Mergerweek

MERGERWEEK® Vol.3 Issue 39

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MERGERWEEK

®

VOLUME 3 ISSUE 39

THE WEEK IN M&A

Sep.29-Oct.3, 2003

INSIDE THIS ISSUE:

CNL Retirement Properties p.4-5 Helen of Troy-Unilever p.5-6 ActiveCore Technologies-SCI Healthcare Group p.6-7 DTE Energy-Vector Pipeline p.8

MANULIFE FINANCIAL CORP. AND JOHN HANCOCK FINANCIAL SERVICES TO MERGE IN $11 BILLION TRANSACTION

Qualcomm-Alcatel p.8-9 RBC Mortgage Company-Sterling Capital Mortgage Company p.10-11 Black Hills Corporation p.11 General Dynamics-Steyr Spezialfahrzeug p.12 Piedmont Natural Gas-Progress Energy p.13 Metso Corporation-Scanfil p.14 The First American Corp.Transamerica p.15 MedCap Properties p.16-17 Fox Paine-CSFB p.18-19 Henkel-DESC Group p.20 Thermo Electron-Siemens p.20-21 Avaya-VISTA p.21-22 Exelon-British Energy p.23-24 Phonenix Footwear Group-Royal Robbins p.24-26

TUESDAY, SEP-30-03 Toronto & Boston - Manulife Financial Corporation (TSX, NYSE: MFC) and John Hancock Financial Services, Inc. (NYSE: JHF) today announced that their Boards of Directors have each unanimously agreed to a tax-free, stock-for-stock merger of the companies, creating a leading global insurance franchise, valued at Cdn$34.7 billion (US$25.6 billion) based on closing stock prices on September 24, 2003, before rumours affected the stock of each company. The combined companies' competitive strength will be marked by the diversity and depth of their products and dis-

tribution, a leading position in the marketplace across all of its core business lines and economies of scale.

Under the terms of the merger, John Hancock common shareholders will receive 1.1853 (continued on p.2)

MergerWord of the week: BUSINESS AS USUAL n.phr. the normal mode of operations; nothing out of the ordinary.

The Wall Street Journal (September 23, 1999): “We are continuing ahead with business as usual,” a Columbia spokesman said. “We continue to believe that this proposal is not in the best interest of this company or its shareholders.”

Dow Jones Newswires (September 28): But that didn’t stop some analysts from dismissing the deal as nothing more than business as usual.

DJ (Index)

NASDAQ (Index)

S&P 500 (Index)

9,572.31, +84.51, +0.89%

1,880.57, +44.35, +2.42%

1,029.85, +9.61, +0.94%

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...MANULIFE FIN.-JOHN HANCOCK (continued from p.1) Manulife common shares for each John Hancock common share, representing a price of US$37.60, a premium of 18.5 per cent, based on unaffected share prices as of September 24, 2003. Manulife intends to invest up to Cdn$3 billion (US$2.2 billion) for the repurchase of its common shares.

Purchases will be made subject to market circumstances and applicable regulatory requirements.

Manulife's Domin i c D'Alessandro will be President & Chief Executive Officer of the combined entity, which will have its global headquarters in Toronto, Canada.

Hancock's David D'Alessandro will become Chief Operating Officer and future President of Manulife when the transaction is complete.

(His appointment to President will take effect 12 months after the transaction closes.) He will report to Dominic D'Alessandro. Dominic D'Alessandro and David D'Alessandro are not related.

David D'Alessandro will remain Chairman & Chief Executive Officer of John Hancock Financial Services.

In that capacity, he will direct the combined companies' North American retail and group businesses, which will

be headquartered in Boston, Massachusetts. John Hancock's Canadian subsidiary Maritime Life, headquartered in Halifax, Canada, will become part of the integrated Canadian division of Manulife and part of the North American division.

The combined company will market products and services under multiple brands including John Hancock in the United States and Manulife in Canada and the United States.

"We see this as a unique strategic opportunity," said Manulife's Mr. D'Alessandro, "to combine two exceptionally strong companies into a single, integrated, global market leader whose scale and capital base will drive even greater growth and shareholder value. The benefits of this transaction are many, strengthening our position in each of our core businesses.

"The merger also enables us to create the largest life insurance company in Canada, and indeed, the second largest in North America.

That is good news for those who believe it is important that we invest in the economic strength of our country, as we expect to maintain significant operations in our Canadian headquarters in 2

Kitchener-Waterloo, as well as Halifax, Montreal, Toronto and the regional offices across the country," he added.

"We believe this transaction is good for our shareholders, our employees and our community," said Hancock's Mr. D'Alessandro. "Not only is consolidation in our industry inevitable, but for companies of our size to compete and grow in the future, it is necessary. This transaction gives us the scale, capital base and diversity of product and distribution to grow as a business, as well as the ability for John Hancock to remain strong and rooted in the City of Boston."

The combination of John Hancock's Asian businesses with Manulife's strong base in Hong Kong, China, Japan and Southeast Asia will expand the operations to 11 countries and territories, resulting in one of the most extensive life insurance franchises in all of Asia.

Both executives emphasized that Manulife and Hancock "complement each other in ways that build on our respective strengths as well as unlock new opportunities for earnings growth that would (continued on p.3)

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...MANULIFE FIN.-JOHN HANCOCK (continued from p.2) not exist but for this combination."

join the consolidated operation.

As President & CEO, Dominic D'Alessandro will oversee all aspects of the combined company's business from its global headquarters in Toronto, including investments, reinsurance, operations in Japan and Asia, and central corporate functions.

David D'Alessandro will oversee integration of the two companies and lead its consolidated North American operations, which, based on 2002 earnings, would account for 67 per cent of the combined entity's net income and encompass all insurance, annuity, group health, mutual fund, pension and 401(k) business lines in the United States and Canada.

Manulife's Executive Committee will consist of Dominic D'Alessandro and David D'Alessandro, along with Senior Executive Vice Presidents from Manulife and John Hancock Financial Services. Reporting to Dominic D'Alessandro will be Victor Apps, Donald Guloien, John Mather, Trevor Matthews and Peter Rubenovitch. Reporting to David D'Alessandro will be James Benson, Wayne Budd, John D. DesPrez III, Bruce Gordon and Tom Moloney.

Most of John Hancock's senior executive team is expected to remain with the company. Manulife's U.S. subsidiary, Manulife USA has a substantial presence in Boston and most of its senior executive team is expected to

The merger is subject to customary closing conditions, including receipt of required regulatory approvals and approval by John Hancock stockholders. Company officials expect that the merger will close in the second quart e r o f 2 0 0 4 .

Manulife Financial is a leading Canadian-based financial services group operating in 15 countries and territories

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worldwide. Through its extensive network of employees, agents and distribution partners, Manulife Financial offers clients a diverse range of financial protection products and wealth management services. Funds under management by Manulife Financial were Cdn$144.3 billion as at June 30, 2003.

Manulife Financial Corporation trades as 'MFC' on the TSX, NYSE and PSE, and under '0945' on the SEHK. Manulife Financial can be found on the Internet at www.manulife.com.

