Business Wire/Pittsburgh

RTI International Metals, Inc. (NYSE: RTI) (“RTI”), a global supplier of advanced titanium mill products and fabricated components, today announced that it has entered into a stock purchase agreement under which it will acquire Remmele Engineering, Inc. (“Remmele”) in a transaction valued at $182.5 million, with approximately $164.5 million in available cash and the assumption of approximately $18.0 million in debt. Remmele, acquired by Goldner Hawn Johnson & Morrison, Incorporated in 2007, provides precision machining and collaborative engineering, as well as other key technologies and services, for the aerospace and defense and medical device sectors. The acquisition is being financed from the deployment of RTI’s existing cash reserves. It is expected to close before the end of the first quarter of 2012 and be immediately accretive to earnings.

The acquisition is expected to accelerate and dramatically transform RTI’s downstream fabrication strategy in the aerospace and defense sector while providing entrance to new contract manufacturing end markets, such as the fast-growing medical device market. Customers of the combined organization will benefit from the complementary strengths of RTI and Remmele as an integrated titanium manufacturer. Remmele’s expertise in engineering and precision machining of titanium for the medical device sector is expected to enhance RTI’s aerospace and defense capabilities, and RTI’s titanium manufacturing experience will help broaden the product offering to Remmele’s existing customers, and open the door to serving new customers.

“I am pleased to have such a high quality organization become part of RTI. Remmele has a strong reputation among many of our shared aerospace and defense customers and holds the same standing in the medical device market,” said Dawne S. Hickton, Vice Chair, President, and CEO of RTI. “Our aerospace and defense customers are increasingly looking for partners that can provide a broader, more complete offering of titanium products and services alongside best in class engineering design, and this acquisition directly addresses that need. The addition of Remmele’s advanced manufacturing platform and expertise reinforces RTI’s position as the supplier of choice for advanced, high quality
titanium fabricated products and precision machined components.”

Transaction Highlights

Upon the closing of the transaction, Remmele’s key senior leadership will remain with and continue to lead the Remmele organization. The deal is expected to be immediately accretive to RTI’s earnings per share, before including the anticipated benefit from any cost or revenue synergies. The combination is also expected to provide meaningful revenue synergies through the expanded product offering to existing and prospective customers.

Following the close of the transaction, it is expected that RTI’s cash, cash equivalents and highly liquid investments would total approximately $165 million, leaving ample liquidity to pursue future strategic initiatives.

The proposed transaction is expected to close during the first quarter of 2012, subject to customary closing conditions, including regulatory approvals.

Barclays Capital acted as financial advisor to RTI, and Buchanan Ingersoll & Rooney PC acted as RTI’s legal advisor. Greene Holcomb & Fisher LLC was the financial advisor to Remmele, and Faegre Baker Daniels LLP acted as the legal advisor.

Great Lakes Packaging serves a wide range of market segments in the Midwest and throughout North America and operates affiliate locations in Madison and Chicago. The company has 125 employees.

“Great Lakes Packaging has an outstanding reputation in the industry for innovation and customer service.” said Sieg Buck, operating partner at Arbor Investments and CEO of Arbor’s packaging platform. “Great Lakes’ management and employees have created an extremely well run business, and our complimentary product offerings and enhanced manufacturing capabilities will enable both companies to provide greater service to their customers.”

All Great Lakes Packaging employees will be retained.

“Things will really remain business as usual and we’ll continue to operate both facilities,” he said. “Our goal is to add to both companies and grow throughout this coming year.” Glen Arnold, former owner and chairman of Great Lakes Packaging, said, “Arbor is an outstanding fit for Great Lakes, as their knowledge and experience in the packaging and display industry will provide significant value to the company and help drive continued growth.”

“Becoming a part of this packaging platform will add tremendous value to the company going forward,” said Jim Nelson, president of Great Lakes Packaging. “We’re excited to begin working with Midland Packaging & Display, which has a reputation of delivering great value and outstanding packaging solutions to customers.”

