Star Tribune from Minneapolis, Minnesota • Page 34

I I I I I I Ill PAGE D6 STAR TRIBUNE I 1 iHv Stirlf ibtin4 I 4thQuajrte98 MONDAY, JANUARY 25 1999 Dougherty Summit Securities LLC Piper Jaffray Inc. I 1 i I 1 "IrKC iffi 1 'MM' Corporate debt Amount raised Location Symbol Exchange (in mil.) Name Northwestern Corp. Sioux Falls, SD. NOR NYSE $50.0 Description: Electric and natural gas utility. 12 percent Trust Preferred Capital Securities Cronin Co.

Inc. Municipal debt Amount I Number of raised i issues (in mil.) -Long-term issues 16 $18.4 i Dain Rauscher Vessels Corporate debt I Amount raised Name Location Symbol Exchange (In mil.) Bay view Capital Corp. San Mateo, Calif. BVCC Nasdaq $80.0 Description: Diversified financial services company. 9.76 percent capital securities Initial public offerings Per share Amount 'Name Symbol Pricing offering raised I Location exchange date price (In mil.) DVI Inc.

DVI NYSE $55.0 Description: Medical equipment financing and related services. 9575 percent senior notes Bay View Capital Corp. San Mateo, Calif. BVCC Nasdaq $80.0 Description: Diversified financial services company. 9.76 percent capital securities Initial public offerings Per share Amount offering raised price (In mil.) Pricing date Name Location Symbol exchange $34.5 111998 $10.00 Computer Literacy Inc.

CMPL Sunnyvale, Calif. Nasdaq Description: Online retailer of technical books and other information resources $782 12498 $17.00 Select Comfort Corp. AIRB 111898 $20.00 $261.7 PAA NYSE Plains All American Pipeline LP. Plymouth Nasdaq Description: Manufactures, markets and sells air beds and sleepn-elated products $44.6 Houston Description: Crude oil pipeline transportation and crude oil terminaling, storage, gathering and marketing activities. -E-Tek Dynamics Inc.

ETEK 12298 $12.00 $60.0 San Jose, Calif. Nasdaq Description: Manufactures components and modules for fiber optic networks. Concur Technologies Inc. CNQR 121698 $12.50 Redmond, Wash. Nasdaq Description: Provides Intranet-based applications Mergers and acquisitions (clients In bold) Municipal debt Amount Number of raised Issues (In mil.) Long-term issues 29 $197.6 Short-term Issues 2 $1022 Goldsmith, Agio, Helms and Co.

Mercers and acquisitions (dents In bold) Acquiring company Target company Closing date Communications Systems Inc. Transition Networks 1298 Hector, Minn. Bloomington Severn Trent Exeltec International 1298 United Kingdom Houston WestPoint Stevens Inc. Llebhardt Mills Inc. 1198 West Point Ga.

Daleville, Ind. Sun Capital Partners Atlas Die Inc. 1198 West Palm Beach, Fla. Elkart, Ind. John G.

Kinnard Co. Municipal debt Amount Number of raised Issues (In mil.) Long-term Issues 17 $71.7 Miller Schroeder Financial Inc. Municipal debt Amount Number of raised Issues (In mil.) Long-term issues 33 $376.3 Miller Johnson Kuehn Inc. Municipal debt Amount Number of raised Issues (In mil.) Long-term Issues 60 $416.8 Private placements equity Amount Pricing raised Name Location date (In mil.) 12498 $12.00 $49.8 PFCB Nasdaq PF. Chang's China Bistro Inc.

Phoenix Description: Owns and operates a chain of full-service restaurants. lnfospace.Comlnc. INSP 121598 $15.00 $75.0 Redmond, Wash. Nasdaq Description: Provides content services for the Internet Mergers and acquisitions (clients In bold) Acquiring company Target company Closing date IntermetCorp. Tool Products 123198 Troy, Mich.

a division of Quadion Corp. St Louis Park Northland Cranberries Inc. Seneca Foods Corp. 121898 Wisconsin Rapids, Wis. juice division Pittsford, N.Y.

