Terren Peizer

From Wikipedia, the free encyclopedia

Terren Peizer is an American financier, the founder and currently the chairman and CEO of Hythiam, Inc., which provides behavioral health management services; researches, develops, licenses and commercializes behavioral treatment programs; and offers disease management for substance dependence built around its proprietary Prometa Treatment Program for alcoholism and dependence to stimulants. [1] Although he has been involved with some of the most successful U.S. financial transactions, Peizer has said that bringing Prometa to market “would be the most important thing he had done in his career, even if the company never becomes profitable.” [2]

Over the years, Peizer has frequently noted the importance of his family and his Ohio upbringing in various interviews. He has stated that his half brother’s problems with addiction spurred him to found Hythiam, and has named his investment companies after his hometown and home street.

Although he has been called “One of Wall Street’s top players,” [3] Peizer has also exhibited a thrifty side. It is believed that he still lives in the same condominium home he first purchased in the 1980s when he moved to Los Angeles to work for the Beverly Hills office of Drexel Burnham Lambert. [4]

Peizer has been chairman of or CEO of many companies—including currently Hythiam and XCorporeal—as well as a major investor in many others, and even owned a minor league basketball team for a short period of time. Prior to his time running various companies, Peizer got his start selling bonds, and held senior executive positions with the investment banking firms Goldman Sachs, First Boston, and Drexel Burnham Lambert. [5]

Peizer is also known for his role testifying—along with other Drexel employees and clients—as a witness in the government’s case against Drexel Burnham Lambert, Inc. in the federal crackdown on insider trading in the late 1980s, which eventually led to guilty pleas and fines from Drexel, as well as financier Michael Milken. Peizer was 28 years old at the time. [6]

Contents

[edit] Education

Born in 1959, Peizer was raised in Beachwood, Ohio, a suburb of Cleveland.[7] He graduated from the University of Pennsylvania Wharton School of Economics.[7]

[edit] Career

Peizer has been chairman of or CEO of many companies over the past 15 years. From 1999 through 2003 he was a director, and from 1999 through 2000 he was chairman of the board of supercomputer designer and builder Cray, Inc., a Nasdaq Global Market company, and remains its largest beneficial stockholder. Since August 2006, he has also served as chairman of the board of XCorporeal, Inc., a developer of congestive heart failure treatment products, wearable artificial kidney, and other medical devices. [1]

Many of these companies, including Cray, Hythiam and XCorporeal became public companies during Peizer's tenure. But in the beginning, Peizer was a “young hotshot salesman from First Boston," [3] who went to work under Michael Milken at Drexel Burnham Lambert’s Beverly Hills office when he was only 25 years old. He was brought on to handle Solomon Asset Management, an investment fund and a major Drexel client.

In 1990, after being laid off with 5,300 Drexel employees (including the entire 400-person Beverly Hills office), Peizer was the owner of the minor league basketball team, the Omaha Racers, which he sold in 1990 before moving back to Los Angeles to start his investment company. [7] Peizer spent most of that year working with the Racers in Omaha and spending time back in Ohio with his family. [3]

After this “break,” Peizer got back into the game by founding investment companies. In 1990, he started an investment company called Financial Group Holdings. One of his first investments was in Millfield Trading, now known as Candie’s. [3] Peizer later changed the name of Financial Group Holdings to a more sentimental moniker: Beachwood Financial, named after his hometown. Another investment company, Wendover, was named for the street on which he grew up. [3]

When first on his own, Peizer’s function for many of these smaller (or development-stage) companies was once described as “lender of almost last resort.” But Peizer’s investment savvy empowered him to get favorable rates at companies still in developmental stages. [3]

His investment philosophy was taking shape in these years, which according to Peizer, was to “Invest in situations where you tip the playing field in your favor” and “Invest in companies with low market caps but with the ability to change the way its industry does things.” [3]

This philosophy has served Peizer well, and it also points to his founding of Hythiam and XCorporeal. He has often stated his hopes that the two companies will change the addiction medicine and implantable medical industries, respectively.

