Venture Partners

    Insight Venture Partners is a leading venture capital and private equity firm investing in on-premise and SaaS-based software, e-Commerce, Internet and data-services companies. Founded in 1995, Insight has raised more than $5 billion and made more than 150 investments worldwide. Our mission is to find, fund and work successfully with visionary executives who are driving change in their industries. We provide management with practical, hands-on growth expertise to foster their long-term success and commit to supporting organic and inorganic growth.

  • Meet… The Replacer

    1970 Dodge Challenger

    Video games are one of the best places to showcase cars, both new and old. So when this ad for “Call of Duty: Black Ops II” starring Peter Stormare came out, we just had to post it. Now normally this wouldn’t qualify on an automotive site, however when you enter a 1970 Dodge Challenger and AC/DC’s thumping “Back in Black” into the mix, it then becomes a no-brainier.

    Source: Youtube.com

  • Export PDFs in a range of different formats with PDFMate PDF Converter

    Adobe’s PDF is a great format for sharing information with others, and normally you might go to considerable effort to export a particular file as a PDF document.

    Occasionally, though, you might have an existing PDF file which you’d really prefer to be in another format: HTML, plain text, images, whatever it might be. That’s when a PDF conversion tool comes in handy, and the free PDFMate PDF Converter — which claims to export your documents to EPUB, TXT, HTML, SWF and image formats, amongst others — just might be able to help.

    After a quick setup process (just be sure to choose the Custom Installation option to avoid installing a browser toolbar), PDFMate PDF Converter opens with a clean and simple interface. An “Add PDF” button enables you to add your source documents, and you can choose your output format from a toolbar. Specify the output folder, click the Convert button and simply wait for your first conversion to finish.

    One irritation you’ll spot immediately is a nag screen which pops up during every batch of conversions, unfortunately, as the authors invite you to upgrade to the Pro version (which adds export to DOC format, and the ability to specify the page range of PDFs to convert). You can dismiss this with a click, but it still becomes quickly annoying.

    And, a little oddly, there’s no option to immediately view an exported file when the conversion is complete. Instead you must click a button which opens the output folder, then double-click one of the files to see how it looks.

    Once you’ve figured this out, though, the results often work well. HTML output looks particularly good, with the program generating a page which looks much like a regular PDF viewer (you get Next and Back buttons, direct links to each page, page zoom options and more). And the SWF export option also delivered generally reliable conversions in our tests, although the core document viewer was a little simpler.

    And there was a nice bonus feature in the program’s ability to shrink bulky PDFs, where it would take each consecutive set of two (or four) pages in the source document, and reduce them to a single page in the destination.

    Not everything works so smoothly, unfortunately. Plain text export seemed extremely unreliable; it might work for very simple documents, but in our experience seemed to be rubbish for files of any complexity. And EPUB export was even worse, with various viewers complaining of problems with our finished documents (and that’s if they could display them at all).

    And we did have occasional issues even with the more successful formats, as for instance text or image from our source PDF would appear in the wrong place on an HTML page.

    Is PDFMate PDF Converter worth your time, then? If you’re using it a lot then the nag screen may become a major irritation. And its EPUB and TXT conversions aren’t something we’d recommend.

    If you’ll use the HTML or SWF exports then it’s a different story, though, as they mostly worked well. While the ability to shrink PDF pages is also useful. And that’s probably enough to justify taking the program for a spin on your own PC, just to see how it works with your own source documents.

  • The new Office has launched — let the advertising blitz begin

    We spent a lot of time dissecting Microsoft’s Office launch yesterday and one thing was clear.  The software giant wants you to move away from the desktop and into the cloud with Office 365 Home Premium. Something which I for one do not think is a bad idea. To prove where its priorities lie, Microsoft has unveiled its very first video ad for the new suites and predictably it’s all about Office 365.

    The 30-second length of the clip indicates that it is likely headed for TV, although I personally have not seen it there yet. It does nothing to show customers the actual apps like Word, Excel, and the rest. Instead it focuses on more of the Metro Modern UI aspects, and the suite’s ability to be available for users at all times, wherever they are.

    It is not flashy, like the Surface ads. There are no dancing hipsters here. Instead, the commercial is more family oriented, focusing on how the suite can be used on devices like tablets and notebooks, and in locations such as at home, in the car, and in the library.

    The ad also makes sure to let users know that 365 contains the entire Office suite of apps and that the price is reasonable — just $99 per year for use on five PC’s.

    This ad, the first of many no doubt, is much less in-your-face than the Surface and Windows 8 commercials, but that does not necessarily mean that Microsoft won’t make some like those. However, given that Office is thought of as more of a “business” tool, the overall tone will probably remain more sober and appropriate.