Verdant Brands Inc. Consep Ina 12798 Bloomington Bend, Ore. Dollar Tree Stores Inc. Step Ahead Investments Inc. 12798 Chesapeake, Va.

North Highlands, Calif. The Learning Co. Inc. Palladium Interactive Inc. 12198 Cambridge, Mass.

San Rafael, Calif. MotivePower Industries Inc. Young Radiator Co. 111898 Pittsburgh Racine, Wis. Eidos Interactive Inc.

Crystal Dynamics Inc. 11598 San Francisco Menlo Park, Calif. Imperial Holly Corp. Diamond Crystal 11298 Sugar Land, Texas Speciality Foods Inc. Wilmington, Mass.

HK Systems Inc. Endura Software Corp. 10998 Brookfield, Wis. Seattle Municipal debt Amount Number of raised Issues (Inmfl.) Long-term Issues 209 $2,4341 Short-term Issues 10 $3943 Private placements Amount Pricing raised Name Location date (In mil.) BUCAinc. Minneapolis 10198 $13.4 VIA Inc.

Northfield, Minn. 10698 $6:0 Acquiring company Target company Closing date Transition Systems Inc. HealthVISION Inc. 123098 Boston Santa Rosa, Calif. Velos Medical Informatics Inc.

Summit Medical 122998 Fremont, Calif. Systems Inc. healthcare software Minnetonka Sigma-Aldrich Corp. Genosys Biotechnologies 122398 St Louis Inc. Jack Henry Associates Peerless Group Inc.

121698 Monett, Mo. Richardson, Texas United Payors United ProAmerlca Managed Care, 1298 Providers Inc. a UnitedHealth Group Rockville, Md. subsidiary Minnetonka Cisco Systems Inc. Summa Four Inc.

11598 San Jose, Calif. Manchester, N.H. Midland Resources Inc. Vista Resources Partners LP. 102898 Houston Midland, Texas Immucor Inc.

Gamma Biologlcals Inc. 102698 Norcross, Ga. Houston Municipal debt i Amount Number of raised 'ssues (in mil.) Long-term Issues 181 $5,370.4 Short-term Issues 3 $150.7 $0.5 $0.7 Global One Dlst Merch. Bell, Calif. 101398 Global Malntech Corp.

Eden Prairie 111898 Norwest Investment Services Inc. Agency debt Number of Issues Amount raised (in mil.) Freddie Mac 12 $605.0 Fannie Mae 18 $858.0 Federal Home Loan Banks 42 $1,513.0 Municipal debt Amount Number of raised Issues (In mil.) Long-term issues 109 $690.5 Short-term issues 2 $19.8 About the Quarterly Deal Report Business section staff writers Patrick Kennedy and Susan Feyder did the research for the Quarterly Deal Report Jim Foster, Business graphics reporter, oversaw the graphics and design. Ray Moucha copy-edited the project which was supervised by Research team leader John Oslund. i DEALS rom Dl Current moves very different from hostile takeovers in 9 80s "The middle market used to be a safe haven, but it's different now. Once you're in the middle market you're in somebody's cross hairs.

You either need to have access to capital markets to grow or you need to sell to become part of another organization that is growing." Jack Helms Goldsmith, Agio, Helms and Co. ary offering. But the equity market regained momentum late in the fall when the market recovered and that has continued so far in early 1999, Hollimon said. While IPOs dipped somewhat at Piper during the last half of 1998, the fell-off didn't mirror the dramatic drop seen nationally. And Piper bucked the national trend that saw the number of mergers and acquisitions level off last year, with increases in both the number and dollar value of deals.

"A number of things strategically came together for us last year," Grangaard said. Among those things was Piper's decision to focus on the technology sector, which paid off as technology companies continued to pair off and go public in 1998. Technology was Piper's largest revenue producer last year in sales, trading and investment banking. Grangaard said Piper may also have benefited from some strategic uncertainties that beset competitors Montgomery Securities and BT Alex. Brown Inc.

after they were acquired by banks. That didn't happen when Piper was acquired last May by Minneapolis-based U.S. Bancorp because the bank has let the investment banking firm continue to operate autonomously, he said. Staff Research Reporter Patrick Kennedy contributed to this story. Allen said the CD-ROM sale was not dictated by Wall Street, although the deal generated favorable comments from analysts, Allen said.

