Coca-Cola close to Glaceau acquisition

The top soft drink company has filed a premerger notification with regulators regarding its proposed acquisition of vitamin water maker.

Coca-Cola has filed a premerger notification with U.S. regulators about the proposed acquisition of vitamin water maker Glaceau, industry publication Beverage Digest reported Monday.

Citing "informed sources," Beverage Digest said the world's largest beverage company filed a Hart-Scott-Rodino Act notification with the U.S. Federal Trade Commission, which is required for proposed deals of significant size, so the FTC and Department of Justice can assess whether the deal is likely to reduce marketplace competition.

A Coca-Cola spokesman declined to comment.

Beverage Digest said a deal, which it heard could be worth about $4 billion, is still likely subject to approval by Coca- Cola's board of directors.

Glaceau, which is 30 percent owned by India's Tata Tea Ltd., maker of Tetley Tea, could not immediately be reached for comment.

Late last month, Beverage Digest reported that Coke, which is trying to enhance its portfolio of noncarbonated drinks, was in "serious talks" to acquire all or part of Glaceau, which controls 3.1 percent of the U.S. noncarbonated beverage market.

Glaceau, the No. 2 maker of enhanced water behind PepsiCo Inc.'s (down $0.45 to $69.03, Propel fitness water, sold 77 million cases last year, compared with Propel's 95 million, according to Beverage Digest.

Coke (down $0.70 to $51.93, shares lost 1.3 percent in afternoon trading on the New York Stock Exchange Monday.

Beech-Nut headquarters to move from St. Louis to upstate New York

Beech-Nut Nutrition Corp., the country's second-largest maker of baby food by sales, will move its corporate headquarters from downtown St. Louis to eastern New York.

The company is building a $124 million, 650,000-square-foot processing and manufacturing plant in the town of Florida in New York's Mohawk Valley. The facility could open in fall 2009, the company said Tuesday.

Beech-Nut, which has about 35 employees in St. Louis, will transfer its executive offices to upstate New York by August, leaving a small regional office for sales and customer support in St. Louis.

Beech-Nut had signed a lease and planned to move into a new business complex near Interstate 170 in Overland after the $9 million project's scheduled completion this summer.

Jerry May, president pro tem of the Overland City Council, said he was not aware of Beech-Nut contacting the city to discuss the change in plans. He said the council heard about the move to New York last week. "It's all pretty sudden."

The move to New York state will end St. Louis' 17-year run as home base for the baby-food maker. The headquarters has been at 100 South Fourth Street.

Beech-Nut — a subsidiary of the Hero Group of Lenzburg, Switzerland — is replacing its primary plant in Canajoharie, N.Y., where Beech-Nut started in 1891 as a ham- and bacon-smoking operation. The Canajoharie plant is more than 100 years old and suffered extensive damage in flooding a year ago, which forced long downtime. As executives planned repairs, they also mulled over the headquarters location.

In November, company representatives met with staff of the St. Louis Regional Chamber and Growth Association.

"They actually told us at that time that they felt like they were operating at a disadvantage, not having their headquarters at the same place" as manufacturing operations, said Steve Johnson, RCGA senior vice president. But the company did not say it was planning to move out of state, and discussions didn't touch on financial incentives to keep Beech-Nut in the St. Louis area, he said.

In November 1989, Ralston Purina Co. of St. Louis bought Beech-Nut from Nestlé Enterprises, the U.S. wing of the ­giant Swiss food company, and announced plans to move Beech-Nut's headquarters from Pennsylvania to St. Louis. Ralcorp Holdings Inc., Ralston Purina's spun-off food business, later sold Beech-Nut in 1998.

Angels Investors clip wings of entrepreneurs

Acting more like VCs; usual source of seed money disappearing

Angel investors are increasingly funding more mature companies, making life hard for the early-stage ventures that have historically relied on them.

Last year angel investments totaled $25.6 billion nationally, a growth of 10 percent over the previous year, according to the University of New Hampshire.

As the market grows, angels -- especially angel investor groups -- are moving upstream, looking to dole out more money and take fewer risks. Meanwhile venture capital firms anchored by huge funds are increasingly looking to invest larger rounds of cash. Entrepreneurs say that combination has made tapping into angel capital, once fertile ground for early-stage funding, trickier in recent years.

"It's a very bizarre process," said Christopher LaFarge, president and CEO of Sensors for Medicine Inc. in Boston. "I've been trying to figure out and understand the dynamic, but it has made it damn near impossible for entrepreneurs to raise capital in a reasonable time frame and with any kind of reasonable probability."

