Chaparral up after holders OK Gerdau acquisition; Hub falls after DNJ purchase; WPCS climbs

By Sheri Kasprzak

New York, Sept. 12 - Chaparral Steel Co.'s shareholders gave the green light to its acquisition by Gerdau Ameristeel Corp., leading another day of light merger news.

The $4.22 billion deal didn't seem to impact either company's shares in the extreme.

"The stock isn't really moving that much," said one sell-side trader. "I think it's probably a good move for them. The stock is up somewhat, it seems like they were having some problems earlier this year so it probably is beneficial."

At 2:30 p.m. ET, Chaparral's stock was up 19 cents. The stock held that gain through the close to finish the day at $85.94 (Nasdaq: CHAP).

Shares of Gerdau were down, losing 8 cents to close at $10.67 (NYSE: GNA).

Elsewhere, Hub Group, Inc.'s shares were off on Wednesday after its subsidiary Comtrak Logistics, Inc., agreed to buy DNJ Transportation, Inc. in a $12.1 million deal.

In other news, WPCS International Inc. agreed to buy Empire Electric in a $2 million cash transaction.

Chaparral deal gets nod

Looking at the Chaparral offering in more detail, Gerdau will pay $4.22 billion for the Midlothian, Texas-based steel beam maker.

"We are pleased to announce that our stockholders have approved the proposed merger with Gerdau Ameristeel," said Tommy Valenta, Chaparral's chief executive officer, in a statement.

"I am excited because this was a decision made by our stockholders and they voted overwhelmingly in favor of the transaction. Our stockholders clearly share our belief that the merger creates significant value and a bright future for the company and for the exceptional people who have participated in our success."

The merger is expected to close on Friday.

Hub to buy DNJ

Moving to other merger news, Hub Group subsidiary Comtrak Logistics agreed to buy DNJ Transportation for $12.1 million with $9.6 million to be paid in cash.

The merger is set to close in October.

Hub's stock slipped by 73 cents, or 2.31%, to close at $30.82 (Nasdaq: HUBG). In after-hours trading, the stock gained 24 cents.

DNJ is a Cicero, Ill.-based inter-modal trucking company. Headquartered in Downers Grove, Ill., Hub provides full-service inter-modal trucking services.

"We are excited about adding DNJ to our Comtrak drayage business," said David Yeager, Hub's CEO, in a news release. "DNJ's international inter-modal business will provide us with immediate growth in this key market. The acquisition is consistent with our strategic plan to increase the amount of drayage we perform."

WPCS to buy Empire

Moving back to the WPCS purchase of Empire, the move sent shares of WPCS early, just after the market opened.

Following the opening bell, WPCS was higher by 11 cents. The stock went on to slip by four-tenths of a cent to close at $10.92 (Nasdaq: WPCS). After hours, the stock gained 10 cents.

In addition to the $2 million in cash Empire Electric will receive, the electrical contractor will receive another $1 million earn-out if the company achieves a targeted earnings before interest and taxes of $850,000 for a year ending Oct. 31, 2007.

"The sale of our company to WPCS will be a timely and beneficial event," said Harold Gomes, president of Empire, in a statement.

"Empire Electric has an increase in project opportunities and we believe that being part of WPCS will give us the expanded service capability and financial support to bring us to a new level of prosperity. It also allows our employees to be part of a successful worldwide organization that has an outstanding reputation for design-build engineering services in the specialty communications field."

Headquartered in Sacramento, Empire Electric is an electrical contractor focused on customers like Kaiser Permanente, the State of California and Beale Air Force Base.

Exton, Pa.-based WPCS is an engineering company focused on specialty communications systems and wireless infrastructure.

Science Applications buys Scicom

In other merger news, Science Applications International saw its stock slip initially Wednesday after closing its acquisition with Scicom Technologies, but then it rebounded to end better on the session.

After the market opened, SAI's stock was down 5 cents. The stock ended the day up 28 cents, or 1.56%, at $18.25 (NYSE: SAI). The stock lost 12 cents in after-hours trading action.

The terms of the deal were not disclosed.

Scicom, headquartered in McLean, Va., provides onsite and offshore hydrocarbon exploration development services and technology consulting in the science and engineering sector.

Scicom will now be headquartered in New Delhi, India and will operate as part of SAIC's Commercial Business Services Business Unit, according to a statement released Wednesday.

San Diego-based Science Applications International provides scientific, engineering, systems integration and technical services and solutions to the U.S. military, agencies in the Department of Defense, the intelligence community, the U.S. Dpeartment of Homeland Security and other U.S. entities.

"With its image visualization and technical product development expertise, Scicom brings a unique set of capabilities to SAIC," said Charles Koontz, president of SAIC's Information Technology and Network Solutions Group.

"The acquisition positions SAIC to become a major provider of data-centric customer services in the upstream oil and gas market. Additionally, Scicom will make it possible for SAIC to expand its footprint in the life sciences and healthcare markets and strengthen its technical base by adding strong imaging and petro-technical skills."

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.