Esco shares down on plan to buy Doble; SportsQuest to buy Javaco; Universal Guardian shares jump

By Sheri Kasprzak

New York, Nov. 7 - Shares of Esco Technologies Inc. edged down on Wednesday after the company said it will buy Doble Engineering Co. in a $319 million cash transaction.

"Strategically, it seems like a good deal for them," said one analyst. "They're buying a name that's going to be profitable for them, so that's an important factor. The price seems reasonable."

It may be a great deal, but Esco's stock was off by more than 2.5% on Wednesday. The analyst said this could just be a function of lower stocks in general.

In other merger news, SportsQuest, Inc. said it will buy Javaco, Inc. in what the company calls one of many accretive acquisitions.

The move did nothing to budge SportsQuest's stock, which has been stalled at $0.45 since Oct. 31 (OTCBB: SPQS).

Meanwhile, the stock of Universal Guardian Holdings, Inc. got a big boost, climbing by more than 33% on Wednesday after the company announced plans to sell its Tagistics Corp. unit in a $1 million cash and debt deal.

Elsewhere, a trader said Doral Financial is losing money and it is time for investors to either sell or short the stock.

"Half of the book value is a deferred tax asset," said the trader. "They are losing money and will continue to do so. GM writes off $39 billion. So will DRL."

The trader said non-performing asserts are 11%, with minimal reserves.

"Adjusted for all this, real book [is] around $6, in my opinion," he said.

Doral's stock closed down $1.30, or 7.52%, at $15.99 on Wednesday (NYSE: DRL).

Esco to buy Doble

Esco said Wednesday it plans to buy Doble Engineering, a diagnostic test company for the electric utility sector.

The company plans to buy Doble for $319 million in cash. Esco said in a statement released Wednesday that it plans to pay for the acquisition with a new $400 million credit facility provided by an investor group led by National City Bank.

The merger is set to close at the end of December.

On Wednesday, Esco's stock fell by $1.10 to close at $39.46 (NYSE: ESE).

When the ink dries on the deal, Doble's current management team - led by chief executive officer Robert Smith -will be operated as a stand-alone subsidiary.

"We are very excited about this acquisition and the immediate financial impact it will have on Esco's operations," said Vic Richey, Esco's CEO, in a statement.

"Not only did we acquire a best-in-class, fast-growing operating company, but we added a very well-respected and talented management team that brings along a wealth of experience in the electric utility industry. This acquisition is a continuation of Esco's commitment to the utility industry and allows us to participate more meaningfully in support of the Intelligent Grid."

Esco is based in St. Louis and provides communications systems for electric, gas and water utilities.

SportsQuest to buy Javaco

In other news, SportsQuest signed an agreement to buy cable television industrial supplier Javaco.

Javaco will become a wholly owned subsidiary of SportsQuest, which is an Orlando, Fla.-based entertainment and sports marketing company.

The terms of the merger were not released on Wednesday.

"I am very pleased to announce the first of what I hope to be many accretive acquisitions for the company," said R. Thomas Kidd, SportsQuest's CEO, in a news release.

"Javaco has been successful in its cable television industry supply business and will bring desired diversity to the holdings of the company. I am glad to be working with Judy Vazquez, president of Javaco, Inc., in expanding its international and domestic customer base in the coming years."

Universal Guardian unit spin-off

Universal Guardian Holdings Wednesday said it plans to spin off its systems business in a transaction the company expects to be completed at the end of November.

In the transaction, Universal Guardian intends to sell its Tagistics Corp. unit for $1 million in cash and a secured note.

"The spin-off will allow each company to focus on its core business - Tagistics on RFID on-demand solutions and Universal Guardian on security through its products and services divisions," said Kevin Wolcott, chief operating officer of Universal Guardian, in a statement.

"Tagistics' mission remains unchanged following the spin-off," said Herbert Goertz, Tagistics' CEO, in a news release.

"Tagistics is superbly positioned as the only RFID on-demand solution provider in the United States. We have secured financing with new strategic partners and will operate the company with a management team that has been working together in the RFID technology sector since 2004."

Newport Beach, Calif.-based Universal provides non-lethal security products.

Universal's stock climbed by 4 cents, or 33.06%, on Wednesday to close at $0.165 (OTCBB: UGHO).

Wheeling-Pittsburgh merger

Finally, Wheeling-Pittsburgh Corp.'s chairman, James Bouchard, encouraged its shareholders to vote in favor of the planned combination with Esmark Inc.

"I am writing to encourage [you] to vote for the proposed merger between Wheeling-Pitt and Esmark because I believe it to be in the best interests of all shareholders," Bouchard said in a letter to Wheeling-Pittsburgh's shareholders.

"In short, Wheeling-Pitt cannot continue to be viable as a stand-alone entity without a stronger balance sheet, dramatically reduced cost structure and a broader, larger and more profitable customer base."

Shares of steelmaker Wheeling-Pittsburgh were down by 25 cents on Wednesday to end at $11.20 (Nasdaq: WPSC).

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