LaFarge spent two years looking for investors to fund the $2.5 million round he is about to close.

LaFarge plans to use the cash to take his company's first product, a medical device that measures prostate size, from the prototype stage to a manufacturable product. After a year of having no luck with local investors, LaFarge ended up cobbling together a group that includes one Boston-based angel and four venture capitalists based in Atlanta; Baton Rouge, La.; Boston and New Orleans. LaFarge talked to a total of 30 investor groups during the process.

"We had angels saying 'it's a VC deal' and the VC's saying 'it's an angel deal,' " said LaFarge. "We were right in between."

Historically, prime angel territory has been investments from $100,000 to $1 million, but as VC investments swell, angel groups have begun syndicating deals and investment sizes have gone up.

It's an increasingly common route for angels to take. In 1998 there were three angel groups in New England compared to 20 today. Some entrepreneurs compare these groups to small VCs.

"I found working with angel groups in New Hampshire and Vermont to be very positive," said Jean-Marie Vogel, CEO and founder of Pluromed Inc. in Woburn. "Some angel groups in Boston are trying to evolve and become mini-VCs. They become difficult, because they tend to be a little more conservative."

Initially, Vogel was unable to secure financing for his three-year-old medical device startup that makes injectable plugs to control bleeding during surgery.

So Vogel dipped into his own money and borrowed $250,000 for a convertible loan from a friend. It took Vogel a year to raise $1.6 million in startup capital from angel groups.

He recently closed another round of $2.4 million in angel funding. After speaking to about 500 investors during the process, Vogel said he thinks it might be easier to raise money from individual angels, who don't have to vote in large groups on whether to invest.

The tough climate will likely force more entrepreneurs to dip into their own savings, ask friends and family for money, pitch corporations or seek out federal funding such as Small Business Innovation Research grants.

"For entrepreneurs, it's a tough problem," said Jeffrey Sohl, director of the University of New Hampshire's Center for Venture Research. "An entrepreneur is forced to bootstrap a lot more and ring up some nasty credit card debt."

Hub Investment Management Group LLC, a Boston-based angel investing group with two funds of $12 million each and raising its third fund, has become cautious, often investing in companies that are ramping up operations, not starting them up. The process of securing funds has gotten slower as well, with the time it takes for due diligence at a high of more than four months. Once a company is in, however, the firm is committed to follow-on investments.

"Companies we are seeing have been around one to three years, whereas previously it was three months," said Charlie Cameron, founder and managing director. "The market doesn't pay us to take that early-stage risk anymore. I let friends, family and fools take the early stage risk."

Harry Mitchell, CFO of Sontra Medical Corp. in Franklin, tried to secure angel funding for a medical device startup in 2006 before he joined Sontra. Mitchell, unable to convince a room full of investors, scrapped the idea.

"I realize from talking to people that the days when people were looking for a good concept (to fund) ... that doesn't happen as much anymore," he said.

James Geshwiler, managing director of Common Angels in Lexington, which invests out of a pair of $10 million funds, disagrees that it's gotten any harder for entrepreneurs. He says it's always been hard. If anything, the increased amount of groups means that angels are more visible. But the average Common Angels round has gone up to $500,000 by themselves and $2.5 million when investing with other groups. Geshwiler acknowledges the business of angel investing is changing.

"What large angel groups do with money under management is they have created the reach and deal flow of a very big VC while having the more favorable economics of a small fund," said Geshwiler. "My dirty little secret is that I'm a venture capitalist."

Sargento acquires Portionables

Sargento Foods, Inc. said Wednesday that it will expand its product line with the purchase of Portionables, Inc. a Bellingham, Wash., food products producer.

Terms of the transaction were not disclosed.

Portionables operates plants in Bellingham, Wash., and North Sioux City, S.D. It is a manufacturer of frozen sauce and other value-added food products.

The Plymouth cheese products manufacturer plans to use Portionables' expertise, particularly in individually quick frozen products, to further enhance its new product portfolio for the company's food ingredient and food service businesses.

"Portionables offered us an exciting and unique opportunity to secure best-in-class product development expertise and manufacturing," Sargento Foods chairman and CEO Lou Gentine said in a statement. "We believe that high quality sauces and meal solutions where cheese and other fresh ingredients are integral to the recipe offer significant opportunities to better serve the expanding product needs of our customers."

