Eaton to buy electrical equipment maker Cooper Industries for $11.8 billion

CLEVELAND, Mon May 21, 2012 – Diversified industrial manufacturer Eaton Corp. agreed to buy electrical equipment maker Cooper Industries Plc for $11.8 billion in cash and stock, its biggest-ever acquisition, a move that will lower Eaton’s taxes by shifting its incorporation to Ireland.

Eaton will pay $72 per share for Cooper: $39.15 in cash and the rest in stock. Eaton shareholders will control almost three-quarters of the new Eaton Global Corp Plc.

Cooper shares were up 27 percent at $70.89 in morning trading, the day’s biggest gainer on the New York Stock Exchange, while Eaton stock was up 1.1 percent at $42.88.

The Eton-Cooper agreement would be the biggest deal of several mergers announced on Monday. Analysts said this was one way for companies to grow in a sluggish global economy.

“It drives the point home that acquisitions are an increasingly important growth avenue in a slow-growth world,” said analyst Matt Collins of Edward Jones.

“Record low interest rates and solid balance sheets make it that much easier to get deals done. Overall I wouldn’t say that it necessarily means anything strategically for other companies in the space, other than more of the same consolidation is likely,” Collins said.

The pricing appears to be fair or “slightly expensive,” valuing Cooper at 11.5 times projected earnings, JP Morgan analyst Ann Duignan said.

The deal will allow Eaton to better participate in an electrical market that is expected to benefit from investment to modernize aging power grids in both mature and developing economies. It will also allow Eaton to expand into lighting and lighting controls, a market poised to benefit from a rebound in commercial construction.

Eaton also cited expected growth from the oil and gas industry, which both Cooper and Eaton serve.

DaVita eyes new markets with $4.4 billion HealthCare deal

DENVER, Mon May 21, 2012 – DaVita Inc., the biggest U.S. operator of dialysis clinics, has agreed to buy privately-held HealthCare Partners for about $4.42 billion in cash and stock to expand into new markets to help offset potential revenue pressures in its main business.

HealthCare Partners, based in Torrance, California, runs medical groups and physician networks in Southern California, Central Florida, and Southern Nevada. Its revenues in 2011 were about $2.4 billion.

The company provides its services to more than 667,000 patients and has total care dollars under management of about $3.3 billion, DaVita said.

The deal follows changes to the way healthcare companies are reimbursed by U.S. state-run health insurer Medicare which could put pressure on revenues across the industry.

Medicare changed its reimbursement model last year to encourage clinic operators to reduce costs and use drugs more sparingly. It no longer pays for individual services and drugs but instead makes a lump-sum payment per dialysis session, as long as patients are kept in good health.

Analysts have said this favors large players such as DaVita and its biggest rival FMC, the U.S. arm of Germany’s Fresenius Medical Care, because they are better placed to cut costs, but it also creates revenue pressures.

DaVita Chief Executive Kent Thiry said DaVita was currently focused on integrated care for specialized kidney care services. “HealthCare Partners executes on that same mission across a full and deep array of healthcare services in three geographic markets.”

Wells Fargo’s play for prime brokerage prompts skepticism

As Wells Fargo becomes a bigger player in the investment banking game, not everyone is a fan.

Moody’s Investors Service, the rating agency, raised concerns on Monday about the bank’s recent move outside its comfort zone of consumer lending. Moody’s directed criticism at the bank for stepping into prime brokerage, calling the bank’s recent acquisition of the midsize company Merlin Securities “credit negative.”

Wells Fargo agreed to buy Merlin last month for an undisclosed sum, making it the last of the nation’s biggest banks to enter prime brokerage, the lucrative business that caters to hedge funds and other big investors. Prime brokers provide a broad array of services, including cash management, execution of leveraged trades and securities lending.

Moody’s expressed concern the Merlin takeover “signals that Wells Fargo intends to expand its” investment banking business. “Though Merlin is small and has a limited balance sheet, we expect that Wells Fargo will build this business and seek to expand its products and services,” Moody’s said in the report.