  • Actis Adds Two

    Actis has appointed Arjun Oberoi as global healthcare sector head, and Ivy Santoso as Indonesian country head, the firm announced. Santoso spent over ten years as Indonesian country head for Avenue Capital, a New York based investor. Most recently, Oberoi was Head of International Strategy & Business Development at Stryker Corporation.


    PRESS RELEASE
    Actis, the pan-emerging markets private equity firm, today announced the appointment of Arjun Oberoi as global healthcare sector head and Ivy Santoso as Indonesian country head.

    Arjun will head Actis’s global healthcare sector, an area of increasing interest for the firm as an ageing population, changes in lifestyle, increasing income, and better insurance coverage continue to drive demand for high quality medical products and services across emerging markets. Actis’s current healthcare investments include hospital chain – Sterling Add-Life, clinical research organisation – Veeda, healthcare IT provider – Anthelio, and the largest local player in the Chinese endoscopy consumable sector, Nanjing Micro-Tech.

    Ivy will be Actis country manager for Indonesia, a country now seen as a strategic location for private equity investment, boasting some of the most impressive growth rates in the region and a stable government and regulatory system.
    Arjun Oberoi trained and worked as a physician in Edinburgh and London before joining McKinsey’s healthcare practice in New York. He subsequently joined Pfizer in the US and held positions in business development and strategic planning in Europe and Asia Pacific before moving to Beijing to run one of Pfizer China’s business units. In 2008, Arjun relocated to Singapore to head Sanofi’s business development efforts in Asia Pacific. Most recently, Arjun was Head of International Strategy & Business Development at Stryker Corporation.

    Commenting on Arjun’s appointment, Peter Schmid, Head of Private Equity at Actis said, “Arjun joins us with an impressive career spanning a number of countries. With a strong track record of innovative business development across a range of healthcare sub-sectors, including stints in big pharma and consultancy, he will be a great addition to our talented group of private equity healthcare specialists.”

    Arjun said: “Healthcare is undergoing a dramatic shift in emerging economies across the globe with rapid infrastructure development coupled with an expanding middle class seeking access to higher quality products and services. Actis has a strong reputation in this sector with historic investments such as Glenmark Pharmaceuticals and a raft of current investment opportunities. I see huge potential for healthcare in the emerging markets and am looking forward to working with my new colleagues to continue the build-out of this sector.”

    Ivy Santoso spent over ten years as Indonesian country head for Avenue Capital, a New York based investor. During this time she has built up an extensive track record both in executing transactions and in portfolio management. Ivy began her career as an accountant for Adindo Foresta Indonesia before working in banking and stockbroking.

    Commenting on Ivy’s arrival, Actis’s Head of China and South East Asia, Meng Ann Lim said, “With economic growth running around 6%, we are optimistic about the prospects opening up in Indonesia. Ivy brings to Actis her long experience of deal-doing in the region, along with her impressive network of contacts. We are thrilled to have Ivy on board and she will play a key role in building Actis’s success in this region.”

    Ivy Santoso said: “Actis is a highly respected firm in South East Asia; it is able to offer a tremendous wealth of knowledge from other emerging markets and draw on a long track record of successful investments. I have great confidence in Indonesia and see exciting opportunities for Actis in this region.”

    Notes to Editors

    Arjun and Ivy join Actis at Director level and have taken up their posts with immediate effect
    In January 2013, Actis’s Head of China and South East Asia, Meng Ann Lim relocated from Beijing to Singapore
    Hi-res photographs of Arjun and Ivy are available on request
    About Actis
    Actis invests exclusively in emerging markets with a growing portfolio of investments in Asia, Africa and Latin America; it currently has US$5.2bn funds under management. Combining the expertise of over 120 investment professionals on the ground in ten countries, Actis identifies investment opportunities in three areas: private equity, energy and real estate. Actis is proud to actively and positively grow the value of those companies in which it invests and in so doing contribute to broader society.

  • Why Running a Family Doesn’t Help You Run a Business

    Gender barriers are being broken everywhere, but a big one remains: Successful re-entry for stay-at-home moms who have opted out of the paid work force to take care of their children.

    In theory, those years of family work at home could look great on a resume. Consider the skills required: setting priorities, training others, organizing complex logistics and schedules, and using interpersonal sensitivity to handle difficult people problems. Indeed, some advocates have argued that the time women with advanced degrees spend out of the workplace managing a family is valuable experience for managing back in the paid work world.

