RSM EquiCo Capital Markets leads negotiations as ODIM acquires Numet Engineering

ODIM Inc., a subsidiary of Norway-based ODIM ASA (ODIM: OBX), has acquired Numet Engineering Ltd., for 110 million Norwegian Kroner ($22 million Canadian). RSM EquiCo Canada Inc. led the negotiations and acted as the exclusive advisor to Numet Engineering.

RSM EquiCo Capital Markets promotes three to managing director

RSM EquiCo Capital Markets LLC, a global investment bank, has announced the promotion of three senior-level professionals to the position of managing director. Mark Agosto, David Burke and Michael Parham were previously senior vice presidents.
Agosto, Burke, and Parham each lead one of the firm’s industry specialty groups. Agosto runs RSM EquiCo’s Rubber, Plastics & Advanced Materials group; Burke oversees Engineering, Construction and Building Materials; and Parham heads the Energy team.

Investment Bank: Aerospace & Defense Industry Dealmaking will Remain Active in 2008

While the domestic airline industry faces severe challenges due to skyrocketing jet-fuel prices, the overall commercial aviation sector should continue to thrive in 2008 and beyond. Development of major new aircraft from Boeing and Airbus is keeping suppliers busy, while demand remains strong for regional jets, business jets and very light jets. Dealmaking activity is robust, with strategic buyers pursuing acquisitions to control costs and secure new value-add product lines and cash-rich private equity groups aggressively competing for middle-market acquisition candidates.
These were among the observations shared by RSM EquiCo Capital Markets LLC at the global investment bank’s third annual Aerospace & Defense Conference, held last week in Southern California. The industry forecast was presented by Paul Weisbrich, senior managing director and head of the firm’s Aerospace & Defense Investment Banking Group.

LBO Deal Of The Month: Deal By Deal, Heritage Works To Redeem Itself To Investors (from Dow Jones Private Equity Analyst)

Saunders & Associates makes machines that test the accuracy of frequency control devices found in most electronics, and is a leader in its relatively small industry. The Phoenix-based company was founded in 1967 and decided to seek a buyer last year, as members of the founding team, including Jack Saunders, were ready to liquidate their stakes, said Heritage General Partner Peter Hermann. It went on the auction block in August, just as the credit crunch hit. “We launched this into an unknown, unquantifiable credit market,” said Paul Weisbrich, a senior managing director at RSM EquiCo Capital Markets LLC, which advised the sellers.
RSM EquiCo put in a good word for the firm, helping it get past any hesitancy on Saunders & Associates’ part about teaming up with a fundless firm. “They have a reputation of certainty to close,” said Weisbrich. “And they aren’t known for retrading at the 11th hour just to get a better price.”

RSM EquiCo Capital Markets leads negotiations as Imperial Headwear acquires Merge Left

Imperial Headwear Inc., a portfolio company of investment firm MCG Global LLC, has acquired Merge Left Inc. RSM EquiCo Capital Markets LLC initiated the transaction, led the negotiations and acted as the exclusive advisor to Merge Left.

Scott Witter Named Vice President of RSM EquiCo Capital Markets

RSM EquiCo Capital Markets LLC, a global investment bank, has named Scott Witter vice president. Witter, who is based in the firm's Costa Mesa corporate headquarters, will provide merger and acquisition and capital raising advisory services to the firm's investment banking clients. His primary responsibilities will include helping expand RSM EquiCo’s presence in the packaging industry segment of the basic industries sector.

RSM EquiCo Capital Markets leads negotiations as 1-800-FLOWERS.COM acquires DesignPac

1-800-FLOWERS.COM Inc. (NASDAQ: FLWS) has acquired DesignPac Inc. for $38.25 million. RSM EquiCo Capital Markets LLC led the negotiations and acted as the exclusive financial advisor to DesignPac.
“DesignPac is an important addition to our gourmet food and gift basket business. It brings tremendous capabilities and experience in the design, sourcing, production and distribution of gift baskets and gift sets, as well as strong relationships with many of the leading retailers throughout the country,” said Jim McCann, chief executive of 1-800-FLOWERS.COM. “It also brings an experienced and focused management team that has built a cost-efficient and profitable business that, we believe, can help us enhance the growth and profitability of all our existing gourmet food gift businesses.”