John Hancock Financial Services, Inc. (NYSE: JHF) and its affiliated companies provide a broad array of insurance and investment products and services to retail and institutional customers. As of June 30, 2003, John Hancock and its subsidiaries had total assets under management of US$139.7 billion. John Hancock can be found on the Internet at www.jhancock.com. ~

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MONDAY: SEPTEMBER 29 CNL RETIREMENT PROPERTIES, INC. ACQUIRES 14 SENIORS' HOUSING FACILITIES FOR $184 MILLION ORLANDO, Fla.- CNL Retirement Properties, Inc. ("CNL"), a leading real estate investment company in the seniors' housing industry, today announced it has acquired 14 seniors' housing facilities from Marriott International, Inc. (NYSE: MAR) for approximately $184 million. This transaction marks the sale of the final 14 communities in Marriott International, Inc.'s seniors' housing portfolio. Sunrise Senior Living, Inc. (NYSE: SRZ) will continue to operate the 14 communities under long-term management agreements.

"We are delighted to participate with Marriott on another significant transaction, acquiring 14 exceptional seniors' housing communities and growing our portfolio into two new states," said Thomas J. Hutchison III, Chief Executive Officer and President of CNL Retirement Properties, Inc. "CNL is also pleased to strengthen our relationship with Sunrise Senior Living, now the industry's largest senior living provider, and we look forward to executing our shared expansion strategies through future transactions."

CNL's total acquisition involves 1,603 units: 1,112 assisted living, 380 special care (dementia) and 111 skilled nursing, and comprises residences in 10 states: Florida, Georgia, Illinois, Kansas, Maryland, Michigan, Nebraska, New Jersey, North Carolina and Ohio. This transaction brings CNL's total portfolio to 75 properties in 26 states.

Sunrise Senior Living is the nation's largest provider of senior living services. The McLean, Va.-based Company, which employs more than 30,000 people, operates over 360 senior living communities either open or under construction in the United CNL Retirement ProperStates, United Kingdom and ties, Inc. is an affiliate of CNL Canada with a combined resiFinancial Group, Inc., and spedent capacity of more than cializes in the acquisition of quality independent and as-

All 14 properties are Brighton Gardens communities and offer an assisted living component, with most offering dementia care. The largest facility acquired, Brighton Gardens of Prairie Village, is located in Prairie Village, Kansas and features 135 units.

sisted living communities and continuing care retirement communities. Headquartered in Orlando, Florida, CNL Financial Group, Inc. is one of the nation's largest, privately held real estate investment and finance companies. CNL Financial Group, Inc. and the entities it has formed or acquired have approximately $8 billion in assets, representing more than 3,000 p ro p e r t i e s and 1,000 mortgage loans in 49 states. For additional information, please visit http://www.cnlonline.com.

(continued on p.5) 4

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...CNL RETIREMENT PROPERTIES (continued from p.4) 40,000. Sunrise communities offer a full range of personalized senior living services, from independent living, to assisted living, to care for in-

dividuals with Alzheimer's and other forms of memory loss and nursing and rehabilitative care. Sunrise's senior living services are deliv-

ered by staff trained to encourage the independence, preserve the dignity, enable freedom of choice and protect the privacy of residents. ~

HELEN OF TROY LIMITED COMPLETES ACQUISITION OF BRUT BRAND FROM UNILEVER EL PASO, Texas -- Helen of Troy Ltd. (Nasdaq: HELE), designer, developer and worldwide marketer of brand-name personal care products, today reported the closing of its previously announced acquisition of the Brut brand name.

man, Chief Executive Officer and President, commenting on the acquisition of this new brand stated, "We are pleased to add the Brut name to our well known consumer brands of lotion and liquid products sold through our Idelle Labs sales division. This will more than double Idelle Labs' sales for the coming year."

On September 2, 2003, Helen of Troy announced the signing of a definitive agreement to acquire Brut for the United States, Canada, Mexico, Puerto Rico and elsewhere in Latin America from Unilever. The transaction was finalized today following the required regulatory approval. The acquisition includes Brut Fragrances, Deodorants and Antiperspirants, and is expected to produce approximately $40 million in sales over the next 12 months. There will be a three month transition period during which operations will be transferred to Helen of Troy. Earnings per share contribution for the Brut brand is expected to be in the range of $.20 $.24 for fiscal year 2005, beginning March 1, 2004. Helen of Troy Limited has obtained a short term credit facility of $50 million that will be partially utilized in conjunction with cash on hand to finance this acquisition.

Helen of Troy Limited is a leading designer, producer and marketer of brand name personal care consumer products. The Company's products include hair dryers, curling irons, hair setters, women's shavers, brushes, combs, hair accessories, home hair clippers, mirrors, foot baths, body massagers, paraffin baths, liquid hair styling products, body powder and skin care products. The Company's products are sold by mass merchandisers, drug chains, warehouse clubs and grocery stores under licensed trade marks including Vidal Sassoon(R), licensed from The Procter & Gamble Company, Revlon(R), licensed from Revlon Consumer Products Corporation, Dr. Scholl's(R), licensed from Schering-Plough HealthCare Products, Inc., Sunbeam(R) li(continued on p.6)

Gerald J. Rubin, Helen of Troy's Chair5

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‌HELEN OF TROY-UNILEVER (continued from p.5) censed from American Household, Inc., Sea Breeze(R), licensed from Shisheido Corporation, and Vitapointe(R) licensed from Sara Lee Household and Body Care UK Limited.

Helen of Troy's owned trade names include Dazey(R), Caruso(R), Karina(R), DCNL(TM), Nandi (TM), Isobel(TM), WaveRage(R), Vi-

talis(R), Final Net(R), Ammens(R), and Condition 3-in-1(R). The Company also markets hair and beauty care products under the Helen of Troy(R), Hot Tools(R), Hot Spa(R), Salon Edition(R), Gallery Series(R), Wigo(R) and Ecstasy(R) trademarks to the professional beauty salon industry. ~

ACTIVECORE ACQUIRES HEALTHCARE INTEGRATION SERVICES DIVISION OF SCI HEALTHCARE GROUP TORONTO -- IVP Technology Corp. (OTC Bulletin Board: TALL), d.b.a. ActiveCore Technologies, Inc., announced today that it has acquired the Integration Services Division of SCI Healthcare Group, Inc. for a combination of shares and cash.

Details were not disclosed.

The transaction closed September 19, 2003.

The Integration Services Division is an experienced provider of IT services to the healthcare market, with over 120 clients serviced during the past few years. SCI is divesting the division to concentrate on services relating to applications developed by McKesson, Siemens, Cerner and other back-office systems development vendors.

ActiveCore

said

that

Rhonda Lindsay has been appointed vice president of U.S. operations. Lindsay has over 20 years of experience in the information technology field.

Her background includes 14 years of managing and selling integration services to the healthcare, financial, utilities and retail industries. She will head up the new six-person unit responsible for marketing MDI software products in the United States as well as expanding the division's existing business.

Peter Hamilton, president of ActiveCore, said, "We are excited about acquiring this group of professionals who will facilitate the sale of our software products to an existing healthcare client base in the U.S. The new division will operate under the MDI Solutions Group umbrella 6

and will give MDI an immediate presence in 12 states ranging from Hawaii to Florida with 18 active service contracts."

Brian MacDonald, chairman and CEO of ActiveCore, said, "We expect this operation to initially generate about $1 million in annual revenue. In addition, the acquisition provides us with a solid prospective customer base for our healthcarespecific software products.

With this solid foothold in the U.S. healthcare market, we are confident we can rapidly grow organically from our new base."

"I look forward to further work with ActiveCore as they take over the reins of the In(continued on p.7)

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...ACTIVECORE-H.I.S (continued from p.6) tegration Services Division," said Tom Rohrer, executive vice president of SCI Healthcare. "The combination of obtaining additional trained staff from Canada and the products represented by MDI and ActiveCore will allow the division to grow its revenues and profitability over the next few months."

