DSC Blog

Net Working Capital Requirements

2011-02-07T07:22:00.001-05:00

When acquiring/selling a business, it is customary for the buyer and seller to agree to a certain level of net working capital that must be delivered at the consummation of the transaction (“Closing”). This is a necessary agreement for both parties and one that often causes confusion, so we thought it would be valuable to provide some commentary. Barron’s Dictionary of Finance and Investment

How much more is the Organic Aisle?

2010-02-05T14:23:00.003-05:00

Our nation’s continued shift to organic food is an exciting trend that Duane Street Capital has been following and thinking about for some time. The organic food industry has been growing at an 18+% CAGR for the past 11 years, but still accounts for less than 4% of American foods spend (see chart below). With a market size approaching $25B (according to the Organic Trade Association), the space

DSC's Evolving View of the Future of Publishing

2010-01-28T21:33:00.005-05:00

For the past week and half, I have been diving into the world of digital publishing. Basically, I bought a Kindle and got intrigued. Reading e-books and observing the e-reader buzz at the CES piqued my interest as an investor. Unfortunately, trying to develop a thesis on digital publishing seems to have spilled over into a broader media thesis. In reflecting on a few weeks of conversations and

We Want to hear from You

2010-01-09T12:52:00.005-05:00

In building relationships with financial intermediaries, I find that bankers will regularly ask how often to call on DSC (or email). Obviously when representing the perfect company, a banker has no hesitation in calling PE investors, but the question is slightly different when developing an investment case, industry thesis, or buyer lists for a niche business. Nobody can be an expert on all

Healthcare Investing Perspectives From Cedars-Sinai Trip

2009-12-07T15:42:00.013-05:00

A few weeks ago Andrew and I went to California to visit with one of our Advisory Partners, Tom Gordon. As the head of the Cedars-Sinai Medical Group, Tom gave us unparalleled access to the hospital system. We were able to meet with some of the best medical practitioners and healthcare minds in the country. Andrew

Be true to your school (The Deal Magazine)

2009-11-30T15:56:00.000-05:00

p, pre {margin: 0;} input.blogger-ie-hack {position: absolute; left: -9999px;}hr.more {border-width:1px 0 0 0; border-style:dashed; border-color: #666; height: 8px; background:#ddd} Interesting article on For-Profit Education landscape - Be true to your school (The Deal Magazine)

The Infamous Re-Trade

2009-11-29T15:56:00.001-05:00

Duane Street Capital (“DSC”) recently participated in a limited auction and, alas, lost to a higher bid. While this is a common reality of the private equity business, sometimes losing outcomes result from adherence to a higher ethical standard than one’s competition. Having gone through a difficult period for investment, many professionals are facing increased pressure to deploy capital as they

Heathcare Spending Fact

2009-09-27T16:02:00.001-04:00

p, pre {margin: 0;} input.blogger-ie-hack {position: absolute; left: -9999px;}hr.more {border-width:1px 0 0 0; border-style:dashed; border-color: #666; height: 8px; background:#ddd} Interesting Fact: McKinsey reports that the US spends more on Healthcare $1.9 trillion than it does on food $1.2 trillion...

Best of the Best... Teasers

2009-09-27T15:59:00.001-04:00

p, pre {margin: 0;} input.blogger-ie-hack {position: absolute; left: -9999px;}hr.more {border-width:1px 0 0 0; border-style:dashed; border-color: #666; height: 8px; background:#ddd} As Private Equity investors, we have the pleasure of learning about a multitude of different businesses; from legal finance companies to family-run gun manufacturers. Often we are introduced to these companies

Pet (Companion Animal) Industry

2009-09-27T15:28:00.002-04:00

The population of dogs and cats in the United States is over 160 million, which penetrates close to 60% of US households. The pet population has grown more than twice as fast as the human population over the past 10 years and annual spending on the companion animal industry has grown at a 7% CAGR since 1994 compared to 5% consumer spending growth in the US during the same period. We believe that

For Profit Education

2009-09-27T15:27:00.006-04:00

As of 2008, BMO Capital Markets estimated the For-Profit-Education industry to have annual revenues of $108 billion or less than 10% of the $1.2 trillion spent on the broader Education Industry. The face of education has been changing over the past 10 years due, in large part, to government funding programs, third party funding options, and new business models for education delivery. Technology

Healthcare

2009-09-27T15:27:00.004-04:00

The US spends $1.9 trillion in the healthcare industry annually or 16% of GDP compared with 5.2% of GDP in 1960. Healthcare spending has been growing rapidly and is expected to continue its trajectory as the baby boomer population continues to age, government changes to healthcare policy materialize, and technology/innovation continues to advance the delivery of medical care. The US hospital

Publishing / Media

2009-09-27T15:26:00.000-04:00

Over the past year (2008-2009) marketing spend has contracted by approximately 15% as the decline in GDP has been amplified in companies' advertising budgets. The big question, however, is if/when the economy rebounds, how will media dollars be allocated? Multiple studies show that over the past 6 years marketing spend has been shifting from advertising to direct marketing and this trend is

The Pet Economy: Purring Along Nicely - BusinessWeek

2009-05-21T12:04:00.000-04:00

The Pet Economy: Purring Along Nicely - BusinessWeek