Investors cash-in on land deals as U.S. housing picks up

NEW YORK , Mon Sep 10, 2012 – From the outskirts of Las Vegas to the coast of California, stretches of undeveloped land in some of the most depressed housing markets in the U.S. are in high demand.

Money managers such as BlackRock Inc, hedge fund Angelo Gordon & Co. and real estate investment firm Starwood Capital, are beginning to cash-in on so-called shovel-ready residential land-tracts with most of the pre-construction and zoning approvals already in place.

The investors snapped up land on the cheap in bankruptcy proceedings, from cash-strapped home developers and banks that seized the properties after foreclosing on them when builders ran out of money.

Now they are re-selling the land, often for returns of more than 20 percent on their initial investment, in the latest sign of a modest recovery in the U.S. housing market. Other investors, meanwhile, are looking to partner with homebuilders to develop the tracts.

Some, like Paulson & Co, which has also been active in the space, will hold onto the land for some time before re-selling it to buyers.

“We are coming out of the mother of all housing cycles, and residential land is the best way to play the ultimate recovery,” said Michael Barr, a Paulson & Co portfolio manager, who oversees the Paulson Real Estate Recovery fund, which has under $500 million in assets for the $19.5 billion hedge fund. “Land is the highest returning component of the home building equation.”

Wind Point Partners purchases Shearer’s Foods

CHICAGO, Tues Aug. 28, 2012 – Wind Point Partners, a Chicago-based private equity investment firm, today announced it has signed an agreement to acquire Shearer’s Foods. The transaction is expected to close in October.

Based in Brewster, Ohio, Shearer’s is the largest producer of private label salty snacks in North America and the largest producer of kettle cooked potato chips in the world. Shearer’s manufactures both branded and private label snacks for leading blue-chip retailers and contract manufactures snacks for the nation’s largest branded snack food companies.

Wind Point is partnering with C.J. Fraleigh, who is joining Shearer’s as chairman and CEO. Fraleigh, who most recently served as CEO of Sara Lee-North America, has 25 years of experience in consumer products.

“I’m very excited to be joining the team at Shearer’s,” Fraleigh said. “With the growth of private label brands and the trend toward outsourcing for branded food companies, Shearer’s is well-positioned to continue its historical growth trajectory. I look forward to working with the company’s 1,850 employees to execute on growth opportunities we’ve identified and continue providing Shearer’s customers with excellent service and consistently high quality products.”

Mark Burgett, a managing director at Wind Point stated, “Wind Point’s partnership with C.J. – a top caliber CEO in the food industry – along with our depth of experience with food investments, creates an excellent opportunity to drive growth at Shearer’s. We are confident that we will create value through initiatives such as introducing a proactive strategic selling effort, leveraging Shearer’s proven ability to innovate and implementing continuous improvement programs. We are excited to work with C.J. and the management team to continue the Shearer’s success story.”

Wind Point currently holds four additional food-focused investments – Hearthside Food Solutions, Nonni’s, Rupari Foods and Ryt-way Industries. Wind Point’s former food investments include Toronto-based Santa Maria Foods (sold to Sofina Foods in April 2012) and Bakery Chef.

Starbucks brews a few U.S. factory jobs as merchandise will fill shelves

LOS ANGELES, Tue Jun 12, 2012 – Starbucks Corp.will debut the first products in a line of U.S.-made mugs and other merchandise that will be sold in its roughly 7,000 U.S. cafes to support domestic manufacturing and raise money for its Create Jobs for USA fund.

The move from the world’s biggest coffee chain follows Chief Executive Howard Schultz’s call to fellow executives to step up hiring and take a bigger role in the country’s economic revival.

Domestic manufacturing, once a pillar of the economy, has been hard-hit by globalization. The industry now employs about 12 million people, down from a peak of nearly 20 million around 1980, according to data from the U.S. Department of Labor.

The new line of U.S.-made merchandise includes a 16-ounce acrylic tumbler made in Chicago, whole bean coffee that is blended, roasted and packaged in the United States and a 16-ounce ceramic mug made with domestically sourced raw materials at the American Mug & Stein factory in East Liverpool, Ohio.

That formerly struggling factory in what was once known as the pottery capital of the United States expanded its workforce from 14 to 22 after the Starbucks order, the coffee chain said.

While that does little to offset the jobs lost when Starbucks closed roughly 600 U.S. cafes during its ultimately successful turnaround in 2008 and 2009, the move signals growing corporate interest in bringing back U.S. factory jobs.

The company partnered with the Opportunity Finance Network, a group of private lenders, to start Create Jobs for USA late last year. Starbucks will make a donation to the fund for each U.S.-made product sold.

Chesapeake to sell pipeline assets for more than $4 billion

OKLAHOMA CITY, Okla., Fri Jun 8, 2012 – Chesapeake Energy Corp. will sell its pipeline and related assets to Global Infrastructure Partners in three separate transactions worth more than $4 billion, as the company scrambles to plug an expected $9 billion to $10 billion funding shortfall.

