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

The Diversification Cure Acquirer: Medtronic Inc. Targets: Sofamor Danek Group Inc.; Arterial Vascular Engineering Inc. Prices: Sofamor Danek, $3.6 billion in stock; Arterial Vascular Engineering., $3.74 billion in stock Target Businesses: Sofamor Danek, spinal implants and related products; Arterial Vascular, stent systems and angioplasty balloon catheters Snapshot: The race to consolidate the far-reaching medical equipment industry has shifted to a new track as exemplified by these deals in which Medtronic shelled out more than $7 billion. After concentrating acquisitions within their core competencies, major acquirers such as Medtronic are moving afield in efforts to offer a broad line of products with varying medical uses to a shrinking customer base – the hospital industry, which itself is undergoing consolidation. Medtronic, historically a producer of equipment for treatment of heart conditions, achieved significant extensions of its product mix through these deals. Shopping for Name Brands Acquirer: Salton Inc. Target: Toastmaster Inc. Price: $101.2 million in cash and assumption of liabilities Target Business: Toasters and other small home appliances Snapshot: In the mature, highly competitive, and rapidly consolidating traffic appliance industry, Salton thus far is a survivor, and Toastmaster, whose name was once synonymous with toasters, is not. The deal gives Salton the opportunity to add a well-recognized brand, broaden its product line, and put more goods through its distribution system. Besides reaching maturity, the small-appliance industry also is under pressure from large retailers that want high volumes of products at low prices. A Natural Fit Acquirer: Scotts Co. Target: Consumer lawn and garden business of Monsanto Co. Price: $300 million Target Business: Pesticides and fertilizers Snapshot: Monsanto, a onetime chemical giant that recast itself as a biotech company, cut one of the last ties with its old business by dealing off its lawn and garden business. Scotts, specialist in lawn and garden products, won the operation, which adds to the lines it can sell to major retail customers. One of the biggest prizes is the Ortho name – one of the major brands in the lawn and garden field, especially for pesticides. Supermarket Shuffle Acquirer: Clorox Co. Target: First Brands Corp. Price: $2 billion in stock and assumption of liabilities Target Business: Plastic bags and wraps, antifreeze, oil and gas additives, and car cleaning products Snapshot: If an acquisition is aimed at garnering more brands to increase supermarket shelf space, this one fits the bill. First Brands owned such strong brands as Glad bags and wraps, Prestone antifreeze, and STP oil and gas additives. As a result of the deal, Clorox also gained a strong position in selling to automotive supply stores. Taking a Bet on Gambling Acquirer: Colony Capital Inc. Target: Harveys Casino Resorts Price: $428 million in cash and assumption of liabilities Acquirer: Harrah’s Entertainment Target: Rio Hotel & Casino Inc. Price: $821.9 million in stock and assumption of liabilities Target Businesses: Hotel casino Snapshot: Ongoing consolidation and restructuring of the gambling industry swept up two of the best-known operators of casinos in Nevada. In recent years, several companies have split their standard hotel operations from their gambling businesses. The “pure” casino plays are expected to be active acquirers as legalized gambling spreads nationally in a variety of formats and concepts.