    I agree it is valuable experience — if the paid job one returns to involves managing a handful of people who are vulnerable and can’t leave. Otherwise, the operating skills for family manager are nothing like the qualifications for workplace professionals.

    Don’t get me wrong. I encourage flexible careers that permit multiple choices over a lifetime, with employers who value skills over lockstep career advancement. If women (or men) choose to put their paid work careers on hold while raising children and nurturing a household, I want to see them succeed at reentry and use their talents to the fullest. But myths about the value of their experience as full-time stay-at-home parents are not going to help them succeed in the business world, and some family habits must be unlearned.

    Family managers are accustomed to being surrounded mostly by people who are much younger than they are, know little or nothing, and are clearly dependent, unable to function fully on their own. Spending quality time with people with limited vocabularies doesn’t hone complex strategic thinking. But in business workplaces, managers generally need to hire “up,” finding people who are as good or better than they are at significant tasks. Wooing people with career aspirations, then motivating, assessing, and retaining them, is totally different than getting family work done.

    Furthermore, family managers who stay home might have a protector and defender in their spouse. But family managers used to having a powerful ally intervene in family conflicts on their behalf won’t benefit from that kind of partnership in most offices. Workplace professionals must stand on their own, something that family managers can forget.

    Family managers operate in a world defined by personal relationships and personal favors. Rightfully, loyalty, caring, and deep emotional bonds are important. But in the paid workplace, even the most compassionate ones, objective measurable goals are key. Sentiment can’t substitute for performance.

    Carrying over the habits learned from years as a family manager can impede success in subsequent paid careers. For example, a professional with an MBA who went back to the paid workforce failed to rise to the significant responsibilities she craved and didn’t last in that first job. She made classic family manager mistakes: She hired people just like her children, one of them a friend of her son’s, and ignored their lack of qualifications, figuring she could train them. She thought people would do favors for her because they liked her, regardless of results. For marketing, she made lunch dates, not strategic plans.

    Structural and institutional norms also impede successful reentry, such as rigid rules requiring people to be all-in the paid workplace or all-out. That only widens the gap between family managers and workplace professionals. This gap disadvantages educated women who might never catch up with their male peers and causes talent to atrophy at a time when society needs every bit of it.

    Creative new mechanisms are required to help family managers keep professional skills polished while focused on their children, especially in rapidly changing fields. Former employers who might want them back can offer access to their online training and live events, as well as offering occasional doable-at-home project work. Colleges and universities can target their growing online education arsenal to this segment. Skilled professionals available for part-time assignments can pool together; there are already consulting businesses that operate according to this model. Community centers offering children’s programs can experiment with parallel adult learning exchanges in which family managers talk about their professional fields.

    While growing a family is different from succeeding in business, it should be easier to transition between these worlds. Planning for reentry is the next form of investing in the future.

  • Mooreland Partners Advises on Teledyne Deal

    Mooreland Partners served as financial advisor to RESON A/S on its sale to Teledyne Technologies Inc., the advisory firm announced. The deal is expected to close during the first quarter.

    PRESS RELEASE
    Mooreland Partners is pleased to announce that it acted as the exclusive financial advisor to RESON A/S (“RESON”) on its sale to Teledyne Technologies Inc. (NYSE:TDY) (“Teledyne”). The closing of the transaction, which is subject to customary conditions, is anticipated to occur in the first quarter of 2013.

    With over 30 years of experience and approximately 1,400 RESON echosounders sold worldwide, RESON is a leading provider of multibeam sonar systems and specialty acoustic sensors for hydrography, global marine infrastructure and offshore energy operations. RESON’s multibeam sonar systems range from portable high-resolution shallow water systems used on autonomous underwater vehicles (AUVs) to full ocean depth vessel mounted oceanographic systems.

    “RESON ideally complements both our marine instrumentation and digital imaging businesses, and will represent our third acquisition in the last twelve months focused on three dimensional imaging,” said Robert Mehrabian, Chairman, President and Chief Executive Officer of Teledyne. “With RESON, Teledyne will possess the ability to provide detailed 3D imaging solutions, ranging from full ocean depth survey, shallow water and coastal zone imaging, terrestrial and airborne mapping, and even deep space science applications.”

    RESON has its corporate headquarters in Slangerup, Denmark, with subsidiaries in the United Kingdom, the United States, the Netherlands and Singapore. RESON received funding from, among others, Maj Invest Equity, DKA Capital and Dansk Erhvervsinvestering.

    This is Mooreland’s 27th announced transaction since January 2012 and is another example of Mooreland’s presence as a leading M&A advisor in industrial technology and electronics.