SCI Healthcare Group is a leading provider of information technology professional services for the healthcare industry. Since its inception in 1994, the company has been a leader in providing quality IT professional solutions to the healthcare environment. Areas of specialization include IT for all McKesson product lines and document imaging. SCI also has created and markets a consolidated statement software billing solution for hospitals.

The privately held company is headquartered in Toledo, Ohio. For more information go to http://www.scihg.com.

IVP Technology Corporation, d.b.a. ActiveCore Technologies, Inc. is an emerging, fast-growing software company that develops and distributes mobile and web applications, including mobile and online games and provides IT and specialized integration services primarily to the healthcare industry.

S i l v erBi rch S tu d i os, http://www.silverbirchstudios .com, ActiveCore's mobile games group, develops games for the rapidly growing cell phone and mobile device market. ActiveCore distributes these titles and other licensed products through a variety of channels. These channels include mobile car-

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riers, original equipment manufacturers, web portals and retail distributors. OEM and carrier channels are currently serviced through wireless publishers such as Tira Wireless and Handango.

The company's MDI Solut i o n s G r o u p , http://www.mdisolutions.com is a product developer and systems integrator of data management products for the healthcare industry. The company has been engaged under medium-term contracts by a number of leading North American hospitals and healthcare providers.

MDI develops and deploys products including MD Eye and MD Link, which are specifically designed for healthcare facilities. MDI also distributes other vendors' products that are licensed by ActiveCore Technologies. ~

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DTE ENERGY TO ACQUIRE ADDITIONAL INTEREST IN VECTOR PIPELINE DETROIT -- DTE Energy (NYSE: DTE) has reached a definitive agreement to acquire an additional 15-percent interest in Vector Pipeline, a 348-mile interstate natural gas pipeline connecting Chicago to Dawn, Ontario.

quarter of 2003.

"This transaction increases our investments in pipeline assets around our geographic and operating strengths," said Jerry Norcia, president of DTE Gas Storage, Pipelines & Processing. "Since Vector Pipeline serves our gas customers in Michigan and is connected to DTE Energy's substantial gas storage facilities, an increased position in this key asset is an excellent strategic fit for our company."

Completed in 2000, the Vector Pipeline plays a key role in supplying natural gas to the Midwest and Northeast U.S., as well as to Eastern Canada.

Vector Pipeline is owned by DTE Energy, Enbridge Inc. and Duke Energy. DTE Energy will increase its ownership in Vector by acquiring half of Duke Energy's 30-percent interest in the pipeline for approximately $72.5 million. Enbridge Inc. will acquire the other half of Duke Energy's interest.

DTE Energy is a Detroit-based diversified energy company involved in the development and management of energy-related businesses and services nationwide. DTE Energy's largest operating subsidiaries are Detroit Edison, an electric utility serving 2.1 million customers in Southeastern Michigan, and MichCon, a natural gas utility serving 1.2 million customers in Michigan.

Information about DTE Energy is available at http://www.dteenergy.com. ~

Upon completion of the acquisition, DTE Energy, through subsidiaries, will own a 40percent interest in Vector and Enbridge Inc. will own the other 60 percent. There are no pending regulatory approvals needed and the transaction is expected to close in the fourth

QUALCOMM TO ACQUIRE ALCATEL'S ASSETS IN THE TRUCKING FLEET MANAGEMENT BUSINESS WAALRE, The Netherlands -- QUALCOMM Incorporated (Nasdaq: QCOM), the leader in mobile communications for the transportation industry, today an-

nounced the purchase of assets from Alcatel Mobicom, a mobile satellite data communications systems and services provider for the European trucking market and 8

part of Alcatel Space. QUALCOMM Wireless Business Solutions Europe, headquartered in The Netherlands, (continued on p.9)

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...QUALCOMM-ALCATEL (continued from p.8) will now service and support the customer base of Alcatel Mobicom. With this acquisition, QUALCOMM Wireless Business Solutions Europe becomes one of the largest providers of fleet managemen t solu tions a cross Europe. Terms of the agreement were not disclosed.

"QUALCOMM and ALCATEL will cooperate fully to ensure that this transition is seamless for the customers that QUALCOMM will now support," said Tom Armenti, vice president and general manager of international operations for QUALCOMM Wireless Business Solutions.

"By consolidating the systems that exist today, we can continue to invest in our high-quality, pan-European service and support network and increase our ability to provide state-of-the-art wireless solutions for European

transportation companies now and well into the future."

QUALCOMM has helped the transportation industry become more efficient since 1988, when the introduction of the OmniTRACS(R) mobile communications system provided transportation companies with an innovative and effective way of managing logistics. Its fleet management solutions continue to set the standard by offering products and services that meet the demands of a constantly changing m a rk e tp l a c e .

QUALCOMM's OmniTRACS system is a satellite-based mobile communications and tracking system that provides real-time messaging and position reporting between fleets and their operations centres. Messages are sent via satellite through Eutelsat's Network Management Centre to dispatch cen-

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tres throughout Europe. The EutelTRACS(TM) system is an interactive, fully integrated information management system that includes two-way mobile communications, satellite tracking and fleet management software.

To date, QUALCOMM has shipped over 480,000 OmniTRACS mobile communications system units worldwide.

QUALCOMM Incorporated ( http://www.qualcomm.com ) is a leader in developing and delivering innovative digital wireless communications products and services based on the Company's CDMA digital technology. Headquartered in San Diego, Calif., QUALCOMM is included in the S&P 500 Index and is a 2003 FORTUNE 500(R) company traded on The Nasdaq Stock Market(R) under the ticker symbol QCOM. ~

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TUESDAY: SEPTEMBER 30 RBC MORTGAGE COMPANY CLOSES ACQUISITION OF STERLING CAPITAL MORTGAGE COMPANY CHICAGO, IL. - RBC Mortgage Company, an indirect subsidiary of Royal Bank of Canada (TSX, NYSE: RY), today announced it has completed its acquisition of Sterling Capital Mortgage Company (SCMC), the residential mortgage operations of the bank subsidiary of Sterling Bancshares, Inc. (NASDAQ: SBIB). Under the terms of the deal, RBC has paid approximately US$100 million for the company.

best practices from each organization to build a best-in-class company in the U.S. We will be a compelling choice for clients and employees."

The deal includes SCMC's 110 branch locations in 16 states, and 16 Affiliated Business Arrangements (ABA) joint ventures, coowned in partnership with residential home builders.

This transaction extends RBC Financial Group's growing U.S. financial services platform. In addition to RBC Mortgage and RBC Centura Bank, RBC's U.S. operations include: RBC Dain Rauscher, a full-service securities firm based in Minneapolis; RBC Capital Markets, with corporate and investment banking operations in New York, Minneapolis, San Francisco and other select U.S. locations; RBC Builder Finance, a Houston-based provider of construction loans with national reach; and Greenville, S.C.-based RBC Insurance, which provides life, health and travel insurance services as well as outsourcing and insurance software solutions.

SCMC's senior management team will play a key role within RBC Mortgage and RBC will retain SCMC's approximately 1,400 employees. Over the next few months, SCMC branches and operations will be consolidated under the RBC Mortgage brand.

The acquisition places RBC Mortgage solidly among the top 10 retail mortgage originators in the U.S. RBC Mortgage operates as both a mortgage banker (underwriting, closing and funding loans) as well as a mortgage broker (offering loan products from more than 150 lenders). RBC Mortgage employs approximately 3,200 people, including 1,600 mortgage sales professionals operating out of nearly 200 offices in 32 states, with the ability to do business in all 50 states.

