Wall Street


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Talk about your big league financings: James T. Sington, investment banker and managing director over at Donaldson, Lufkin & Jenrette’s Century City offices, last month successfully engineered a combined $814 million pair of underwritings for the Palm Desert-based United States Filter Corp, already listed on the Big Board.

The first $400 million of the underwriting was stock, and another $414 million was for 4.5 percent convertible debt.

U.S. Filter is a leading global provider of industrial and municipal wastewater treatment systems. On a pro forma basis, U.S. Filter posted revenues of $1.8 billion in its latest reported fiscal year.

Investors in U.S. Filter have cleaned up; the stock has gesyered from a low of $8.11 in 1995 to $31 in trading last week.

The company is buying smaller water clean-up companies nationally and even worldwide, in pursuit of its goal of becoming the global leader in a fragmented industry.

“This is an example of a company appropriately tapping into the capital market to fund their growth,” Sington said last week.

Lawyers Nick Saggese and Dan Weiser, of the downtown Los Angeles firm Skadden Arps Slate Meagher & Flom, acted as counsel to DLJ on the mammoth underwriting.

A couple interesting tidbits on U.S. Filter one of its board members is J. Danforth Quayle (yes, the former veep), another is Arthur Laffer (of the “Laffer Curve” fame), and another is Alfred Osborne, the ubiquitous UCLA business prof.

U.S. Filter is led by chairman and chief executive Richard Heckmann, a former stockbroker (1982-1990) with then Prudential-Bache in Rancho Mirage.

Stratton Oakmont 90210

There is a local angle to the December ouster of New York-based brokerage Stratton Oakmont Inc. from the securities industry by the National Association of Securities Dealers.

Beverly Hills-based brokerage J.B. Oxford will pick up the customer accounts, the NASD announced.

Stratton Oakmont was known in the industry as a “schlock shop,” and according to NASD enforcement regulator Barry Goldsmith, was involved in “fraud, market manipulation, sales practice abuses and failures to adequately supervise its employees.”

It should be noted, however, that Stratton Oakmont operated for nearly 10 years before the NASD shut it down, and for at least the last seven years of that, short traders licked their chops at many a Stratton Oakmont initial public offering.


When “The Graduate” star Dustin Hoffman learned the future was in petroleum-based products, he might have sought employ at the Arcadia-based Reid Plastics Inc., now on an acquisition tear.

The nation’s 11th-largest maker of plastic bottles, Reid is seeking to become a $500 million a year company by the year 2000. It recently capped the acquisition of La Palma-based Stewart/Walker Co., an industry competitor. No terms were spilled. Reid is the nation’s largest producer on plastic bottles that are one gallon or larger.

John Mavredakis, investment banker with Century City-based Houlihan Lokey Howard & Zukin, has been advising the family-owned Reid, and did so on the Stewart acquisition.

“We’ve been able to make a series of acquisitions…doing an industry roll-up (consolidation). We have been very effective at convincing other companies that as a family-owned business, we would be a good acquirer, not another heartless corporation,” said Mavredakis.

Reid has the liquidity to pour money into more acquisitions, said Mavredakis.

Sutro & Co.

It’s official over at Sutro & Co. the regional brokerage is now owned by its managers and employees.

The ownership change should be salubrious, said Michael Brown, managing director in Westwood and a mergers and acquisitions specialist.

“If there was one thing I discovered in M & A; practice, it was that ownership is a great incentive-izer,” said Brown, who founded the M & A; practice in Los Angeles for Drexel Burnham Lambert Inc., back in 1983.

Sutro had been owned by John Hancock Mutual Life Insurance Co.

Sutro will now rev up institutional sales and trading, and boost local analyst coverage. Both will help local investment banking efforts, said Brown. “Companies want to know that there can be analyst support, and that you can create both retail and institutional support for the stock,” he said. “In the past, these things were controlled out of the East Coast, but no longer.”

The huge middle market in California is Sutro’s target, said Brown.

It will be interesting to watch the Sutro name now that local smarts are in charge.

Social shake-up

There was hardly an ear on Wall Street West that wasn’t pointed and cocked towards Washington last week, as a federal advisory panel recommended that Social Security revenues be invested in the stock market.

Securities industry denizens have never heard more enchanting music.

“It’s great from two standpoints: It will provide additional liquidity for the stock market, and it will be great for the Social Security system,” said Fred Roberts, of the F.M. Roberts & Co. Inc., a Westside investment banking boutique. Roberts noted that equities have outperformed other financial groups for decades.

Of course, many a blue-ribboned recommendation gets mugged in the political night that is our nation’s capital. Still, with all that Wall Street money sloshing around the halls of Congress, maybe Social Security will become a shareholder yet.

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