America’s most imported wine relying on holiday promotion

Yellow tail, America’s most imported wine, is relying on the holiday season in the US to promote itself and its prospects among customers in the country.

The Australia-based wine company said that it would start a national advertising campaign on late-night television, cable and the Internet from October 1 until January 1. Deutsch Family Wine & Spirits, the exclusive importer and marketer for yellow tail, is gambling that Americans will increase their wine intake during the holidays and is promoting products that it says have been developed specifically for the holidays.

The wine company is to promote itself through a ‘go to’ holiday campaign that will promote the brand as the ideal choice for the holidays.

Tom Steffanci, president of Deutsch Family Wine & Spirits, said, ‘Yellow tail is the most beloved wine brand in the U.S. with a dedicated consumer following that cuts across all age groups. The brand delivers what our consumer research has shown our customers want: reliability, consistency and great value. It is the wine you can count on for any occasion, and with pricing under eight dollars for a 750ml bottle it is the wine you can afford to stock up on for the holidays. Yellow tail has the country’s number one selling Merlot and Shiraz and the number three selling Cabernet Sauvignon. This year we’ve added two hot wines to the brand portfolio: Yellow tail Moscato, one of the most successful launches of the year, and Sweet Red Roo, a naturally sweet red blend of Shiraz, Cabernet Sauvignon and other red varieties. Both are perfect wines for casual parties and fun with family and friends.’

Figures show that the brand has grown 2.5 percent over the last 52 weeks, mostly helped by television and online campaigns.

Sponsor Clayton Dubilier & Rice in $1bn deal to acquire David’s Bridal

US private equity group Clayton, Dubilier & Rice LLC (CD&R) has entered into a definitive agreement that will make it the new owner of David’s Bridal Inc, the US retailer specialising in wedding gowns and related accessories.

Leonard Green & Partners LP, which bought David’s Bridal in 2006, will retain a minority stake in the business. CD&R said that the deal values the target company at about USD1.05bn (EUR842m) and is expected to close during the fourth quarter. Paul Pressler, operating partner at CD&R, will become chairman of David’s Bridal once the purchase is finalised.

David’s Bridal has been in business for more than six decades and currently sells its wares through 300-plus US stores, five outlets in Canada and an online store. In addition to designer bridal gowns, the company also offers special occasion dresses and accessories.

CD&R partner Richard J. Schnall said that David’s Bridal had the advantage of being a unique and strong business operating in a sizeable and stable industry. CD&R looks forward to helping the company solidify its leadership and make the most of its scale by expanding into new segments, channels and geographies, Schnall added.

David’s Bridal president and chief executive Robert D. Huth said that the company was excited to have the CD&R team on board. Their operational expertise will be most welcome as David’s Bridal accelerates its growth strategies, Huth stated.

CD&R, which received legal advice from Debevoise & Plimpton LLP, has secured financing commitments from Bank of America Merrill Lynch, Barclays plc (LON:BARC), Goldman Sachs Bank USA and Morgan Stanley (NYSE:MS). David’s Bridal had Bank of America Merrill Lynch and Barclays as financial advisers, while Latham & Watkins LLP provided it with legal counsel.

US food group General Mills completes acquisition of Brazil’s Yoki

US food company General Mills Inc (NYSE:GIS) said it had finalised its deal to acquire Brazilian sector player Yoki Alimentos SA.

The definitive purchase agreement was unveiled on 24 May 2012 but the financial parameters of the transaction remained undisclosed. Sean Walker, president of General Mills’ Latin American operations, described the closure of the acquisition as a new start for the company’s Brazilian business.

General Mills has expanded its portfolio with brands that have been favourites of Brazilian households for decades. As a result of this acquisition, General Mills will be able to accelerate its growth in the vibrant Brazilian market, Walker added.

Walker, who also runs General Mills Brazil, will be put in charge of Yoki. He will be assisted by a management team comprising key executives from both companies.

Yoki was established in 1960 by Yoshizo Kitano and currently sells over 600 products across the country under nine brands. The food products marketed under its Yoki and Kitano brands have secured leading market positions in categories such as snacks, convenient meals, basic foods and seasonings.

The company has multiple production facilities and a national retail distribution network. In 2011, it booked revenues of BRL1.1bn (USD539.4m/EUR438.5m) on an IFRS basis.

UK insurance group Aviva puts its US business on the block

UK insurance major Aviva Plc (LON:AV) is gearing for a sale of its US business after receiving several unsolicited approaches from trade buyers and private equity groups, the Sunday Telegraph reported without specifying its sources.

According to the UK newspaper, Aviva’s finance chief Pat Regan has spent quite a while in Des Moines, Iowa – the city where Aviva USA’s headquarters are located – to make preparations for the sale and launch the process. An investment bank is yet to be formally appointed but Aviva’s executives are believed to have settled on Goldman Sachs Group Inc (NYSE:GS) as manager of the sale.