RBC Mortgage, headquartered in Chicago, includes a nationwide network of loan officers and branches in 32 states. The company has operations in both retail (originations direct to consumers) and wholesale (originations through third-party brokers). RBC Mortgage operates as both a

"RBC Mortgage's objective is to be a premier national mortgage broker/banker," said Jon Legg, chief executive officer of RBC Mortgage. "I am pleased to welcome the SCMC employees and leadership team to RBC. We are looking forward to taking the

(continued on p.11) 10

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...RBC-SCMC (continued from p.10) mortgage banker - underwriting, closing and funding loans - as well as a mortgage broker offering loan products from more than 150 lenders. This unique business model enables RBC Mortgage to offer its customers a broad selection of mortgage products, along with superior customer service from experienced mortgage professionals. For more information about RBC Mortgage, please visit the company's Web site at http://www.rbcmortgage.com. RBC Mortgage is a wholly owned subsidiary of RBC Centura Bank, which is an indirect subsidiary of Royal Bank of Canada. RBC Centura delivers a wide range of financial services and advice, including a complete line of banking, investment, loan, mortgage and insurance to individuals and businesses in North Carolina, South Carolina, Virginia, Georgia and Florida. RBC Centura is a brand name used by RBC Centura Banks, Inc., a wholly owned subsidiary of Royal Bank of Canada (NYSE,

TSX: RY). Additional information may be found at http://www.rbccentura.com.

Royal Bank of Canada (TSX, NYSE: RY) uses the initials RBC as a prefix for its businesses and operating subsidiaries, which operate under the master brand name of RBC Financial Group. Royal Bank of Canada is Canada's largest financial institution as measured by market capitalization and assets, and is one of North America's leading diversified financial services companies. It provides personal and commercial banking, wealth management services, insurance, corporate and investment banking, and transaction processing services on a global basis. The company employs 60,000 people who serve more than 12 million personal, business and public sector clients through offices in North America and some 30 countries around the world. For more information, please visit http://www.rbc.com. ~

BLACK HILLS CORPORATION COMPLETES HYDROELECTRIC ASSETS SALE RAPID CITY, S.D. -Black Hills Corporation (NYSE: BKH), has announced the completion of the sale of its ownership interests in seven hydroelectric power plants located in upstate New York. The purchasers were affiliates of Boralex Inc., a Canadian corporation, and Boralex Power Income Fund, an unincorpo-

rated Canadian trust of which Boralex owns an interest.

The sale proceeds were approximately US$186 million. Concurrent with this transaction, the Company paid off the remaining amount of project-level debt and related interest rate swaps associated with these

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assets, which totaled approximately $91 million. Remaining cash proceeds from the sale are expected to be used to repay other corporate or subsidiary-level debt, or for other corporate purposes.

Black Hills Corp. is a diverse energy and communications company. ~

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GENERAL DYNAMICS TO ACQUIRE STEYR SPEZIALFAHRZEUG OF AUSTRIA FALLS CHURCH, Va. -- General Dynamics (NYSE: GD) plans to acquire Steyr Daimler Puch Spezialfahrzeug Aktiengesellschaft & Company KG (Steyr Spezialfahrzeug) and its parent company, SSF-Holding GmbH, of Austria, on October 2, 2003. General Dynamics had previously acquired 25 percent of the parent company, in 1999.

for us in the United States, Europe and other parts of the world," said Veitch.

Headquartered in Vienna, Austria, Steyr Spezialfahrzeug developed the Pandur family of wheeled combat vehicles and began production in 1996. About 285 Pandur 6x6 wheeled armored vehicles are in service or on order worldwide. Projects for 6x6 and 8x8 Pandur vehicles are under evaluation in several countries. General Dynamics' Land Systems unit has been the U.S. licensee for Pandur vehicles since 1999.

The acquisition will be immediately accretive to General Dynamics' earnings, and General Dynamics anticipates that Steyr Spezialfahrzeug will generate approximately $230 million in sales in 2003. The company has a backlog of approximately $300 million.

Steyr Spezialfahrzeug also makes the Ulan tracked infantry fighting vehicles and family of variants. Production of 112 Ulan vehicles for the Austrian Army is in progress, and 50 units have been fielded.

Steyr Spezialfahrzeug, which has approximately 400 employees, will become part of General Dynamics' Combat Systems group.

There are no plans to relocate any production activity from present locations as a result of the acquisition.

General Dynamics, headquartered in Falls Church, Virginia, employs approximately 64,600 people worldwide and anticipates 2003 revenues of $15.5 billion. The company has leading market positions in mission-critical information systems and technologies, land and amphibious combat systems, shipbuilding and marine systems, and business aviation. More information about the company can be found on the W o r l d W i d e W e b a t http://www.generaldynamics.com. ~

Hans Michael Malzacher, current chairman of the managing board, will remain and will be responsible for the unit's performance.

He will report to Arthur J. Veitch, executive vice president and group executive for General Dynamics Combat Systems.

"Steyr Spezialfahrzeug will significantly broaden General Dynamics' combat vehicle offerings and creates additional opportunities

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PIEDMONT NATURAL GAS COMPLETES PURCHASE OF NCNG AND 50% INTEREST IN EASTERNNC FROM PROGRESS ENERGY CHARLOTTE, N.C. -Piedmont Natural Gas (NYSE: PNY) today announced that it has closed on its purchase of North Carolina Natural Gas (NCNG), a natural gas distribution subsidiary of Progress Energy, and Progress Energy's investment in EasternNC for $425 million in cash, plus $32.4 million for estimated working capital. NCNG serves approximately 180,000 residential, commercial and industrial natural gas customers, including 56,000 served by four municipal wholesale customers in eastern and southern North Carolina. EasternNC is a joint venture with the Albemarle Pamlico Economic Development Corporation to bring natural gas service to 14 counties in eastern North Carolina.

"This is an exciting time in the history of natural gas

service in North Carolina, with one company serving the vast majority of our growing state -- from the mountains to the sea," commented Piedmont's President and CEO Thomas E. Skains.

"Combined with our other service areas in the upstate region of South Carolina and the greater Nashville, Tennessee, metropolitan area, our company now serves over 920,000 natural gas customers in the Southeast. In addition, we look forward to becoming an integral part of the new communities we now serve in the eastern and southern parts of North Carolina."

Piedmont expects the purchase to be accretive to earnings in its 2004 fiscal year beginning November 1, 2003.

Piedmont utilized a new short-term commercial paper program to finance the trans-

action, and intends to issue long-term securities, both debt and equity, in the near future to realign its longterm debt and equity capitalization to traditional ratios.

Piedmont Natural Gas is an energy services company primarily engaged in the distribution of natural gas to 920,000 residential, commercial and industrial customers in North Carolina, South Carolina and Tennessee.

Piedmont is also invested in a number of non-utility, energy-related businesses including companies involved in unregulated retail natural gas and propane marketing, and interstate and intrastate natural gas storage and transportation. More information about Piedmont Natural Gas is available on the Internet at www.piedmontng.com. ~

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METSO AUTOMATION SELLS CPS ELECTRONICS TO SCANFIL HELSINKI, Finland -Metso Corporation's (NYSE: MX; HEX: MEO) automation and control technology business area Metso Automation has agreed to sell its subsidiary, CPS Electronics Inc. to Scanfil Plc of Finland as of September 30, 2003. Divestment of CPS Electronics is part of Metso's efficiency improvement program and according to that Metso divests its non-core functions and products. The parties have agreed not to disclose the transaction price.

