Merger & acquisition activity picking up

After several flat years, merger and acquisition activity in Wisconsin finally appears to be picking up steam, with several new transactions announced recently.
Stanley Johnson, president of Anderson/Roethle, Inc., which specializes in mergers and acquisitions, said activity has picked up this year after three consecutive slow years.
"We began to notice a slowdown in 2001, and 2002 and 2003 were very depressed," Johnson said. "In 2004, we have had more opportunities at Anderson/Roethle than the previous 18 months. We have a number of transactions we’re working on now that are new to this year."
Johnson said the company has recently helped companies that were waiting for business to pick up and their valuation multiples to rise before making the move to sell.
"We continue to get opportunities to work with perspective clients that were waiting on the sidelines for their businesses to improve," he said. "The activity, at least from our perspective, has picked up. And from talking to others (in the industry), the activity level has picked up."
Bolstering his statements about increased activity is a recent announcement of Anderson/Roethle new joint venture with Sattell, Johnson, Appell & Co., S.C., an accounting, tax and auditing firm.
Both companies are based in downtown Milwaukee.
Johnson said the new venture, yet un-named, will result in Anderson/Roethle from its current offices at 788 N. Jefferson St. into Sattell, Johnson, Appell & Co.’s offices at 700 N. Water St.
However, the joint venture will not be a merger of the two companies.
"I have known their firm for a long time. That was part of why this was attractive to me," Johnson said. "We’ve been talking for some time now."
Johnson said the new venture will give customers a chance to draw on expertise from both firms, as accounting and other financial advice is almost always needed in M&A transactions.
"Our structure will be set up in a fashion that will give us a high probability of success," he said. "We kept looking for aspects of such a relationship that would not be beneficial or negative, and we couldn’t find any."
As first reported in BizTimes Daily, the daily e-mail news bulletin of Small Business Times, several other mergers and acquisitions involving Wisconsin firms have recently been announced:
* Site Locators, a petroleum-based business brokerage firm in Waukesha, has been acquired by Cornerstone Business Services, a Green Bay-based mergers and acquisitions firm. Cornerstone purchased the business from John Theisen of Mukwonago. The financial terms of the acquisition were not disclosed. "Site Locators has been one of this state’s premier petroleum business brokers, so it should solidify our position as Wisconsin’s leading firm to sell petroleum-based businesses," said Scott Bushkie, president of Cornerstone Business Services. Site Locators will become a wholly-owned subsidiary of Cornerstone Business Services. Theisen said he has stepped down from his role in Site Locators to spend time on other business ventures. He owns Great Lakes Lube in Mukwonago. "Cornerstone will be able to take a solid company, with great ties to the petroleum and food industry, and expand its reach and sales," Theisen said. Site Locators brokers, who acquire and sell convenience stores, are currently working out of offices in Mukwonago and Madison. The firm and three to five employees will be relocated to Milwaukee offices in the next six months, although a new site hasn’t been selected yet, a spokeswoman said.
* Anderson Pump & Process, an A.A. Anderson Co. of Waukesha, announced it has purchased UMISCO, a New Berlin-based custom hose manufacturer. The acquisition will enable Anderson Pump & Process to aggressively pursue contractor markets while widening its current industrial customer base, according to company officials.
The UMISCO operations have been moved to the Anderson Pump & Process plant in Waukesha. UMISCO employees have moved with the company to join the 42 employees at Anderson Pump & Process, the company said.
Anderson Pump & Process, which manufactures pumps, filters and heat exchangers, also operates offices in Waupaca and in Carol Stream, Ill.
* Nassco Inc., a New Berlin-based marketer of maintenance, paper and packaging supplies and equipment to commercial and industrial businesses, has acquired Dillon Co. Inc. of Green Bay.
Dillon supplies janitorial, paper, packaging and shipping supplies and equipment. With the acquisition, Nassco now has a work force of 80 employees.
"We are excited to welcome the Dillon Co. to our Nassco team. Both of our family-owned firms share a common culture of providing quality products and superior service," said Gene Melzer, president of Nassco. "The product lines and customer bases offered by Nassco In. and the Dillon Co. are complementary. The merger of our two companies creates one of the largest distributors of these products in Wisconsin, making it possible to offer unequalled value through economies of scale."
Financial terms of the acquisition were not disclosed.
* Media Dynamics of West Allis has acquired 3D Impact, a Milwaukee-based company that specializes in three-dimensional visualization and animation. 3D Impact will operate as a division of Media Dynamics and will be overseen by Tod Cruikshank and Joe McCarthy.
