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   Strategies & Market TrendsSpeculating in Takeover Targets

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From: richardred9/28/2010 12:37:42 AM
   of 6155
TransDigm to Acquire McKechnie for $1.27 Billion
By Will Daley - Sep 27, 2010 4:24 PM ET

TransDigm Group Inc. agreed to buy rival aircraft-parts supplier McKechnie Aerospace Holdings Inc. for about $1.27 billion to expand its offerings for planes built by companies such as Boeing Co. and Airbus SAS.

McKechnie, controlled by buyout firm JLL Partners Inc., will post about $300 million in revenue this year, Cleveland- based TransDigm said today in a statement. The cash purchase is TransDigm’s largest, Bloomberg data show.

McKechnie makes parts for aircraft including Boeing’s 787 Dreamliner and Airbus’s A380, TransDigm said. The world’s two largest planemakers are boosting output as airlines recover from the recession and seek more fuel-efficient jets to refresh and expand their fleets.

“TransDigm and McKechnie both make proprietary, sole-source aerospace component parts,” said Jonathan Crandall, director of investor relations for TransDigm. “McKechnie has a complementary product mix to TransDigm’s.”

Products made by TransDigm include pumps, motors, cockpit security doors, flight-deck audio, batteries, ignition systems and lavatory hardware. McKechnie makes external latches for thrust reversers, engine cowlings and cargo doors, along with motors, blowers and valves used all over the aircraft.

“The McKechnie customers are the same customers as TransDigm’s,” Crandall said.

Revenue, Employment

McKechnie gets about 60 percent of its sales from aerospace manufacturers and the rest from replacement components, TransDigm said. The closely held company, based in Irvine, California, has about 1,500 workers.

In August, TransDigm forecast revenue of as much as $825 million for its fiscal year that ends this month. The company’s sales a year earlier were $762 million. TransDigm had about 2,000 workers at the end of September 2009, according its annual regulatory filing.

TransDigm said that it expects to pay for the purchase with senior and subordinated debt and that it has commitments for the full amount, without providing specifics. The company reported cash and equivalents of $258.4 million and $1.77 billion in long-term debt as of July 3.

“We feel very comfortable at this level of leverage, as we have operated at this level in years past,” Crandall said. TransDigm is able to pay down debt quickly because of its cash flow and growth in its existing business, he said.

TransDigm fell 56 cents to $61.68 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have gained 30 percent this year.

Other Bidders

Precision Castparts Corp. and TransDigm were both bidding for McKechnie, people with knowledge of the discussions said last week. Carlyle Group, the Washington-based buyout firm, also submitted an offer for McKechnie last week, the people said.

JLL, based in New York, and Morgan Stanley had been seeking bids for McKechnie for several months. They bought the company in 2007 for about $850 million from Melrose Plc, the London- based component maker. Before that, it was owned by Cinven Ltd., the U.K. private-equity firm.

The company’s issuer default rating from Fitch Ratings is B, five levels below investment grade. Fitch in an April 7 report cited concerns including “the size or number of potential acquisitions going forward and the risks of integrating them successfully.”

Credit Suisse and UBS Investment Bank served as financial advisers to TransDigm.

To contact the reporter on this story: Will Daley in New York at

To contact the editor responsible for this story: Ed Dufner at

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From: richardred9/28/2010 10:14:00 AM
   of 6155
Endo to buy privately held Qualitest for $1.2 billion

On Tuesday September 28, 2010, 9:42 am

By Anand Basu and Rajarshi Basu

BANGALORE (Reuters) - Endo Pharmaceuticals Holdings Inc (NasdaqGS:ENDP - News) said it agreed to buy privately held generics company Qualitest Pharmaceuticals for about $1.2 billion in cash to expand its portfolio of pain drugs, marking its second acquisition in as many months.

The acquisition of Qualitest, owned by private-equity firm Apax Partners, will help Endo cover the revenue gap from its key pain drug, Lidoderm, which goes off patent in 2015.

"I think at first glance, it looks like an interesting deal for the company," said Collins Stewart analyst Louise Chen.

Lidoderm, used to treat post-shingles pain, has annual sales of about $700 million, she said.

Endo shares, which have gained 23 percent since it agreed to acquire Penwest Pharmaceuticals (NasdaqGM:PPCO - News) in August, were up 11 percent at $34.08 in morning trade on Nasdaq.

Endo, which makes and sells branded and generic drugs for the treatment of pain, overactive bladder, and prostate and bladder cancers, expects the deal to add about $400 million in revenue and 40 cents in adjusted earnings per share annually.