CPS Electronics is a contract manufacturer of electronics, specializing in small and medium-sized series production. It purchases basic components and circuit board bases, automatically and manually composes them, as-

sembles ready products, designs maintenance procedures and performs testing operations. The company is located in Tampere, Finland.

The number of employees totals approximately 130. Approximately half of CPS Electronics' net sales comes from customers outside Metso.

Scanfil is a global contract manufacturer and systems supplier for the telecommunications and electronics industries. Scanfil has production plants in Finland, China, Estonia, Hungary and Belgium.

Scanfil has 1,650 employees.

The company is listed on the Helsinki Exchanges.

Scanfil acquires production and know-how which Metso Automation has utilized in its equipment ten

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years time. Scanfill will continue as important contract manufacturer of industrial electronics for Metso Automation. Metso Corporation is a global supplier of process industry machinery and systems, as well as know-how and aftermarket services.

The corporation's core businesses are fiber and paper technology (Metso Paper), rock and mineral processing (Metso Minerals) and automation and control technology (Metso Automation). In 2002, the net sales of Metso Corporation were EUR 4.7 billion and the personnel totaled approximately 28,500.

Metso Corporation is listed on the Helsinki and New York Stock Exchanges. ~

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WEDNESDAY: OCTOBER 1 THE FIRST AMERICAN CORPORATION COMPLETES $375 MILLION ACQUISITION OF TRANSAMERICA'S TAX AND FLOOD COMPANIES SANTA ANA, Calif. -- The First American Corporation (NYSE: FAF), the nation's leading diversified provider of business information and related products and services, and Transamerica Finance Corporation, today announced the completion of First American's acquisition of Transamerica's real estate tax service and flood hazard certification businesses for a net cash purchase price of $375 million. The structure of the transaction will result in a tax benefit to First American of $186 million over a 15year period with a net present value of $115 million.

The Transamerica businesses, which had combined pretax earnings of $65.7 million on revenue of $245.1 million in 2002, have continued their strong performance throughout 2003.

The transaction will be immediately accretive to First American earnings. By integrating these businesses with current First American operations that provide simi-

lar services, First American expects to benefit from significant cost synergies that will result in additional pretax profit in excess of $50 million on an annualized basis. These synergies will be realized over the next 18 months as integration is completed.

First American, already the nation's leading provider of flood zone certification and real estate tax services, will combine Transamerica's flood data with its own to create the nation's preeminent flood zone determination database. The addition of Transamerica's tax service operations helps to further strengthen First American's position as the number one real estate tax service provider to the nation's largest mortgage lenders.

"Transamerica is an excellent company with a very strong reputation for technical expertise and customer service. The added scale of these operations will allow us to better serve the mortgage lending community and provide the 15

mortgage industry's most comprehensive and accurate bundle of information products and services," said Parker S. Kennedy, president of The First American Corporation. "This combination helps to improve First American's long-term profitability, and the quick integration of these businesses will allow us to continue to provide the mortgage industry with highquality information, advanced technology and dedicated customer service."

"The completion of this transaction creates significant economic value and is a great benefit to the shareholders of both companies," stated Robert Watson, chief executive officer of Transamerica Finance Corporation.

"First American provided the perfect fit to leverage the high quality customer base and operations of the Transamerica businesses."

Transamerica Flood Haz(continued on p.16)

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...FIRST AMERICAN-TRANSAMERICA (continued from p.15) ard Certification Inc., which pioneered the flood determination business, certifies the location of properties in flood zones to four of the nation's top 10 mortgage lenders and to many of the nation's largest insurance companies.

This combination will facilitate First American's commitment to supporting the mortgage closing process through timely and accurate flood hazard determinations.

Transamerica Real Estate Tax Service Inc., headquartered in Dallas, provides services to four of the nation's top 10 mortgage lenders from 15 offices nationwide, including a field force of associates who work with tax collectors to help ensure the payment of property taxes and the reporting on tax delinquencies.

This business will be integrated with First American's tax service business, also headquartered in Dallas. The

similarities of the tax service and flood certification businesses of both companies will facilitate a smooth and swift integration process.

Financial performance for the new business will be included in the operating results of the First American's Mortgage Information segment in the fourth quarter of this year.

First American completed this acquisition through the 80percent owned First American Real Estate Solutions (FARES) joint venture with Experian Information Solutions, Inc. The transaction was funded from FARES' existing cash and proportional cash contributions from First American and Experian.

The First American Corporation, a Fortune 500 company and the nation's leading diversified provider of business information, supplies businesses and consumers with informa-

tion resources in connection with the major economic events of people's lives, such as getting a job; renting an apartment; buying a car, house, boat or airplane; securing a mortgage; opening or buying a business; and planning for retirement. The First American Family of Companies, many of which command leading market share positions in their respective industries, operate within seven primary business segments including: Title Insurance and Services, Specialty Insurance, Trust and Other Services, Mortgage Information, Property Information, Credit Information and Screening Information. With revenues of $4.70 billion in 2002, First American has nearly 25,000 employees in approximately 1,400 offices throughout the United States and abroad. ~

DEAL MAKES NASHVILLE-BASED COMPANY ONE OF THE LARGEST MEDICAL OFFICE ASSET MANAGERS IN THE NATION NASHVILLE, Tenn. -- Nashville-based MedCap Properties, LLC, announced today that it has entered into a definitive agreement to sell 113 medical office buildings in

16 states to a joint venture formed by Health Care Property Investors (NYSE: HCP) and GE Commercial Finance. GE will (continued on p.17) 16

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...MEDCAP PROPERTIES (continued from p.16) own approximately two-thirds of the joint venture, known as HCP Medical Office Portfolio, with HCPI owning one-third. The estimated $575 million-dollar deal will make MedCap one of the largest healthcare asset managers in the nation. The transaction is expected to be finalized on October 2, 2003.

latory surgery centers and other ancillary medical facilities. It is currently the largest owner and manager of medical office buildings in the U.S. GE Commercial Finance, with approximately $200 billion in assets, offers businesses of all sizes an array of financial services and products. It is a part of GE, a diversified services, technology and manufacturing company with operations worldwide.

G E R e a l E s t a t e (http://www.gerealestate.com) is one of the world's leading resources for commercial real estate capital. GE Healthcare Financial Services offers a full range of financing capabilities from equipment leasing and real estate financing to working capital lending and vendor programs.

Although MedCap Properties will be acquired, its management team will continue to manage the combined portfolio of medical office properties as part of HCPI. "We are excited about joining the HCPI team and continuing our long-term relationship with GE Capital," said Chuck Elcan, MedCap President and CEO. "GE has been our primary lender since formation and their familiarity with our portfolio made for an efficient due diligence process."

Health Care Property Investors is a selfadministered equity real estate investment trust (REIT) that invests directly or through joint ventures in healthcare facilities. As of June 30, 2003, the company's portfolio of 448 properties in 44 states consisted of 31 hospitals, 175 long-term care facilities, 126 retirement and assisted living facilities, 85 medical office buildings and 31 other healthcare facilities (http://www.hcpi.com).

"When we considered a potential transaction, HCPI was at the top of our list given its understanding of the acute-care hospital industry and delivering value to its shareholders," Elcan added. "This transaction makes HCPI and MedCap management the clear leader in the medical office building industry with almost 200 buildings and more than ten million square feet of medical office space. We look forward to adding our expertise to this team and establishing a fullystaffed HCPI office in Nashville."