Aviva agreed to pay GBP1.8bn (USD2.8bn/EUR2.3bn) in mid-2006 for what was then called AmerUs, combining it with its existing US business to create Aviva USA. The sale of the business is expected to leave the UK company with a loss of GBP800m on its initial investment since the division is now estimated to be worth GBP1bn, the Sunday Telegraph said.

Following shareholder pressure, Andrew Moss stepped down as chief executive of Aviva in May, leaving newly appointed executive chairman John McFarlane to fill the gap on a temporary basis.

Earlier in July, McFarlane presented his plan for a strategic overhaul of the company, saying that 16 out of 58 businesses have been designated non-core and will either be sold or shut down. However, Aviva could not be drawn into commenting at the time on whether its US division was one of those businesses.

The company has already pulled out of Hungary, Romania, the Czech Republic and Australia and is set to exit Taiwan as well, selling its 49% stake in its local joint venture.

The Sunday Telegraph was unable to extract a comment from an Aviva spokesman with regard to the US divestment.

Cosmetics giant Coty forms South Korean JV with LG Household & Health

US-based beauty care products maker Coty Inc has formed a joint venture with South Korean sector company LG Household & Health Care Ltd (KRX:051900), or LG H&H, to extend their presence in the Korean cosmetics market, the parties announced today.

The creation of this JV, called Coty Korea, is an important step for Coty through which the company wants to grow its presence in Asia and to strategically expand its cosmetics and skin care operations on a global basis, it said. At the same time, the move strengthens LG H&H’s leadership in the Korean consumer market.

According to Coty Prestige president Michele Scannavini, Korea represents an important emerging market for the beauty sector. The newly-announced development may also be followed by other potential common projects abroad, LG H&H CEO Suk Cha said.

The parties did not provide information regarding the ownership structure of the venture or the amount they will invest in the new entity.

This autumn, the JV intends to introduce its beauty brand philosophy into the Korean marketplace, Coty said, adding that this brand is expected to play a crucial role in the expansion of its product portfolio. Furthermore, Coty Korea will continue to seek for opportunities to further grow and improve its presence in the market.

Coty is a beauty care products manufacturer with annual net sales of USD4.5bn (EUR3.7bn), about 12,000 employees and offices in New York, Paris and Geneva.

US newspapers increasingly outsource journalism to the Philippines

Newspapers across the United States of America are outsourcing the production of local news to low-paid researchers and writers in the Philippines, radio progamme This American Life has revealed.

In an interview with a young American journalist, Ryan Smith, This American Life presenter Sarah Koenig exposes the work of outsourcing company Journatic and the newspapers for whom it works, many of whom would rather remain unknown.

Former Journatic employee Smith says in the report that Journatic’s news is ‘written overseas, half-heartedly edited and slapped on a page’.

Smith, who risked being fired for speaking publicly, says he wrote and edited stories for newspapers in Texas while never leaving Chicago, about 1,000 miles away.

Using freelancers in the Philippines, Brazil, Eastern Europe and Africa, Journatic produces vast quantities of local stories, such as death notices, house sales and bowling scores based on publicly available information, for American newspapers that no longer have the resources to cover the micro detail of daily life.

Journatic and some of the newspaper companies who use it told This American Life that no writing was done in the Philippines itself. Rather, the Filipinos, who earn between 35 to 40 cents per story, ‘assemble information, in paragraph form,’ which is then written and edited in America.

However, it is hard to know how true this is. Koenig spoke to one anonymous Filipino freelancer who claimed to write stories himself. Yet their real names are never published. Instead, American newspaper publishers can click a ‘Select Alias’ button and choose Americanised names such as Jenny Cox or Glenda Smith.

While the programme paints the practice in a negative light, Journatic CEO Brian Timpone argues a good case for his model. He says he knows that he will be criticised for his business interests, but he argues that outsourcing information aggregation is the way forward for the financially-strapped media industry.

‘I personally think we’re saving journalism with our approach, ‘ says Timpone.

‘The single reporter model, the old model, just doesn’t work and hasn’t done for 30 or 40 years.’

‘We’ll be able to see more things, things that no one covers,’ Timpone says.

He goes even further, asserting that having journalists on the ground does not produce more accurate or more engaging stories than his at-a-distance model.

Timpone claims that his company can produce more content for less, helping to drive traffic for newspapers and encourage local advertising, an important stream of revenue.

‘If you have a better idea, I’m all ears,’ challenges Timpone.

Written by Will Fitzgibbon of The Bureau of Investigative Journalism.

Listen to the original This American Life programme here.

 

Forestar’s target Credo Petroleum gets no offers

US oil and gas explorer Credo Petroleum Corp (NASDAQ:CRED) announced on Tuesday it had received no alternative takeover approaches during the go-shop period agreed with its suitor Forestar Group Inc (NYSE:FOR) in June.

The agreement announced on 4 June for $14.50 (€11.60) a share, or some $146m in total, allowed Credo to seek alternative proposals during a 30-day period which ended on 3 July, the target firm said.