Endo also expects revenue growth of the combined generics business to be at least 15 percent over the next two years.

On a pro forma basis, the combined company would have revenue of about $2 billion in 2010, it said.

The new company will have a larger pipeline of generic-drug applications with 46 of them under active review in areas such as urology, oncology and hypertension.

Endo, which agreed to buy drugmaker Penwest last month and medical-device maker HealthTronics Inc in May, plans to fund the purchase with $500 million in cash from its balance sheet and by drawing down an existing $300 million credit facility. It has also secured financing for another $400 million.

Lazard acted as financial adviser to Endo on the deal, while J.P. Morgan Securities advised Qualitest.

Endo expects to close the deal late in the fourth quarter of 2010 or early in the first quarter of 2011.

Endo also reiterated its 2010 revenue outlook of $1.63-$1.68 billion and full-year adjusted earnings of $3.30-$3.35 per share.

(Reporting by Anand Basu and Rajarshi Basu in Bangalore; Editing by Aradhana Aravindan and Vinu Pilakkott)

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To: Paul Senior who wrote (2322)9/28/2010 11:12:02 AM
From: richardred
   of 6155
Cypress Bioscience board rejects new Ramius bid
Cypress Bioscience board of directors rejects new Ramius $4.25-per-share tender offer
On Tuesday September 28, 2010, 10:32 am

NEW YORK (AP) -- Cypress Bioscience Inc. said Tuesday its board of directors has unanimously rejected Ramius V&O Acquisition LLC's sweetened buyout offer of $4.25 per share and is committed to evaluating other alternatives.

Ramius owns 9.9 percent of Cypress' stock. In July it offered to buy San Diego-based Cypress in July for $4 per share, but that offer was rejected as inadequate. The current bid, which was made on Sept. 15, values Cypress at $164 million based on its total of 38.6 million shares outstanding.

Ramius has said it is taking its offer directly to shareholders because Cypress' board won't negotiate. The new offer marks a 21 percent premium to the stock's Sept. 14 closing price and a 70 percent premium to its closing price on July 16.

The new bid is scheduled to expire on Oct. 13.

"The Cypress board unanimously determined that the Ramius offer grossly undervalues Cypress' current business and future prospects, is highly conditional rendering it illusory and is not in the best interests of Cypress stockholders, other than Ramius and its affiliates," said Daniel H. Petree, lead independent director at Cypress.

Meanwhile, Cypress' board has adopted a short-term stockholders rights agreement, or "poison pill," in order to ward off hostile takeovers while it pursues strategic alternatives including the possible sale of all or part of the company. The rights plan would be triggered if any shareholder took control of 15 percent of the company's stock.

Cypress said it will continue to take actions to sell or exit its diagnostics business by the end of the third quarter.

Jefferies & Co. and Perella Weinberg Partners are serving as financial advisers to Cypress.

In morning trading, Cypress shares rose 7 cents to $3.74.

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To: richardred who wrote (2440)9/28/2010 11:55:55 AM
From: Paul Senior
   of 6155
Thanks for the update. I'm hanging on, and will vote for Ramius, if solicited by them.

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From: richardred9/29/2010 12:38:21 AM
   of 6155
Rampant Buyout Rumors False 100% of the Time This Month

On Tuesday September 28, 2010, 3:47 pm EDT

Think you've got a hot tip on a buyout rumor? Think again. None of the rampant deal speculation in the market this month has come true, according to, a subscription service for trading professionals. The service said in a note to subscribers today that of the 74 rumors this month that it has reported on, none have come to fruition.

"This is precisely why I don't invest on potential takeouts," said Patty Edwards, founder of money management firm TrutinaFinancial.

Theories abound on why rumormongering is so rampant (and so wrong) these days. Some blame the massive social networking sphere, where one "tweet" can sink a stock like the Titanic. There's also the fact that trading volume has been below average for the last month and for most of the last year, making it easier for nefarious participants to move a stock.

The real reason is most likely that deals are actually taking place. Companies have a record amount of cash on their books and their putting it to use. Global merger and acquisition volume last month hit $281.6 billion, the highest August amount on record and more than double from a year ago, according to Dealogic. That trend has continued this month with Walmart (NYSE:WMT - News), Southwest Airlines (NYSE:LUV - News) and Unilever (NYSE:UN - News) announcing deals just Monday alone.

