American Pharmaceutical deal boosts November value.Merger and acquisition activity chugged along at a healthy pace last month as private equity investors and corporate buyers, flush with cash, continued to pay exorbitant prices to buy other businesses. Some investment bankers are especially optimistic about merger activity in 2006--just as they were at this time last year about 2005--because U.S. companies and private investors are sitting on an estimated $1.9 trillion in cash, an 8.5 percent jump from a year ago, according to a report released last week by PricewaterhouseCoopers. All that money has to go somewhere. "We're going to see explosive M&A activity in the first and second quarters of 2006," said Robert Whyte, managing director at Morgan Joseph & Co. in Los Angeles. Deal volume for companies that were bought or companies that bought others jumped to $9.2 billion in November, although $4 billion of that came from the unusual merger of American Pharmaceutical Partners and its majority-owned Santa Monica-based American Biosciences Inc. In October, deal volume in L.A. was $6.5 billion. The number of announced deals, considered the most reliable gauge of merger activity, dipped to 66 last month, from 72 in October and 77 in September, according to Goldsmith-Agio-Helms, which assembled the local M&A data for the Business Journal. Still, overall merger volume in the U.S. remains robust, exceeding $1 trillion so far this year, up from $878 million in 2004. Only 20 of the 66 local companies that changed hands in November disclosed their purchase price, and of those only four deals were valued at more than $100 million. One of the largest was the $386 million purchase of Enterasys Networks by Gores Technology Group and Tennenbaum Capital Partners LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , two Los Angeles buyout shops that joined forces for the first time. Shareholders of Enterasys, an Andover, Mass.-based competitor of networking giant Cisco Systems, will receive $13.92 a share in cash, a 32 percent premium over the stock's closing price on Nov. 11, the day the buyout was announced. After being wallflowers the past few years, technology companies are finally getting looked at as takeover targets. Going-private transactions are expected to rise in the coming year, as small companies buckle under the disproportionate weight of Sarbanes-Oxley compliance. "We're seeing mergers and acquisitions start to happen more and more to companies with less than $150 million in market cap," said Bryant Riley, chief executive of B. Riley & Co., an independent research firm. "It's nonsensical being a small public company right now, and the valuation gap between large companies and small companies is only getting bigger." Last month, B. Riley teamed up with Robert Lee, founder of National R.V. Holdings National R.V. Holdings (NYSE:NVH) is a company from the north of Perris, California, that makes recreational vehicles. The company is divided into two subsidiaries: National R.V., Inc., (diesel and gasoline RVs), and Country Coach, Inc. (diesel RVs only). Inc., to make a buyout offer for the motor home maker in Perris, Calif. The group's $92 million buyout offer, which represented a 10 percent premium, was rebuffed. Since then, National R.V. shares have soared on takeover rumors. The company recently hired Los Angeles-based Spartan Group LLC as its financial advisor to explore "strategic planning," in the hopes of getting a better offer. Jim Freedman, managing director at private investment bank Barrington Associates, said 2005 is shaping up as the company's best year both in the number of deals and deal volume, with a strong backlog heading into 2006. "It's very strong, very solid right now and I think 2006 is probably going to be a little bit better than 2005," he said, noting that the firm is trying to close six deals by year-end. "It's not going to be 20 percent growth, but