But Holcomb said that stock analysts drive a lot of mergers and acquisitions, and that companies find themselves under increasing pressure to boost earnings and meet earnings projections. Metatec's own strategic goals were served by acquiring Imation's CD-ROM business, Greene said. Besides making it a bigger player in a consolidating industry, acquiring Imation's business gave Metatec a presence it had lacked in California and Europe, two important markets, he said. Perhaps most important, it gave them access to Imation's customer list, which dated back to its pre-spinoff days with 3M. "These are strong Fortune 400 customers that a company like Metatec might not have been able to get to on its own," Greene said.

While the huge dollar value of last year's mega-deals attracted considerable attention, Jack Helms of Minneapolis-based Goldsmith, Agio, Helms and Co. points out that the proportion of middle-market deals about 70 to 80 percent hasn't changed in the past 20 years. "The middle market used to be a safe haven, but it's different now," said Helms, whose investment banking firm specializes in middle-market clients. "Once you're in the middle market, ing the acquisition, expanding the companies they invest in internally and through acquisitions, keeping an eye on costs and eventually selling their investments. Helms said that about half of the deals his firm did in the last year involved representing private equity groups selling their investments.

IPOs decline The number of initial public offerings nationwide and in Minnesota dropped last year, although IPO activity began to pick up in November when the stock market recovered. Local investment bankers say some IPOs shelved last fall were simply delayed until the end of 1998 or early this year. IPO volume has fallen for the past three years, with 1998's decline attributable largely to a sharp drop in deals nationwide when the stock market fell late in the summer. Dain's Hollimon said IPO activity had two distinct seasons in 1998: January through August, when 258 IPOs were done nationally, and August through December, when 50 IPOs were completed. The pattern was similar for secondary offerings.

At Dain, IPOs followed the same track, with 16 done in the first seven months of the year and four done in November and December. When the stock market gyrated downward between August and mid-November, Dain did no IPOS and just one second One example, he said, is Golden Valley-based General Mills which several years ago sold its non-food operations and spun off its restaurants in order to focus on its cereal and packaged food businesses. But the current round of deals differs markedly from the hostile takeovers of the 1980s, which often resulted in the breakup of. target companies, said Bryson Hollimon, director of investment banking at Dain Rauscher Wessels. "These deals are friendly and strategic in nature," he said.

"Executives now understand that the process can be a very important tool for positioning a company in markets." An example, Hollimon said, would be Dain's representation of Summa Four Inc. of Manchester, N.H., which was acquired by data networking giant Cisco Systems Inc. of San Jose, Calif. Summa makes switches used to direct phone calls, a product that can position Cisco in the telecommunications market and help it compete with phone equipment makers Lucent Technologies Inc. and Northern Telecom Ltd.

As for deals done locally, Greene points to his firm's work for client Imation Corp. in the sale last fall of its CD-ROM services business to Metatec Corp. of Dublin, Ohio. At $39.8 million, the transaction didn't generate as many headlines as another Imation divestiture the $533 million sale of most of its medical imaging business to Eastman Kodak Co. However, both deals resulted from an ongoing strategic review at the Oakdale-based company.

Spun off from 3M Co. in 1996, Imation has been "a collection of businesses that sometimes didn't share a lot of customers or technology," said Brad Allen, vice president of investor relations and corporate communications. The objective in each sale was to free up financial, management and other resources for Imation's core data-storage business, he said. The CD-ROM business generated about $60 million of Imation's $2.2 billion in revenues in 1997, was breaking even and heading toward profitability, Allen said. Significant investments would have been required to make it a meaningful contributor to Imation, he said.

At the same time, Imation believed the CD-ROM business "was one that could be worth a lot more to somebody else," Allen said. you're in somebody's cross hairs. You either need to have access to capital markets to grow or you need to sell to become part of another organization that is growing." Helms noted one thing that distinguished 1998's crop of deals: For the first time, the amount of money raised by private equity markets surpassed the amount raised in IPOs. Similar to venture capital groups, private equity groups invest not in start-ups but in private businesses. The return on their investments comes from carefully using leverage in mak i.