Kent Adams, GH&F Managing Director commented, “Alumacraft is a well-recognized brand and known as a category leader throughout the boating industry.  We are very pleased to have achieved a successful outcome for all parties involved.  Alumacraft has found a home with a private equity group that is focused on growing the business while simultaneously providing a strong, stable financial platform to provide quality and service to Alumacraft customers.  We worked closely with the Company’s other advisors – Northern Trust and Davis, Graham & Stubbs – to ensure a positive outcome for the Company and the family.”

In the Company’s press release, James Irwin, President of Alumacraft stated, “the current management of Alumacraft has worked together for over 10 years and has over 80 combined years in the marine industry. Together with our prior owner, Dave Benbow, Alumacraft has built a strong legacy in the boating community.”  Irwin went on to say, “generations of fishing enthusiasts have relied on the quality, durability and value of Alumacraft.  When Dave passed in 2010, we committed ourselves to build upon this legacy; Corinthian Capital shares the same strong commitment to employees, quality manufacturing and growth.  Combining Corinthian’s resources and our strong management team will help the employees and management of Alumacraft continue to build upon our tradition of excellence.”

About Alumacraft

Alumacraft is one of the most recognized brands and leading manufacturers in the fishing and recreational boat industry. Alumacraft is the only independently-owned brand amongst the leading fishing boat players and enjoys the #2 market share in the fishing boat industry throughout North America and a #1 position in the Upper Midwest. Through its multiple boat lines, the Alumacraft brand is known by generations of boat dealers, and fishing and boating enthusiasts for delivering the highest quality, smoothest riding
aluminum boat products in the industry, introducing a constant stream of revolutionary new boats and boating components, and providing exceptional customer service.  For more information, visit www.alumacraft.com.

About Corinthian Capital

Corinthian Capital Group, LLC is a $300 million private equity firm specializing in investments in small and middle market companies. Corinthian was founded in 2005 and is headquartered in New York with offices in Boston and Chicago.  For more information, visit www.corinthiancap.com.

About Greene Holcomb & Fisher

Greene Holcomb & Fisher, with offices in Minneapolis, Phoenix and Seattle, is an investment banking firm that specializes in mergers and acquisitions, private placements and financial advisory services for the middle market. At GH&F, we blend our experience from nationally prominent investment banks, New York Stock Exchange-listed companies and leading law firms with senior-level attention and entrepreneurial ingenuity to deliver creative services to high quality companies.

We thank you for your continued support. To learn more about our practice,
please visit our website at www.ghf.net or call us at 612-904-5700.

By NEAL ST. ANTHONY and PATRICK KENNEDY, Star Tribune Staff Writers

Last update: January 31, 2011 – 5:25 AM

Corporate dealmakers are back in business. Big-time.

Investment bankers in Minnesota and nationally orchestrated more buyouts and initial public offerings in 2010 than they have since capital markets tanked in 2008.

With stock market values rising and big banks, saved by the federal bailout of 2008-09, finally starting to increase their lending, the mergers-and-acquisition numbers should continue to rebound in 2011.

“The deal market came back and normalized in 2010. The last quarter was a busier quarter than we’d had for a couple of years,” said Matthew Knopf, head of the M&A practice at Dorsey & Whitney. “There are strategic buyers in medical devices and health care technology. A lot of companies that had been thinking about putting themselves up for sale … scrambled to get on the market.”

Notable developments in the last couple of weeks include:

• Michigan-based Perrigo Co. announced that it will buy New Hope-based Paddock Laboratories Inc., a home-grown maker of generic drugs, in a deal valued at a whopping $540 million in cash.
• Boston Scientific announced plans to acquire Atritech Inc., a Plymouth-based company that has developed a device to treat patients with atrial fibrillation who are at risk for ischemic stroke. The deal could mean up to $275 million for Atritech shareholders through 2015.
• Shares of up-and-down investment banker Piper Jaffray jumped about 16 percent as it reported its best quarter since 2007. That’s owed to a surging public and corporate finance businesses in the United States as well as a booming underwriting business in Hong Kong and Shanghai, China, home to more than a dozen alternative-energy and other companies for which Piper helped raise capital in 2010.