all indications are that because of private equity investments, valuations are higher and lenders are stable, so it's going to be a very strong year for M&A." In the past five years, private equity firms have taken a bigger slice of the M&A pie. They are expected to make up 20 percent of all mergers and acquisitions next year, according to PricewaterhouseCoopers. That's up from 16.7 percent of M&A deals in 2005 and 12.7 percent in 2004. Among the more prominent deals last month was Oaktree Capital Management Oaktree Capital Management LLC is a US investment management corporation which operates a number of investment entities commonly known as hedge funds of approximately $40 Billion. LLC's $225 million purchase with Millennium Gaming Inc. of the Meadows, a racetrack outside Pittsburgh, from Magna Entertainment Corp. The deal is conditional on the track's winning a state slot-machine license. Magna, which owns Santa Anita, was unable to get slot machines in California race tracks, despite two propositions in 2004 that ended in defeat. In other deals, DirectTV Group Inc., the El Segundo-based satellite television company, agreed to sell its remaining 50 percent take in Hughes Network Systems Hughes Network Systems, LLC (HNS), is a provider of broadband satellite network products for businesses and consumers. HNS pioneered the development of high-speed satellite Internet access services and IP-based networks with its original DirecPC service but which it now markets Inc. to New York-based SkyTerra Communications Inc., a unit of buyout shop Apollo Management LP, for $100 million. The company will still operate under the Hughes name and no layoffs are expected among its 1,500 employees. The deal is a boost for Apollo, a major shareholder in Sirius Satellite Radio
The hottest sector for merger activity last month was health care. That included the sale of Home Pharmacy of California in Burbank to Walgreens Home Care, a unit of the large drug store operator, for an undisclosed price. Home Pharmacy is one of the largest providers of home infusion therapies in Southern California and also provides nurses who administer the pharmaceuticals intravenously to patients discharged from hospitals. "This is a segment in health care where margins are very strong, it's highly fragmented with a lot of small competitors, and Walgreens has made a strategic push to expand in this market," said Paul Kacik, senior vice president and head of health care investment banking at Barrington who handled the deal. "We're going to see a lot more deals in the home healthcare space, including hospices, which are growing tremendously." M&A Report--November 2005 BUSINESS SERVICES Seller: Bay View Capital Corp.: NYSE NYSE See: New York Stock Exchange :BVC BVC Bar Vocational Course (UK) BVC Bolsa de Valores de Colombia (Colombia) BVC Bureau Veritas Certification BVC Banco Venezolano de Credito (Venezuela) (San Mateo) sold Bay View Acceptance Corporation (Covina) Business: Provides financing services to auto dealers Buyer: Americredit Financial Service (Fort Worth) Deal Value: $62 million Seller: Classic Tents (Torrance) Business: Provides party equipment rental services Buyer: Classic Party Rentals (Culver City) Deal Value: ND Seller: EDAW EDAW Eight Days A Week (Beatles song) EDAW Eckbo, Dean, Austin & Williams (New York, NY) (San Francisco) Business: Provides consulting services for urban development Buyer: AECOM AECOM Albert Einstein College of Medicine of Yeshiva University (Bronx, NY) AECOM Architectural and Engineering Company Technology Corp. (Los Angeles) Deal Value: ND Seller: Global Affiliate Network (San Francisco) Business: Provides Internet-based marketing services Buyer: Stampede Entertainment (Encino) Deal Value: ND Seller: Lange America (La Mirada) Business: Specialty contractor that performs remediation services Buyer: PDG PDG Président Directeur Général (CEO) PDG Particle Data Group PDG