Siemens AG, Europe’s largest engineering company, has agreed to buy Los Angeles-based Diagnostic Products Corp. for about $1.86 billion in cash, the companies announced April 27.
The acquisition would expand Siemens’ medical division, which now is strongest in medical imaging and healthcare information technology. Diagnostic Products makes test kits to detect diseases such as cancer and allergies and will give Siemens an immediate presence in in-vitro diagnostics.
Siemens will pay $58.50 a share, a 21 percent premium from the day prior to the announced sale. Diagnostic Products shares jumped 19 percent to $57.81 by last Thursday.
Diagnostic Products had 2005 sales of $481 million and operating income of $96 million. The company announced last week that its first-quarter net income increased 12 percent on sales of its Immulite automated diagnostic systems. Earnings rose to $18 million, or 60 cents per share, from $16.1 million, or 54 cents, in the same period a year ago. The results included a stock option compensation expense of $1.4 million in compliance with new reporting rules.
Mossimo Pact
Persisting in its intention to acquire Mossimo Inc., Iconix Brand Group Inc. said April 27 that it now has a definitive agreement with rival Cherokee Inc. to buy out Cherokee’s Mossimo finders agreement for $33 million.
As part of the agreement, Cherokee will withdraw its $135 million offer to purchase Santa Monica-based Mossimo. The $33 million is payable when New York-based Iconix, which owns apparel brands such as Joe Boxer, closes its deal to acquire Mossimo.
Cherokee, a Van Nuys-based licensor and marketer of brands to retailers including Target Corp., made its own bid for Mossimo in the wake of a $119 million offer from Iconix. Both offers are stock-and-cash deals.
A long-standing Mossimo finder’s agreement provided for Cherokee to receive 15 percent of all earned royalties received from Mossimo’s license with Target Stores in perpetuity, in exchange for Cherokee services in brokering the license agreement.
Stormy Outlook
Still feeling the sting of damage from Hurricane Katrina, Northrop Grumman Corp. posted a loss and faced opposition in the Senate last week regarding language in a spending bill that would have the Navy re-coup storm-related damages.
The company announced net income for the quarter ended March 31 of $358 million or $1.02 per share, down from $409 million or $1.11 per share. Revenues totaled $7.2 billion, down from $7.5 billion a year ago.
The earnings include gain from the sale of Teldix aircraft parts unit, but even on an operating basis the company’s earnings were down as sales fell in its shipbuilding unit. Last year’s Gulf Coast hurricanes damaged Northrop’s shipyards in New Orleans and Mississippi, causing $850 million in damage. It also caused delays in ship production that pushed sales down nearly 4 percent to just over $7 billion for the quarter. The company also said that it should take until the end of the year to fully recover.
Northrop has sought the Navy to pay it $500 million in Katrina-related damages that the company’s insurer has refused to pay, but Oklahoma Republican Sen. Tom Coburn introduced an amendment that would strip the request from a $106 billion emergency spending request currently in the Senate.
“This is just another form of corporate welfare,” John Hart, a spokesman for the Senator said. “There are far better things to spend $500 million on than bailing out Northrop and their insurance company.”
Univision Bait
The media world has come calling since Univision Communications Inc. announced it was open to a sale, according to published reports.
A New York Times article stated that CBS Corp. and Walt Disney Co. had discussions with Univision executives last week over potential bids, and the Wall Street Journal reported that Mexico-based Grupo Televisa is teaming with private investors to make an offer of its own.
The Los Angeles-based company is the undisputed Spanish-language broadcasting champ, and Univision stock has jumped since Feb. 8, when the company announced it was considering a sale. Shares topped $35 late last week.
Disney executives were examining Univision’s financial records, according to the Times. However, CBS chief executive Les Moonves said during an earnings call later in the week that his company wasn’t seeking out “an acquisition of that size.”
Televisa, Univision’s largest programming supplier, needs a partner to make a bid, since only U.S. citizens can own more than 25 percent of an American broadcaster under federal law. Televisa currently has an 11 percent stake in Univision, and a Televisa director, Carlos “Slim” Domit son of Carlos “Slim” Helu, the wealthiest businessman in Latin America raised eyebrows when he bought $288 million worth of Univision stock last month.
The two companies have had a rocky relationship of late, and a bitter royalty showdown led Televisa chairman Emilio Azcarraga Jean and executive vice president Alfonso De Angoitia to quit their board posts as director and alternate director, respectively, at Univision last May. Televisa filled the vacancy April 19 when it named its secretary counsel of administration, Ricardo Maldonado Yanez, as a director of Univision.
Port Containers
Container traffic at the ports of Los Angels and Long Beach continued to surge last month, according to the latest figures.
The Port of Long Beach saw a 32 percent increase in the number of 20 foot equivalent units, or TEUs, that came into the ports in March. The port handled 282,440 TEUs, compared to 210,093 for the same period last year. Export traffic heading out of Long Beach also saw a steep increase of nearly 14 percent year over year, (104,519 to 118,728).
The Port of Los Angeles saw an even more impressive increase, with TEUs increased 34 percent to 340,793, up from 255,389 a year ago. Currently, the Los Angeles port has handled a total of 670,949 TEUs year to date, putting it more than 27 percent ahead of last year’s pace.
Deborah Crowe, Anne Riley-Katz, Allen P. Roberts Jr.