In the late 1990s, Peizer founded Clearant, a company that patented a pathogen inactivations technology that prevents infectious disease transmission, and served as its CEO and chairman until 2003. [8]


[edit] Investments

Peizer has been a major shareholder of many companies, including:

  • Cray, Inc. (formerly Tera Computer Company) [9]
  • Xcorporeal Inc (formerly Pacific Spirit Inc.) [1]
  • Clearant Inc [10]
  • CMS Enhancements [11]
  • Hollis-Eden Pharmaceuticals [12]
  • Advanced Promotion Technologies [12]
  • Financial Group Holdings [13]
  • Integrated Waste Services [13]
  • Urethane Technologies [14]
  • Millfield Trading Company [15]
  • Wendover Financial Corporation [16]
  • Intellect Capital Corporation [9]

[edit] Major Deals and Financial Transactions

Although there have been no recent attempts to estimate Peizer’s wealth, the Los Angeles Times confirmed his worth at $50 million in 1994. [4] While discussing the unusual step of Peizer investing his own personal net worth in some investment deals, the paper stated that he “…avoids the usual accouterments of wealth, such as big houses and expensive cars.” The reporter also noted that “Peizer still lives in the condo he bought nine years ago, when he came West to sit at Milken’s left hand.”

However, despite his modest surroundings, Peizer has been involved in some of the top U.S. financial transactions. For instance, while at Drexel Peizer was a part of the team that financed some of the largest corporate takeovers of the 1980s, [7] including Ted Turner’s purchase of MGM/UA Entertainment Co., and the merger of Chuck Barris Productions with the Guber-Peters Co., [17] as well as TLC’s acquisition of a controlling interest in Beatrice Foods [18] and McCaw Cellular’s take-over of LIN Broadcasting Corp. [19]

In the 1990s Peizer worked with Manufacturer’s Indemnity and Insurance Company of America to purchase 50.5% of Ameriquest, with Peizer owning just over 35% of the company. [3]

Peizer surprised the financial markets when he successfully outbid Gores Technology Group in a takeover bid for Cray Research (now Cray, Inc.) by the much smaller Peizer-headed Tera Computer Co. Tera issued cash, stock and notes to purchase the once-struggling supercomputer company from Silicon Graphics. Over the years, Cray has developed many of the supercomputers used by the U.S. defense and intelligence communities. [20]

In 2002 he distinguished himself once again by raising $20 million for biotech start-up Clearant, Inc., which has developed a gamma ray-based technology to kill bacteria and viruses. The funding, for a small company, was a surprise during a “slump” market. [21]

[edit] Drexel Burnham Lambert Prosecution

Peizer is also known for his role testifying—along with other Drexel employees and clients—as a witness in the government’s case against Drexel Burnham Lambert, Inc. in the federal crackdown on insider trading in the late 1980s, which eventually led to guilty pleas and fines from Drexel, as well as financier Michael Milken. [2] Current-at-the-time Drexel employees who cooperated in the government’s prosecution of the firm included Cary J. Maultasch, a senior equity trader, Charles Thurnher, an accountant, and James Dahl, a trader; as well as former Drexel employees Michael Davidoff, Setrig Mooradian and David Jachimczyk. [6] The case was prosecuted by Rudolph Giuliani while he was the U.S. Attorney in New York.