Barter Up: The consensus among market pros is that the climate is right for a surge in stock-for-stock deals

Dealmakers waiting for conditions to perk up have largely been disappointed in the first quarter of the year. According to research from R.W. Baird, middle-market deals sank by 25% during the first three months of 2008, with the drop largely attributed to the tightened lending markets. But while the uncertainty has impacted highly leveraged transactions, some believe the conditions could accommodate a resurgence in stock-for-stock deals.
What may make a difference is that many companies today remain cash rich, with healthy balance sheets. And cash deals will always be preferable to the somewhat fluid valuations of stock transactions, says Jean Cayanni, senior managing director at RSM EquiCo Capital Markets. Reflecting the buyer reticence, he notes: "Very often a large company doesn't want to issue stock because it dilutes its own shares."
Typically stock deals are considered educated bets on the future, and ideally, a stock-for-stock merger strives to make the most of undervalued stock. "Let's say you are Company A and your stock is undervalued and you sell it for cash. On the other hand if you get stock in Company B, it's likely that company B is also undervalued. Therefore when the market comes around, you are going to get a pop," Cayanni describes.
Cash-strung companies during the last downturn were forced to turn to the stock-for-stock structure in order to get deals done. While declining earnings numbers in the current market would seem to hint at that trend's second coming, Cayanni believes such a movement has yet to take place.
"In 2003, 2002, several companies were selling leveraged balance sheets - you cannot pay cash, therefore you issue stock," Cayanni says. "Those are things that can occur again, although I'm not sure it's there right now."
The Baird numbers seem to back Cayanni up. For the year through February, all-stock transactions made up 9.1% of all middle-market deals compared to 12.4% in the year ago period. But at the same time, the market hasn't yet entered a recession, at least officially, although most prognosticators concede a contraction has likely already begun. If that's the case, stock prices will indeed begin to reflect that.

In Defense of M&A: Deals in aerospace and defense are likely to heat up, and PE firms can expect competition from European acquirers (from Investment

The manufacturing and assembly of the airline industry's next wave of large passenger airplanes like the double deck Airbus A380 and Boeing 767 is really just beginning to ramp up, says Paul Weisbrich, a senior managing director at RSM EquiCo Capital Markets. "The entire aerospace and defense manufacturing base, whether it's metals or composites, has everyone thinking about whether to invest or merge. There is a level of euphoria in the aerospace industry that people haven't felt for a long time."
Renewed M&A interest in the market couldn't come at a better time for Costa Mesa, Calif.-based investment bank RSM EquiCo, which is holding its third annual aerospace and defense symposium on June 4 in Marina Del Rey, Calif. The event will feature a keynote address from retired Major General Charles Vyvyan, panels featuring Joseph Berenato, chief executive of Ducommun, composite materials maker HITCO, as well as a private equity session featuring Mark Jrolf, a partner at Heritage Partners, and Hammond Kennedy Whitney partner Ted Kramer.
Weisbrich, who's been meeting with executives from Boeing and other aerospace companies, says that the aerospace supply chain boom will really take place in mid-2009. "Right now people have contracts, but they're not really manufacturing the planes," he says.

RSM EquiCo Capital Markets leads negotiations as RFE Investment Partners acquires NUDO Products

RFE Investment Partners has acquired NUDO Products Inc. Terms of the transaction were not disclosed. RSM EquiCo Capital Markets LLC initiated the transaction, led the negotiations and acted as exclusive financial advisor to NUDO Products.
“Despite unsettled economic conditions, the NUDO management team continued to deliver strong operating and financial performance during the sale process,” said Bruce Manchester, senior managing director, RSM EquiCo. “RFE Investment Partners, which was selected from an attractive group of interested buyers, has exciting plans for continued NUDO success.”