Gannett confirms $280 million acquisition of Journal Media Group
October 8, 2015 09:19 AM
McLean, Va.-based USA Today publisher Gannett Co. Inc. confirmed Wednesday evening that it plans to acquire Milwaukee Journal Sentinel parent Journal Media Group for about $280 million.

The deal, first reported by the Wall Street Journal Wednesday, has been approved by both companies’ boards of directors and will now go to Journal Media Group shareholders and federal regulators for approval. Each shareholder would receive $12 per share in cash, which would be a 44.6 percent premium, based on the stock’s closing price on Wednesday. The deal is expected to close in the first quarter of 2016.

Milwaukee-based Journal Media Group was formed April 1 through the merger of Milwaukee’s Journal Communications and The E.W. Scripps Co. The newspaper and publishing operations were spun off and combined in the new Milwaukee-based company Journal Media Group, which has about 3,000 employees nationwide. The group includes the Milwaukee Journal Sentinel and its digital products, and daily newspapers and related digital offerings in 13 other U.S. markets, which include the Naples Daily News, the Knoxville News Sentinel and the Corpus Christi Caller-Times.

If the deal is completed, Gannett will oversee publications in 106 U.S. markets serving more than 100 million unique domestic digital visitors per month. The company expects to realize cost savings through shared printing and distribution assets and consolidated functions.

Gannett expects to add about $450 million to its revenues through the acquisition and about $60 million of adjusted EBITDA, including more than $10 million in “immediately available synergies,” with another $25 million in operating synergies expected over the next two years as the companies consolidate administrative and corporate operations, integrate with shared service centers and consolidate certain printing and distribution assets in adjacent markets.

“This transaction marks a critical next step in the transformation of our industry as we build local media brands that matter at a time when operational scale is a competitive advantage,” said Tim Stautberg, president and chief executive officer of Journal Media Group. “Both Journal Media Group and Gannett are guided by a vision of strengthening lives and communities, and we’ll be better stewards in our local markets by sharing ideas, content and best practices among our new and larger family.”

“The publications of both Gannett and Journal Media Group have a rich history, a commitment to journalism, and a dedication to informing and being active members in the communities we serve,” said Robert Dickey, president and CEO of Gannett. “Our merger will combine the best of each of our organizations to create a journalism-led, investor-focused company which will provide substantial value to the shareholders of both companies. This transaction is an excellent first step in the industry consolidation strategy we have communicated to our shareholders and is a good example of the value-creating opportunities we believe are available.

“We would also like to welcome the outstanding leadership, journalists, sales staff and other employees of Journal Media Group to the Gannett family. Our combined company will be an industry leader, dedicated to the local communities we serve, committed to generating value for shareholders and empowering communities to connect, act and thrive.”

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Carroll University receives $3 million from state for construction project
October 8, 2015 10:47 AM
The state of Wisconsin has awarded Carroll University $3 million towards its new science laboratory building on the Waukesha campus.

The university demolished Maxon Hall in February and began constructing the $24 million, 44,500-square-foot, state-of-the-art science building equipped with interactive teaching and research laboratories for anatomy and physiology, biology, chemistry and biochemistry.

The building will open in fall 2016, before the start of the school year, said Tiffany Wynn, university spokesperson.

Once complete, Carroll will begin phase two of its campus renovation project, which includes a 12,000-square-foot hall, to be named the Bucyrus Center for Applied Physics and Engineering. The building will be attached to Lowry Hall, which will also be renovated.  

The Bucyrus Foundation has issued a $1 million challenge grant to the Carroll for the project.

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MSOE career fair to feature record 240 employers
October 8, 2015 10:55 AM
The Milwaukee School of Engineering will hold its biggest career fair yet on Friday as 240 employers descend upon campus to recruit students and graduates for open positions and internships.

The annual career fair is drawing companies from across the country and from a variety of industries, including business, engineering and health care.

The fair will run from 9 a.m. to 2:30 p.m. at the MSOE Kern Center, located at 1245 N. Broadway in downtown Milwaukee.

