M&A Roundup Some M&A Roster Deals Worth Noting

For Bed and Bath Acquirer: Pillowtex Corp. Target: Fieldcrest-Cannon Inc. Price: $768.2 million, including $468.2 million in cash and stock and assumption of $300 million in liabilities Target Business: Sheets, pillowcases, and towels Snapshot: The deal results in a full-line home furnishings branded goods company that combines Pillowtex’s pillows and blankets with the target’s well-known Fieldcrest sheets and Cannon towels. Pillowtex gained the ability to supply a complete line of household textiles to large retail customers through a common distribution channel which should enhance its position in a competitive marketplace. Safety First Acquirer: Breed Technologies Inc. Target: Air bag and seat belt business of AlliedSignal Inc. Price: $710 million in cash Target Business: Automotive air bags and seat belts Snapshot: Breed, primarily a specialist in crash sensors for automotive air bags, integrates forward with this acquisition, obtaining the capability to offer complete safety systems to automobile manufacturers. Auto makers have been reducing their lists of suppliers and requiring the survivors to offer complete products lines and systems. Into the Office Acquirer: Corporate Express Inc. Target: Data Documents Inc. Price: $159.4 million in stock Target Business: Tabulating cards and business forms Snapshot: Corporate Express has been a busy acquirer as a key consolidator in the distribution and retailing of office supplies and equipment to businesses. This deal takes it somewhat afield from the core distribution business and gives it a position in more specialized products, including production capability. Competitive advantage through differentiation should be a key acquisition objective as pure consolidation nears a peak. Taking a Big Swing Acquirer: TearDrop Golf Co. Target: Tommy Armour Golf business of U.S. Industries Inc. Price: $24.8 million, including $10 million in cash, $10 million in convertible preferred stock, and $4.8 million in common stock. Snapshot: TearDrop, a specialist in putters, expanded fivefold by acquiring Tommy Armour, and the ability to produce and distribute a full line of golf equipment – a major brand to boot – through its established distribution channels. The intriguing structure, which enabled the smallish TearDrop to swing the deal, positions U.S. Industries as a stockholder but allows the diversified company to continue its restructuring. The Dental Network Acquirer: Henry Schein Inc. Target: Sullivan Dental Products Inc. Price: $312.8 million in stock Target Business: Distribution of dental supplies Snapshot: Two of the nation’s largest distributors of dental supplies and equipment – East Coast-based Schein and Midwest-centered Sullivan – joined forces creating a company with wide geographic coverage and the ability to gain economies of scale with its enlarged customer base. Operating in one of the many health care sectors that are consolidating, Schein stole a march by acquiring a firm of Sullivan’s size and penetration. Timely Combination Acquirer: Capstone Pharmacy Services Inc. Target: Pharmacy Corp. of America unit of Beverly Enterprises Inc. Price: $862.5 million in stock and the assumption of liabilities Target Business: Institutional pharmacy services Snapshot: A lot of bases were touched in this deal, which was carried out under a Morris Trust format. Capstone issued 50 million shares which went to Beverly shareholders who held a 57% interest in the combined firm, which was named PharMerica Inc. While Capstone gained mass and scope in institutional pharmacy services, Beverly shed a business that it considered outside of its core nursing home operations.