Mergers & Acquisitions

Chicago investors acquire Midland Container

Chicago-based Arbor Investments has completed its acquisition of Midland Container Corp. in Franksville, Wis.

Midland produces value-added corrugated packaging and display products.

In conjunction with the acquisition, Arbor operating partner Sieg Buck, a former senior executive for Newell-Rubbermaid, has been named chief executive officer of Midland.

The current management team will continue in their respective roles with the company.  Financial terms of the acquisition were not disclosed.

Founded in 1947 by the Gerlach family, Midland manufactures corrugated shipping containers, custom-designed industrial packaging and full-color point-of-purchase displays.  The company also provides an array of value-added services in structural design, front-end creative design, just-in-time (JIT) inventory management, packout and fulfillment.

“We are excited to be acquiring a company the caliber of Midland Container,” said Arbor vice president Richard Boos. “Midland’s outstanding reputation as a market leader in product quality and service provides the ideal foundation for accelerating the Company’s growth.”

Arbor Investments is one of the only private equity firms in North America that solely invests in the food, beverage and related industries. The firm has $236 million of capital under management across two private equity funds.

Boos said Arbor anticipates future growth for Midland.

“Employees and facilities will grow with the company,” Boos told SBT. “We feel that it’s a great platform for growth.”

Arbor remains interested in making investments in other Wisconsin companies, Boos said.

“We’re always interested in something nearby, given our location in Chicago,” he said. “And the area (Wisconsin) is a big interest. It’s got a lot of food and beverage (companies).”

West Bend mutual banks to merge

West Bend Savings Bank and Continental Savings Bank, two mutual community banks, jointly announced the companies will merge to create a new Wisconsin bank with more than $650 million in combined assets and 27 locations serving southeastern Wisconsin.

A name for the new bank will be determined upon completion of the merger.

“It’s a very proud day for both organizations,” said Jim Podewils, president of Continental Savings Bank. “This is the first merger between two mutual savings banks in Wisconsin in over eight years. This partnership will allow us to offer a greater depth of products and services to our customers, while allowing us to retain our community philosophy of friendly customer service.”

Ray Lipman, chief executive officer of West Bend Savings Bank, said, “This is a wonderful opportunity for both banks. When Jim and I began meeting in February 2007, we quickly saw the advantages that this combination provides to both organizations.”

Upon completion of the merger in late 2008, the combined bank headquarters will be located in West Bend, while the bank will maintain a regional office in Greenfield.

Lipman will become chairman and CEO and Podewils will be president and chief operating officer. Current employees and officers of both institutions will retain their employment with the new bank.

West Bend Savings Bank was formed in 1926 and has 18 branches.

Continental Savings Bank was formed in 1914 and seven branches, including East North Avenue, Lincoln Avenue and West Villard Avenue in Milwaukee, as well as offices in Brookfield, Brown Deer, Hales Corners and Mukwonago.

Tushaus acquires business from Bedrock

Milwaukee-based Tushaus Computer Services announced it has acquired the southeastern Wisconsin client list of mid-market customers of Bedrock Managed Services of Madison.
The acquisition is aligned with the Tushaus business strategy to provide strategic information technology and managed services to mid-market clients.
“The mid-market is underserved by IT services providers. We have streamlined our operations to effectively serve this market with the quality and professionalism normally reserved for much larger organizations,” said Gregg Tushaus, founder and chief executive officer of Tushaus. “We are pleased to take on these new customers and look forward to delivering business value to them for years to come.”

MillerCoors closes on merger

SABMiller plc and Molson Coors Brewing Company announced they have closed on the transaction to combine their U.S. and Puerto Rico operations to create MillerCoors.

“As a unified company with a world-class board and leadership team in place, MillerCoors will be able to create tremendous opportunities for innovations in products and services that will allow us to drive profitable growth,” said Pete Coors, chairman of MillerCoors. “Personally, I am thrilled to be part of such an exciting and innovative organization and look forward to serving as the chairman of this new business.”

Graham Mackay, chief executive of SABMiller, said, “Today is an historic day in the American beer business, not only for the shareholders of both SABMiller and Molson Coors, but for MillerCoors consumers, employees, distributors and business partners. Now that the transaction has closed and MillerCoors is a reality, the strong leadership team we have put in place is ready to execute and realize the tremendous potential of this great organization.”

Leo Kiely, chief executive of MillerCoors, said, “MillerCoors will be entrepreneurial, with the ability to operate with speed and agility in the marketplace, backed by the powerful combined resources of two exceptionally successful companies. We will drive profitable growth and bring new energy to the U.S. beer industry. Our focus now is to deliver on the $500 million in identified annualized cost synergies by improving sourcing across our eight major breweries, building a streamlined organization and leveraging the scale of the new company. Our talented people are experienced and passionate about this business and – importantly – are determined to win.”