MSOE has a population of about 2,800 students and a graduate placement rate of 96 percent, according to the university.

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Nordstrom readies for opening at Mayfair
October 8, 2015 10:39 AM
High-end department store Nordstrom will officially open its Mayfair Mall store in Wauwatosa on Friday, Oct. 23 at 10 a.m. But not without a little pre-opening fanfare.

The store will host an Opening Gala, followed by a Fashionably Late event, on Wednesday, Oct. 21 beginning at 6 p.m. The gala, which will offer cocktails, dinner, live music and fashion presentations, costs $100 per ticket and aims to raise more than $160,000 for three local charities. Tickets can be purchased at

Immediately following the gala, from 9 to 11 p.m., the Fashionably Late event will feature music, DJs, shopping, cocktail treats and surprises and food trucks. That event costs $25, and tickets are available at

Nordstrom will also host an Opening Day Beauty Bash from 8 to 10 a.m. in front of its first floor mall entrance. Customers awaiting the big reveal will be treated to makeup applications, consultations and tips from the store’s beauty advisors, as well as snacks and other treats. The first 1,500 customers will get a beauty tote bag.

And on Saturday, Oct. 24, Nordstrom will host a Tile Find Party from 8 to 10 a.m. for children who painted tiles to benefit Discovery World back in April. Those children will be invited to the store to find their tiles, which have been installed in the Kids’ Wear department, and eat some treats.

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Franklin Walgreens sold for $5.6 million
October 8, 2015 11:40 AM
The Walgreens Pharmacy at the northeast corner of Ryan Road and 27th Street has been sold for $5.6 million to a Madison-based LLC.

Stkali Holdings LLC purchased the 13,743 square foot store at 9527 S. 27th St. from Waukesha-based MRED Associates, according to state real estate records.

The property was listed, along with 45 other Walgreens stores nationwide by Aspen, Co.-based Andrus & Morgan, a national commercial and investment real estate company specializing in passive income investments, property redevelopment and building reuse.

The company has also listed the Walgreens at 2985 S. Chicago Ave. in South Milwaukee. The 13,905 square foot building is listed for $2.3 million. The South Milwaukee Walgreens has been on the market for 1,088 days. The Franklin property sold in 39 days.

According to the Andrus & Morgan website, the company is selling Walgreens with proven records as “profitable performers,” to investors in light of the April 2015 announcement by the drugstore chain that Walgreens is expecting to close 200 stores as part of a plan to cut $1.5 billion over three years.

Walgreens has not said which stores it plans to close.

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Morning Headlines: Health, construction drive state job growth
October 8, 2015 10:24 AM
Just a few years ago, homebuilders and contractors were doing what they could to just keep their heads above water.Today as the economy rebounds, builders and contractors said it’s now a challenge to find qualified workers to fill the void.

Read more in today’s Wisconsin Morning Headlines.

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WSJ: Journal Media Group to be acquired by Gannett
October 7, 2015 05:09 PM
The Wall Street Journal is reporting that Milwaukee-based Journal Media Group may soon be acquired by national media company Gannett Co.

Journal Media Group was formed April 1 through the merger of Milwaukee’s Journal Communications and The E.W. Scripps Co. The newspaper and publishing operations were spun off and combined in the new Milwaukee-based company Journal Media Group, which has about 3,000 employees nationwide. The group includes the Milwaukee Journal Sentinel and its digital products, and daily newspapers and related digital offerings in 13 U.S. markets, which include the Naples Daily News, the Knoxville News Sentinel and the Corpus Christi Caller-Times.

Gannett, which publishes USA Today and 92 daily newspapers nationwide, would incorporate the Journal Media Group papers into its wheelhouse in the proposed deal, which could be completed by Thursday, according to the report.

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SABMiller rejects another offer from AB InBev
October 7, 2015 12:10 PM
BRUSSELS (Reuters) - SABMiller, the world's second largest brewer and parent company of MillerCoors, has promptly rejected an improved offer from bigger rival Anheuser-Busch InBev, saying on Wednesday that its $104 billion valuation was insufficient.