    ABOUT MOORELAND PARTNERS: Mooreland Partners is the most active international technology-focused M&A advisory firm, serving clients from its offices in New York, Silicon Valley and London. In 2012, Mooreland Partners advised on a total of 26 transactions across all major technology sectors including communications and digital media, enterprise software and services, semiconductors and electronics. Founded in 2002, Mooreland Partners is an integrated global firm, 100% owned by its partners, with a team of over 40 investment banking professionals.

  • Lightbank Opens an Office in New York

    Chicago-based venture firm Lightbank is opening an office in New York, part of a plan to expand the number of investments in companies on the East Coast. Lightbank principal Vicki Levine will head up activities at the firm’s New York office.

    PRESS RELEASE
    Lightbank, a venture capital firm founded by entrepreneurs Brad Keywell and Eric Lefkofsky, today announced the opening of its second location in the Flatiron District of New York. Lightbank’s New York presence will enable the firm to better serve and grow its portfolio in New York and the East Coast, where it will join a community full of promising tech startups.

    “New York is an active and diverse tech hub that has produced many remarkable companies, and we look forward to collaborating with great entrepreneurs as they grow their businesses,” said Brad Keywell, co-founder of Lightbank. “The New York tech community has deep roots in spaces like ecommerce and media that align with our expertise. By being on the ground, we strengthen our ability to help emerging tech startups develop and scale their businesses.”

    Lightbank plans to grow the number of investments into companies based in New York and the East Coast region in the coming years, reflective of the increasing amount of venture capital flowing into the region’s startups. The firm will continue to focus on early-stage tech companies, with areas of particular interest including ecommerce, media and health.

    Since 2010, Lightbank has invested in more than 50 early-stage tech startups across the country, with nearly 20 percent of its portfolio located on the East Coast, including Frank & Oak, Contently, Centzy, Bevel, Ovuline and OnSwipe. Additionally, Lightbank’s Keywell and Lefkofsky have co-founded New York-based MediaOcean and InnerWorkings, both of which have a strong presence in New York.

    Lightbank principal Vicki Levine will head up activities at the firm’s New York office, with active participation from the firm’s partners.

    “The New York technology community surrounds its entrepreneurs with resources beyond just capital,” said Keywell. “There is the government’s support, collaboration from large organizations, many world-class conferences and events, hackathons, as well as an increasing number of co-working spaces and accelerators, which all work together to create an ecosystem that we are excited to join.”

    About Lightbank:

    Lightbank is a Chicago-based fund focused on early-stage technology companies. Founded by Eric Lefkofsky and Brad Keywell, who are founders of Groupon, MediaBank, InnerWorkings (NASDAQ:INWK) and Echo Global Logistics (NASDAQ:ECHO), Lightbank not only makes investments of capital, but also takes an active hands-on role in helping entrepreneurs ensure their early- and mid-stage businesses grow and succeed.

  • JLL Partners Buys BioClinica, JLL Partners

    JLL Partners has acquired BioClinica, a provider of clinical trial management, and CoreLab Partners Inc., a provider of medical imaging and cardiac safety services. The firm will pay $7.25 a share for BioClinica, which results in an equity value of approximately $123 million. Specific terms of the CoreLab deal were not released.

    PRESS RELEASE
    BioClinica(R), Inc. BIOC -0.33% , a leading global provider of clinical trial management solutions, today announced that it has entered into a definitive agreement to be acquired by a holding company controlled by JLL Partners, Inc., a leading private equity firm.

    Simultaneously, JLL Partners announced that it has reached a definitive agreement to acquire CoreLab Partners, Inc., a provider of medical imaging solutions and cardiac safety services based in Princeton, N.J.

    Following the proposed acquisitions, BioClinica and CoreLab Partners will be merged to create a leading provider of medical imaging services and best-in-class eClinical solutions for clinical trials. Ampersand Capital Partners, which is the majority owner of CoreLab Partners, will also be a significant investor in the combined company.

    Mark L. Weinstein, currently President and CEO of BioClinica, will lead the combined company.

    Dan Agroskin, Managing Director of JLL Partners said, “We are excited about the tremendous promise of this business combination given the strong fundamentals of each company and the overall industry. We will conservatively capitalize the combined business and look forward to supporting its continued growth.”

    Terms of the agreement
    Under terms of the BioClinica agreement, the holding company will commence a cash tender offer to purchase all of BioClinica’s common stock at an offer price of $7.25 a share, which results in an equity value of approximately $123 million. Any BioClinica shares not tendered in the offer will be acquired in a second-step merger at the same cash price as paid in the tender offer. The purchase price represents a premium of 23.2% over its average closing price for the 90 days ended January 29, 2013, and 28.7% over the average price for the 52-week period ended January 29, 2013. BioClinica’s Board of Directors has unanimously approved the definitive merger agreement and the transaction contemplated hereby.