"Adding 3D visualization and animation technology to our production capabilities enables us to help our customers develop 3-D prototypes, demonstrate concepts, showcase new products, tour 3-D environments and add entertainment value to their programs," said Ron Trilling, a partner at Media Dynamics. "Whether it’s a mechanical cut-away of a machine part or an exploded view, a point-of-purchase display, character model, packaging concept, illustration or virtual tour of a facility, we now have the knowledge and experience to create it."
Financial terms of the acquisition were not disclosed.
* The Russ Darrow Automotive Group has acquired its first Ford dealership with the purchase of Best Ford of Wauwatosa. The new Russ Darrow Ford recently opened at the Best Ford location, 1901 N. Mayfair Road.
The Darrow Group previously acquired its first Chevrolet dealership with the purchase Lancaster Chevrolet in Madison. The Darrow Group had added Cadillac and KIA dealerships last fall.
"Our goal is to make Russ Darrow Ford the No. 1 Ford dealership in volume and satisfaction in the entire state of Wisconsin in 2005," said Russ Darrow III, president and chief operating officer of the Menomonee Falls-based company. The firm named John Sutterfield general manager for the new Ford dealership.
* Milwaukee-based Actuant Corp. announced it has completed its purchase of all of the outstanding shares of Yvel S.A., a Paris, France-based provider of hydraulic latches to the European cab-over-engine truck market.
The value of the cash transaction is estimated at $9 million. Yvel reported annual sales of about $15 million in 2003. Funding for the transaction was provided by borrowings under Actuant’s $250 million revolving credit facility.
"Yvel’s market leadership, geographic proximity and manufacturing competency complements our Power-Packer truck business," said Robert Arzbaecher, president and chief executive officer of Actuant, which is a diversified industrial company with operations in more than 20 nations.
* Modine Manufacturing Co. announced it has completed its acquisition of the Shanghai, China, assets of Automotive Climate Control Division(ACC) of WiniaMando Inc.
Financial terms of the acquisition were not disclosed. Racine-based Modine, a thermal management technology manufacturer, had acquired ACCùs South Korean assets in July.
Modine also intends to acquire ACCùs interest in a joint venture in Hefei, China, in the near future.
ùWith these significant investments in Asia, we look forward to serving our customers from a global platform,ù said David Rayburn, president and CEO of Modine.
Modine also announced it has begun producing engine cooling modules for the new BMW 1 Series, which was recently launched worldwide. BMW expects to sell about 100,000 models of the 1 series in 2005, the first full year of production of the automobile.
The cooling module will be assembled at Modine’s newest plant in Wackersdorf, Germany.
"We have been a BMW partner for nearly 25 years. Our companies continue to work well together, which is shown by the other BMW platforms for which we provide cooling systems," said Klaus Feldmann, group vice president and managing director of Modine Europe.
* The targeted completion of BancWest Corp.’s acquisition of Community First Bankshares Inc. has been bumped back until the fourth quarter. The companies had expected to complete the transaction in the third quarter.
The estimated $1.2 billion acquisition is still pending regulatory approval. When completed, Fargo, N.D.-based Community First will merge into Bank of the West of San Francisco. Commmunity First Bankshares is the parent company of Community First National Bank, which operates 156 branches in 12 states, including Wisconsin. Community First also operates Community First Insurance Inc. offices in 56 communities.
"We remain as enthusiastic about this merger as we were when the definitive agreement was signed earlier this year. We anticipate a fourth-quarter completion of the transaction so that our clients can begin to fully benefit from the strength and responsiveness that the combined organization will offer," said Mark Anderson, Community First president and CEO.
* PacifiCare Health Systems Inc. of Cypress, Calif., has signed a definitive agreement to acquire all of the outstanding shares of common stock of Green Bay-based American Medical Security Group Inc. (AMS) Under terms of the agreement, PacifiCare will pay $32.75 in cash for each share of AMS stock, for a totally equity purchase price of about $502 million. PacifiCare also will assume about $30.2 million of AMS debt. AMS, which has about 1,400 employees, provides individual and small group health insurance products to members in 33 states and Washington, D.C. AMS generated $712 million in total premium revenue in 2003. Samuel Miller, AMS president and CEO, and members of his management team will continue to lead AMS after the acquisition. "The underlying mission of AMS has been to create value for our shareholders. This merger accomplishes that objective while also being beneficial for our employees, policyholders and agents," Miller said. The acquisition is subject to regulatory approval and is expected to close in early 2005.
October 1, 2004, Small Business Times, Milwaukee, WI