Filed under: Earnings reports, Deals, Anheuser-Busch Cos (BUD)

The credit crunch should be bad news for investment banks, right? Not necessarily. After all, strategic buyers have been aggressive lately, perhaps because there’s not much competition from private equity operators.

One of the beneficiaries is Lazard (NYSE: LAZ), which reported its Q2 numbers. Eearnings came to $64.6 million, or 54 cents per share, which compares to $61.5 million, or 53 cents per share in the same period a year ago.

Simply put, Lazard has been snagging some choice client engagements. For example, Q2’s revenues on merger assignments spiked 37% to $225.1 million.

In fact, the firm is an advisor on InBev’s $52 billion deal to buy Anheuser-Busch Cos. (NYSE: BUD). Another high-profile assignment is Gaz de France’s 44.6 billion euro deal with Suez.

Keep in mind that Lazard has worked on about $100 billion in announced deals in July alone. This is certainly a nice momentum boost.

Besides, Lazard has a strong restructuring division. While the business is still fairly small - at $32.7 million - there should be lots of potential for growth. Just look at some of the major bankruptcies lately, such as Mervyn’s, Steve & Barry’s, Linen ‘n Things and so on.

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

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Filed under: Business, Utilities, News, Productivity

We’re willing to bet radiologists in Shanghai like to listen to music — who doesn’t? — but that’s not how they’re using iTunes. At Renji Hospital and Shanghai Jiaotong University School of Medicine, they’re using it to organize PDFs of important medical research and images that they say are more useful than many textbooks.

You can drop a PDF into iTunes and sort it just like you would with music. That means that the medical documents in Shanghai are searchable, ratable, and can be given multiple different tags. Before iTunes, they were keeping redundant copies of PDFs in directories by category. Now, they only need to keep one of each. So, if you’ve been looking for software that can organize your PDFs, think about an app you likely already have: iTunes!

[via Dr. Dobb’s]

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Filed under: Business, Developer, Internet, Security, Commercial, Open Source

Louis Suarez-Potts, the community manager for the open-source Open Office project, states software piracy also hurts the open-source community, and though it can be argued that open-source is bad for innovation, most of us love the open source community. So does the occasional pirated piece of software really hurt our beloved open source projects?

Suarez-Potts thinks it’s bad for everyone including the open source community since pirated software theoretically takes “customers” away from open source projects. For example, a college student may never end up downloading Open Office since he copied Microsoft Office from a friend, but that’s not to say it hurts the money-makers like Microsoft at all. A tiny bit of piracy helps to establish big company’s products as “the standard”, hurting open source projects even more and making it harder for them to get their foot into a user’s door.

Now we’d like to pose a question: Like the college student used in the example above, does pirating software generally prevent you from trying Open Source software or would you’ve put the cash down anyway even if you couldn’t get it for free?

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Filed under: Deals, Industry, Private equity, CIT Group (CIT), Merrill Lynch (MER)

Lately, there’s been lots of dire talk about the private equity world. Returns are likely to be much lower and perhaps there will be many firms that shut down.

Indeed, such things might turn out to be true.

However, whenever there’s extreme turbulence and a pervasive credit crunch, there are also big opportunities to make money. Just look at Apollo Management and Cerberus Capital. Both firms made a killing during the rough early 1990s.

Fast forward to today, and we might be seeing something similar with one of the top beneficiaries possibly being Lone Star Funds. Yes, this week the fund purchased a collateralized debt portfolio from Merrill Lynch & Co. (NYSE: MER) at 22 cents on the dollar [subscription required]. The face value on it? About $30.6 billion.

This isn’t a one-off deal as it looks like Lone Star is hungry for high-risk debt. For example, the firm recently bought the mortgage division of CIT Group Inc. (NYSE: CIT) and acquired Bear Stearn’s mortgage segment. There was also the buy of Accredited Home Lenders Holding Co. for $295 million.

All in all, this is risky stuff, but the chief of Lone Star, John Grayken, has lots of experience with structuring complex deals for distressed financial institutions. During the early 1990s, he worked for Robert Bass — a Forth Worth billionaire — and made a variety of deals for ailing S&Ls.

Then, in 1995, he started Lone Star, where he focused on troubled financial institutions in Japan and South Korea.

Lone Star’s recent dealmaking does not necessarily mean that the credit crunch is thawing and the housing/mortgage markets are coming back. After all, private equity firms can hold investments for several years.

Then again, such investments are a good sign since they show that the smart money does see value in the marketplace.

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.

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Filed under: Deals, Law, Whole Foods Market (WFMI)

If a new legal ruling forces Whole Foods to reverse its Wild Oats buy-out, WFMI shares could soar.

A federal appeal court has decided that the FTC’s challenge of the merger between Whole Foods (NASDAQ: WFMI) and Wild Oats should have gone forward. A lower court has said the FTC had to cease its investigation into whether the marriage was anti-competitive.

According to The Wall Street Journal, “Jeffrey Schmidt, head of the FTC’s competition bureau, stated the bureau is hopeful the ruling will ultimately grant the FTC to undertake a full review of competitive issues raised by the combined companies.”

Whole Foods ended up with 74 Wild Oats stores which it plans to cut down to 50. The FTC could ask the new company to close other locations in areas where the new parent has two stores, and, perhaps a monopoly for that region.

The FTC could also argue that the entire merger constitutes an antitrust threat. That news could not be better for WFMI shareholders. If Wild Oat has to be spun back out, it would need to re-brand it stores, add pricey management, and undertake its own marketing, In other words, it would be a severely weakened competitor for Whole Foods instead of a thorn in the side of WFMI shareholders.

Shares in WFMI are off well over 40% this year. Stocks in many other major food retailers are closer to flat. Part of the might be due to the concern that premium products do poorly in a recession. But, part may have to do with the fact that Wild Oats stores were considered weaker as a group than the original Whole Foods chain.

If WFMI gets to rid itself of the company it got in the buy-out, its shares might get back from $22, near their 52-week low, to the $30 to $40 range.

Douglas A. McIntyre is an editor at 247walls.com.

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