Minnesota-affiliated investment firms closed 298 mergers and acquisitions in 2010. That compares with 152 in 2009 and 230 in 2008, according to Dealogic and Star Tribune research. Nationally, there were 9,833 deals last year, compared with 7,350 in 2009 and 8,734 in 2008.

“The month of December and the fourth quarter were all-time records for us,” said Glenn Gurtcheff, a 20-year Twin Cities investment banker who runs the Minneapolis office of Harris Williams & Co. “Of the 60-plus deals we closed, 19 were in December.”

Gurtcheff said much of the fourth-quarter activity started out as tax-driven in anticipation of a 2011 rise in federal long-term capital gains taxes. But the fact that the Bush-era tax cuts were extended by President Obama and Congress took away much of that impetus.

“Instead, the biggest factors driving end-of-year activity were the significantly improved operating performances of both sellers and buyers,” he said.

One of the biggest deals for Harris Williams was the $840 million sale of Kentucky-based Griffin Industries, a family-owned animal-rendering and biodiesel oil business, to fast-growing Darling International.

“That doubled Darling’s business and would never had occurred if Darling had any doubts,” Gurtcheff said. Texas-based Darling has extensive operations in the Midwest including Minnesota.

Chip Fisher, a principal at Minneapolis-based Greene Holcomb & Fisher, which tends to focus on transactions of less than $250 million, nevertheless, represented Paddock Laboratories on its $540 million acquisition by Perrigo.

“We’ve been as busy as we’ve ever been during the last quarter of 2010 and into 2011,” Fisher said. “This could be our best year in terms transactions.”

The majority of his firm’s deals are done by strategic industries and about 35 or 40 percent might be financial deals done by private equity buyers. “The credit markets are opening up to help them finance [leveraged buyout] deals,” Fisher said. “That’s a real plus for the private equity people.”

The deals are popping nationally in food, energy, medical technology and elsewhere — excluding commercial real estate, where values remain depressed amid a glut of office and retail space.

But generally the outlook is optimistic thanks to the low interest rates, huge piles of cash in corporate treasuries, and big companies that want to acquire earnings through acquisitions in an environment of modest revenue growth. Meanwhile, there is pressure from investors in hedge funds to sell some of their old holdings to generate returns. Some of those same outfits are starting to raise fresh capital from affluent investors and institutions as they look for promising companies that need expansion capital.

So are happy days here again?

“We don’t expect to see a dramatic upswing [in 2011],” Gordon Dyal, global head of M&A at Goldman Sachs told the New York Times this month. “But looking at our backlog, we see continued, steady growth.”

Neal St. Anthony • 612-673-7144 • nstanthony@startribune.com • Patrick Kennedy • 612-673-7926 • pkennedy@startribune.com

Posted: 3:43 pm Wed, October 27, 2010
Finance & Commerce

By Mark Anderson
Mergers and acquisitions specialists address Faegre & Benson’s annual industry seminar Wednesday. Left to right: Matt Miller, senior reporter with The Deal; Jon Salveson, head of investment banking at Piper Jaffray & Cos.; Brian Holcomb, managing director at Greene Holcomb & Fisher; Hugh Hoffman, managing director at Craig-Hallum Capital Group; and Morgan Burns, Faegre & Benson. (Staff photo: Bill Klotz)

The prognosis for the mergers and acquisitions market continues to be upbeat for the rest of 2010, but a panel of M&A specialists addressing Faegre & Benson’s annual industry seminar Wednesday tempered their considerable optimism with an armful of caveats.

Global M&A activity has grown 20 percent to $2 trillion this year, and the roster of buyers and sellers should keep the market growing into 2011, said Hugh J. Hoffman, managing director with Craig-Hallum Capital Group.

Non-financial companies have more than $1 trillion in cash on hand, and when they reach into those bulging wallets, they’re choosing to spend it on acquisitions and share buybacks. Private equity funds are aging and exiting mature investments, which is opening a new round of fundraising and deployment of those recycled funds. Hoffman noted 15 private equity transactions worth more than $1 billion this year.

And hostile transactions are on the rise – a leading indicator of more M&A activity on the horizon.

“The deal market is back, and there are a lot of drivers to keep feeding it,” Hoffman said.