Chesapeake, the second-largest U.S. natural gas producer, is under pressure to sell assets and cut spending to reduce debt after tumbling natural gas prices have pinched profits. The company, which is holding its annual meeting later on Friday, has also come under intense scrutiny for corporate governance issues.

Chesapeake said it will sell its limited partner units and general partner interests in Chesapeake Midstream Partners LP to infrastructure fund GIP for $2 billion.

The company also entered into an agreement with Chesapeake Midstream Partners for potential sale of certain Mid-Continent gathering and processing assets.

It also has a agreement with Global Infrastructure Partners for the sale its interests in wholly owned subsidiary Chesapeake Midstream Development LP.

Chesapeake expects to raise more than $2 billion from the latter two transactions.

Chesapeake Midstream Partners has more than 3,700 miles of natural gas gathering pipelines, according to the company’s website. Chesapeake also held about 1,950 miles of pipelines in the Chesapeake Midstream Development unit as of the end of last year, according to regulatory filings.

Chesapeake has said it will sell as much as $11.5 billion in assets this year in order to reduce its funding gap. Last month, the company arranged for a pricey $4 billion loan from its investment bankers to tide it over.

Chesapeake selling 504,000 DJ acres, production from 29 wells

OKLAHOMA CITY, Okla., Thu May 24, 2012 – Chesapeake Energy Corp. has put 504,000 acres in the DJ Basin in Wyoming and Colorado up for sale, as the U.S. energy company scrambles to raise cash to close a $9 billion to $10 billion funding shortfall.

The deal includes oil and gas production from 29 wells that the company operates and Chesapeake’s interest in 24 nonoperated wells, according to a prospectus on the deal.

Chesapeake, the nation’s second-largest gas producer behind Exxon Mobil Corp and for years one the most active gas drillers, sold off a third of its holdings in the region – then around 800,000 acres – to China’s CNOOC Ltd for nearly $1.3 billion in 2011.

The company faces a 2012 funding shortfall as natural gas prices are the lowest in a decade.

It has already announced that it is looking to sell its 1.5 million acres of lease holdings in the oil-rich Permian basin as well as find a joint venture partner in another liquids-rich region, the Mississippi Lime basin, in order to raise cash.

Analysts and investors have also called for change at the company after Reuters reported that CEO Aubrey McClendon had taken out more than $1 billion in loans using his interest in thousands of company wells as collateral.

Chesapeake shares were down 1.8 percent at $14.82 on Thursday afternoon on the New York Stock Exchange.

Ally not looking to sell U.S. auto lending: CEO

DETROIT, Tue May 15, 2012 – Ally Financial is “absolutely not” looking to sell its core U.S. auto lending business as it seeks ways to pay back $12 billion it owes to U.S. taxpayers after a government-funded bailout during the financial crisis, the company’s CEO said Tuesday.

Ally, the former in-house financing arm for General Motors Co., on Monday announced plans to sell some international operations at the same time that its Residential Capital mortgage unit filed for bankruptcy protection.

Monday’s actions give Ally some flexibility in finding ways to pay back the $12 billion, CEO Michael Carpenter said in a conference call with analysts on Tuesday.

The company could still pursue an initial public stock offering, find private-equity firms to buy out the stake owned by the U.S. Treasury, release capital or pursue acquisitions, Carpenter said.

“We will have created optionality and opportunity as a result of these steps,” he said.

Ally last year filed for an initial public stock offering, but shelved those plans after its mortgage woes mounted and the European debt crisis roiled markets. That has led to speculation that the company might have to sell itself as a whole or in pieces to pay back taxpayers.

Ally has repaid about one-third of the $17 billion it received from the U.S. government and expects to return another third after selling its international auto, banking and insurance operations, Ally has said.

Citigroup Inc. and Evercore Partners Inc. are advising the company on the sale of its international businesses. Ally is looking to sell these operations by year-end, Carpenter said.

GM, the largest U.S. automaker, is interested in buying Ally’s international operations, GM’s chief executive told Bloomberg on Monday.

UBS analyst Colin Langan said on Monday that GM could be interested in parts of Ally’s U.S. operations, such as its dealer wholesale and leasing units. GM could pay $7.6 billion for Ally’s international, dealer wholesale and lease operations, he said.

GM is “probably not” interested in acquiring Ally’s U.S. operations, CEO Dan Akerson told Bloomberg.

PF Chang’s to go private in $1.1 billion deal with private equity firm

SCOTTSDALE, Ariz., Tue May 1, 2012 – P.F. Chang’s China Bistro Inc (PFCB.O), which has been fighting to recover from ill-timed price increases, said it would go private in a $1.1 billion deal with Centerbridge Partners, sending its shares up 30 percent.