At the signing of the agreement, Credo’s chairman James T. Huffman said that the deal, backed by both companies’ boards, reflected the value built into Credo since it started its transition four years ago from natural gas to oil. Forestar’s size and substantial oil and gas portfolio would help step up that transition, while the tie-up would create synergies from the combined human and technical resources, Huffman added.

For Forestar, the acquisition of Credo would more than double its existing oil and gas production and proven reserves, give it operating flexibility and establish a strong platform for future growth, the group’s president and CEO Jim DeCosmo has said. It also serves Forestar’s Triple in FOR strategy to accelerate value realisation and boost net asset value through investments, he added.

Credo expects now to wrap up the deal in the second half of this year, pending a number of conditions, including clearance from its shareholders.

The transaction does not need the approval of Forestar stockholders and it is not subject to financing conditions.

The target company has substantial assets in regions including North Dakota Bakken and Three Forks, Kansas, Nebraska, the Texas Panhandle and Oklahoma.

German Linde to expand in the US with possible deal to acquire Lincare

German gases group Linde AG (ETR:LIN) is racing to buy US Lincare Holdings Inc (NASDAQ:LNCR), a provider of oxygen and other respiratory therapy services, for some USD3.4bn (EUR2.7bn), in a move that would substantially expand its pharmaceutical and medical gases business, according to informed sources cited by the the Financial Times Alphaville blog.

Linde is offering at least USD40.00 a share for Lincare and leads the bidding race which also includes French Air Liquide (EPA:AI) and an unnamed private equity firm, the people said.

A deal would see the German group expand its presence in the US after widening its reach across the sector in Belgium, Germany, France, Portugal and Spain with the acquisition earlier this year of Air Products and Chemicals Inc’s (NYSE:APD) homecare business in Europe. The Air Products deal gave Linde the second position in the homecare sector after Air Liquide.

A potential acquisition of Lincare would boost Linde’s healthcare operations which provides higher margins than its main industrial gases business while improving its position in the high-growth sector.

With a capitalisation of slightly over USD20bn, Linde is seen capable of ensuring financing a potential deal for Lincare, the report said.

Lincare provides homecare services to customers suffering from chronic obstructive pulmonary disease (COPD). It served over 800,000 customers in 48 US states and Canda through 1,108 operating centres as of 31 December 2011.

US private equity sponsor Ceberus exits Guilford Mills in $257m deal

US private equity major Cerberus Capital Management LP said it had completed its exit from Guilford Mills Inc, selling the North Carolina-based manufacturer of automotive and speciality fabrics for USD257m (EUR205m).

The business was acquired by Lear Corporation (NYSE:LEA), the US automotive industry supplier of seating and electrical power management systems. The transaction, which was conducted through a Cerberus affiliate, was finalised on 31 May 2012. The private equity group bought Guilford in 2004.

Dev Kapadia, managing director at Cerberus, said that his company was pleased with the closure of the sale, which places Guilford under the wing of a world-class corporation. The deal with Lear represents the achievement of a key objective for Cerberus since it leaves Guilford in the hands of a market-leading enterprise.

Under the ownership of Lear, Guilford will be able to reach new heights in terms of performance and success. This has proved a good investment for Cerberus, which is proud of its contribution to Guilford’s achievements over the course of their partnership, Kapadia stated.

Guilford’s former chairman Chan Galbato said that the support provided by Cerberus had helped Guilford become a market leader in the automotive and specialty fabrics business. The partnership had made it possible for Guilford to streamline production, launch best-in-class products and assemble an exceptionally strong management team, Galbato added.

Kinder Morgan and El Paso complete $21bn merger

US natural gas pipeline operator Kinder Morgan Inc (NYSE:KMI) said it had finalised its planned USD21bn (EUR16.7bn) combination with peer El Paso Corp (NYSE:EP) announced last October.

The transaction, effective as of 25 May, converts Kinder Morgan into the largest midstream company and the fourth largest energy company in North America, based on enterprise value.

Its new position as the US’ largest transporter and storage operator of natural gas, ensures many growth opportunities for Kinder Morgan in the US, which it plans to pursue as means to create value for shareholders and to benefit employees and customers, chairman and CEO, Richard D. Kinder, said.

As part of the merger, El Paso agreed in February to sell its exploration and production business EP Energy to a group led by private equity firm Apollo Global Management LLC (NYSE:APO) in a deal worth some USD7.15bn, which has also been completed, the companies said.

In order to secure regulatory clearance for the tie-up, Kinder Morgan had agreed to sell some of its own assets, which it plans to do in the third quarter this year. The Federal Trade Commission gave it six months from the date of its ruling on 1 May to complete the divestment.

The acquisition of El Paso was financed with cash and stock.
Kinder Morgan said the combination will be accretive to its results. It will generate annual cost savings of over USD400m, above Kinder Morgan’s initial projection of around USD350m, the buyer added.