HCA is the hospital owner/operator contiguous to the on- ca mpu s fa ci li ties.

H CA i s th e na tion's leadi ng p rov id er o f h ea l th ca re serv i ce s wi th 19 0 h osp i ta ls and 8 2 surg ery cen ters in 23 sta te s, th e UK an d S wi tz e rla nd . ~

Formed in 2000 with an initial purchase of properties from HCA, MedCap Properties is a private real estate company that acquires, develops and manages medical office buildings, specialty physician clinics, ambu-

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THURSDAY: OCTOBER 2 FOX PAINE'S UNITED AMERICAN ENERGY AGREES TO MERGE WITH AN AFFILIATE OF CSFB PRIVATE EQUITY WOODCLIFF LAKE, N.J. and FOSTER CITY, Calif. -United American Energy Holdings Corp. ("UAE") and Fox Paine & Company, LLC ("Fox Paine"), which manages funds that control a majority stake in UAE, announced today that UAE has entered into an all-cash merger agreement with an affiliate of DLJ Merchant Banking Partners III, L.P. and its affiliated co-investors, each managed by Credit Suisse First Boston Private Equity ("CSFB Private Equity"), the principal investing arm of Credit Suisse First Boston.

UAE, a developer, acquirer, and operator of electric power generating facilities, owns and operates six operating projects, as well as a 50% interest in American Ref-Fuel Company LLC ("American Ref-Fuel"), one of the largest owners and operators of waste-to-energy facilities in the United States.

Fox Paine have transformed the company by dramatically adding to UAE's net ownership of generating capacity and significantly increasing operating income and free cash flow during this time," stated David Goodman, UAE's Chief Executive. "We are pleased that our efforts have created a valuable enterprise which has been able to consistently increase shareholder value."

Saul A. Fox, Chief Executive of Fox Paine and Chairman of the Executive Committee of the Board of Directors of UAE added: "We are delighted with our investment in UAE and our association with UAE's extraordinary, world class management team. The success of the UAE/Fox Paine partnership has been clearly reflected in the progress of the company over the past four years." Since Fox Paine acquired its initial stake in UAE in March of 1999, the Company completed five acquisi"Over the past four and a tions aggregating $850 million half years, UAE's manage- and financings totaling over ment team and our partner $1.6 billion facilitating this 18

growth.

CSFB Private Equity also announced that it had entered into agreements to sell several interests and assets it will be acquiring through the merger. Subject to the completion of the merger with UAE and certain other conditions, CSFB Private Equity has agreed to sell interests in five UAE-operated projects to a subsidiary of Delta Power Company, LLC ("Delta Power"), an owner, developer and manager of electric power generation facilities in the United States. In addition, CSFB Private Equity has entered into an agreement to sell interests in UAE's power generating facility in Mecklenburg, Virginia, to an affiliate of Delta Power and an affiliate of John Hancock Financial Services Inc. ("John Hancock"), subject to the completion of the merger with UAE and certain other conditions.

Following the closing of (continued on p.19)

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...FOX PAINE-CSFB (continued from p.18) the merger with UAE and these subsequent transactions, CSFB Private Equity will retain UAE's 50% indirect interest in American RefFuel. Affiliates of CSFB Private Equity currently own an indirect 25% interest in American Ref-Fuel through MSW Energy Holdings, LLC. Upon the closing of this transaction, CSFB Private Equity expects to indirectly own a majority of the economic interests in American Ref-Fuel.

The consummation of the merger is subject to customary closing conditions, including approvals from federal and state regulatory agencies. Consumation of the UAE merger is not conditioned on the completion of, or approval for, the subsequent sales to Delta Power and John Hancock. Financial terms of the transactions were not disclosed. UAE anticipates that the closing of the merger to occur by early 2004.

United American Energy Holdings Corp. is a privately held company that develops, acquires, owns and manages electric generating facilities, including gas-fired cogeneration, hydroelectric generation, and generation powered by coal and solid waste fuels.

UAE holds a 50% ownership interest in American Ref-Fuel LLC, the largest municipal solid waste-to-energy company in the Northeast.

Fox Paine & Company, LLC manages investment funds in excess of $1.5 billion, providing equity capital for corporate acquisitions, company expansion and growth programs and management buyouts. The Fox Paine funds are managed on behalf of over 50 leading international financial institutions, including major governmental and corporate pension systems, Fortune 100 companies, major life and property and casualty insurance and reinsurance companies, money center and super regional commercial banks, investment banking firms, and university endowments. Fox Paine was founded in 1997 by Saul A. Fox, a former general partner of Kohlberg Kravis Roberts & Co., and W. Dexter Paine, III, a former general partner of Kohlberg & Co.

mezzanine, real estate and venture capital investments as well as primary and secondary purchases of interests in private investment funds.

CSFB Private Equity includes the family of DLJ Merchant Banking funds and the Sprout funds as well as the Private Fund Group, which is dedicated to raising investment capital for global private investment firms. CSFB Private Equity also provides Customized Fund of Funds services, designing tailormade solutions for institutional and high net worth investors. CSFB Private Equity maintains offices in New York, Los Angeles, Menlo Park, Chicago, San Francisco, Houston, London, Buenos Aires, Hong Kong and Tokyo.

Privately owned Delta Power Company, formed in 1997, owns interest in and manages fourteen operating power projects in the U.S., with installed capacity of approximately 1,675 MW. Delta CSFB Private Equity, the Power has become a leading global private equity arm of midsize U.S. independent Credit Suisse First Boston, is power producer headquarthe largest private equity tered in Morristown, N. J., manager in the world, with with additional offices in more than $29 billion of assets California, New Mexico, under management. CSFB PriTexas, Michigan and Florida. vate Equity is comprised of inFor more information, visit vestment funds that focus http://www.deltapower.com. ~ globally on leveraged buyouts,

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HENKEL ACQUIRES ADHESIVES CONSTRUCTION MATERIALS FROM DESC GROUP DUSSELDORF, Germany and MEXICO CITY -- The Henkel Group, Dusseldorf, Germany, acquired the entire adhesives and construction materials business of the DESC Group, Mexico City, Mexico, effective October 1, 2003. This business, which employs over 900 people, generated total sales of 85.9 million euros in fiscal 2002.

AND BUSINESS

primarily as weather protection. The product range also includes glue sticks and household adhesives.

With this acquisition, the industrial adhesives sector of Henkel Technologies will also strengthen its market positions in the woodworking, footwear and paper converting businesses.

"This acquisition strengthens our presence in the Mexican market. The newly acquired branded products are an excellent complement to our existing do-it-yourself and craftsmen activities in the region," explained Alois Linder, Executive Vice President, Consumer and Craftsmen Adhesives, of the Henkel Group.