That uptick isn’t even across the board, though. Most deals are being completed in the large company segment, where capital markets are providing cheap and plentiful debt financing, in both high-yield and investment grade bonds.

But there’s a different story in small- and middle-market sectors, where most of the advisers, investors and lawyers attending Wednesday’s session work.

Mid- and small-market buyers and sellers generally rely on banks to finance acquisitions, and those lenders are still showing some post-crisis reluctance to originate new loans, according to Brian Holcomb, a managing director at Greene Holcomb & Fisher.

“They still have portfolio issues to deal with, headaches with regulators,” Holcomb said. “And there’s still no appetite for collateralized debt obligations,” which created a secondary market for those M&A loans during the last decade.

Mid-market deals that do close are more likely to be in the upper end of that segment, for targets with at least $15 million in EBITDA (earnings before interest, tax, depreciation and amortization), Holcomb said. Leverage ratios are also coming back slowly from the credit-crisis lows, but “we still see capital structure with 50 percent or more equity,” he said.

Strategic buyers – companies looking to increase market share through acquisitions – are very busy looking at deals, said Jon Salveson, a vice chairman and head of investment banking at Piper Jaffray & Co.

“We’re probably at an all-time high in the number of conversations we’re having on the strategic side,” he said.

But still-rocky business fundamentals are posing obstacles. Global consumption is still low, making it hard for buyers or targets to achieve revenue growth, and many companies continue to miss their revenue projections.

“They’re facing extreme uncertainty,” Salveson said, and for mid-market companies forced to finance deals with high-priced equity, that uncertainty puts a chill on their appetite.

The health-care segment, which has delivered much of Minnesota’s wealth for decades, is one of the hardest hit by consumption declines and uncertainty, Salveson said. Those companies see uncertainty in every direction – the regulatory regime, who their customers will be, and who will pay the health-care bills.

“That’s left them in quicksand on Wall Street,” Salveson said, pointing out that the sector had traded at a 30 percent premium to Standard & Poor’s 500 in the past, but is trading at a 25 percent discount now.

One incentive that will keep M&A markets busy in the near term is tax law. With capital gains rates expected to climb to 20 percent, up from the current 15 percent, companies with an interest in selling are feeling an extra measure of motivation to close by year-end.

As an example, Holcomb pointed to a cash-rich buyer who has made a low-ball offer on a target company. “He’s playing chicken, offering a lower price, and betting that the seller will take less than they want in order to get the deal done and get some benefit from lower capital gains.”

Salveson predicted the M&A climate and activity should continue strengthening into next year – just as long as another economic crisis doesn’t come along.

“If we can avoid a shock we’ll be OK,” he said. “A lack of volatility is an enormous driver of deals.”

Greene Holcomb & Fisher is pleased to announce the hiring of Tom Newell as a Managing Director to spearhead its Pacific Northwest investment banking efforts. ”We are excited to have an office in the Pacific Northwest and to have Tom lead our efforts in that region of the country,” said Kent Adams, Managing Director at Greene Holcomb & Fisher. “We believe the Pacific Northwest will be served very well by our middle market investment banking expertise. Tom’s background, reputation and track record as an investment banker and entrepreneur are an exceptional fit for us and the needs of the middle market in that geography.”

The opening of an office in Seattle and the addition of Tom to the team are key elements of GH&F’s aggressive and targeted growth plans. “Over the past 18 months, we have continued to grow our firm and brand to support our position as one of the leading Middle Market M&A firms in the country,” commented Hunt Greene, Managing Director at Greene Holcomb & Fisher. “We have been extremely active in this first half of 2010, and we look forward to Tom helping us continue that momentum as we expand our presence in the Pacific Northwest and nationally.”

Tom, a native of Seattle, has over a decade of business experience in a broad range of industries, including roles as an investment banker, entrepreneur and operating executive working with and serving a number of Pacific Northwest companies. Tom began his investment banking career with Piper Jaffray in Minneapolis.  Prior to joining GH&F, Tom was a managing director at a middle market investment bank based in Seattle, where he focused on the consumer and food sectors. Tom has also served as Chief Executive Officer of ODS Software and Coy Products, two Seattle-based start-up companies. Tom was honored as one of the Puget Sound Business Journal’s top 40 business leaders under the age of 40. He is a graduate of Yale University (BA) and the University of Washington (JD).

