Outside Counsel – 9/29/11: Maricom Systems acquired by CSC

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Colfax to buy Charter International in $2.4B deal

(AP) Fulton-based pump and valve maker Colfax Corp. said it will buy Charter International PLC, which owns two engineering businesses, in a cash-and-stock deal valued at $2.4 billion.

Colfax said it has agreed to pay about $14.45 per share, for Dublin-based Charter, Europe’s biggest welding equipment maker. The offer includes cash and a portion of Colfax shares for each share of Charter. The offer trumps one made by Melrose Plc for Charter.

Colfax’ offer, recommended by Charter, is 48 percent higher than the stock’s closing price on June 28, the day prior to Melrose’s preliminary proposal.

Colfax and Melrose have been battling for control of Charter as they seek to add businesses such as air- and gas-handling equipment. Colfax Chief Executive Officer Clay H. Kiefaber said the purchase will complement the company’s fluid-handling equipment range, and also speed expansion into emerging markets including Brazil, Russia, India and China. Charter is registered in Jersey and has its headquarters in Dublin.

“This is a business with great brands and great technology,” Kiefaber said in an interview.

Charter’s Howden division focuses on air and gas handling, and its ESAB business focuses on welding and cutting.

Colfax also said the deal provides exposure to emerging markets and offers an additional growth platform in the fragmented welding and cutting industry.

Colfax said Charter’s board has unanimously approved the deal. Colfax will finance it with a combination of cash, new bank debt and new equity.

It has received $2.1 billion in firm commitments for the bank debt from Deutsche Bank and HSBC.

Charter shareholders can vary the percentage of stock or cash they receive for the shares, the two companies said. Funds that compare themselves to benchmarks such as the FTSE 350 index may not want to hold U.S. shares, said David Larkam, an analyst at Arden Partners who has a “buy” recommendation on Charter.

“Short-term, it’s the best offer on the table,” Larkam said. “Long-term, I don’t know how many people will be able to hold paper in U.S. companies.”

Colfax, which is seeking to buy a company five times its size in sales, will fund the acquisition through an equity issue, new debt facilities and existing cash. It expects credit ratings of at least BB- after the transaction, Senior Vice President Dan Pryor said in an interview. Ratings services currently don’t rate its debt, he said.

Developers close deal to buy Solo Cup plant

Local developers Greenberg Gibbons and Vanguard Equities Inc. have closed on the purchase of the former Solo Cup manufacturing plant in Owings Mills with plans to redevelop it into upscale retail space.

Greenberg Gibbons’ projects include Hunt Valley Towne Center, Annapolis Towne Centre at Parole and the White Marlin Mall in West Ocean City.

Vanguard Equities is a 24-year-old real estate development firm based in Baltimore whose projects include residential real estate and shopping center developments in Maryland, Delaware and Virginia.

“Our offices in Owings Mills are less than a mile from the site and we plan to make this project a true showcase,” said Brian Gibbons, CEO of Greenberg Gibbons, in a statement. “We are meeting with residents, community leaders and elected officials to gather input to help us shape a concept for the site and deliver something we can all be proud of.”

The vacant plant, on a 52-acre site, once employed 540 people in the manufacture of items including paper and plastic cups and plastic cutlery. Solo Cup announced in June 2010 that would shutter the facility and transfer the work to plants in Illinois, Georgia and Texas as part of a cost-cutting restructuring.

“The timing for this project could not be better as it will create thousands of new jobs and substantial new tax revenues for Baltimore County and the state,” said Brad Glaser, principal of Vanguard, in a statement.

Terms of the deal were not released. The companies said they expect to have a conceptual plan ready for the site in mid-October.

First Mariner, Priam extend deadline to Nov. 30

The deal to infuse much needed new capital into 1st Mariner Bank got a new deadline when the bank’s parent company and the private equity firm it is partnered with extended the deal until Nov. 30.

First Mariner Bancorp had missed a pair of deadlines in its effort to raise more than $123 million, which would have allowed Priam Capital Fund LP to walk away from the deal on Oct. 16.

But Howard Feinglass, the Baltimore native who is Priam’s managing partner, said again that the firm remains committed to the deal and that the extension buys more time to raise the capital.

“We are continuing to work with Priam Capital and our advisors to complete our recapitalization efforts,” said First Mariner CEO Edwin F. Hale Sr. “Extending our agreement was a necessary step in that process.”

Priam Capital Fund I LP agreed in April to pump $36.4 million into the Baltimore-based parent of 1st Mariner Bank — if the bank could raise an additional $123.6 million. Priam is allowed to terminate the deal if certain goals aren’t met.

First Mariner was to have raised $70.6 million by July 18, but didn’t meet that deadline. The company was to have raised the entire $123.6 million by Thursday. The deadlines were voluntary, as is a third to have the deal closed by Oct. 16.

McCormick & Co. closes on $286M Kamis acquisition

(AP) Spice and seasonings maker McCormick & Co. has completed its $286 million buyout of Polish spice company Kamis S.A.

McCormick said it hopes to build the Kamis brand and continue to run its plant near Warsaw.

The company anticipates profits from privately held Kamis to add about 6 percent per share to its 2012 earnings.

McCormick, which announced the acquisition in June, paid for the deal with available cash and debt.

Kamis distributes in Russia and other parts of Central and Eastern Europe. McCormick said at the time the transaction was announced that that deal would expand its reach in Western Europe into Poland as well as other markets in Central and Eastern Europe.

Aside from spices, Kamis makes seasonings, mustards, vinegars, sauces and marinades.

McCormick, based in Sparks, expects acquisition-related costs to lower its fourth-quarter earnings by about 2 cents per share.

Hagerstown’s ThompsonGas expands

ThompsonGas of Hagerstown announced that its subsidiary, ThompsonGas-Southeast, has purchased substantially all of the assets of Cooperative Propane Inc., a subsidiary of Power South Energy Cooperative of Andalusia, Ala., as well as substantially all of the assets of Fox Gas of Foxworth, Miss. Terms were not disclosed.

ThompsonGas said it would finance the transactions with a combination of equity and debt. The company is in an acquisition mode, having purchased six other propane companies in 2010 and 2011. With completion of the new acquisitions, ThompsonGas said it will become the 19th largest retail propane company in the United States, serving nearly 170,000 customers in 10 states.

Maricom Systems acquired by CSC

Computer Sciences Corp. of Falls Church, Va., a provider of information technology services to business and government, said it acquired Woodlawn-based Maricom Systems Inc. for an undisclosed amount.

Maricom is an information technology consulting firm offering data management and database administration, primarily to health care organizations.

CSC said the acquisition will strengthen its efforts to implement IT improvements related to the federal health care reform law, particularly in the areas of health care informatics and data management. Maricom’s approximately 200 employees will become part of CSC’s Health Services business area.