Some of those efficiencies will be reached, presumably, by cutting hundreds of administrative jobs. Miller has about 900 administrative jobs in Milwaukee.

MillerCoors has not yet announced where its combined headquarters will be. SABMiller is based in London, and its Miller Brewing Co. unit is based in Milwaukee. Molson Coors is based in Golden, Colo.

Pete Coors said earlier this year that the merged company’s headquarters will likely be in a neutral location. The Denver Post reported that the cities being considered for the merged headquarters are Chicago, Kansas City, Dallas, Atlanta, New York and Des Moines.

Miller spokesman Julian Green said a decision on the location of the merged headquarters will be announced soon.

SABMiller and Molson Coors have each named five representatives to the MillerCoors board of directors, as follows:

•    Pete Coors, vice-chairman of Molson Coors Brewing Company and chairman of the MillerCoors board.
•    Graham Mackay, CEO of SABMiller plc and vice-chairman of the MillerCoors board.
•    Peter Swinburn, president and CEO of Molson Coors.
•    Sam Walker, global chief legal officer and corporate secretary of Molson Coors.
•    Stewart Glendinning, global chief financial officer of Molson Coors.
•    Dave Perkins, president, global brand and market development of Molson Coors.
•    Malcolm Wyman, CFO of SABMiller plc.
•    Nick Fell, group marketing director of SABMiller plc.
•    Johann Nel, group human resources director of SABMiller plc
•    Sue Clark, corporate affairs director of SABMiller plc.

Based on results for Miller and Coors reported under International Financial Reporting Standards (IFRS) for the year ended March 31, 2008, and U.S. GAAP for the four fiscal quarters ended March 30, 2008, respectively, MillerCoors’ annual pro forma combined beer sales were 70.1 million U.S. barrels, which is a 1.6-percent increase from the comparable pro forma period a year earlier.
The combined company’s pro forma net revenues were approximately $7.0 billion for the most recent year, a 6-percent increase from a year earlier.  Pro forma combined EBITDA totaled approximately $991 million, an 18-percent year-over-year increase.

Fiserv to shed insurance businesses

Fiserv Inc., Brookfield-based provider of information technology services to the financial and insurance industries, has signed a definitive agreement to sell 51 percent of its interests in its insurance businesses to Trident IV, a private equity fund managed by Stone Point Capital LLC.
Trident will invest approximately $205 million in equity and $335 million in debt in the transaction.
Fiserv expects to receive approximately $510 million in net after-tax proceeds and to retain a 49 percent equity interest in Fiserv Insurance Solutions. The transaction is anticipated to close in July, subject to regulatory approval and other customary closing conditions.

The transaction will include nearly all aspects of Fiserv’s insurance segment. The current management team and employee base will continue with the company, which will be known as Fiserv Insurance Solutions Inc.

“Stone Point Capital brings a proven track record of insurance industry success that we believe will accelerate the growth opportunities for Fiserv Insurance Solutions and its clients,” said Jeffery Yabuki, president and chief executive officer of Fiserv. “Within Fiserv, we are able to free up capital, maintain an interest in Fiserv Insurance Solutions that should increase in value, and intensify our focus on delivering products and services within the broad financial services and payments landscape.”

“We are delighted to partner with Fiserv and the management team of Fiserv Insurance Solutions,” said Chuck Davis, CEO of Greenwich, Conn.-based Stone Point Capital. “Fiserv Insurance Solutions is a leading player in the insurance technology and outsourcing space. We believe there are a number of exciting growth opportunities for the business, and we look forward to working with the Fiserv Insurance Solutions management team to pursue these growth initiatives as an independent company focused on serving the insurance marketplace. We are also pleased that Fiserv will be continuing its involvement, through a significant minority ownership position, which we believe will further enhance the company’s prospects for success.”

“Stone Point Capital’s business philosophy and culture match our own,” said Mark Damico, president and CEO of Fiserv Insurance Solutions. “The entire Fiserv Insurance Solutions management team is excited to go to market with a partner with deep insurance sector expertise. Stone Point Capital recognizes our commitment to employees as well as clients and, through our partnership, we will continue to provide innovative solutions for years to come.”

Fiserv expects slight 2008 earnings dilution of less than 1 percent, or 2 to 3 cents per share..

In a related action, the Fiserv board of directors authorized the repurchase of up to an additional 10 million shares of Fiserv common stock, or approximately 6 percent of its outstanding shares.

The company has completed its previous repurchase authorization.

“We continue to view share repurchase as an important element in building shareholder value through capital allocation,” Yabuki said. “Our strong free cash flow combined with significant proceeds from dispositions in 2008 allows us to meet our debt commitments and to repurchase shares under this new authorization.”




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