Tom can be reached at tnewell@ghf.net or 206-295-9746.

About Greene Holcomb & Fisher LLC

Greene Holcomb & Fisher, with offices in Minneapolis, Phoenix and Seattle, is an investment banking firm that specializes in mergers and acquisitions, private placements and financial advisory services for the middle market. At GH&F, we blend our experience from nationally prominent investment banks, New York Stock Exchange-listed companies and leading law firms with senior-level attention and entrepreneurial ingenuity to deliver creative services to high quality companies.

We thank you for your continued support. To learn more about our practice, please visit our website at www.ghf.net or call us at 612-904-5700.

Greene Holcomb & Fisher Contacts

Kent Adams, Managing Director, kadams@ghf.net
Kyle Crowe, Managing Director, kcrowe@ghf.net
Bob Dovenberg, Managing Director, bdovenberg@ghf.net
Chip Fisher, Managing Director, cfisher@ghf.net
Hunt Greene, Managing Director, huntgreene@ghf.net
Ken Higgins, Managing Director, khiggins@ghf.net
Brian Holcomb, Managing Director, bholcomb@ghf.net
Paul Jevnick, Managing Director, pjevnick@ghf.net
Joe Lavely, Managing Director, jlavely@ghf.net
Tom Newell, Managing Director, tnewell@ghf.net
Eric Nicholson, Managing Director, enicholson@ghf.net
Mike Smiggen, Managing Director, msmiggen@ghf.net

GALLIPOT IS THE PERFECT PLATFORM TO LAUNCH THE FAGRON STRATEGY IN THE US.  FAGRON IS READY TO ROLL OUT ITS SUCCESFUL STRATEGY GLOBALLY

Waregem (Belgium) / Rotterdam (the Netherlands)1, Arseus today announced that it has entered into a definitive agreement to acquire the US company Gallipot Inc., a leading supplier of raw materials for pharmaceutical compounding to pharmacies in the US. It is anticipated that the transaction will close at the end of May 2010.

Gallipot has grown strongly in recent years, generating a turnover of about US$ 12.5 million (approximately € 9.8 million) and an EBITDA margin in line with that of Fagron. Gallipot will be consolidated from  April 1 and will contribute to Arseus’s earnings per share in 2010.

Ger van Jeveren, CEO of Arseus: “In only one decade Fagron grew from a local player to the European market leader and is now taking the role as the global consolidator in the fast growing niche market of pharmaceutical compounding. In the past year Fagron further optimized operational excellence and prepared the internal organization for the expansion of the proven and profitable strategy of Fagron to other continents. We are therefore very pleased with this first acquisition outside Europe. The acquisition of Gallipot gives Fagron a strong entry into the US market and forms an ideal platform for rolling out the Fagron strategy of revitalizing pharmaceutical compounding and profiting from the fast-growing need for tailormade medication. A program to make the best possible use of the scale benefits and introduce Fagron’s broader product range in the US through Gallipot will be launched immediately.

We are very pleased with the confidence expressed by Gallipot’s former owners, Barbara and Michael Jones, and senior management to support the Fagron strategy, as well as their commitment to further contribute to the development of Gallipot.”

Michael Jones, President of Gallipot: “Barb and I are convinced that Gallipot is a perfect match for Fagron, which is a leader in everything to do with pharmaceutical compounding and has built an impressive track record in recent years in Europe. Since its formation in 1979, Gallipot has built a solid reputation in the US for the conditioning and sale of pharmaceutical raw materials, and the sale of creams, ointments and equipment for pharmaceutical compounding to pharmacists. The acquisition offers both Gallipot and Fagron promising opportunities for the future.”

Gallipot’s production facilities and laboratories, which are approved by the Food and Drug Administration (FDA), and its central warehouse are located in St. Paul, Minnesota. Gallipot also has a facility in Scottsdale, Arizona, to provide optimal services for clients in the western US.

