TOP STORY
Irvine-based Diedrich Coffee Inc. plans to sell 40 of its coffeehouses to Starbucks Corp. for $13.5 million, closing a chapter for the company that once tried to take on the coffee superpower. Diedrich, which plans to focus on selling coffee to restaurants, specialty stores and other customers, is selling off its company-run Diedrich Coffee and Coffee People stores. Fran-chisees are expected to keep running coffeehouses under the brands. The company’s wholesale businesses accounted for 78% of coffee sold by Diedrich in the June quarter. The move is the latest restructuring for Diedrich, which has seen lackluster performance, financial restatements and other changes in recent years.
British business software maker Sage Group PLC completed its biggest acquisition yet for its Irvine-based North American unit. Sage agreed to pay about $565 million in cash for Tampa-based Emdeon Practice Services, which makes software to manage doctors’ practices. Emdeon Practice is part of Elmwood Park, N.J.-based Emdeon Corp.
Western Digital Corp. said it may have discovered irregularities with its stock options grants and is delaying its annual filing with the Securities and Exchange Commission. The Lake Forest-based disk drive maker said an initial internal review showed that “measurement dates for accounting purposes may differ from recorded dates” used for certain grants made from 1999 to 2003.
Newport Beach-based SRS Technologies received a contract from a U.S. military research agency that could total $123.7 million if all options on the five-year contract are met. The Newport Beach-based company provides scientific, engineering, technical assistance and administrative support.
Costa Mesa drug maker Valeant Pharmaceuticals Inc. said a second late stage trial of key hepatitis C drug Viramidine fell short of expectations. The company said it plans to do an interim trial to see if the drug is more effective at higher doses. Separately, the SEC is looking into stock sales, option grants and the release of earlier disappointing data for Viramidine. Regulators also want to know about Valeant’s bid to get back a $33 million bonus awarded in 2002 to former chief Milan Panic (see story page 5).
TriZetto Group Inc., a Newport Beach healthcare technology company, is buying Phoenix-based Quality Care Solutions Inc. for $133 million cash and $1.2 million in debt. The company could pay an additional $12 million in early 2008 if Quality Care hits performance targets. TriZetto also said it was going to pay $15 million to settle a software patent battle with San Francisco-based McKesson Corp.
Biolase Technology Inc., a maker of lasers used in medical applications, received a warning from the Food and Drug Administration about its plant in Irvine. The warning letter, following an inspection by the FDA, stated that some aspects of the manufacture, packing, storage or installation of the company’s devices do not conform to FDA requirements.
Irvine-based Cortex Pharmaceuticals Inc. said that it has provided additional information to the FDA in hopes of lifting a hold on clinical tests of one of its compounds used to treat neurological and psychiatric disorders. Cortex officials expect an FDA response in 30 days.
Top executives of Irvine-based homebuilder Standard Pacific Corp. told analysts and investors that a sluggish housing market is causing it to curtail building some new homes, put off a stock buyback and juggle pricing for homes at least through next year.
The Orange County Board of Supervisors cut retiree medical benefits by $815 million because of the program’s soaring costs. The cuts take effect in early 2008.
A Lennar Corp. plan to build nearly 6,000 more houses at the former El Toro Marine base in Irvine won preliminary approval from Irvine’s City Council. An environmental study still is needed before final approval. Lennar also would cut by 30% the commercial and industrial development originally slated for the site.
Gov. Arnold Schwarzenegger joined Henry Segerstrom and others to cut the ribbon on the $200 million Ren & #233;e and Henry Segerstrom Concert Hall in Costa Mesa. Segerstrom and wife Elizabeth also gave another $10 million-plus to the concert hall. The gift raises the Segerstroms’ giving tally to $50 million.
Santa Ana-based vocational school operator Corinthian Colleges Inc. has asked the SEC for another extension on filing its annual report amid a stock options grant probe. The new deadline is Sept. 28 for Corinthian’s fiscal year ended June 30.
