Filed under: Raising money, Warburg Pincus, Private equity industry, Investments

Warburg Pincus has recently announced the closing of a $15 billion global private equity fund, Warburg Pincus Private Equity X. Many existing investors increased funds to WP X and includes various investors such as public and private pension funds, endowments, and global financial institutions such as Washington State Investment Board and GE Asset Management.

Warburg Pincus currently manages over $35 billion in assets globally. The global fund will focus on businesses in any growth stage in core industries in North America, Europe, and Asia. The company invests across geographies, industries, and business growth stages from a single global fund, always with a focus on growing businesses and growing regions.

They have significant experience in consumer and retail, energy, financial services, healthcare, life sciences, industrial, technology, media and telecommunications. Typically, Warburg provides funding for the creation of business or to expand them where long run growth and sustainability is a central factor.

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Filed under: Ripoffs and Scams, Consumer Complaints

This day, after many months of procrastinating, I finally called AT&T to tell them to take their “long distance service” off my home phone line. I don’t even use the line, much less the long distance. So the idea of paying an additional $5 a month for something that doesn’t cost AT&T anything to make available to me, and for something I don’t ever use, is just silly.

Of course, it took me many months to get around to making this phone call. (Imagine them collecting $5 a month from hundreds of thousands of customers just like me, who just ignore the issue.) I know, I know. It’s my fault for being too lazy to call them. It’s just that it’s always so painful to call AT&T…

So I call customer service, go through several menus, and end up speaking to a live person. He tells me he’s happy to remove the $5 per month charge for the long distance I don’t use, if I just pay a $9 fee. Huh? I have to pay you if I want to cease paying you?

Of course! That’s the way it works with so many service providers these days. I think phone companies, wireless carriers, and cable providers are some of the worst. There’s a fee for everything including blowing your nose, and if you try to stop the fees, you have a pay another fee for the privilege of not paying the fees.

I told him three times that I wasn’t interested in paying his $9 fee for removing a service I never use and never should have been charged for in the first place. After the third time, he finally told me that the way around the $9 fee was for him to assign an outside long-distance carrier to my account. So long as I had some long distance service associated with my account, there wouldn’t be the $9 fee to take off AT&T’s long distance.

Sigh. Why must we play these games? He assured me that he could assign a long distance carrier that wouldn’t charge me any fees at all, so long as I never use the service. Fine. Do it. But why, oh why, must the phone company make it so hard?

Have you cheated, scammed, or otherwise disappointed by a company? WalletPop wants your real life consumer complaints and scam stories Email us with your story...

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Bookkeeping, and is the author of Essentials of Corporate Fraud.

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Filed under: Insurance, Ripoffs and Scams, Health

Yesterday it was reported that Whirlpool Corp. suspended 39 employees for lying about tobacco use. The employees had signed paperwork indicating that they did not use tobacco, but they were seen smoking or chewing tobacco on company property.

The company’s stance is simple: They’ve employees fill out paperwork that asks them about tobacco use. The paperwork says that they could be suspended or terminated if they lie. Whirlpool then uses the paper to charge tobacco users an extra $500 per year toward their health insurance premiums.

Personally, I don’t care if people smoke or not. But I do care if they lie to their employer about it. The easy fact is that health insurance premiums are higher for tobacco users. The reasons are obvious: They cost insurance companies more. I think that employer should have each right to recover part or all of that additional premium based upon the smoking factor.
Now of course, this raises the issue of what employees should be held responsible for in regard to their health. Sicker people mean higher insurance premiums, so where do we draw the line? Who pays for the higher cost of medical conditions that are not the sick person’s fault? I’m not quite sure. But I do know that for many years, employees were spoiled.

They had the benefit of health insurance policies that required them to pay very little out of their own pockets for their health care. There was tiny incentive to be responsible with health care, and it cost companies a lot of money. (What is “responsible” health care, you ask? Things like eating and living well to prevent illness, visiting a physician for preventive health care measures and choosing to visit a physician during office hours rather than running to an emergency room on the weekend.)

Health insurance premiums are costing companies far more money than many employees realize. Companies must move toward more consumer-driven health care options which force employees to be as responsible as possible with their health care choices. And forcing tobacco users to pay more for their more pricey insurance policies is right in line with giving employees incentives to live healthier lives.

I think the Whirlpool employees who were caught lying on their paperwork should have two choices. They can be fired. Or they can reimburse their employer for the full cost of their health insurance premiums since the day they lied, and be responsible for paying the full cost of their health insurance premiums going forward. Forcing dishonest employees to bear the burden of their own health insurance costs would certainly send a message, wouldn’t it?

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

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Filed under: The Blackstone Group, Financials and analyticals, The Carlyle Group, Permira, Private equity industry, Value and lack thereof, Public or private?

Freescale is the old chip giant that was acquired by a private equity group led by The Blackstone Group (NYSE: BX), The Carlyle Group, and Permira Advisers. Prior to being public, this was a unit of Motorola Inc. (NYSE: MOT).

The company still has to report earnings as though it was a public company because of its ratings and because of its public debt. The company has shown that over the last twelve months, the company’s adjusted EBITDA was $1.55 billion.

Net sales for Q1-2008 were $1.405 billion, up from $1.361 Billion in Q1-2007 and down from $1,539 billion in Q4-2007. Unfortunately, the company is still posting an operating loss of $152 million for the quarter, compared to $654 million in operating losses in Q1-2007 and $595 million in Q4-2007. The net loss after items for this last quarter was $245 million, also down from a loss of $539 million in Q1-2007 and down from a loss of $525 million in Q4-2007.

Its cash and total short term investments were $1.25 billion on March 28, 2008, compared to $751 million at the fourth quarter ending December 31, 2007; and its accounts receivable were $680 million and inventory was $732 million. But here is where things get tricky. Its long-term debt is $over $9.3 billion alone. Of the company’s total asset base of $15.197 billion, more than $5.3 billion is goodwill and more than $3.6 billion was listed as intangible assets.

If you go back to the BloggingBuyouts article, “Why private equity firms avoid technology companies,” you’ll see that being a highly leveraged technology company that requires high capital expenditures isn’t always the greatest place to be be. Unfortunately for all the private equity partnersm the company can’t live on EBITDA alone and many believe that Freescale will need more capital and thus more leverage.

The original private equity deal was put at $17.6 billion for an enterprise value. So far that isn’t turning out too great. Who knows, maybe a re-IPO of Freescale isn’t too far off.

Jon Ogg is a producer and editor of the Special Situation newsletter for 247WallSt.com.

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