These actual deals, along with and this rampant speculation, has helped push the S&P 500 (INDEX: .SPX) up almost 9 percent this month. But just because the rumors are false, doesn't make this rally totally false also, traders said.

"It is also probably another indication that people are realizing how strong and cheap company's balance sheets are becoming," said Brian Stutland, president of Stutland Equities. "People look at these rumored company and believe buyout or not, the company should be valued higher."

Exhibit A is the agriculture space. Australia's BHP Billiton (NYSE:BHP - News), the largest mining company in the world, bid for U.S.-based Potash (NYSE:POT - News) in August in a move to lock-in control of fertilizer needed for the emerging world. Shares of Agrium (NYSE:AGU - News) and other related names have been among the top performers this month in the wake of the deal.

Rumors aside, investors believe that if BHP finds value in that industry, then they should too. Plus, if BHP is able to close the deal, investors will rotate money out of that stock to similar names in the space in order to keep some of the industry exposure.

To be sure, StreetAccount has been clear that the speculation is simply conjecture and has been very upfront with subscribers about the poor track record this month of these rumors, hence its note Tuesday. The service, which efficiently tracks press releases, analyst moves, SEC filings and other market intelligence for subscribers, reports on the speculation when it is affecting the stocks.

Cloud computing and data storage is another top performing area this month. This follows IBM's (NYSE:IBM - News) announced purchase of Netezza (: NEZ) last week and the infamous bidding war between Hewlett-Packard (NYSE:HPQ - News) and Dell (NasdaqGS:DELL - News) for 3-Par (NYSE:PAR - News) (H-P eventually won for $2.35 billion). The problem is that anything with "cloud computing" in its company description has been bid higher on the back of these deals.

Investors beware that not every one of them will be bought out, nor does each of them have an actual great product that would be attractive to another tech giant (See, circa 1999).

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From: richardred9/29/2010 9:48:18 AM
   of 6155
:+ ) I had a takeover today. It was one of those I never expected. Nice premium to.
KEI-Keithley Instruments
Message 23138365

Danaher to Acquire Keithley Instruments

Press Release Source: Danaher Corporation On Wednesday September 29, 2010, 9:00 am

WASHINGTON and SOLON, Ohio, Sept. 29 /PRNewswire-FirstCall/ -- Danaher Corporation (NYSE:DHR - News) and Keithley Instruments, Inc. (NYSE:KEI - News) announced today that they have entered into a definitive merger agreement pursuant to which Danaher will acquire all of the outstanding Common Shares and Class B Common Shares of Keithley at a purchase price of $21.60 per share in cash for an enterprise value of approximately $300 million net of cash to be assumed. The acquisition has been unanimously approved by the Keithley Board of Directors.

Keithley Instruments, Inc. designs, develops, manufactures, and markets complex electronic instruments and systems geared to the specialized needs of engineers at electronics manufacturers and academic institutions for research, product development, high-performance production testing and process monitoring. The company currently offers approximately 150 products used to source, measure, connect, control or communicate direct current (DC), and alternating current (AC) signals. Keithley's product offerings include integrated systems solutions, along with instruments and data acquisition modules that can be used as system components or stand-alone solutions. Upon closing Keithley will be part of Danaher's Tektronix business.

"We are excited about the opportunity to acquire a premier brand and technology leader in bench solutions," said Jim Lico, Executive Vice President - Danaher. "Along with Fluke and Tektronix, Keithley further solidifies Danaher's leading position in the Test & Measurement industry and presents an attractive value creation opportunity."

"We believe this transaction creates significant value for Keithley's shareholders and I am excited about the opportunity this transaction represents for Keithley's customers and employees," said Joseph P. Keithley, Chairman, President and CEO of Keithley. "Danaher has a great history of nurturing leading brand names within the Test & Measurement industry and we look forward to joining the Danaher team."

The acquisition is subject to customary closing conditions, including the receipt of regulatory approvals and adoption of the merger agreement by Keithley's shareholders, and is expected to be completed during the fourth quarter of calendar 2010. A partnership affiliated with Joseph P. Keithley has agreed to vote a number of Class B Common Shares representing 19.99% of the voting power of the Company in favor of the merger.

