Technology industry review Q3-2007; RSM EquiCo Capital Markets

M&A Activity in Semiconductor Industry Gains Momentum

• RF Micro Devices announces acquisition of Sirenza Microdevices for $900 million for its radio frequency (RF) components manufacturing capabilities
• Cadence acquires design-for-manufacturing technology provider Clear Shape
• AMETEK acquires CAMECA SAS for $112 million for its high-end elemental analysis systems used in semiconductor applications
• TriQuit Semiconductor announces acquisition of RF discrete transistor technology provider Peak Devices
• Singulus Technologies acquireswet-chemical equipment provider Stangl Semiconductor Equipment

Read More.

Rubber & Plastics industry review Q3-2007; RSM EquiCo Capital Markets

New Applications for Rubber and Plastic Spur Increased Demand

Rising Costs of RawMaterials Drive Rubber and Plastics Prices Higher Demand for rubber and plastic products has increased, particularly due to the trend of replacing metal parts in automobiles and aircrafts with rubber and plastic parts because of their low-weight components. The use of plastics in automobiles has increased more than twelve-fold since 1980 and continues to grow. Advanced plastics have a reputation for costing less than comparable metal parts without sacrificing performance. Higher continuous-use and heat-deflection temperatures, as well as good pressure-velocity, ratings have made new applications possible for resins. High-temperature, high performance plastics are replacing aluminum, brass, steel and other metals that had been historically employed by manufacturers. Read More.

Recreation & Leisure industry review Q3-2007; RSM EquiCo Capital Markets

Continued Softness in Marine Industry

Retail boat sales continue to be soft. The housing downturn, declining consumer confidence, high fuel prices and tightening credit environment are the primary factors affecting the overall marine industry. Brunswick, one of the leading companies in the marine industry, reported second quarter retail sales were down 12% for fiberglass boats and 13% for stern drive and powerboats segments. Brunswick's management commented that 2007 might be the weakest year since 1965, based on unit sales. The current industry expectation for boat retail sales in 2007 is roughly 260,000 units, which is below the lowest level recorded (277,000 units) in the early 1990s and 11% less than the 296,000 units sold in 2003, the last trough year. Read More.

Healthcare industry review Q3-2007; RSM EquiCo Capital Markets

Skilled Nursing Facilities and Assisted Living Centers

Medicare provided coverage to 42.9 million seniors in 2006. By 2030, the number of people covered will balloon to 78.3 million due to the massive number of Baby Boomers entering retirement age starting in 2011. Even with an estimated 37,000 nursing homes currently being operated in the United States accounting for $13 billion in annual revenues, the demand for nursing homes, assisted living centers and other senior care communities is expected to escalate. Read More.

Government Services industry review Q3-2007; RSM EquiCo Capital Markets

Credit Market Turmoil

Due to higher than expected default rates in the sub prime lending market this summer, Countrywide Financial and a host of other large firms with significant subprime debt exposure experienced big losses. As news of the ensuing credit crunch spread, the bear rally became widespread. Upon the initial bear rally, the flight to quality began with government services firms continuing to provide a safe haven for investment dollars as shown above. Over the past seven years, government services firms have significantly outperformed the S&P 500 Index as the market places a premium on companies with significant exposure to government service contracts, as shown below. Read More.