Earlier, Belgium-based AB InBev said it was willing to pay $64.57 in cash per SABMiller share, having already made two prior offers at $58.22 and $61.28, the increase made possible if its two biggest shareholders accept a lower value share-and-cash alternative offer.

But SAB Miller said its board, excluding the directors nominated by its biggest shareholder, Altria, has unanimously rejected the proposal.

"It still very substantially undervalues SABMiller, its unique and unmatched footprint, and its standalone prospects," the UK-based company said in a statement.

SABMiller chairman Jan du Plessis had earlier described his company as "the crown jewel of the global brewing industry" and described AB InBev's proposals as designed to be unattractive to many shareholders.

AB InBev is offering an alternative to the cash offer of partial payment in shares, limited to about 41 percent of SABMiller stock and expected to be taken up by the brewer's top two shareholders, Altria and the Santo Domingo family of Colombia, who together own 40.5 percent.

Under this offer, shareholders would get $3.63 a share plus 0.48 special unlisted AB InBev shares, which are convertible into ordinary stock after a five-year lock-up period.

With AB InBev intending to buy nearly 41 percent of SABMiller via the partial unlisted shares and cash offer alternative (PUSCA), SABMiller noted this put an implied price tag on SABMiller's equity of just $99.6 billion.

AB InBev said it expected most SABMiller shareholders would accept the all-cash offer but emphasized the proposal was conditional on getting the support of both Altria and BevCo, the Santo Domingo family's company, which holds a 13.9 percent stake.

Altria, the tobacco group which has 26.6 percent of SABMiller, said in response it supported the bid and would be prepared to opt for the share alternative.

But AB InBev later issued a statement saying it "wishes to clarify that it does not currently have the support of BevCo Ltd for the proposed combination."

Meanwhile, SABMiller said its board members, excluding those from Altria, had been unanimous in rejecting the approach. Two directors are Santo Domingo nominees.

Analysts at RBC Capital Markets also said the proposed offer appeared some way below a "knock-out" bid.

Bernstein Securities said the most likely outcome was for SABMiller to eventually accept AB InBev's advances, leading to a higher bid after extension of an Oct. 14 deadline for AB InBev to reveal its intentions.

Africa the prize

If the bid is successful the merged group would be a brewing colossus making nearly a third of all beer consumed worldwide, with analysts seeing it as the end-game for the industry's  consolidation as the big four - AB InBev, SABMiller, Heineken and Carlsberg already brew over half of the world's beer.

It would add Africa and certain Latin American and Asian breweries to AB InBev's extensive presence across the Americas and add SABMiller's Peroni, Grolsch, Pilsner Urquell and other international brands to AB InBev's existing lineup, which includes Budweiser, Stella Artois and Corona.

Africa is expected to see a sharp jump in the legal drinking age population in the years ahead, as well as increased beer consumption among a fast-growing middle class.

In western Europe and North America, beer volumes have steadily declined in the past two decades and U.S. consumers in particular have shifted to craft brews made by independent players.

"We believe Africa in particular will be a key driver for the joint company in the future," Brito said.

AB InBev also said it intended to establish a secondary share listing and regional headquarters in Johannesburg, where SABMiller has a secondary listing, which local investors have said they want retained.

Public Investment Corp, a South African state-owned firm with a 3.4 percent stake in SABMiller, said the listing addressed one of its concerns and that it would wait for guidance from SABMiller's board.

The company, partly controlled by 3G Capital, a private equity fund run by a group of Brazilian investors, has a strong track record for takeovers and keen cost-cutting thereafter, but  Brito declined to say what potential synergies a SABMiller deal might realize.

He did say, however, that he remained confident the company could put together financing for a bid. According to banking sources, it has asked banks to underwrite $70 billion in debt.

(Additional reporting by Robert-Jan Bartunek in Brussels, Aastha Agnihotri in Bengaluru and Martinne Geller in London; Editing by Gopakumar Warrier and Greg Mahlich)

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Johnson Controls reportedly to acquire industrial battery manufacturer
October 7, 2015 10:24 AM
Glendale-based Johnson Controls Inc. is discussing a potential purchase of Reading, Pa.-based industrial battery manufacturer EnerSys, according to a Wall Street Journal report that cited “people familiar with the matter.”