Past District Governor PDG Parti Democratique Gabonais (Gabonese Democratic Party) PDG Product Development Group PDG Program Dependence Graph Environmental: OTCBB OTCBB See OTC Bulletin Board (OTCBB). :PDGE PDGE Convergencia para la Democracia Social (Spanish: Democratic Party for Equatorial Guinea) (Pittsburgh) Deal Value: ND Seller: My Corporate Business Services (Agoura Hills) Business: Provides online incorporation, LLC formation, and trademark protection services Buyer: intuit: NasdaqNM:INTU INTU Intuit, Inc. (stock abbreviation, AMEX) (Mountainview) Deal Value: $20 million Seller: Preferred Freezer Services (Los Angeles) Business: Provides refrigerated warehouse services Buyer: TA Associates (Boston) Deal Value: ND Seller: ProTrust Private Clients SA (Switzerland) Business: Provides investment and financial services Buyer: Tally-Ho Ventures (Glendale) Deal Value: $8 million Seller: Secured Capital Corp. (Los Angeles) Business: Provides investment banking services Buyer: Wells Fargo (San Francisco) Deal Value: ND CONSUMER Seller: buydiscount.com (Long Beach) Business: Consumer direct website Buyer: NeWave: OTCBB:NWWV.E (Long Beach) Deal Value: ND Seller: Don Algodon Confeccion SA (Spain) Business: Retailer of apparel Buyer: AZ3 (Vernon) Deal Value: ND Seller: eCOST.com: NasdaqNM:ECST ECST European Carotid Surgery Trial ECST Expeditionary Combat Skills Training ECST European Charter for Sustainable Tourism (Torrance) Business: Operates as an online discount retailer Buyer: PFSweb: NasdaqSC:PFSW PFSW Partnership for Safe Water (Pennsylvania) (Torrance) Deal Value: $30 million Seller: National RV Holdings: NYSE:NVH (Perris, CA) Business: Designs, Mfrs, and markets RVs Buyer: B. Riley & Co. (Los Angeles) Deal Value: $77 million Seller: Richter Furniture Mfg (Vernon) sold Apex Design Group (Vernon) Business: Mfrs upholstered furniture Buyer: Buxbaum Group (Calabasas) Deal Value: ND ENERGY Seller: Geoproduction Oil and Gas Company (Broussard, LA) Ray Oil Tool Co. (Broussard, LA) sold Geoproduction Oil and Gas Company and Ray Oil Tool Co., Esperanza Block (Colombia) Business: Exploration and production of oil and gas Buyer: Avenue Energy (Sherman Oaks) Deal Value: $3 million FOOD & BEVERAGE Seller: Roncadin SpA: CM:RON (Italy) sold Gelus N.V. (Netherlands) Business: Mfrs frozen food and dairy products Buyer: Oaktree Capital Management (Los Angeles) Deal Value: ND Seller: Royal Spring Water (Beverly Hills) Business: Bottles and distributes spring water Buyer: Easy.com (Beverly Hills) Deal Value: ND HEALTH CARE Seller: American BioScience (Santa Monica) Business: Develops treatment for life-threatening diseases Buyer: American Pharmaceutical Partners: NasdaqNM:APPX APPX Appendix APPX Application eXcellence (4GL software development tool) (Schaumburg, IL) Deal Value: $4 billion Seller: Creative Age Publications (Van Nuys) sold Dialysis & Transplantation (Van Nuys) Business: Provides medical articles on nephrology and renal transplantation Buyer: John Wiley & Sons: NYSE:JW.A (Hoboken, NJ) Deal Value: ND Seller: Healthcare Enterprise Group: LSE LSE - Language Sensitive Editor :HCEG (U.K.) sold Medical Development and Technology (Netherlands) Medical Development Specialists (Netherlands) Business: Produces voice controlled reporting systems and medical instruments Buyer: Ridgecrest Healthcare Group: OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). : RGHG (El Segundo) Deal Value: $8 million Seller: Home Pharmacy of California (Burbank) Business: Provides home healthcare services Buyer: Walgreens Home Care (Elmhurst, IL) Deal Value: ND Seller: O2 Plus (San Fernando) Business: Supplies respiratory and durable medical equipment Durable medical equipment is a term of art used to describe certain Medicare benefits, that is, whether Medicare may pay for the item. The item is defined by Title XVIII the Social Security Act: Buyer: Arcadia Resources: OTCBB:ACDI ACDI Agence Canadienne