    The transaction will be financed by an equity commitment from JLL Partners and Ampersand Capital. It is subject to a valid tender of a majority of BioClinica’s common stock, regulatory approvals, and other customary conditions. It is not subject to any financing conditions, nor is it subject to the closing of the CoreLab Partners transaction. The parties expect the tender offer to close before the end of this year’s first quarter.

    David E. Nowicki, DMD, Chairman of the Board of Directors of BioClinica and Chairman of its Strategic Committee said, “After careful and thorough analysis, together with our independent advisors, the Strategic Committee of our Board has endorsed this transaction as being in the best interest of the company and our shareholders. We are pleased that the transaction appropriately recognizes the value of BioClinica as one of the leaders in providing clinical trial management solutions to the pharmaceutical and medical device industries, while providing our shareholders with immediate cash liquidity for their investment in BioClinica.”

    Mark L. Weinstein added, “We are pleased to announce this transaction and look forward to merging our company with CoreLab Partners and working with JLL Partners and Ampersand Capital to continue to expand our business. The combined platform significantly enhances our global scale, scientific expertise, and our prospects for accelerating the pace of innovation for customers. We are also delighted that this transaction comes at a time when our industry is poised for growth in demand for imaging and eClinical solutions.”

    Following completion of its proposed acquisition, BioClinica will become a privately held company and its stock will no longer trade on the NASDAQ stock exchange. The proposed acquisition of CoreLab Partners is contingent on the closing of the BioClinica transaction. Both acquisitions are expected to close concurrently.

    Michael Woehler, Ph.D., CEO of CoreLab Partners said, “We’re excited about the prospect of working with BioClinica, which has a great track record and reputation as a leader in this industry. We look forward to contributing our deep scientific expertise, our diverse customer base, and our successful clinical trial experience. Together, we will offer our customers best-in-class solutions at an industry-leading standard of quality and service.”

    About BioClinica, Inc.

    BioClinica, Inc. is a leading global provider of integrated, technology-enhanced clinical trial management solutions. BioClinica supports pharmaceutical and medical device innovation with imaging core lab, internet image transport, electronic data capture, interactive voice and web response, clinical trial management, and clinical supply chain forecasting and optimization solutions. BioClinica solutions maximize efficiency and manageability throughout all phases of the clinical trial process. With over 20 years of experience and more than 2,000 successful trials to date, BioClinica has supported the clinical development of many new medicines from early phase trials through final approval. The company operates state-of-the-art, regulatory body-compliant imaging core labs on two continents, and supports worldwide eClinical and data management services from offices in the United States, Europe and Asia. For more information, please visit http://www.bioclinica.com

    About CoreLab Partners, Inc.

    Built on over 15+ years of cumulative clinical research experience, CoreLab Partners offers the worldwide biopharmaceutical industry unparalleled service quality, dedicated global capabilities and advanced technologies, with 100% on-time delivery of all projects. CoreLab Partners also provides clinical trial sponsors with best-in-class centralized cardiac safety and efficacy services, and independent medical image assessment solutions–all designed to facilitate successful new drug development in the pharmaceutical, biotechnology and medical device market sectors. CoreLab Partners’ services include medical image management, interpretation, and response assessment for clinical trials, with a particular focus on the oncology therapeutic area. CoreLab Partners also provides regulatory support and digital image submission, as well as cost-effective cardiac safety assessments for development programs, support for clinical studies, and equipment rental. The company also offers worldwide ambulatory blood pressure monitoring services, digital ECG services, and cardiac safety services. For more information, please visit http://www.corelabpartners.com

    About JLL Partners, Inc.

    JLL Partners is a leading New York-based private equity investment firm with approximately $4 billion of capital under management. JLL Partner’s investment philosophy is to partner with outstanding management teams and invest with them in companies that they can continue to grow into market leaders. JLL Partners has invested in a variety of industries, with special focus on healthcare services, financial services and business services. For more information, please visit www.jllpartners.com .

    About Ampersand Capital Partners

    Ampersand Capital Partners, based in Boston, is a leading private equity firm that focuses on middle market growth equity investments in the Healthcare sector. Ampersand Capital Partners leverages its unique blend of private equity and operating experience to build value and drive long-term performance alongside its portfolio company management teams. To learn more about Ampersand Capital Partners, please visit http://www.ampersandcapital.com .