Despite the global economic crisis, the market for pharmaceutical compounding in the US has shown strong growth in recent years, a trend that is expected to continue in the coming years.

The strong growth is attributable to increasing demand for tailor-made medication and the continued development of new and effective compounded applications. The majority of prescription pharmaceutical compounds in the US are covered by medical insurance.

Fagron aims to further strengthen its market leadership through robust organic growth and a focused buy-and-build strategy. In Europe, the emphasis will lie on acquisitions in existing markets and in Central and Eastern Europe and Scandinavia. Outside Europe, Fagron will further look for acquisition possibilities to strengthen its position in the US and the rest of the world.

Greene Holcomb & Fisher, LLC represented Gallipot in the transaction. Allen & Overy LLP provided legal counsel to Arseus and Faegre & Benson LLP advised Gallipot.

CONFERENCE CALL

Ger van Jeveren (CEO) and Jan Peeters (CFO) will provide further details of the Gallipot acquisition in a conference call today. The conference call starts at 9:30 a.m. CET. You can call in up to 15 minutes before the start on +31 10 7137295 (the Netherlands) or +32 2 4040334 (Belgium).

For more information:

Constantijn van Rietschoten

Director Corporate Communications

+31 88 33 11 222 (Office)

+31 6 536 91 585 (Mobile)

constantijn.van.rietschoten@arseus.com

Arseus – press release – 10 May 2010 – 3/3

Profile Arseus

Arseus is a multinational group of companies that supplies products, services and concepts to professionals and institutions in the European healthcare sector. Arseus is subdivided into four divisions and operates in the markets for pharmaceutical compounding for pharmacies, dental products, medical and surgical products, and medical IT-solutions.

The Belgian company Arseus NV is located in Waregem and is listed on NYSE Euronext Brussels and NYSE Euronext Amsterdam. The perational activities of the Arseus group are driven by the Dutch company Arseus BV. The head office of Arseus BV is located in Rotterdam.

Acquisitions, mergers and private equity activity are ramping up as the market thaws. Experts forecast good things to come in 2010.

By NEAL ST. ANTHONY, Star Tribune

Last update: January 24, 2010 – 4:06 PM

As the economy has warmed in recent months, color has returned to the cheeks of corporate dealmakers.

Last week, Illinois-based Trustmark Mutual said it would buy Bloomington-based HealthFitness in a $100 million deal that provides a healthy premium to long-term HealthFitness shareholders and delivers the company’s high-payback health-and-fitness programs to a broader platform.

Meanwhile, two other small public companies, Zareba Systems and Gander Mountain, announced they are being acquired and going private, providing some immediate relief to long-suffering shareholders with a premium while also ridding themselves of the seven-figure cost of regulatory compliance that is particularly burdensome for small-cap companies, which have fewer revenues across which to spread the costs.

Investment bankers interviewed for the Star Tribune’s Quarterly Deals Report say there is growing interest among private equity firms as well as independent owners to sell their companies, now that valuations are starting to rise for the first time since the recession and credit squeeze struck in late 2008.

“In the last 60 to 90 days our pitch activity … already is up 60 percent over last year, which we think bodes really well for the second half of 2010,” said Brian Holcomb, a managing partner and founder of Greene Holcomb & Fischer, a Minneapolis investment bank. “We’ve been asked by private equity groups about companies they’ve owned for several years, that have done well and they’re thinking now is a good time to sell.”

Privately held Greene Holcomb added several bankers last year to bring the total number of professionals to 19 at its 22-person firm.

The number of corporate acquisitions nationally in the fourth quarter was 1,960 including 66 by Minnesota-affiliated firms, the best quarter of 2009 as the M&A market thawed. However that was still off the two-year high number of 2,441 and 76 in the first quarter of 2008, according to Dealogic and Star Tribune research.

A Minnesota company called GovDelivery was bought for $19.7 million by Internet Capital Group of Pennsylvania, according to Bloomberg News. Founded in 2000, GovDelivery is an online e-mail service for local, state and federal governments. Its proprietary software scans client websites to detect content changes, then e-mails an alert to a list of subscribers who have indicated an interest in the topic. Craig Hallum Capital Group represented GovDelivery.

