Corporate Report

Corporate Report

by Sean Roth | Real Estate Editor

Gerdau Ameristeel plans

Chaparral Steel purchase

Tampa's Gerdau Ameristeel Corp. signed a merger agreement to acquire Chaparral Steel Co. for $86 per share in cash. The agreement equates to a purchase price of $4.22 billion.

Chaparral Steel Co.'s board of directors has already approved the transaction and will recommend it to shareholders.

Chaparral is the second largest producer of structural steel products in North America and also is a major producer of steel-bar products. The company operates two mini-mills, one located in Midlothian, Texas, and the other located in Dinwiddie County, Virginia. Chaparral has about 1,400 employees and an annual installed capacity of 2.9 million metric tons.

"This strategic combination is an excellent fit for us and it broadens our product portfolio and gives us a full range of structural steel products, Mario Longhi, GNA's president and CEO said in a press release. "Chaparral brings not only high quality products and assets but also a strong organization with excellent technical capabilities."

Following the closing, Gerdau Ameristeel executives plan to explore issuing additional stock to recapitalize the company's balance sheet.

Gerdau Ameristeel's majority shareholder, Gerdau S.A., has committed to support the merger and will subscribe to any equity issuance in order to maintain its current level of equity ownership.

Gerdau Ameristeel expects that the combination with Chaparral Steel Company's operations will generate annual pre-tax operating savings of more than $55 million by the end of 2008. However, Gerdau Ameristeel officials expect the purchase to hurt its 2007 and 2008 earnings per share.

The deal is still subject to the approval of Chaparral Steel Co.'s shareholders and other closing conditions. Even so, the transaction is scheduled to close before the end of the year.

J.P. Morgan Securities Inc. is acting as exclusive financial advisor to Gerdau Ameristeel and the Gerdau Group on this transaction and has provided financing commitments of $4.6 billion to Gerdau Ameristeel to complete the transaction. Simpson Thacher and Bartlett LLP and Torys LLP acted as legal advisors for the transaction.

Gerdau Ameristeel is the second largest mini-mill steel producer in North America with annual manufacturing capacity of more than 9 million tons of mill finished steel products. Gerdau Ameristeel is 67% owned by Gerdau SA.

Progress Energy Florida

seeking renewable sources

St. Petersburg-based Progress Energy Florida is issuing a request for renewables to expand the company's portfolio for cost-effective renewable energy sources to offset the need for new power plants.

Progress Energy is seeking information, contacts, questions, and potential contracts from all sources.

"We are continually looking for newer, cleaner ways to produce energy," Jeff Lyash, president and CEO of Progress Energy Florida said in a press release. "The continued development of renewable energy has been part of our balanced approach to meeting growing customer demand for years...."

To be considered, renewable energy projects must use renewable fuels, be reliable, be located in Florida, be fully operational by Jan. 1, 2013, sell its electrical output to Progress Energy Florida for no more than the cost to build a new power plant and be capable of producing at least one megawatt of electricity.

Progress Energy will be launching its photovoltaics for schools program in August. The company also is seeking pricing for its solar-thermal water-heating initiative for residential customers.

Earlier this year, the company launched a solar-energy initiative that offers customers rebates and incentives to install a solar-thermal water heater. Customers can save up to 85% on the hot-water portion of their electric bill.

In other news, Progress Energy selected Westinghouse Electric Co.'s AP1000 reactor technology for the potential future expansion of its nuclear energy plant line. The Westinghouse AP1000 is an 1,100-megawatt nuclear power plant that uses passive safety system designs and engineering simplicity to enhance plant reliability and reduce construction costs. The AP1000 has 87% less cable, 83% less pipe, 50% fewer valves and 35% fewer pumps than the generation of reactors in operation today.

Progress Energy has named a site in southern Levy County as the preferred location for potential nuclear expansion in Florida. The proposed site is going through detailed assessments, including environmental and weather studies. Progress Energy Florida anticipates filing a need case with the Florida Public Service Commission in early 2008. If approved, construction on site preparations could begin as early as 2010 with construction in 2012 with commercial operation in 2016.

DenCor sells to Great

Expressions Dental Centers

Bloomfield Hills, Mich.-based Great Expressions Dental Centers Inc. has acquired the assets of St. Petersburg-based DenCor Management Services Inc. and entered into an agreement with Apple Dental Affiliates PA to manage its dental centers in the Tampa/St. Petersburg area. Great Expressions already owns centers in Fort Myers, but the purchase expands the large dental management firm's reach into Hillsborough and Pinellas counties.