Fitch, one of Moody’s top competitors, offered a softer interpretation of the deal. While Wells Fargo “may use Merlin as a platform for further expansion, the transaction is still viewed as relatively small in nature,” Fitch said last week.

In a statement, Wells Fargo defended the deal and challenged the Moody’s assessment.

Dura-Line Holdings acquires PolyPipe Holdings

KNOXVILLE, Tenn., Mon Apr 16, 2012 – Dura-Line Holdings Inc., a portfolio company of Chicago-based CHS CapitalTM, has completed the acquisition of PolyPipe Holdings Inc. Dura-Line is a portfolio investment of CHS Private Equity V LP, a $1.3 billion investment fund.

Headquartered in Gainesville, Texas, PolyPipe is one of the largest independent North American manufacturers of pressure-rated high density polyethylene pipe for diverse infrastructure applications in the energy, natural gas distribution, water/sewer, nuclear power, mining and industrial segments with strong brand recognition. Dura-Line will integrate PolyPipe into its current U.S. regional operations. The combined company will have 12 manufacturing facilities of HDPE duct and conduit in the U.S. and 19 worldwide.

Dura-Line is a global leader of HDPE conduit, duct and pressure pipe solutions for telecom, energy and infrastructure-related markets. Dura-Line serves customers in 50 countries and is the exclusive provider for many of the world’s leading telecom companies.

Paresh Chari, president and CEO of Dura-Line, said, “With its significant market share, national presence and differentiated products and capabilities, PolyPipe will position us to further strengthen our footprint in the U.S. Together, we will continue to provide our customers with best-in-class service and a versatile product line.”

Devon Energy Corp. raises 2012 spending by $1 billion, targets oil

OKLAHOMA CITY, Okla., Wed Apr 4, 2012 – Devon Energy Corp. will spend $1 billion more than planned this year on acreage acquisition and exploration in shale basins that produce oil and more profitable natural gas with a high liquids content, the company said on Wednesday.

Devon, like most other U.S. exploration and production companies, is shifting capital away from natural gas drilling in a time when prices for that fuel are at a decade low. Energy companies are instead targeting crude oil trapped in rock like shale and natural gas that can be stripped of valuable liquids like propane.

“We’re very confident that there are a lot of oil and liquids-rich opportunities to be found in North America,” Dave Hager, Devon’s head of exploration and production, told analysts.

In addition to previously announced exploration plans in emerging basins like the Utica Shale in Ohio, Devon said it has amassed 500,000 acres in the Cline shale in West Texas that holds oil. Devon is also targeting oil on another 250,000 acres in an unspecified location and the company hopes to increase that position to 500,000 acres, Hager said in remarks broadcast over the Internet.

The Oklahoma City, Oklahoma, company now plans to spend $6.1 billion to $6.5 billion this year, up $1 billion from its original budget.

Devon has no plans to use its $7.1 billion cash pile on a large acquisition as some have speculated, said John Richels, the company’s chief executive officer.

Richels said he and other executives at Devon have not spent “five minutes” thinking about a big acquisition. Instead, the company’s cash will be invested in exploration and production projects, Richels said.

Cisco to buy software developer NDS for $5 billion

SAN JOSE, Calif., Thu Mar 15, 2012 — Cisco Systems said on Thursday it will buy NDS, a developer of software for multi-channel television networks, for $5 billion.

Founded in Israel in 1988 and headquartered in London, NDS is 51 percent owned by private equity fund Permira and 49 percent by News Corp. It maintains a large research and development center in Jerusalem.

Cisco said it will pay about $5 billion, including the assumption of debt and retention-based incentives, to acquire all of NDS. The acquisition, which is expected to close during the second half of 2012, has been approved by the boards of both companies.

The deal’s value is about 35 percent higher than NDS’s value when it was delisted from the stock exchange in 2009.

NDS specializes in the development of interactive systems for secure delivery of entertainment and information to digital TVs, digital set-top boxes, PCs and mobile devices. It also provides electronic security systems for Web applications.

Its technology is expected to complement Cisco’s Videoscape video delivery technology.

The company’s flagship product is its encryption and conditional access system VideoGuard, which is installed on home TVs via smartcards integrated into set-top boxes.