Private equity leads IPOs

Private-equity-owned companies are expected to dominate the IPO landscape this year, thanks to improving stock prices and pent-up demand among funds wanting to sell their investments.

Companies such as gunmaker Freedom Group Inc., online investment adviser Financial Engines and automated customer service call provider West Corp. already have filed for IPOs. Funds run by huge Cerberus Capital Management, Blackstone Group and Bain Capital have a stockpile of companies they purchased in recent years.

“The huge number of investments that have been made over the last seven years is being revalued based on the market’s rally,” William Buchanan Jr., chief executive of Lazard Capital Markets, told the Wall Street Journal earlier this month.

The percentage of IPOs in the United States that were spun out to public shareholders by private-equity or venture-capital firms rose to 52 percent in 2009, up from 22 percent in 2008, according to Dealogic. That’s the highest level since the deal-tracking began compiling IPO statistics in 1995.

In Minnesota, Piper Jaffray, which is developing a globe-spanning investment bank, was the most active underwriter of corporate equity with more than two dozen offerings in the fourth quarter alone. Piper participated in the $100 million IPO of Ancestry.com, the popular website for tracing family histories.

Piper was followed by Minneapolis-based equity research and banking boutique Craig-Hallum Capital, which had seven deals, including $74 million for fast-growing Compellent Technologies, a modular-data storage outfit in Eden Prairie.

As companies finally spend money updating systems and storage, the technology sector is expected to be a capital-raising growth area in 2010.

The same story is likely to play out among so-called “green” or “clean-tech” manufacturing. This includes energy-conserving businesses as well as alternative energy, as fossil-fuel-based fuels rise in price as the economy warms and amid the possibility of carbon-related caps and taxes to slow pollution and global warming.

“I would expect more deals in 2010,” said Doug Cameron, a scientist and former venture capitalist who leads the green investment banking team at Piper Jaffray. “There are a bunch of good companies that make bio-based chemicals and biofuels that could get funding.”

Piper raised money for several wind, solar-electrification and high-efficiency motor companies last year.

Staff reporter Patrick Kennedy contributed to this report.

With their stock prices languishing, smaller ‘orphan’ firms find going private can be a money-saver.

Minnesota business by the numbers

Promising orphan companies are being adopted by new parents.

Last week, Zareba Systems, the Plymouth-based maker of electronic fences, announced that it plans to be acquired by a larger Pennsylvania corporation in a $9-per-share cash deal that represents a nice premium for shareholders. The company has traded between $2 and $6 per share for most of its 18-year life as a public company.

Meanwhile, Gander Mountain, the outdoors goods retailer, announced late last year that its two largest shareholders, who control two-thirds of the publicly held company’s stock, plan to take Gander private in a $5.15 per share deal. That’s a 35 percent premium to before-offer share prices, but far off the nearly $14 per share high of 2005, the yearGander went public.

These two companies, both of which have demonstrated some revenue growth and operating profits over the years, are considered market “orphans.” They may have potential as private companies, or as part of a larger organization, but they have little potential to satisfy public shareholders or to become the shining stars of growth-oriented mutual funds.

“There are more and more companies falling under the ‘orphan’ category,” saidHunt Greene, a veteran Twin Cities investment banker and founding partner in Greene Holcomb & Fisher. “You put it all together, and it’s a lot more expensive and there’s a lot less interest in small-capitalization companies, and there’s less expansion capital available in today’s market.”

Greene’s boutique investment bank primarily advises smaller companies in recapitalizations and sales. And he advised the boards of Zareba and GanderMountain.

These public companies typically have market values far less than $500 million, often considered the minimum for big mutual funds or other institutional investors. As a result, orphans tend to get little — or no — coverage by Wall Street analysts or the few remaining regional brokerages

We are likely to see more small companies taken out or going private and avoiding the full expense of compliance with the Sarbanes-Oxley Act of 2002 and stepped-up regulation by the Securities and Exchange Commission. Lawyers, accountants, reporting requirements and documentation required under Sarbanes-Oxley can cost several hundred thousand dollars to more than $1 million a year, a significant burden for small companies

Last year, Greene Holcomb was retained by Zareba — a profitable company with $32 million in revenue but with a stock price that was bobbing around $2 per share and a market value of less than $25 million.