de Développement International (Canadian International Development Agency) ACDI Agricultural Cooperative Development International ACDI Asynchronous Communications Device Interface (IBM) (Southfield, MI) Deal Value: ND Seller: Platinum Equity (Beverly Hills) sold SourceOne Healthcare Technologies (Mentor, OH) Business: Provides medical imaging equipment and supplies Buyer: Merry X-Ray Corp. (San Diego) Deal Value: ND Seller: Safe Sedation (Washington, D.C. Business: Ambulatory/office-based anesthesiology practice Buyer: Triton Pacific Capital Partners (Los Angeles) Deal Value: ND INDUSTRIAL Seller: Airgas Inc.: NYSE:ARG See argument. arg - argument (Radnor, PA) sold Rutland Tool & Supply Company (Whittier) Business: Provides metalworking tools and industrial supplies Buyer: Lawson Products: NasdaqNM:LAWS (Des Plaines, IL) Deal Value: $15 million Seller: Allied Capital Corporation: NYSE:ALD ALD abbr. adrenoleukodystrophy ALD, n.pr See adrenoleukodystrophy. ALD aldolase. (Washington, D.C.) sold Packaging Advantage Corporation (Los Angeles) Business: Contract mfr of liquid and paste products for the personal care industry Buyer: Marietta Corporation (Cortland, NY) Deal Value: $50 million Seller: Benthos benthos: see marine biology. : NasdaqSC:BTHS BTHS Brooklyn Technical High School BTHS Barth Syndrome BTHS Bartram Trail High School (Jacksonville, Florida) BTHS Brick Township High School (New Jersey) (North Falmouth, MA) Business: Mfrs oceanographic products Buyer: Teledyne Technologies: NYSE:TDY (Los Angeles) Deal Value: $41 million Seller: Compass Aerospace Corporation (Santa Ana) sold Lamsco West (Valencia) Business: Mfrs laminated shims for the aerospace industry Buyer: Hampson Industries plc: LSE:HAMP HAMP Hampton National Historic Site (US National Park Service) HAMP Horizontal Avionics Modernization Planning Deal Value: ND Seller: Honeywell International: NYSE:HON (Morris Town, NJ) sold Brand-Rex (U.K.) Business: Supplies structured wiring systems for data networks and cable solutions Buyer: Gores Technology Group (Los Angeles) Deal Value: ND Seller: Miltec Corporation (Huntsville, AL) Business: Design, development, integration, and testing of missile and aerospace systems Buyer: Ducommun: NYSE:DCO (Carson) Deal Value: ND Seller: Sanatex (Carson) Business: Mfrs clothes and packaging materials Buyer: Jeantex Group: OTCPK:JNTX.B (Los Angeles) Deal Value: ND Seller: Talon Instruments (San Dimas) Business: Mfr of digital test and measurement equipment Buyer: EADS EADS European Aeronautic Defence and Space Company N.V. EADS Expeditionary Air Defense System (USMC) EADS Extended Air Defense Systems EADS Environmental Assessment Data System EADS Echelons Above Division Study North America Defense Test & Services (Irvine) Deal Value: ND Seller: Three-Star Refrigeration Engineering (Gardena) Business: Mfrs walk-in cold storage coolers and freezers Buyer: Standex International Corp.: NYSE:SXI (Salem, NH) Deal Value: ND MEDIA & ENTERTAINMENT Seller: DirecTV Group: NYSE:DTV (El Segundo) sold Hughes Network Systems Business: Provides broadband satellite services Buyer: SkyTerra Communications: OTCBB:SKYT (New York) Deal Value: $100 million Seller: GameTrailers (Los Angeles) Business: Provides video game trailers and online downloads Buyer: MTV Networks Music (New York) Deal Value: ND Seller: Kartenhaus GmbH (Germany) Business: Provides automated ticketing services Buyer: Ticketmaster (Los Angeles) Deal Value: ND Seller: Liberation Publications (Los Angeles) Business: Magazine publisher Buyer: PlanetOut: NasdaqNM:LGBT LGBT Lesbian, Gay, Bisexual, Transgender (San Francisco) Deal Value: $31 million Seller: Magna Entertainment Corp.: NasdaqNM:MECA MECA Maine College of Art MECA Middle East Children's Alliance MECA Manufacturers of Emission Controls Association (Washington, DC) MECA Marriage Equality California MECA Mars Environmental Compatibility Assessment (Canada) sold Mec