Portionables products are used in restaurants, cafeterias and on dinner tables throughout North America. Principal products include sauces, soups, desserts, side dishes, and fruit and vegetable purees for both the food service and food ingredient sectors across the United States, Canada and Western Europe.

P&G reorgs global businesses

Consumer goods company will be divided into three new global units; Gillette will no longer be a separate business unit.

Procter & Gamble Co. announced an overhaul of its business structure Monday, dividing into three new global units and breaking up the Gillette Co. business it acquired in 2005.

As part of the restructuring, the company will promote Susan Arnold to president, global business units, and Robert McDonald to the newly created position of chief operating officer. Both will be on the same rung of the corporate ladder as Chief Financial Officer Clayton Daley, a level below Chairman and Chief Executive A.G. Lafley.

P&G which competes with Johnson & Johnson and Kimberly-Clark Corp, has nearly doubled its business since 2000 with the acquisitions of the Clairol and Wella hair care businesses and Gillette. The change in structure is designed to meet the needs of a larger business that is also developing new initiatives faster than in the past, Lafley said in a news release.

As part of the restructuring, Gillette will no longer operate as its own global business unit. Its Duracell battery operation will be part of the global household care unit, while the shaving part of the business will come under beauty care.

Several unit presidents and other corporate officers will also leave the Cincinnati-based company, P&G said.

The changes will take effect July 1.

CEO succession?

Arnold, 53, will be in charge of the company's three worldwide business units: beauty care, global health & well being and household care. In that job, she will be responsible for development and innovation in P&G's brands, which also include Tide laundry detergent and the Olay skin care line. She is currently vice chairman for P&G beauty and health products.

McDonald, 53, is vice chairman for global operations. As COO he will be in charge of global operations, including the units that develop P&G's businesses in local markets.

"We believe this news formalizes a potential near-term succession plan with Arnold and McDonald as the primary successors to Lafley," Goldman Sachs analyst Amy Low Chasen wrote in a research note. She rates the shares "buy."

Still, as she noted, "Lafley has no intention to retire" soon. Should the CEO, who turns 60 in June, stay until P&G's mandatory retirement age of 65, he will have five more years at the helm.

At that point, "it is conceivable the board could go with a younger CEO," Chasen wrote. If Lafley were to stay until he turns 65, Arnold and McDonald would both be in their late 50s.

CFO Daley, 55, was given the added role of vice chair.

Bruce Byrnes, 59, vice chairman of the board overseeing household care, has already said he plans to retire in 2008. Until then, Byrnes will serve as vice chair for global brand building training.

Among the other retirements, Mark Leckie, 53, group president of the Gillette global business unit, plans to retire on Sept. 1. Until then, he will serve as group president on special assignment reporting to Daley.

Pfizer Shifts Leadership In Key Posts

In one of his biggest moves to turn around Pfizer Inc., Chief Executive Jeffrey Kindler announced last night a leadership change for two of the drug giant's key functions: research and finance.

Pfizer said the longtime head of research and development, John LaMattina, will retire shortly after Pfizer finds a successor for him, a sign the world's largest drug maker is taking seriously its problems in its research pipeline.

Alan Levin, the company's relatively new chief financial officer, also will step down, as the company looks to bring in a finance chief with more visibility and experience on Wall Street. The moves suggest Mr. Kindler, the former general counsel who took the top job last summer, is acting on his promise to "transform" Pfizer into a leaner, more productive company.

Pfizer's main problem is its weak pipeline, which critics say stems from the company's unwieldy size, ingrained mentality and narrow focus on blockbuster drugs. Pfizer, with its roughly $7 billion annual research budget, pours more money into research and development than most. Its most promising candidate, torcetrapib, which boosted "good" cholesterol, died in clinical trials late last year because of safety problems. The drug was Pfizer's best hope for a blockbuster to replace Lipitor, the big-selling cholesterol treatment that loses patent protection as early as 2010.

Dr. LaMattina, the 57-year-old leader of Pfizer's 12,500 researchers, had been a vocal champion of torcetrapib. He has been at the company since 1977. Pfizer is just beginning a search to replace the two executives. "A new R&D head can have a significant impact on the speed with which the pipeline is advanced and products are commercialized," says a person familiar with the matter.

Martin Mackay, currently vice president R&D and head of world-wide development, is an insider mentioned frequently as a possible contender for the top R&D job. But Mr. Kindler, a former McDonald's Corp. executive who got the top job last summer in part because he was an industry outsider, is expected to also look outside Pfizer for a leader, particularly one with experience in the hot areas of biotechnology and vaccines.