A spokesman for Johnson Controls, which makes building HVAC systems and auto parts and batteries, declined to comment on the rumors.

EnerSys, which makes batteries used in motive power applications such as forklifts and mining and reserve power solutions such as telecom, generated fiscal 2015 revenue of $2.5 billion, according to an analysis by Robert W. Baird analyst David Leiker, CFA.

While Johnson Controls made industrial batteries until 1998 and has since focused on automotive batteries, this transaction would make sense for the company, which has recently divested several divisions, Leiker said.

“There appears to be very little overlap between JCI and Enersys in market,” he said in the report. “This would reengage JCI in the industrial battery space while immediately taking a leading position.”

In addition, Johnson Controls chief executive officer Alex Molinaroli has discussed using strategic growth to strengthen the company’s “core” industrial business, Leiker said in his report. The “new” Johnson Control also has more leverage to use for mergers and acquisitions, and the combination could result in cost savings through joint procurement and R&S and optimized manufacturing, he said.

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MCTS makes concession to union, will meet again next week
October 7, 2015 11:36 AM
Following a “no” vote from the Amalgamated Transit Union Local 998 Monday, the Milwaukee County Transit System has sent a letter to the union indicating it plans to remove from its contract proposal part-time worker language with which ATU leaders had taken issue.

In the letter, MCTS managing director Dan Boehm asks ATU to revote on the adjusted contract.

“We heard you clearly that the most important issue to you is the number of part-time drivers proposed in the contract,” Boehm wrote. “In consultation with (Milwaukee) County Executive Chris Abele and (Department of Transportation) director Brian Dranzik, and because you have stated that this is the issue that is standing between us and finalizing this contract, we would like to remove the part-time provision from the contract in the interest of resolving this issue quickly for the benefit of transit riders.”

But that might not be enough to get approval from ATU, said James Macon, president of ATU Local 998.

“We will negotiate at the table,” he said. “I will not negotiate with the press; everything has to be done at the table.”

He wants to see a formal written contract with the adjustment, and also hash out some issues members have with working conditions, such as bathroom breaks and security for drivers.

“This is something I’ve been writing to the company about for a while, the security, the bathrooms, the runtime, workers’ comp, things like that,” Macon said. “Right now, you’ve got drivers speeding up and down the street trying to stay on time.”

“If (part-time workers) was truly the biggest issue, we’ve taken it off the table. It’s no longer a concern,” said Brendan Conway, MCTS spokesman. “This is the revolving door where James Macon gets to say whatever he wants and people just expect us to bend to his every whim. It’s time for him to say yes or no. What’s this all about?”

The two sides will meet again to continue discussions on Oct. 16.

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Real Estate Weekly: Portillo’s plans to open first Wisconsin restaurant in 2016
October 7, 2015 11:42 AM
Chicago-based Portillo's will open its first Wisconsin restaurant in 2016 as part of the Shoppes at The Corridor development on Bluemound Road, west of Calhoun Road, in Brookfield.

Read more in today’s Real Estate Weekly.

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WaterStone Bank opens Greenfield branch
October 7, 2015 11:55 AM
Wauwatosa-based WaterStone Bank has opened its newly constructed branch in Greenfield.

The bank built the 3,500-square-foot full-service branch at 5000 W. Loomis Road, on the northwest corner of Loomis and Edgerton Avenue, beginning in early spring. It has a drive-thru ATM.

This is WaterStone’s 10th branch. It also has locations in Wauwatosa, Brookfield, Franklin, Germantown, Oak Creek, Oconomowoc, Pewaukee, Waukesha and West Allis. It also has a commercial real estate loan office in Minneapolis.

Elizabeth Baumann will serve as branch manager in Greenfield. She previously was assistant vice president-bank office manager at Bank Mutual.