Pennsylvania Racing (Meadow Lands, PA) Business: Standardbred horse racetrack Buyer: Millennium Gaming (Lakewood, CO), Oaktree Capital Management (Los Angeles) Deal Value: ND Seller: Magna Entertainment Corp.: NasdaqNM:MECA (Canada) sold Mountain Laurel Racing (Meadow Lands, PA) Business: Standardbred horse racetrack Buyer: Millennium Gaming (Lakewood, CO), Oaktree Capital Management (Los Angeles) Deal Value: ND Seller: Magna Entertainment Corp.: NasdaqNM:MECA (Canada) sold Washington Trotting Association (Meadow Lands, PA) Business: Standardbred horse racetrack Buyer: Millennium Gaming (Lakewood, CO), Oaktree Capital Management (Los Angeles) Deal Value: $225 million Seller: Patient Safety Technologies (Santa Monica) sold Excelsior Radio Networks (New York) Business: Operates radio syndication business Buyer: Lincolnshire Management (New York) Deal Value: ND Seller: Superluminal Entertainment (Beverly Hills) Business: Art film studio builder and operator Buyer: Archer Entertainment Media Communications Incorporated (Los Angeles) Deal Value: $5 million Seller: Walt Disney Television Walt Disney Television is the television production division of The Walt Disney Company with Walt Disney name. Until 1983, Disney shows were aired under the banner of the parent company, then named Walt Disney Productions. International (Burbank) sold IPS Multicanal Business: Provides thematic television in the Spain and Portugal Buyer: Chellomedia (Netherlands) Deal Value: ND REAL ESTATE Seller: 3 Class A buildings (Woodland Hills) Business: Industrial property Buyer: US Industrial REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). (San Antonio, TX) Deal Value: $51 million Seller: Aruna Hotel Chennai (India) Business: Operates a hotel Buyer: Tracinda Corp (Beverly Hills) Deal Value: ND Seller: Aventura Resorts (Bellevue, WA) Business: Designs, plans, develops, and manages upscale resorts Buyer: INQB8 Corp.: OTCPK:INQC (West Hollywood) Deal Value: ND Seller: Campton Place Hotel (San Francisco) Business: Operates a hotel Buyer: Kor Hotel Group (Los Angeles Deal Value: ND Seller: Capital & Regional plc: LSE:CAL (U.K.) sold 10 Industrial Estates (U.K.) Business: Industrial property Buyer: CB Richard Ellis CB Richard Ellis Group, Inc. NYSE: CBG is a multinational real estate corporation currently based in Los Angeles, California, U.S.A.. On December 20, 2006, the corporation, also known as CBRE, completed acquisition of Trammell Crow Co. in a transaction valued at $2. Investors (Los Angeles) Deal Value: ND Seller: Colliers Seeley International (Los Angles) Business: Commercial real estate transaction advisor Buyer: FirstService Corp.: TSX:FSV (Canada) Deal Value: ND Seller: Hilton Hotels Corp. (Beverly Hills) sold DoubleTree Hotel at The Bradley International Airport Coordinates:
(Windsor Locks, CT) Business: Operates hotel Buyer: United Capital Corp. (Great Neck, NY) Deal Value: ND Seller: Johnson Controls Battery Group (Milwaukee) sold 15-Acre Industrial Site (Fullerton) Business: Industrial property Buyer: Lowe Enterprises (Los Angeles) Deal Value: ND Seller: Property/2 Industrial Tenants (Sylmar) Business: Industrial property Buyer: EACO EACO Emmanuel Alliance Church of Ottawa (Canada) Corp.: OTCBB:EACO (Neptune Beach, CA) Deal Value: $8 million TECHNOLOGY Seller: Clearstone Venture Partners Clearstone Venture Partners is an early stage venture capital firm focused on IT investing with offices in Santa Monica, CA, Menlo Park, CA, and Mumbai, India. Founded in 1997, as Idealab Capital Partners, Clearstone is responsible for the early-stage funding of many successful (Santa Monica), Intel Capital (Santa Clara) sold PhaseBridge (Pasadena) Business: Designs, Mfrs, and markets miniaturized multi-chip system-in-package optical modules Buyer: EMCORE EMCORE Environmental Management Center Opportunities Resource Corp.: NasdaqNM:EMKR (Somerset, NJ) Deal Value: ND Seller: Enterasys Networks: NYSE:ETS (Andover, MA) Business: Develops, markets, and supports network solutions Buyer: Gores Technology Group (Los Angeles) Tennenbaum Capital Partners (Santa Monica) Deal Value: $380 million Seller: Gores Technology Group (Los Angeles) sold Inmac Micro Warehouse (France) Business: B-to-B direct reseller of information technology products Buyer: Wstore Europe S.A. (France) Deal Value: $16 million Seller: InfoPro Solutions (Agoura Hills) Business: Develops, implements, and maintains information systems for drug companies Buyer: Aptuit (Greenwich, CT) Deal Value: ND Seller: Lexington Ventures (Beverly Hills), Mapleton Investments (Los Angeles) sold Omnipod Business: Provides on-demand secure instant messaging solutions Buyer: MessageLabs Ltd. (U.K.) Deal Value: ND Seller: Living Mobile GmbH (Germany) Business: Developer of Web-based video games Buyer: Walt Disney Internet Group The Walt Disney Internet Group (WDIG) oversees several websites owned by The Walt Disney Company and its subsidiaries. [1] The division's Disney Online unit operates disney. (Burbank) Deal Value: ND Seller: Soltre Technology (Los Angeles) Business: Application service provider and implementer Buyer: RCM Technologies: NasdaqNM:RCMT (Pennsauken, NJ) Deal Value: ND Seller: The Link (Montgomery, AL) Business: Internet service provider Internet service provider (ISP) Company that provides Internet connections and services to individuals and organizations. For a monthly fee, ISPs provide computer users with a connection to their site (see data transmission), as well as a log-in name and password. Buyer: IVI Communications: OTCBB:IVCM IVCM Integrated Value Chain Model IVCM Master Chief Investigator (USCG Rating) (Los Angeles) Deal Value: ND Seller: Visual Sound (Broomall, PA) Business: Reseller of broadcast audio, video, and AV presentation technology Buyer: Point.360: NasdaqNM:PTSX PTSX Paul Trap Simulator Experiment (Burbank) Deal Value: ND Seller: Vizual Corporation (Los Angeles) sold Vizual Corporation, Intellectual Property Assets (Los Angeles) Business: Delivers television over existing broadband infrastructure Buyer: GTX Global Corp.: OTCPK:GTXC GTXC Global Telephone Exchange Carrier (Henderson, NV) Deal Value: ND Seller: Xi'an Jiaotong University Xi'an Jiaotong University (Simplified Chinese: 西安交通大学; Traditional Chinese: 西安交通大學 (China) sold Jump Technology Co. (China) Business: Provides network security solutions for Internet users Buyer: The Hartcourt Companies (Pasadena) Deal Value: $2 million TELECOM Seller: Puma Unified Communications Limited (U.K.) Business: Telecom company provides outsourced fax, voice and short message services Buyer: J2 Global Communications j2 Global Communications (Nasdaq:JCOM) is a company based in Hollywood, California that offers messaging and communications services. Its most popular service is called "eFax", which allows users to send and receive faxes via the Internet. j2 was previously called JFAX. : NasdaqNM:JCOM JCOM Journal of Clinical Outcomes Management (Los Angeles) Deal Value: ND Information provided by Goldsmith Agio AGIO, aggio. This term is used to denote the difference of price between the value of bank notes and nominal money, and the coin of the country. Encyc. Helms ND = Not Disclosed Golsdsmith Agio Helms is a national investment banking firm specializing in providing merger and acquisition, private placement of debt and equity, valuation and fairness opinions and distressed advisory and restructuring services to all middle-market businesses. All data is provided by Goldsmith Agio Helms from sources deemed reliable. The firm can be contracted at (310)551-4111. M&A Update Announced mergers and acquisitions in L.A. County. Month Number of Deals Deal Value July 85 $7.5 billion August 75 4.7 billion September 77 2.4 billion October 72 6.5 billion November 66 9.2 billion Source: Goldsmith Agio Helms |
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