Zareba says it is the world’s largest manufacturer of electronic fences and security systems for animals. Still, the company had limited growth potential.

“After careful consideration, our board and a special committee of the board concluded that the costs associated with our being a public reporting company are not justified by the benefits,” CEO Dale Nordquist concluded last August. “We believe that our shareholders are better served by deregistration [as an exchange-listed, public company], which will allow management to reduce expenses, focus on operating the business and work to further increase shareholder value.”

Zareba’s board approved a 1-for-250 reverse split of its common stock that would result in $5.20 per share for each pre-split share. That move drew some interest from potential acquirers, so Zareba pulled its going-private plan last fall while Greene Holcomb entertained offers. The process culminated in last week’s $9-per-share offer by Woodstream Corp., a Pennsylvania-based manufacturer of bird feeders, rodent and wild animal control equipment and lawn and garden ornaments.

“Zareba’s operations will enhance our operating capabilities and allow us to better serve the needs of our customers,” Woodstream CEO Harry Whaley said.

The Gander Mountain deal is still pending. The outdoors retailer had potential but has struggled for success as a public company. Interim CEO David Pratt, a St. Louis businessman and outdoors enthusiast, owns about 42 percent of the company, and the owners of Holiday Stationstores, the birthplace of Gander, own about 28 percent. There wasn’t much stock available to trade in Gander, which had limited expansion capital and lots of competition.

Pratt’s company and Holiday plan to buy out remaining shareholders for $5.15 per share, a 35 percent premium to the price before the deal was announced last fall, in a deal that will cost them up to $30 million. The deal is expected to be completed by spring.

“They’ve been operating almost like a private company anyway, so it’s not very surprising” said Reed Anderson of D.A. Davidson & Co., a Montana brokerage and the only analyst following Gander last fall. “It’s expensive to be a public company. If you have no need to be a public company, ultimately it’s a distraction and an expense.”

Neal St. Anthony • 612-673-7144 • nstanthony@startribune.com

© Business Wire

Zareba Systems, Inc. (NASDAQ: ZRBA) announced today that it has signed a definitive agreement to merge with a subsidiary of Woodstream Corporation, a Pennsylvania corporation. Woodstream is majority owned by private equity firms Brockway Moran & Partners, Inc. and Code Hennessy & Simmons LLC.

Under the terms of the agreement, a newly-formed subsidiary of Woodstream will merge with and into Zareba, Zareba will become a wholly-owned subsidiary of Woodstream, and Zareba shareholders will receive $9.00 in cash for each outstanding share of Zareba common stock. This price represents a premium of approximately 100% over the closing price of Zareba stock on January 11, 2010. Zareba’s board of directors and a special committee of Zareba’s disinterested directors have unanimously approved the agreement and the merger. The merger is expected to be completed in the first half of 2010 and is subject to Zareba shareholder approval and other customary closing conditions. A special meeting of Zareba shareholders will be announced following preparation and filing of proxy materials with the Securities and Exchange Commission.

“Our board thoroughly explored strategic alternatives for enhancing shareholder value and determined that this transaction with Woodstream represents an excellent value to our shareholders,” stated Zareba President and Chief Executive Officer Dale Nordquist. “Furthermore, our complementary product offerings and market strengths will also result in the substantial utilization of our existing operations and employees going forward.”

“Zareba’s and Woodstream’s Fi-Shock product offerings are highly complementary and when combined will result in an impressive portfolio of products, brands and intellectual property” stated Woodstream President and Chief Executive Officer Harry E. Whaley. “Zareba’s operations will significantly enhance our operating capabilities and allow us to better serve the needs of our customers around the world.”

Greene Holcomb & Fisher LLC acted as financial advisor, and Fredrikson & Byron, P.A. served as legal advisor, to Zareba. William Blair & Company LLC acted as financial advisor, and Faegre & Benson LLP