Compiled by Julie Leupold
TOP STORIES
The parent company of the Orange County Register has pushed back plans to buy out two private equity investors that took a sizable stake in the family-controlled company in 2004, the Wall Street Journal reported. Irvine-based Freedom Communications Inc., which owns the Register, other papers, magazines and TV stations, was planning to spend more than $500 million to buy out Blackstone Group LP and Providence Equity Partners Inc., which own about 45% of Freedom. Freedom had planned to borrow from General Electric Co.’s GE Capital and other lenders but faced higher borrowing costs amid the credit crunch and newspaper slowdown. The private equity firms have the right to sell back their stakes by May 2009.
Irvine-based Impac Mortgage Holdings Inc. posted a staggering $1.2 billion third-quarter net loss, nearly 10 times as large as the struggling company’s losses a year earlier. Impac, which acquires mortgages as investments and had made home loans itself before quitting that business in the third quarter, has lost $1.5 billion for the first nine months of the year. The loss is massive given Impac’s interest income of $313.8 million for the quarter and its recent market value of about $50 million. Impac’s third-quarter loss included a $628 million increase in provision for losses on loans it owns, a further sign of the deterioration in the housing and mortgage markets. It also included a $161 million loss from its discontinued operations.
Epicor Software Inc. of Irvine plans to buy Britain’s NSB Retail Systems PLC for $323 million. Publicly traded NSB makes software for apparel, shoe and specialty retailers. Its customers include Irvine-based St. John Knits International Inc., Mervyn’s LLC and Donna Karan International. Epicor is set to pay $155 million in cash and use a credit line for the rest of the deal. The company expects the buy to close in the first quarter.
TECHNOLOGY
Newport Beach chip startup GloNav Inc. is set to be bought for $85 million by NXP Semiconductors, the former chip arm of Royal Philips Electronics NV. Netherlands-based NXP is buying GloNav, a maker of chips for global positioning systems and satellite navigation systems, to expand its mobile communications chip business. The cash deal, expected to close in the first quarter, could be worth as much as $110 million if GloNav meets sales and product development goals in the next two years. The deal is the second for a local GPS chipmaker in December. On Dec. 13, Irvine’s U-Nav Microelectronics Inc., a maker of GPS chips and software, said it was being bought by Santa Clara-based Atheros Communications Inc. for $54 million.
HEALTHCARE
Valeant Pharmaceuticals International is selling Infergen, a hepatitis C drug, to Pennsylvania’s Three Rivers Pharmaceuticals LLC for $91.3 million. The Aliso Viejo drug maker will get $70.8 million in cash and up to $20.5 million in two payments during the next 18 months. Valeant acquired Infergen in 2006 for $113.5 million from InterMune Inc., a Bay area company. The deal is expected to close in the first quarter.
REAL ESTATE
OC home prices inched up in November from October but still remain well below prices of year earlier as the pace of sales in the county remained slow. The median price of an OC home was $582,750 in November, a 1.6% increase from a month ago, according to La Jolla-based DataQuick Information Systems. Median prices are down 6.5% from a year ago and are off about 10% from OC’s record high, set in June. Sales in the county were off 45% from a year earlier, with 1,567 home sales in November. Sales were off about 8% from October.
Robert Maguire said he is ready to buy Los Angeles-based Maguire Properties Inc. himself and has lined up financing for a likely bid from a Persian Gulf investor as well as one of Los Angeles’ largest real estate investment firms. His financial partners, he said, would be Century City-based real estate investment giant Colony Capital and the Qatar Investment Authority, which invests on behalf of the emirate (see story, page 1).
New Century Financial Corp., which declared bankruptcy in early 2007, said its debtors have submitted $32 billion in claims leaving it with no money to pay shareholders.
Fullerton’s City Council approved a $140 million student housing project near California State University, Fullerton. The project is set to include 350 apartments and stores, offices and recreation space on 6.8 acres. Texas-based JPL will develop the project, called Jefferson Commons, which is slated for a 2010 completion.
FINANCE
Bear Stearns is closing its loan making operations in Irvine and let the remaining 150 workers go, the company said. These layoffs are in addition to 650 nationwide job cuts announced at the end of November, the company said. Those cuts included an undisclosed number in Irvine. Bear said it continues to expand operations of loan servicer EMC Mortgage in Irvine. The company opened an EMC office about nine months ago and has hired 300 workers. It continues to hire about 40 people a month, mostly in loss mitigation, the company said. It also will continue to make loans from its office in Scottsdale. The company reported a $1.9 billion loss for the November quarter, its first loss in 84 years.
Downey Financial Corp. vice chairman Cheryl Olson,daughter of chairman and dominant owner Maurice McAlister,is leaving the board of the Newport Beach-based savings and loan operator. Olson plans to run the McAlister family’s charitable foundation. She could return to Downey later, the company said. Daniel Rosenthal, Downey’s chief executive and McAlister’s former son-in-law, is set to become vice chairman upon Olson’s retirement.
OTHER NEWS
Costa Mesa-based Mexican fast food chain El Pollo Loco Inc. raised $45 million in private equity funding from Los Angeles private equity firm Freeman Spogli & Co. El Pollo Loco plans to use the money to open restaurants as part of a national expansion.
Advanced Micro Optics Inc. of Santa Ana said it will close an Irvine laser manufacturing plant inherited in its buy of IntraLase Corp. and transfer the work to Northern California and Puerto Rico. The announcement, in a
filing with the Securities and Exchange Commission, did not say how many local jobs would be cut. Cost of the move, expected to be completed in 2008, is $11 million to $13 million.
Costa Mesa-based Ceradyne Inc. said the Pentagon has ordered 20 of its new armored cars for soldiers in Iraq. The $18.1 million order for the mine-resistant vehicles, called the Bull, is part of a partnership with Virginia-based Ideal Innovations Inc. and Wisconsin’s Oshkosh Truck Corp. The shipment could be the first part of a $12.5 billion deal, according to Ceradyne. Delivery is of the vehicles is set for the first quarter.
ECONOMIC INDICATORS
Up: The price of a hotel room in Orange County at $150 a night, up 8.7% from October 2006.