NDS’s products are at the heart of News Corp’s technological infrastructure — the company’s coding system allows it to control the channels provided to each subscriber on multi-channel TV as well as billing.

Boston Scientific to buy Cameron Health for $150 million

NATICK, Mass. – Fri Mar 8, 2012: Boston Scientific Corp said it agreed to acquire Cameron Health Inc. for $150 million in cash and additional payments of up to $1.20 billion if the privately held company’s device achieves certain regulatory and sales milestones.

Cameron Health is currently developing a defibrillator, known as S-ICD that can be implanted beneath the skin, unlike conventional defibrillators, which require thin, insulated wires to pass through the venous system and into the heart.

Boston Scientific will pay Cameron an additional $150 million after receiving U.S. regulatory approval for its device.

S-ICD has already received a CE mark in Europe and has been commercially available in major European countries since 2009.

Last year, Cameron Health filed a marketing application in the United States and Boston Scientific expects U.S. regulatory approval for the device in the first half of 2013.

Following the U.S. Food and Drug Administration’s approval, Cameron Health will be eligible to receive an additional $1.05 billion upon achievement of certain revenue-based milestones over six years.

Boston Scientific expects the deal to hurt 2012 adjusted earnings by 1 cent.

Shares of Boston Scientific, which expects to close the deal in the second or third quarter of this year, closed at $5.93 on Thursday on the New York Stock Exchange.

Apple buys Israeli technology firm Anobit, flash storage chipmaker

CUPERTINO, Calif. ― Apple said on Wednesday it had bought Israel’s Anobit, a maker of flash storage technology whose chips it already uses in gadgets such as the iPad.

Israeli media reported on Dec. 20 that Apple bought Anobit for as much as $500 million, its first acquisition of an Israeli company. Apple declined to comment at the time.

“Yes … we did buy Anobit,” Apple spokesman Alan Hely said in an e-mail to Reuters, declining to elaborate. “Apple buys smaller technology companies from time to time and we generally do not discuss our purpose or plans.”

Anobit has developed a chip that enhances flash drive performance through signal processing. The chip is already incorporated in Apple devices such as the iPhone, iPad and the MacBook Air.

The Calcalist financial daily reported last month that Apple, among one of the largest buyers of flash memory, was interested in Anobit’s technology to increase and enhance the memory volume and performance of its devices. The chip may as much as double the memory volume in the new iPads and MacBooks.

Anobit has raised $76 million from Battery Ventures, Pitango Venture Capital and Intel Capital since it was founded in 2006.

Fossil to buy accessories maker Skagen Designs for $236.8 million

RICHARDSON, Texas ― Fashion accessories maker Fossil Inc said it will buy privately held Skagen Designs Ltd for about $236.8 million in a cash and stock deal to add the maker of designer watches, jewelry, sunglasses and clocks to its portfolio.

Fossil will pay Reno, Nevada-based Skagen Designs about $225 million in cash and 150,000 of its shares.

In addition, Skagen could receive up to 100,000 additional Fossil shares if the net sales of its branded products exceed certain targets, Fossil said in a statement.

The acquisition is expected to close by February 2012.

Skagen products are sold in 75 global markets and in company-owned retail stores in Denmark, Germany, United Kingdom and Hong Kong.

Shares of Fossil closed at $78.98 on Monday on the Nasdaq.

RTI International to buy Remmele Engineering for $164.5 million

PITTSBURGH ― Titanium products maker RTI International Metals said it will buy Remmele Engineering for $164.5 million to enter new contract manufacturing markets, such as the fast-growing medical device space.

Pittsburgh-based RTI said it will also assume $18.0 million in Remmele’s debt. The company expects the deal to immediately add to its earnings.

The acquisition, which is being financed from RTI’s existing cash reserves, is expected to close before the end of the first quarter, RTI said in a statement.

Remmele, which was bought by private equity firm Goldner Hawn Johnson & Morrison in 2007, caters to the aerospace, defense and medical device sectors.

RTI shares closed at $23.41 on Monday on the New York Stock Exchange.