    Excel Partners is acting as financial advisor to BioClinica, and Morgan, Lewis & Bockius, LLP is acting as BioClinica’s legal counsel.

    Robert W. Baird is acting as CoreLab Partners’ financial advisor and Edwards, Wildman Palmer LLP is acting as legal counsel to CoreLab Partners and Ampersand Capital Partners.

    Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal counsel to JLL Partners.

    Important information about the tender offer

    This announcement and the description contained herein are for informational purposes only and are not an offer to purchase or a solicitation of an offer to sell securities of BioClinica, Inc. The tender offer described herein has not yet been commenced. At the time the tender offer is commenced, affiliates of JLL Partners intend to file a tender offer statement on a Schedule TO containing an offer to purchase, a letter of transmittal and other related documents with the Securities and Exchange Commission. At the time the tender offer is commenced, BioClinica, Inc. intends to file with the Securities and Exchange Commission a solicitation/recommendation statement on Schedule 14D-9 and, if required, will, file a proxy statement or information statement with the Securities and Exchange Commission in connection with the merger, the second step of the transaction, at a later date. Such documents will be mailed to stockholders of record and will also be made available for distribution to beneficial owners of common stock of BioClinica, Inc. The solicitation of offers to buy common stock of BioClinica will only be made pursuant to the offer to purchase, the letter of transmittal and related documents. Stockholders are advised to read the offer to purchase and the letter of transmittal, the solicitation/recommendation statement, the proxy statement, the information statement and all related documents, if and when such documents are filed and become available, as they will contain important information about the tender offer and proposed merger. Stockholders can obtain these documents when they are filed and become available free of charge from the Securities and Exchange Commission’s website at http://www.sec.gov , or from the information agent JLL selects. In addition, copies of the solicitation/recommendation statement, the proxy statement and other filings containing information about BioClinica, Inc., the tender offer and the merger may be obtained, if and when available, without charge, by directing a request to BioClinica, Inc. Attention: Ted Kaminer, Chief Financial Officer, at 826 Newtown-Yardley Rd., Newtown, PA 18940, or on BioClinica’s corporate website at http://www.bioclinica.com .

    Forward-looking statements

    Certain statements made in this press release are “forward-looking statements” intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may be identified by, among other things, the use of forward-looking terminology such as “believes”, “expects”, “may”, “should” or “anticipates” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. Such forward-looking statements include the decision by BioClinica, Inc. to enter into an agreement to be acquired by the holding company controlled by JLL Partners, the ability of BioClinica, Inc. and the holding company controlled by JLL Partners to complete the transaction contemplated by the definitive agreement, including the parties’ ability to satisfy the conditions set forth in the merger agreement, and the possibility of any termination of the definitive agreement. The forward-looking statements contained in this press release are based on our current expectations, and those made at other times will be based on our expectations when the statements are made. Factors that could cause or contribute to such differences include, but are not limited to, the expected timetable for completing the proposed transaction; the risk and uncertainty in connection with a strategic alternative process; financial results; the demand for our services and technologies; growing recognition for the use of independent medical image review services; trends toward the outsourcing of imaging services in clinical trials; realized return from our marketing efforts; increased use of digital medical images in clinical trials; integration of our acquired companies and businesses; expansion into new business segments; the success of any potential acquisitions and the integration of current acquisitions; and the level of our backlog are examples of such forward-looking statements; the timing of revenues due to the variability in size, scope and duration of projects; estimates made by management with respect to our critical accounting policies; regulatory delays; clinical study results which lead to reductions or cancellations of projects and other factors, including general economic conditions and regulatory developments, not within our control. Further information can be found in the risk factors contained in the Annual Report of BioClinica, Inc. on Form 10-K for the year ended December 31, 2011 and most recent filings. BioClinica, Inc. does not undertake to update the disclosures made herein, and you are urged to read our filings with the Securities and Exchange Commission.

  • Reuters – Kinder Morgan Pays $3.22B for Copano Energy

    Kinder Morgan Energy Partners LP will buy natural gas pipeline operator Copano Energy LLC for $3.22 billion to tap into growing demand for infrastructure to transport vast supplies from the shale fields of Texas and Oklahoma. Private equity firm TPG Capital, Copano’s top shareholder with a stake of more than 14 percent, will get a 41 percent premium to its $300 million investment made in 2010, if the deal goes through, Reuters reported.

    (Reuters) – Kinder Morgan Energy Partners LP will buy natural gas pipeline operator Copano Energy LLC for $3.22 billion to tap into growing demand for infrastructure to transport vast supplies from the shale fields of Texas and Oklahoma.