"Henkel -- A Brand like a Friend". Henkel is a leader with brands and technologies that make people's lives easier, better and more beautiful. The Henkel Group operates in three strategic business areas -- Home Care, Personal Care, and Adhesives, Sealants and Surface Treatment. In fiscal 2002 the Henkel Group generated sales of 9.66 billion euros and an operating profit (EBIT) of 666 mi lli on eu ros. 50 ,00 0 empl oy ees w o rk f o r the H en ke l G rou p w o rldw id e. H enk el b ran ds and te ch no log i es a re av ail ab le in 1 26 coun tri es. ~

The brands, which are marketed almost exclusively in Mexico, include Resistol, Fester, Resikon and Simon. The product line includes contact, wood and construction adhesives, and waterproofing systems used

THERMO ELECTRON TO ACQUIRE ELECTRONIC PERSONAL DOSIMETRY BUSINESS FROM SIEMENS WALTHAM, Mass. -Thermo Electron Corporation (NYSE: TMO) announced that it has signed an agreement to acquire Siemens' Electronic Personal Dosimetry (EPD) business for approximately $4.5 million in

cash, subject to a post-closing adjustment. EPD is a global supp li er of ra dia tion monitoring products and systems used mainly by workers at nuclear power plants, the military, and first responders for safety, security, and civil 20

defense applications. The business will become part of Thermo's Environmental Instruments division within the Measurement and Control sector. (continued on p.21)

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...THERMO ELECTRON-SIEMENS (continued from p.20) With total estimated sales of approximately $10 million in 2003, EPD's products range from electronic dose meters worn by personnel at radiation- sensitive locations to modular teledosimetry systems that can be integrated to form a complete monitoring network. The company is a leader in new-generation wireless radiation-monitoring systems. EPD operates in Atlanta, Georgia, and Poole, Dorset, United Kingdom.

Marijn E. Dekkers, president and chief executive officer of Thermo Electron, said, "EPD is an ideal fit with Thermo's radiation measurement and protection product lines. In addition to broadening our portable radiationmonitoring offerings, EPD adds advanced technologies for wireless monitoring and networking applications.

Given the heightened concern for security around the world, we expect growing demand

for systems that protect people in 30 countries worldwide. wherever there's a risk of ra- For more information, visit dioactive contamination." http://www.thermo.com.

Ian Howard, director of mergers and acquisitions at Siemens plc, said, "This sale is a logical step for Siemens. Although EPD has won good customer orders and their future prospects are excellent, the personal dosimetry business has not been core to our business strategy for a considerable time."

A world leader in high-tech instruments, Thermo Electron Corporation helps life science, laboratory, and industrial customers advance scientific knowledge, enable drug discovery, improve manufacturing processes, and protect people and the environment with instruments, scientific equipment, and integrated software solutions. Based in Waltham, Massachusetts, Thermo Electron has revenues of more than $2 billion, and employs approximately 10,000 people

Siemens was established in the UK 160 years ago. The company employs 18,000 people in the UK, including 6,000 in the manufacturing sector. With annual revenues of $4.3 billion, Siemens provides innovative, high-quality services and solutions to customers in a diverse range of industry sectors comprising: power, automation and control, information and communication, medical, transportation, lighting, and household.

Siemens operates through a de-centralized structure, with its headquarters in Bracknell, Berkshire. The company's structure reflects that of its parent company, Siemens AG, headquartered in Munich, Germany. For more information, visit http://www.siemens.co.uk. ~

AVAYA COMPLETES ACQUISITION OF VISTA ASSETS BASKING RIDGE, N.J. -- Avaya Inc. (NYSE: AV), a leading global provider of communications networks and services for business, today announced it has completed the acquisition of service delivery technologies and two business units from VISTA In-

formation Technologies Inc. The acquisitions enhance Avaya Global Services' delivery of end-to-end design, implementation and management services for converged, multi(continued on p.22) 21

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...AVAYA-VISTA (continued from p.21) vendor networks and advanced multimedia contact centers. Financial terms of the agreement were not disclosed.

vice tools used by Avaya Global Services, which currently includes technologies such as Avaya ExpertNet(TM) Assessment Tool for Internet Protocol (IP) telephony readiness and Avaya EXPERT Systems(SM) Diagnostic Tools, remote network management tools that support resolution of an average of 96 percent of system alarms remotely. The acquired software tools will help streamline integration of complex multi-channel, multivendor contact center networks and enhance remote network management capabilities.

The agreement between the companies, announced on September 25, 2003, calls for members of the former VISTA Professional Services and Managed Services units to join similar groups in Avaya Global Services.

VISTA engineers, consulting and sales professionals join Avaya, carrying certifications and qualifications from leading technology companies including Avaya, Cisco, Nortel and Microsoft.

Avaya Global Services includes more than 7,000 consultants, professionals and research and development experts, 23 network operations and 13 technical centers worldwide. The Avaya Services team can assess, plan, design, manage and maintain converged voice and data networks, including multi-vendor local area and wide area networks. For more information about all offerings from Avaya Global Services, please visit: http://www1.avaya.com/services.

"We're pleased to welcome this group of highly trained professionals to Avaya Global Services," said Lou D'Ambrosio, group vice president of Avaya Global Services. "The consultants who join Avaya have extensive qualifications and experience integrating multi-vendor, converged networks and contact centers. Our customers can take advantage of this additional, industry-certified expertise immediately for assistance in designin g an d i mp lemen ting bu sin esstransforming technology solutions quickly and cost-effectively."

Avaya Inc. designs, builds and manages communications networks for more than 1 million businesses worldwide, including 90 percent of the FORTUNE 500(R). Focused on businesses large to small, Avaya is a world leader in secure and reliable Internet Protocol (IP) telephony systems and communications software applications and services.

Driving the convergence of voice and data communications with business applications - and distinguished by comprehensive worldwide services -- Avaya helps customers leverage existing and new networks to achieve superior business results. For more information v i si t the Avaya w e b s i te : http://www.avaya.com. ~

Peter Licata, former CEO of VISTA, joins Avaya Global Services as vice president, Multi-Vendor Solutions and Strategy. He will lead and direct Avaya's continuing expansion of service offerings and capabilities to support converged, multi-vendor networks. "We are delighted to join Avaya Global Services," said Licata. "We look forward to helping the team continue to deliver value-based, multi-vendor communications solutions that help companies grow revenue and reduce costs."

The acquired VISTA service delivery technology assets expand the range of ser22

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FRIDAY: OCTOBER 3 EXELON TO MATCH FPL'S $276.5-MILLION OFFER FOR AMERGEN PURCHASE FROM BRITISH ENERGY CHICAGO -- Exelon Corporation (NYSE: EXC) announced today that it will buy British Energy's 50percent interest in AmerGen Energy Co. LLC for $276.5 million, giving Exelon sole ownership of AmerGen and its three nuclear plants.

AmerGen and Clinton, Oyster Creek and TMI-1 completely inside the Exelon family," said Exelon Chairman and CEO John Rowe. "We were satisfied in our relationship with British Energy, but if we had to make a change, this was the best possible outcome."

The amount matches the offer by FPL Energy, which announced Sept. 11 that it intended to buy British Energy's share of AmerGen. Under the AmerGen agreement between Exelon and British Energy, either can exercise a "right of first refusal" by matching any bona fide thirdparty offer agreed to by the other partner.

Exelon's decision to purchase British Energy's interest ends a yearlong effort that began in September 2002 with an announcement that both companies intended to explore the possible sale of AmerGen. Exelon withdrew from the exploratory sale in March 2003 because bids received for AmerGen were insufficient, but British Energy continued to look for a buyer for its oneAmerGen owns the Clinhalf interest. ton Power Station in central Illinois, Three Mile Island Exelon Nuclear President Unit 1 near Harrisburg, Pa., and CNO Jack Skolds, who is and the Oyster Creek Gener- also Chairman of AmerGen, ating Station on the New Jer- said the three single-unit sites sey shore. The three stations are already operationally interepresent about 2,500 mega- grated with Exelon Nuclear watts of generating capacity. and will continue their record of safe and reliable operation.

