Good morning, MBA readers,
What has appeared inevitable for weeks is now official: The Federal Reserve Bank cut its benchmark interest rate Wednesday for the first time since 2008. In the Kansas City area, Waddell & Reed is planning to cut almost 160 jobs this year and Rockhurst University has agreed to take over St. Luke’s nursing school. Meanwhile, Gov. Mike Parson is due in Australia this weekend for another trade mission. Read on for these and other top business stories from around the state.
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Fed votes for first rate cut in a decade
The Federal Reserve Bank voted to lower its benchmark rate by 25 basis points to a range of 2% to 2.25%, citing “implications of global developments” and “muted inflation pressures.” Fed presidents Esther George of Kansas City and Eric Rosengren of Boston cast the two dissenting votes. (CNBC)
Waddell & Reed to lay off 158 workers this year
Overland Park, Kansas-based Waddell & Reed Financial plans to cut 158 jobs by the fourth quarter. The financial services firm had almost 1,200 full-time-equivalent workers in the Kansas City area as of June 1. (Kansas City Business Journal)
Parson heads to trade mission in Australia
Gov. Mike Parson will travel to Australia this weekend for a trade mission, marking his second overseas trip this summer. (Associated Press)
SSM Health to launch health insurance in St. Louis
Creve Coeur-based SSM Health announced Wednesday that it will offer new health insurance options for St. Louis customers beginning this fall. WellFirst Health, the health care system’s new insurance program, will be available to local individuals and families “both on and off” the Affordable Care Act marketplaces. (St. Louis Post-Dispatch)
Rockhurst University takes over St. Luke’s nursing school
St. Luke’s Health System’s nursing school will become part of Rockhurst University in an agreement announced Wednesday. The agreement, which awaits regulatory approval, would transfer 700 St. Luke’s students to the St. Luke’s College of Health Sciences at Rockhurst University. (Kansas City Star)
St. Louis-area horse track plans $50 million gambling upgrade
The Fairmount Park in Collinsville, Illinois, plans to build at least $50 million in new facilities to house slot machines, casino table games and sports betting approved by an Illinois law passed last month. (St. Louis Post-Dispatch)
Neighbors sue to stop cattle farm expansion
A lawsuit filed Tuesday by 141 property owners argues that Valley Oaks Steak’s plan to expand its farm outside Kansas City from roughly 1,000 to 7,000 cattle will bring more noise, odor and pests. (Associated Press)
St. Louis biotech startup signs $30 million deal with Chinese firm
MediBeacon, a developer of medical diagnostic devices, has reached a $30 million agreement giving China’s Huadong Medicine exclusive rights to its portfolio in China, Hong Kong, Macau and Taiwan. The deal calls for Huadong to fund MediBeacon’s clinical trials in 25 Asian countries. (St. Louis Business Journal)
Missouri court ruling a partial victory for graduate student workers
A Missouri appeals court on Tuesday ruled that University of Missouri graduate students are considered employees of the university. However, the ruling reversed a lower court ruling that affirmed student workers’ right to collective bargaining. (Columbia Missourian)
Say that again
“It’s all kind of been an accident so far. So, rather than get ahead of ourselves and plan super far ahead, I think we’re just taking it step by step to see what happens.”
That’s Catherine Pollman, who co-founded the biotech startup Bionic Bowel with her classmate Vanessa Mahen. The two were working on a class project at the Missouri University of Science and Technology when they invented the Bionic Bowel, a pill that treats Crohn’s Disease and ulcers by altering pH levels, Startland News reports. They took their idea to the University of Missouri-Kansas City’s Regnier Venture Creation Challenge and won $10,000 for second place. Now, the duo is preparing to enter animal testing for the product before they focus on commercialization.
That’s how much Peabody Energy’s earnings dropped in the second quarter, the company announced Wednesday. The St. Louis coal company reported a $37.1 million profit for the second quarter, down from roughly $114 million a year earlier, the St. Louis Post-Dispatch reports. The decreased earnings stem from a 28% reduction in metallurgical coal sales volume and a 14% decrease in seaborne thermal coal pricing.
Word to the wise
A contractual provision that ties a portion of an acquisition’s closing price to the business meeting certain financial targets in the future. Todd McGuire, a partner at the Kansas City law firm of Stueve Siegel Hanson, writes in Startland News that such provisions often favor the buyer of a business at the seller’s expense, as it is not guaranteed that new owners will meet the milestones required for additional payment. McGuire advises entrepreneurs to work with an experienced transactional attorney before they take an exit involving an earn-out. Further, he says, sellers should save every document produced or received during negotiations in case of a future dispute with the buyer over the earn-out.
It’s been a pleasure doing business with you this morning.