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Management Buyout
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Business New Haven
2/23/1998
By: Russell Stone
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CHESHIRE - DeGeorge Financial Corp. (NASDAQ: DEGE) has signed a definitive agreement that will hand it over to a company controlled by DeGeorge's chairman and CEO, Peter DeGeorge, along with other DeGeorge directors and officers. Current holders of shares in DeGeorge Financial will receive $1.50 in cash per share. A group of independent members of DeGeorge's board of directors reviewed the management buyout with the advice of Houlihan Lokey Howard & Zukin Capital and concluded unanimously that the $1.50 per share offer was fair to current shareholders.
Here Comes the Sun
NEW HAVEN - Vion Pharmaceuticals Inc. (NASDAQ: VION) has announced an agreement to market its proprietary technology Melasyn, an easily soluble form of the skin pigment melanin. San Mar Laboratories, a leading manufacturer of private label cosmetics and pharmaceuticals, will be Vion's exclusive worldwide partner to manufacture and distribute Melasyn products. Vion will receive royalties on San Mar's sales; some products are already in development and may be marketed this year. Vion's Melasyn may have applications in the $2 billion market for self-tanning creams, sunscreens and other hair and makeup products.
Acquisition Complete
NORWALK - U.S. Surgical Corp. (NYSE: USS) has completed its cash acquisition of Valleylab, a division of pharmaceutical giant Pfizer Inc., for $425 million. U.S. Surgical chairman Leon Hirsch called Valleylab an “ideal fit” with its extensive line of electrosurgical and ultrasonic systems. Valleylab, based in Boulder, Colo., has yearly sales of approximately $200 million.
In an unrelated story, U.S. Surgical received good legal news. The Court of Appeals for the Federal Circuit, confirming an earlier District Court ruling, has dismissed a patent infringement lawsuit against U.S. Surgical brought by Ethicon Inc., a unit of Johnson & Johnson. That ruling clears the way for a countersuit by U.S. Surgical against Ethicon for infringing three patents on safety-shielded trocars, tubes used for minimally-invasive surgery. Potential damages in the case could reach $500 million before trebling. Ethicon has declared that it will request a reconsideration of the ruling.
Utilities Consolidation
BRIDGEPORT - Conectiv/CNE Energy Services, a joint venture of Connecticut Energy Corp. (NYSE: CNE) and Delmarva Power & Light, will form a marketing alliance with Berkshire Energy Marketing, a division of Berkshire Gas. This continues Conectiv/CNE Energy's pattern of expanding its market for natural gas, electricity, and fuel oil through establishing local alliances. The collaboration with Berkshire aims at expanding sales in western Massachusetts, eastern New York state and southern Vermont.
Asian Opportunity
HARTFORD - Aetna's (NYSE: AET) subsidiary Aetna International has taken advantage of a relatively strong dollar and depressed valuations in Thailand to form two joint ventures with Osotspa, a Thai conglomerate. The joint ventures will sell life and property casualty insurance in Thailand, where at present only a small fraction of the population carries insurance.
Financial Turnaround?
NORWALK - Troubled Oxford Health Plans Inc. (NASDAQ: OXHP) has finally gotten some good news in its efforts to recover from financial collapse and a wave of shareholder lawsuits. A unit of Donaldson Lufkin & Jenrette has agreed to lend the company $100 million, with the possibility of an additional $100 million, as a bridge loan until additional financing can be arranged. Two other institutions, Texas Pacific Group and Kohlberg Kravis Roberts & Co. are discussing possible equity investments. Some sources say those two buyout firms are pushing Norman Payson, formerly the chief executive of Healthsource Inc., as Oxford's new CEO.
Who's Earning What?
WATERBURY - Webster Financial Corp. (NASDAQ: WBST), the holding company for Webster Bank, reported profits of $14.8 million for the fourth quarter of 1997, $1.06 per fully-diluted share. This represented a 39-percent increase over profits of $10.6 million, or 76 cents per share a year ago. For the year, net operating income grew 30 percent to $53.8 million for what Webster Chairman James C. Smith called Webster's “best year ever.” One-time expenses related to three acquisitions during 1996 drove down that figure, however, to $33.8 million in net income. That represents a drop from last year's net income of $38.5 million.
BRIDGEPORT - Connecticut Energy Corp. (NYSE: CNE), parent company
of the Southern Connecticut Gas Co., boosted earnings on flat revenues for the first quarter of its year ended December 31. Sales grew from $74.9 million to $76.5 million, while net income climbed to $6.2 million from $5.4 million. EPS grew four cents to 64 cents per share. The addition of 2,600 new residential customers and lower labor and tax costs nudged profits
higher.
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