About Danaher

Danaher is a diversified technology leader that designs, manufactures, and markets innovative products and services to professional, medical, industrial, and commercial customers. Our portfolio of premier brands is among the most highly recognized in each of the markets we serve. Driven by a foundation provided by the Danaher Business System, our 47,000 associates serve customers in more than 125 countries and generated $11.2 billion of revenue in 2009. For more information please visit our website:

About Keithley

With more than 60 years of measurement expertise, Keithley Instruments has become a world leader in advanced electrical test instruments and systems. Our customers are scientists and engineers in the worldwide electronics industry involved with advanced materials research, semiconductor device development and fabrication, and the production of end products such as portable wireless devices. The value we provide them is a combination of products for their critical measurement needs and a rich understanding of their applications to improve the quality of their products and reduce their cost of test. We serve customers in more than 80 countries and generated $102.5 million of revenue during our fiscal year ended September 30, 2009.

Additional Information and Where to Find It

Keithley intends to file with the Securities and Exchange Commission a preliminary proxy statement and a definitive proxy statement and other relevant materials in connection with the proposed transaction. The definitive proxy statement will be sent or given to the shareholders of Keithley. Before making any voting or investment decision with respect to the merger, investors and shareholders of Keithley are urged to read the proxy statement and the other relevant materials when they become available because they will contain important information about the proposed transaction. The proxy statement and other relevant materials (when they become available), and any other documents filed by Keithley with the SEC, may be obtained free of charge at the SEC's website at, or by going to Keithley's website at

Participants in the Solicitation

Keithley and Danaher and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from Keithley shareholders in connection with the proposed transaction. Information about Danaher's directors and executive officers is set forth in Danaher's proxy statement on Schedule 14A filed with the SEC on April 5, 2010 and Danaher's Annual Report on Form 10-K filed on February 24, 2010. Information about Keithley's directors and executive officers is set forth in Keithley's proxy statement on Schedule 14A filed with the SEC on December 29, 2009 and Keithley's Annual Report on Form 10-K filed with the SEC on December 14, 2009. Additional information regarding the interests of participants in the solicitation of proxies in connection with the merger will be included in the proxy statement that Keithley intends to file with the SEC.

Forward-looking statements

Statements in this release that are not strictly historical, including statements regarding the proposed acquisition, the expected timetable for completing the transaction and any other statements regarding events or developments that we believe or anticipate will or may occur in the future, may be "forward-looking" statements within the meaning of the federal securities laws. There are a number of important factors that could cause actual events to differ materially from those suggested or indicated by such forward-looking statements and you should not place undue reliance on any such forward-looking statements. These factors include, among other things: general economic conditions and conditions affecting the industry in which Keithley operates; the uncertainty of regulatory approvals; adoption of the merger agreement by Keithley shareholders; the parties' ability to satisfy the closing conditions and consummate the transactions; Danaher's ability to successfully integrate Keithley's operations and employees with Danaher's existing business; and the ability to realize anticipated growth, synergies and cost savings. Additional information regarding the factors that may cause actual results to differ materially from these forward-looking statements is available in Danaher's and Keithley's respective SEC filings, including each company's most recent, respective Annual Report on Form 10-K and Quarterly Report on Form 10-Q. These forward-looking statements speak only as of the date of this release and neither company assumes any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise.

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To: richardred who wrote (2348)9/29/2010 1:47:51 PM
From: richardred
   of 6155
AIRT added to the position today around 8.86. Like the fact they got a AF contract.

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From: Paul Senior9/29/2010 4:09:54 PM
   of 6155
I'll follow you: Started up a position again with a small buy. Will add more to build position if stock falls on no adverse news.

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To: richardred who wrote (2317)9/30/2010 12:12:38 AM
From: richardred
   of 6155
ELMG From the 13D filing.On September 27, 2010, MMI Investments delivered a letter to the Issuer stating its belief that the Issuer’s corporate strategy and structure is overly-complex and disjointed and expressing its frustration with the Issuer’s valuation multiple, which underperforms its peers, and its stock price, which is virtually unchanged in 10 years. MMI Investments states that it has extensively analyzed the Issuer’s operations, performance, corporate structure and valuation, both individually and relative to its peers, and has concluded that for the Issuer’s fair value to be realized it will require more than a successful operational streamlining. MMI Investments strongly urges the Issuer to form a special committee of independent directors to pursue all strategic alternatives, including the potential sale of the Issuer in whole or parts, to maximize value for stockholders of the Issuer. A copy of the letter is attached as an exhibit hereto and is incorporated herein by reference.

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To: richardred who wrote (2444)9/30/2010 12:29:24 PM
From: richardred
1 Recommendation   of 6155
Added to AIRT again today 8.81. Volume created an opportunity to buy some shares. Usually though to buy shares due to light volume. The dividend yield, good management team, and enhanced prospects enticed me to buy more.

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