    Private equity firm TPG Capital, Copano’s top shareholder with a stake of more than 14 percent, will get a 41 percent premium to its $300 million investment made in 2010, if the deal goes through.

    The deal is the latest in a flurry of multi-billion-dollar takeovers in the U.S. pipeline industry over the past two years as companies rush to cash in on a shortage of pipelines to move gas and gas liquids such as ethane and propane.

    The oversupply of gas and gas liquids, largely due to the advent of new drilling methods such as hydraulic fracturing, has also hurt prices.

    Many companies have announced plans to build new pipelines, but stricter regulations and environmental concerns have delayed the completion of several projects.

    “Copano is already executing on a substantial backlog of expansion projects for which it has secured customer commitments and is exploring a significant amount of projects incremental to these,” said Kinder Morgan Chief Executive Richard Kinder.

    Kinder is also the chief executive and co-founder of Kinder Morgan Inc, which sold its Tennessee Gas Pipeline and a 50 percent stake in El Paso Natural Gas pipeline to Kinder Morgan Energy for about $6.22 billion in August.

    Kinder Morgan in May won U.S. approval for its $23 billion acquisition of rival El Paso Corp.

    Kinder Morgan Energy said late on Tuesday it would offer 0.4563 of its unit for each share of Copano. The ratio translates into a price of $40.91 per share – a 23.5 percent premium to Copano’s Tuesday close of $33.13.

    Thomson Reuters StarMine’s intrinsic valuation model suggests Copano should be trading at $22.44. The models take into account analyst estimates for growth, usually over five years, and then model the typical growth trajectory of companies over a longer period of time.

    Shares of Houston-based Kinder Morgan Energy closed at $89.66 on Tuesday on the New York Stock Exchange.

    Including debt, the total deal value is about $5 billion, Kinder Morgan Energy said.

    “As a result of this acquisition, we will be able to pursue incremental development in the Eagle Ford Shale play in south Texas, gain entry into the Barnett Shale Combo in north Texas and the Mississippi Lime and Woodford Shales in Oklahoma,” CEO Kinder said.

    Copano owns an interest in or operates about 6,900 miles of pipelines with capacity of 2.7 billion cubic feet per day (bcf/d) of gas and nine processing plants with more than 1 bcf/d capacity.

    Kinder Morgan Energy owns an interest in or runs about 46,000 miles of pipelines that transport gas, gasoline, crude oil and other products, while its 180 terminals store petroleum products, chemicals and such other products.

    The acquisition will add at least 10 cents per unit to Kinder Morgan Energy’s earnings for at least the next five years beginning 2014, the company said.

    Kinder Morgan Energy said TPG, to which Copano had sold 10.33 million convertible preferred units at $29.05 each, has agreed to support the deal, which is expected to close in the third quarter.

    Kinder Morgan Energy expects to retain the “vast majority” of 415 people employed by Copano, which was founded in 1992 by John Eckel Jr, who served as its chief executive until his death in November 2009.

    Citi advised Kinder Morgan Energy, while Weil Gotshal & Manges LLP and Bracewell & Giuliani acted as legal counsel. Barclays Capital Inc and Jefferies & Co Inc were the financial advisers to Copano, with Wachtell, Lipton, Rosen & Katz acting as its legal counsel. (By Krishna N Das)

  • The 787’s Problems Run Deeper Than Outsourcing

    The 787 Dreamliner was supposed to be a big jump forward for Boeing — notably, the first plane to be made entirely of composites rather than aluminum. It consumes 20% less fuel than an equivalent 767; which, given today’s increasing fuel prices and airlines’ diminishing profit margins, should make it an extremely desirable aircraft.

    Unfortunately, things haven’t quite worked out as planned.

    While the first 787 was originally scheduled to be delivered back in 2008, a string of delays and cost overruns meant that deliveries didn’t start until 2011. Boeing looked to have turned the corner with the 787 once deliveries had started, but since launch it has been plagued with a number of high-profile problems — fuel leaks, smoke in the cabin, and fires. The troubled plane has been grounded as global regulators investigate whether it’s safe to fly.

    Now, it is true that problems like these are always a feature of new plane launches. But the extent to which the 787 has been troubled both in gestation and post-launch suggests that something more is at work. Boeing undertook one of the most extensive outsourcing campaigns that it has ever attempted in its history. That decision has received a lot of press coverage, and the common wisdom is coalescing around this as a cause of the problems.