"We're delighted to bring AmerGen is the NRC licensee 23

for the three units. "We've made extensive improvements at all three plants since their purchase by AmerGen," Skolds said. "Our commitment is to ensure the safety and efficiency of these plants, and we will continue to improve our overall performance."

Exelon currently owns a half-share in AmerGen. The purchase will increase Exelon's "owned" nuclear generation capacity by about 1,250 megawatts, to more than 16,000 megawatts. Exelon's overall "managed" nuclear generation will remain at 17,800 megawatts because Exelon already manages the three AmerGen plants and includes them as a part of the Exelon fleet.

Exelon believes the AmerGen sites have significant long-term value. Licenseextension studies are under way at Three Mile Island Unit 1 and Oyster Creek. On (continued on p.16)

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...EXELON-BRITISH ENERGY (continued from p.23) Sept. 25, Exelon submitted an Early Site Permit application to the U.S. Nuclear Regulatory Commission identifying the Clinton property as a candidate for future nuclear construction should the company ever decide to build a new nuclear plant.

The AmerGen sale is expected to be completed in the first half of 2004. When the transaction is complete, Exelon will fully own eight of the 10 nuclear stations it operates. The company will continue to share ownership of two stations -- Peach Bottom

Atomic Power Station in Pennsylvania (with PSE&G owning 50 percent) and Quad Cities Generating Station in Illinois (with Mid- American Energy owning 25 percent). Exelon also owns 50 percent the Salem Nuclear Power Station in New Jersey, which is operated

by PSE&G. Exelon Corporation is one of the nation's largest electric utilities with approximately 5 million customers and more than $15 billion in annual revenues. The company has one of the industry's largest portfolios of electricity genera-

tion capacity, with a nationwide reach and strong positions in the Midwest and Mid-Atlantic. Exelon distributes electricity to approximately 5 million customers in Illinois and Pennsylvania and gas to more than 440,000 customers in the Philadelphia area. The company also has holdings in such competitive businesses as energy, infrastructure services, energy services and telecommunications. Exelon is headquartered in Chicago and trades on the NYSE under the ticker EXC. ~

PHOENIX FOOTWEAR GROUP TO ACQUIRE ROYAL ROBBINS, INC., ESTABLISHED CASUAL AND OUTDOOR APPAREL BRAND CARLSBAD, Calif. -- Phoenix Footwear Group, Inc. (Amex: PXG) announced today that it has signed a definitive agreement to acquire Royal Robbins, Inc., an established casual and outdoor apparel brand based in California. The acquisition will mark Phoenix Footwear's entry into the men's and women's apparel category, and elevate the Company into a full-scale men's and women's footwear and apparel company with an emphasis on classic, comfortable footwear and outerwear brands.

ditional contingent purchase value of approximately $5.0 million based on a twoyear earn-out formula. The closing payment will be $6.0 million in cash, and the remainder in Phoenix Footwear common stock.

Phoenix Footwear anticipates that the acquisition will increase sales by 30% to 40% on an annual basis. In addition, Phoenix Footwear expects the acquisition will be accretive to GAAP earnings per share within the first full year of operation under Phoenix Footwear's ownership. Further information on the anticipated contribution of Royal Rob-

The purchase price for this transaction includes $6.5 million due at closing, plus ad-

(continued on p.25) 24

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...PHOENIX FOOT.-ROYAL ROBBINS (continued from p.24) bins to fiscal 2004 earnings will be provided after the close of the transaction.

team as we take the brand to the next level.

We welcome Dan Costa, Francisco Morales and all of the Royal Robbins employees."

The transaction is subject to financing and other customary closing conditions.

Phoenix Footwear has received a commitment from its lender for a new $24,750,000 credit facility. The transaction is expected to close in the fourth quarter of 2003.

"This partnership is a 'win win' for our retailers and our consumers," said Dan Costa, Chairman of Royal Robbins. "Phoenix Footwear brings us tremendous resources that will enable us to build upon our heritage and extend the brand. Through this new relationship, we will expand our ability to offer innovative styling, distinctive fabrications and a broad choice of apparel at excellent price points. In addition, we anticipate strengthening and preserving our existing specialty retail distribution channel, which has been a fundamental building block for this brand. We look forward to being part of the Phoenix Footwear family."

Founded in 1968 by outdoor enthusiasts, Royal and Liz Robbins, Royal Robbins, Inc. is known for comfortable, rugged clothing and classic styles. The company's Go Everywhere(R) line of technical clothing gear, featuring lightweight, wrinkle-resistant supplex nylon, is particularly popular among hikers, kayakers and other outdoor enthusiasts. The Royal Robbins line of apparel will compliment Phoenix Footwear's recently acquired H.S. Trask and Ducks Unlimited footwear brands, creating cross-marketing opportunities in the outdoor apparel and footwear sectors.

Greg A. Tunney, Phoenix Footwear's President and COO, added, "Royal Robbins carries a complete line of men's and women's outdoor clothing that is practical, comfortable and affordable. Royal Robbins does not rely on short-term fashion trends, but rather focuses on sustainable, classic styles utilizing high-quality materials. These are among the hallmarks of our current lines of men's and women's footwear brands. As we integrate Royal Robbins into Phoenix Footwear, we will take advantage of strong crosspromotional opportunities between the customer bases of both companies to drive sales and earnings."

James R. Riedman, Chairman and CEO of Phoenix Footwear, commented, "We believe that today's acquisition will allow us to further enhance our profitability and provides us with a significant new growth vehicle. A well-known brand with strong sales and a loyal and growing customer base, Royal Robbins is the perfect compliment to our current line of classic and comfortable men's and women's footwear brands. In addition, this transaction is consistent with our strategic focus on acquiring brands that can strengthen our earnings and operating margins. As we seek to grow the top line, we have an opportunity to utilize our existing infrastructure to drive natural cost-saving synergies. I look forward to working closely with the Royal Robbins' senior management

Phoenix Footwear Group, Inc., headquartered in Carlsbad, California, designs, develops and markets men's and women's casual and dress footwear. The Company's premium footwear brands include the Trotters(R), SoftWalk(R), H.S. Trask(R), and (continued on p.26) 25

MERGERWEEK® Vol.3 Issue 39

WWW.MERGERCENTRAL.COM Founder Stanley Foster Reed Editor Taillefer A. Long

...PHOENIX FOOTWEAR-ROYAL ROBBINS (continued from p.25)

Writers Taillefer Long Letters and Submissions Send questions, comments and article proposals to: Editor, MergerWeek™ P.O. Box 20097 Charleston, SC 29413-0097 Or send email to:

info@mergercentral.com

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Ducks Unlimited(R) lines. The Company was ranked by Footwear News as the fastest growing footwear firm during the three-year period of 1999 to year-end 2001, and the 10th most profitable for 2002 based on net margins. Phoenix Footwear Group, Inc. is traded on the American Stock Exchange under the symbol PXG. Royal Robbins was founded in 1968 by internationally acclaimed climber Royal Robbins and his wife Liz, who could not find the right clothing for their adventures and explorations. Liz's first creation was the Billy Goat(R) Hiking Short, still among the company's most popular styles, and a classic design of enduring popularity. The success of the Billy Goat(R) Hiking Short evolved into a complete line of outdoor + travel clothing. It is specifically designed for today's active adventurer.

Royal Robbins is committed to creating the best functional outdoor clothing, with the performance fabrics necessary for today's high adventure lifestyle. ~

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