Centerbridge, a private equity firm that owns restaurant holding company CraftWorks Restaurants & Breweries, will pay $51.50 per share for P.F. Chang’s, a premium of about 30 percent to the stock’s closing price on Monday.

The shares jumped $11.83 to $51.52 on the Nasdaq Tuesday morning. The stock, which had fallen about 20 percent over the year to Monday, last traded above $50 in February 2011.

“It looks like a fair price,” said Morningstar analyst R.J. Hottovy.

The deal comes in at about 8 times trailing earnings before interest, tax, depreciation and amortization (EBITDA), right where most deals in the last year have landed, including Golden Gate Capital’s acquisition of California Pizza Kitchen in July 2011, he said.

“If you find a company that’s been beaten up but there’s no structural damage to the company, this may be the time for a deal,” Hottovy said.

Shares in other full-service restaurants, including Cheesecake Factory Inc. and Buffalo Wild Wings Inc., moved higher on the P.F. Chang’s news.

In a week brimming with consumer sector news, Microsoft Corp. said it would invest $605 million over five years in Barnes & Noble Inc.’s Nook e-reader and college business; Collective Brands Inc., owner of the discount footwear chain Payless ShoeSource, signed a deal to be bought by shoemaker Wolverine Worldwide Inc. and two private equity firms for $1.32 billion; and DineEquity Inc. found a buyer for 39 of its Applebee’s restaurants in Virginia.

P.F. Chang’s CEO Rick Federico said going private would give his company greater flexibility to pursue its long-term strategy to increase traffic and improve performance.

P.F. Chang’s, which operates namesake Bistro restaurants and the smaller Pei Wei quick-service chain, is free to solicit superior proposals through May 31, the parties to the deal said.

“Although we do not anticipate any other potential suitors now, we think any potential buyer will pave the way for greater cost scrutiny, potential closures of underperforming units and a more rapid turnaround,” Miller Tabak restaurant analyst Stephen Anderson wrote in a note to clients.

Warner Chilcott weighs sale, other options, according to report

ROCKAWAY, N.J., Mon Apr 30, 2012 – Warner Chilcott is evaluating options, including a possible sale of the company, after receiving interest from strategic and private-equity buyers, Bloomberg News reported on Monday.

Goldman Sachs is helping the Nasdaq-listed drugmaker assess interest, said the news service, citing people with knowledge of the matter. Warner Chilcott is also considering paying a dividend as an alternative to a sale, one person said.

Warner Chilcott’s stock rose 8 percent to $18.79 on Friday on takeover speculation, giving it a market capitalization of $4.7 billion, after the Times of London said in a market report there was talk Bayer might bid $32 a share.

Reuters reported on April 25 that Bayer was nearing a multibillion-dollar acquisition to bolster its healthcare division, citing three people close to the planned transaction.

Warner Chilcott focuses on women’s health care, dermatology, urology and gastroenterology.

Trimble Navigation to buy Google’s SketchUp

SAN FRANCISCO, Thu Apr 26, 2012 – Trimble Navigation Ltd. has agreed to buy SketchUp 3D modeling platform from Google Inc. for an undisclosed price, the companies said.

As part of the SketchUp platform, Trimble will partner Google in developing SketchUp’s 3D Warehouse – an online repository where users can find, share, store and collaborate on 3D models, the companies said in a joint statement.

Trimble, which makes surveying, mapping, and marine navigation equipment, said SketchUp will enhance the integration of its field presence with the wider enterprise.

SketchUp is a free 3D modeling platform that helps in designing 3D models within Google Earth – a virtual map of most of the planet’s surface.

The platform enables users to create collections of models, including 3D buildings, and share them with fellow modelers around the world.

SketchUp, which was a tiny startup when it was bought by Google in 2006, now boasts of millions of active users.

“With over 30 million SketchUp activations in just the last year, we’re awfully proud of our accomplishments,” John Bacus, SketchUp product manager wrote in a blog post.

The deal is expected to close in the second quarter of 2012, and it would not be material to Trimble’s 2012 earnings.

Trimble’s stock was trading flat at $53.98 in morning trade on the Nasdaq on Thursday.

Schlumberger sells Wilson piping and fitting unit to National Oilwell Varco

HOUSTON, Wed Apr 11, 2012 – Schlumberger Ltd., the world’s largest oilfield services company, will sell its piping and fitting unit to National Oilwell Varco in a cash deal, the firms said on Tuesday.

They did not disclose terms of the deal for the Wilson distribution unit, which also makes valves, lifts and other products used by oil and gas companies.

Wilson was bought as a part of Schlumberger’s $11.3 billion buyout of Smith International in 2010.

National Oilwell, which makes equipment used in oil and gas drilling, expects to tap into new market opportunities with the deal, it said in a statement.

Schlumberger shares closed down 0.5 percent at $67.26 while National Oilwell Varco was down around 3 percent at $7