Outside Counsel: Big deals with a Maryland legal connection

Posted: 10:06 am Fri, April 30, 2010
By Erin Drenning
Daily Record Assistant Legal Editor

GP Strategies Corp. and RWD Technologies LLC, two consulting companies founded 22 years apart by the same entrepreneur, will combine under a $28 million deal.

RWD, founded in 1988, is located in the Research and Technology Park at the University of Maryland, Baltimore County in Catonsville. The company also has offices in the United Kingdom, Canada and Colombia.

GP Strategies said it expects to pay for the acquisition using cash on hand, but could borrow from its $35 million revolving credit facility if necessary.

Elkridge-based GP Strategies provides sales and technical training, e-learning, management consulting and engineering services. RWD is a provider of products and services in areas of training, consulting and organizational performance.

The companies were both founded by Robert W. Deutsch, who still serves as chairman of RWD Technologies’ board of directors.

RWD Technologies generated more than $65 million in consulting revenue in 2010. The company is privately held.

GP Strategies has 1,892 employees going into the merger. The company reported $259 million in revenue for 2010 according to a filing with the Securities and Exchange Commission. For the year, GP Strategies reported a $12.7 million profit, compared to a $1.19 million loss in 2009.

OAO Severstal sells Sparrows Point mill

The Sparrows Point steel mill is getting a new owner and possibly a new lease on life under a deal announced in early March.

The Baltimore County plant, which has been largely idle since the summer, and two other properties owned by OAO Severstal were acquired by the Renco Group Inc. for $1.2 billion.

The Russian steel giant had paid $2.2 billion for the plants, including Severstal Warren in Ohio and Severstal Wheeling in West Virginia, in 2008. Of the total amount, Severstal paid $810 million for Sparrows Point.

Severstal will receive $125 million in cash, a $100 million secured note and $317 million payment toward debt. Renco, a private investment firm, will also assume $650 million of Severstal’s financial liabilities including employee-related and environmental liabilities.

RG Steel LLC, a newly formed subsidiary, will take over the mills. In announcing the deal, RG Steel, which will be headquartered at Sparrows Point, said it had reached a new collective bargaining deal with the United Steelworkers union. The deal needs to be ratified by its members.

Privately held Renco was founded in 1975 by Ira L. Rennert. Renco’s companies have $5 billion in revenue and 15,000 employees. One of Renco’s subsidiaries is AM General — a former subsidiary of American Motors that created the Humvee military vehicle.

LaSalle buys Santa Monica hotel

LaSalle Hotel Properties of Bethesda is buying the Viceroy Santa Monica hotel for $80.1 million.

The 162-room hotel, which is one block from Santa Monica Beach, is subject to a ground lease with the city of Santa Monica, Calif., that expires on Sept. 25, 2065, LaSalle said.

The hotel opened as the Pacific Shores Hotel in 1967 and reopened in 2002 as the Viceroy Santa Monica following a renovation. It will continue to be managed by Viceroy Hotel Group. LaSalle, a real estate investment trust, owns 35 upscale hotels in nine states and the District of Columbia.

Black Oak acquires shopping center

Black Oak Associates, Inc., an Owings Mills-based commercial real estate development and investment group, has purchased a 93,000-square-foot shopping center in Manassas, Va., for $18.1 million.

The recently constructed Hastings Marketplace is currently 73 percent leased, and is anchored by a 56,000-square-foot Harris Teeter Food Market and Pharmacy, which opened in October 2010. About 25,000 square feet is still available, which Black Oak is working to fill, assisted by Rappaport Retail Brokerage, the exclusive leasing representative for the property.

The acquisition is the second purchase by Black Oak in the past five months. In November 2010 the company acquired the 130,000-square-foot South Cumberland Marketplace.

Catalyst shares soar on Walgreen deal

(AP) Walgreen Co. said it is leaving the pharmacy benefits management business, selling that operation to Catalyst Health Solutions Inc. for $525 million in cash and freeing it to focus on its drugstore network, the largest in the United States.

The news sent the Rockville-based company’s shares soaring more than 18 percent in early March.

The companies expect to complete the deal by the end of June, assuming regulators approve.

After the deal is complete, Catalyst’s total membership will rise to about 18 million from 7 million. The company said it will handle about 165 million prescriptions a year, compared to about 80 million previously.

As part of the deal, Catalyst will administer Walgreen’s prescription savings club. It will also provide pharmacy benefits management services to Walgreen’s 244,000 employees and retirees and dependents. Walgreen will provide some services to help patients transition to Catalyst. It expects those services to cost it around $40 million.

ThompsonGas acquires five propane companies

DLA Piper US LLP represented ThompsonGas in its acquisition of L & L Propane, a propane distribution and service company located in the Southeast.

ThompsonGas is the largest privately-held propane distributor in Maryland and, with its Dec. 6 acquisition, it is now the 16th largest in the country.

The transaction closed on Dec. 6.

KEYW acquires Everest Technology Solutions

KEYW Corporation, based in Hanover, acquired Everest Technology Solutions, Inc. on Dec. 2.

The purchase price was $28 million.

KEYW provides cybersecurity solutions, primarily for U.S. Government intelligence and defense customers.

Banks call off deal

American Bank of Rockville will not buy from the Baltimore County Savings Bank four branches in Catonsville, Owings Mills, Baltimore and Ellicott City.

According to a joint statement, the cancellation of the deal will not penalize either bank.

Baltimore County Savings has 18 branches in the Baltimore area, while American Bank has six locations in Maryland, Washington, D.C., and Ohio.

UBC buys London consultancy

The Bethesda-based United BioSource Corporation, a wholly owned subsidiary of Medco Health Solutions, Inc., announced the acquisition of Total Healthcare Group, headquartered in London.

THG provides consulting services to the biopharmaceutical industry. UBC is a global scientific and medical affairs organization.

THG’s Dr. Robert Hollamby has been appointed Senior Vice President at UBC.

Nursing homes in Maryland acquired

Genesis HealthCare, a Pennsylvania-based provider of skilled nursing facilities, announced its acquisition of a group of nursing homes previously owned by Rockville-based Adventist HealthCare.

The transaction, which took place on Wednesday, involved five facilities owned by Adventist HealthCare and one that was a joint venture between Adventist and Frederick Memorial Healthcare System. JER Partners and Formation Capital LLC jointly sponsored the acquisition of the six skilled nursing facilities.

Financial details of the transaction were not disclosed.

The facilities are Bradford Oaks Nursing & Rehabilitation Center in Clinton; Fairland Nursing & Rehabilitation Center in Silver Spring; Shady Grove Nursing & Rehabilitation Center, including Kingshire Manor Assisted Living, in Rockville; Sligo Creek Nursing & Rehabilitation Center in Takoma Park; Springbrook Nursing & Rehabilitation Center, including Adventist Dialysis Services, in Silver Spring; and Glade Valley Nursing & Rehabilitation Center in Walkersville.
In-House Counsel, The Daily Record’s monthly electronic newsletter, welcomes your news about mergers, acquisitions or other deals involving Maryland lawyers or Maryland companies. Please e-mail materials to erin.drenning@thedailyrecord.com.