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Milwaukee Biz Blog: Will Walker lead on big issues back home?
October 7, 2015 10:27 AM
In some ways, the brevity of Gov. Walker’s shot at a presidential nomination is a blessing. There really is a lot of work to do at home.

Read more in today’s Milwaukee Biz Blog by John Torinus of Serigraph Inc.

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Morning Headlines: Duluth Trading Co. files IPO paperwork
October 7, 2015 10:28 AM
Belleville-based retailer Duluth Trading Company filed papers Tuesday to be listed on the stock market and publicly traded.

Read more in today’s Wisconsin Morning Headlines.

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Caterpillar to close its Oak Creek corporate office complex, move jobs to South Milwaukee
October 6, 2015 02:34 PM
Peoria, Ill.-based Caterpillar Inc. announced to its employees Monday that it plans to close its Oak Creek corporate office complex at 6744 S. Howell Ave. and move the 250 jobs there to South Milwaukee in the first half of 2016.

South Milwaukee Mayor Erik Brooks posted the information on his blog Tuesday afternoon, and Caterpillar confirmed the move with BizTimes Milwaukee.

Caterpillar said the closure is part of its overall cost reduction actions, and it will sell the facility. The company expects to complete the shift by the third quarter of 2016. There will be no layoffs associated with the move.

The positions that will be relocating include salaried professionals who work in finance, human resources, legal and marketing. Many of those jobs were previously based in South Milwaukee at 1100 Milwaukee Ave., a Caterpillar facility that was formerly the headquarters of Bucyrus International Inc.

Brooks said it's hard to call this good news, because it will be a loss for Oak Creek, but it will strengthen Caterpillar's presence in South Milwaukee and should help businesses in that community.

“The move is not a surprise, given Cat's announcement last month of up to 10,000 global job cuts and other consolidations coming in light of a continuing slumping mining industry,” Brooks wrote in his blog.

Bucyrus International Inc. purchased the two-building, 120,833-square-foot former Midwest Airlines corporate headquarters office complex at 6744 S. Howell Ave. in Oak Creek for $9 million in June 2010.

Then Caterpillar acquired Bucyrus for $8.6 billion in November 2010 and moved the headquarters of its global mining division to the Oak Creek campus.

Caterpillar announced on Sept. 24 that it plans to cut 4,000 to 5,000 jobs between now and the end of 2016, with most of the cuts occurring this year. In total, the company plans to reduce its workforce by more than 10,000 through 2018 as part of a move to reduce annual costs by about $1.5 billion.

The company did not specify how many Milwaukee-area employees would be impacted.

As of the end of the second quarter, Caterpillar had 800 production and office employees in South Milwaukee and 1,300 total employees in Wisconsin. The global manufacturer has 111,247 employees globally.

“A company spokesman tells me that the South Milwaukee plant — now in the company's Surface Mining and Technology group — will be focusing on rope shovels and draglines going forward,” Brooks wrote. “Caterpillar continues to plan investments in the facility in the next three years to meet eventual demand.”

Oak Creek Mayor Stephen Scaffidi said Caterpillar officials contacted him late Monday afternoon with the news.
“I was surprised – obviously I’ve been paying close attention to what is going on with the mining business, but considering this is a newer location for them and an upgraded facility; I’m disappointed,” Scaffidi said.
The Oak Creek building consists of 120,833 square feet of office space in two buildings and 761 parking spaces on a 27-acre site.
Scaffidi said the site’s proximity to the freeway and the airport – as well as all of the recent development in Oak Creek, including the Drexel Town Square project at Drexel and Howell avenues, will make it an attractive property to a potential buyer.
“I’m sure Caterpillar will aggressively sell it and we’ll do whatever we can to assist,” Scaffidi said.  
When contacted by phone, Brooks said a lot remains to be seen regarding Caterpillar’s commitment to South Milwaukee, but he remains optimistic.
“It’s never a bad thing to have jobs move back in,” Brooks said. “I’m hopeful for a turnaround in the mining industry overall and for stronger days for Caterpillar for South Milwaukee and worldwide.”

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