The day after Drexel Burnham Lambert agreed to plead guilty to six felony counts and pay a record $650 million to avoid a criminal racketeering indictment, [22] the firm forced Peizer to take an unexplained, yet paid, leave of absence. He was reinstated at the firm one month later, [23] and continued to work there until 1990 when the company laid off more than 5,300 employees, including all 400 of the employees in the firm’s Beverly Hills office. [7] After being indicted on 98 counts of securities violations, Milken ultimately pleaded guilty to six felony charges, including manipulating stock prices . [4]

[edit] Trivia

In 2006 Peizer announced that Hythiam would be working with The Farley Foundation, founded by members of the comedian Chris Farley’s family, whose mission is to help spread the word about the need for addiction treatment. The Farley Foundation agreed to let Hythiam use the late comedian’s image in a now well-publicized awareness campaign. Tom Farley, the late comedian’s brother, joined Peizer in educating the press and public about addiction as a biological disease that needed to be addressed with medical solutions as well as behavioral ones. While the campaign generated a lot of attention, it was also criticized for its use of the late Farley's image.[2]

[edit] References

  1. ^ a b c Forbes Profile - [1]
  2. ^ a b c Huus, Kari: "Meth, cocaine 'remedy' stirs debate." MSNBC.com, Nov 2, 2006
  3. ^ a b c d e f g h Taub, Stephen. “From rats to riches.” Financial World, Apr 26, 1994.
  4. ^ a b c Lee, Patrick. “In the shadow of the '80s.” Los Angeles Times, Jul 31, 1994
  5. ^ Profile, Investment Capital Conference: http://icc2005.lava.org/pp/com.php/article/o/speakers/oid/24
  6. ^ a b Labaton, Stephen. "4th Drexel Employee in Immunity Bargain," The New York Times, Dec 10, 1988.
  7. ^ a b c d e Kelly, Michael. “Racers’ Owner Given Immunity.” Omaha World-Herald, Feb 25, 1990.
  8. ^ “Clearant Names President, CEO.” Los Angeles Business Journal, Oct 13, 2003.
  9. ^ a b "Tera gets Finance Facelift." Electronic News, Jul 12,1999.
  10. ^ Clearant Website - [2]
  11. ^ "CMS ENHANCEMENTS COMPLETES 3.4 MILLION SHARE COMMON STOCK PRIVATE PLACEMENT; SHAREHOLDERS ELECT NEW CHAIRMAN AND TWO OTHER BOARD MEMBERS", PR NewsWire Association, Inc., Dec 6, 1993.
  12. ^ a b Lubove, Seth. "Small world, ain't it?" Forbes, Sept 6, 1999
  13. ^ a b Zweig, Jason. "Another Drexelite resurfaces." Forbes, Aug 5, 1991.
  14. ^ "URETHANE TECHNOLOGIES NAMES JIM OREFICE CHAIRMAN AND CHIEF EXECUTIVE OFFICER." PR Newswire Association, Inc., Feb 3, 1994.
  15. ^ Rigg, Cynthia. "Neil Cole eyes '70s classic to buoy troubled shoe firm." Crain's New York Business, 1992.
  16. ^ Longwell, John. "CMS buys NY regional distributor." Computer Reseller News, Jan 3, 1994.
  17. ^ Griffin, Nancy and Masters, Kim. Hit & Run: How Jon Peters and Peter Gruber Took SONY for a Ride in Hollywood. Simon & Schuster. 1996.
  18. ^ Hicks, Jonathan. “Beatrice Unit Brings $985 Million.” The New York Times, Aug 10, 1987.
  19. ^ “McCaw Says it has Financing for Bid.” Seattle Times, Jul 28, 1989
  20. ^ Alexander, Steve. “Struggling Firm Buys Struggling Cray Research. Silicon Graphics Sells Company to Seattle-based Tera Computer.” Star-Tribune, Mar 3, 2000.
  21. ^ Palazzo, Anthony. “L.A. venture deals slump at year-end.” Los Angeles Business Journal, Jan 28, 2002.
  22. ^ Vise, David and Coll, Steven. "Drexel Puts Employee Aiding Prosecutors on Leave of Absence." Washington Post, Dec 24 1988.
  23. ^ “Drexel Says Its Suspensions of 2 Employees Will End.” The Wall Street Journal, Jan 31, 1989.