    But Boeing is no stranger to subcontracting. And while outsourcing can certainly lead to problems, I’m not convinced it’s the cause of these problems. Outsourcing leads to business model risk — you open the door to outsourcing your profits (in fact, a 2001 Boeing paper that is incredibly prescient and worth the time to read identified exactly this problem). But this isn’t the problem that the 787 is suffering from. At least not yet.

    Rather, the issues the plane has been facing have much more to do with Boeing’s decision to treat the design and production of such a radically new and different aircraft as a modular system so early in its development.

    In the creation of any truly new product or product category, it is almost invariably a big advantage to start out as integrated as possible. Why? Well, put simply, the more elements of the design that are under your control, the more effectively you’re able to radically change the design of a product — you give your engineers more degrees of freedom. Similarly, being integrated means you don’t have to understand what all the interdependencies are going to be between the components in a product that you haven’t created yet (which, obviously, is pretty hard to do). And, as a result of that, you don’t need to ask suppliers to contract over interconnects that haven’t been created yet, either. Instead, you can put employees together of different disciplines and tell them to solve the problems together. Many of the problems they will encounter would not have been possible to anticipate; but that’s ok, because they’re not under contract to build a component — they’ve been employed to solve a problem. Their primary focus is on what the optimal solution is, and if that means changing multiple elements of the design, then they’re not fighting a whole set of organizational incentives that discourage them from doing it.

    Conversely, if you’re trying to modularize something — particularly if you’re trying to do it across organizational boundaries — you want to be absolutely sure that you know how all the pieces optimally work together, so everyone can just focus on their piece of the puzzle. If you’ve done it too soon and tried to modularize parts of an unsolved puzzle across suppliers, then each time one of those unanticipated problems or interdependencies arises, you have to cross corporate boundaries to make the necessary changes — changes which could dramatically impact the P&L of a supplier. Lawyers will probably need to get involved. So too might the other suppliers, who could quite possibly be required to change the design of their component, also (chances are, you’ve already contracted with them, too). The whole thing snowballs.

    Historically, Boeing understood that, and had worked with its subcontractors on that basis. If it was going to rely on them, it would provide them with detailed blueprints of the parts that were required — after Boeing had already created them. That, in turn, meant that Boeing had to design all the relevant pieces of the puzzle itself, first. But with the 787, it appears that Boeing tried a very different approach: rather than having the puzzle solved and asking the suppliers to provide a defined puzzle piece, they asked suppliers to create their own blueprints for parts. The puzzle hadn’t been properly solved when Boeing asked suppliers for the pieces. It should come as little surprise then, that as the components came back from far-flung suppliers, for the first plane ever made of composite materials… those parts didn’t all fit together. Time and cost blew out accordingly.

    It’s easy to blame the outsourcing. But, in this instance, it wasn’t so much the outsourcing, as it was the decision to modularize a complicated problem too soon.

    Boeing’s experience bears comparing to another company, one which has mastered the art of managing design as an integrated process, while still utilizing outsourcing — Apple. Apple doesn’t manufacture their own products; but anyone who has used an Apple device can tell you that having someone else doing the manufacturing hasn’t compromised the quality of the product at all. But Apple treats both the design process and its suppliers very differently to the way that Boeing does — or at least did, in the case of the 787.

    Two key questions remain:

    Has Boeing learned from the mistake? Recent comments from their leadership suggest that they may have: Jim Albaugh, the company’s commercial aviation chief, noted that “in hindsight, we spent a lot more money in trying to recover than we ever would have spent if we tried to keep many of the key technologies closer to Boeing. The pendulum swung too far.” The company’s Chief Executive, Jim McNerney, said that he “would draw the lines in a different place” — but don’t mistake that for ditching the outsourcing, because he also said that he “would still have the same supplier/partner concept.”

    And why did Boeing decide to do this in the first place? The New Yorker provides some context on this question — and it relates to McDonnell Douglas. While ostensibly Boeing took over McDonnell Douglas, what really happened was more akin to a reverse takeover — McDonnell Douglas took over Boeing. Several of the top positions in the merged Boeing were assigned to executives who had previously worked in St. Louis, where the heritage of McDonnell Aircraft had been one of fighter and attack aircraft for the military. The thing about these Government contracts is that they are paid as development proceeds. This is entirely different — and a lot less risky — than the development model for a traditional commercial airliner, where an aerospace company needs to find all the capital. My hypothesis is that McDonnell’s mindset from its defense work — minimizing the amount of capital put at risk during R&D — was applied to the 787.

    They didn’t want to pay full price for the Dreamliner’s development, so, they didn’t — or at least, that’s what they thought. But as Henry Ford warned almost a century earlier: if you need a machine and don’t buy it, then you will ultimately find that you have paid for it and don’t have it.