Mr. Levin, 45, was the lieutenant to the previous chief finance officer, David Shedlarz, and took over as the chief of finance in 2005 as Mr. Shedlarz's responsibilities expanded.

Mr. Kindler's background may predispose him to look outside the drug industry for Mr. Levin's successor. Through a Pfizer spokesman, Dr. LaMattina and Mr. Levin declined to comment beyond remarks in a prepared statement released last night. Dr. LaMattina, in the statement, said, "With this strong foundation in place, I believe that now is the time for a leadership transition, so that we have the right leader in place to bring our innovative new medicines forward."

In the statement, Mr. Levin said, "With a strong finance organization in place, and after 20 years of service with Pfizer, I feel that now is the appropriate time for me to explore career opportunities outside of the company."

Last summer Mr. Kindler shook up his inner circle, including elevating Mr. Shedlarz to be his main deputy and vice chairman. In January, Mr. Kindler unveiled the first part of a strategy that some investors felt didn't go as far toward the real institutional change they felt the organization needed.

L'Oreal Buys Salon Hair Care Brand PureOlogy

Stefan Oschmann, Merck's president for Europe, the Middle East, Africa and Canada, said the U.S. drugmaker was interested in expanding its portfolio with the purchase of biotechnology firms with late-stage products or mid-sized pharmaceutical companies with promising research platforms.

He told a small group of journalists in Geneva that large-scale consolidation was likely not in Merck's interest, especially given that market valuations of companies in the sector are so high.

"Mega mergers have in most cases not delivered what they had promised," Oschmann said. "We don't necessarily think that a mega merger is the right thing."

Merck signed 35 acquisition and partnership deals in 2006. Oschmann said Merck, ranked seventh in the industry for sales last year, is investing heavily in developing an HIV vaccine and sees large promise in its HPV vaccine Gardasil for cervical cancer prevention.

Playtex Products Inc. acquired the stock of Tiki Hut Holding Company Inc., the owner of Hawaiian Tropic sun care -- a move that is in line with Playtex’s acquisition strategy to acquire products in its core categories that promote growth internationally. The acquisition increases the size of the Playtex skin care line -- which includes the Banana Boat brand -- to more than $340 million in annuals sales. The purchase price for the stock, and repayment of all outstanding debt at the closing, was $83 million, plus a seasonal working capital adjustment.

"Hawaiian Tropic is an important addition to our skin care brand portfolio,” says Neil P. DeFeo, chairman, president and CEO of Playtex. "We see significant opportunities with the Hawaiian Tropic brand and expect to drive incremental growth and profitability over time by investing in advertising and new product development."

Hawaiian Tropic sells its products -- spanning the Tanning, General Protection, Baby and Kids, Sunless, After-Sun, Burn Relief and Lip protection categories -- globally to more than 700 customers through multiple distribution channels including mass, drug and food. In 2006, net sales of Hawaiian Tropic exceeded $110 million with approximately 20 percent of the company's net sales generated outside of North America, primarily in Europe and Latin America.

"I am delighted to know that the Hawaiian Tropic brand will be in the hands of a company that understands and builds great consumer brands. I am confident the Playtex management team will take Hawaiian Tropic to the next level given their depth of experience and demonstrated success in the category," comments Hawaiian Tropic Founder Ron Rice.

MEGA Brands Names Chief Marketing Officer

 

MEGA Brands Inc. names Kathleen Campisano as executive vice-president and chief marketing officer. As the corporation's senior marketing and brand executive, Campisano will be responsible for the strategy, development and management of marketing initiatives for all brands within MEGA worldwide, including Mega Bloks, Rose Art, Magnetix and Board Dudes. In this capacity, she will work closely with the corporation's global business teams on the development and implementation of growth strategies. Campisano has been building brands in executive leadership roles for more than two decades with LeapFrog Enterprises, Fisher Price and Century Products Company.

  

MEGA Brands Inc. names Kathleen Campisano as executive vice-president and chief marketing officer. As the corporation's senior marketing and brand executive, Campisano will be responsible for the strategy, development and management of marketing initiatives for all brands within MEGA worldwide, including Mega Bloks, Rose Art, Magnetix and Board Dudes. In this capacity, she will work closely with the corporation's global business teams on the development and implementation of growth strategies. Campisano has been building brands in executive leadership roles for more than two decades with LeapFrog Enterprises, Fisher Price and Century Products Company.