Hyde Park Capital Advisors LLC, the investment banking subsidiary of Hyde Park Capital Partners LLC, served as the investment bank for DenCor in the transaction.

"We've been around since 1998 and were at a crossroads," Phil Powell, president and CEO of DenCor said in a press release. "We had to either get bigger or explore ways to sell out. Our board decided to look for ways to sell the business."

Great Expressions Dental Centers has 106 affiliated dental practices operating out of 77 facilities in Connecticut, Florida, Georgia, Massachusetts, Michigan, Ohio and Virginia.

Diamondhead Casino

expanding casino land

Officials for Largo-based Diamondhead Casino Corp. report the company has entered into a non-binding letter of intent to purchase about five acres of land with an option to purchase an additional five acres of land on the west side of its 404 acre Diamondhead, Miss., property for $750,000 an acre. The newly acquired land would be strictly limited to non-gaming purposes only and conditions would also apply to any later sale or lease of the land.

Diamondhead Casino owns, through its subsidiary company Mississippi Gaming Corp., about 404 acres fronting Interstate 10 and the Bay of St. Louis, which it plans to develop as a land-based casino resort with condominiums and additional amenities. Diamondhead Casino Corp. is reportedly still in discussion with potential partners, ground lessees, investment banking firms and potential purchasers of all or part of the property. The board previously rejected a $100 million offer from an entity to purchase the entire 404-acre property.

"The proposals received by the company and the caliber of the parties who have expressed interest in the property underscore the fact that we are dealing with an extremely valuable asset," Deborah Vitale, president and chair of the board said in a press release. "However, since we are a single asset entity, we simply cannot afford to make the wrong deal or one that does not translate into real shareholder value. We have a strategically located tract of land on an Interstate highway zoned for casino development, no debt, no liens, no litigation, and sufficient cash to get through the next year."

General Dynamics Ordnance

receives $44 million order

St. Petersburg's General Dynamics Ordnance and Tactical Systems, a business unit of General Dynamics, has been awarded a $44 million modification to an existing contract for production of small-caliber ammunition by the U.S. Army Field Support Command in Rock Island, Ill.

This award is the third delivery order executed under this systems contract for a total of $500 million.

This order is for the production of 5.56mm, 7.62mm and 0.50 caliber small-arms cartridges to replenish stockpiles used in training and combat operations. General Dynamics serves as the systems integrator coordinating supply-chain management for a consortium of small-caliber ammunition producers with the U.S. Defense Department.

General Dynamics Ordnance and Tactical Systems is a leader in the manufacture of direct and indirect-fire munitions, mortar weapons and systems, artillery projectiles, bomb bodies and Ball Powder Propellant. The company also manufactures precision metal components; provides explosive load, assemble and pack services for a variety of munitions, tactical missile and rocket programs; and designs and produces shaped charge warheads and control actuator systems.

Beall's stores president

moving to head Beall's Outlets

Conrad Szymanski has joined Bradenton-based Beall's Outlet Stores Inc. as its president. Szymanski will be relinquishing his position as president of Beall's Department Stores Inc. During his twelve year term at the helm of Beall's Department Stores, Szymanski was instrumental in transforming the business through a series of initiatives including nearly doubling the average store size, establishing and growing the company's e-commerce operations and helping establish the Beall's brand..

Bealls Inc. has hired Heidrick & Struggles to conduct a national search for a new president for Beall's Department Stores. Beall's, operates, through its wholly-owned subsidiaries Beall's Department Stores Inc. and Beall's Outlet Stores Inc., 546 stores throughout Florida and the Sun Belt region.

Obee's Franchise Systems

predicts $662,000 in earnings

Port Charlotte-based Obee's Franchise Systems Inc. released a system-wide sales and revenue forecast for the second half of 2007, from July to December.

The forecast projects that Obee's Soups, Salads & Subs will generate $6.4 million in system-wide sales during the next six months. OBFC is expecting to earn about $662,000 in revenues from these sales along with the franchise fees the company also expects to generate from the sale of new franchises. The sales figures are based on the revenue stream currently being earned from its existing franchise network, combined with the new royalties and management fees that will be added to the company's revenue stream as new Obee's Soups, Salads & Subs units are opened.

Obee's Franchise Systems Inc. will undergo a 30-1 forward stock split on July 23 and will also be traded under a new stock symbol. The company is the parent of Obee's Soups, Salads & Subs, a fast casual restaurant chain that manages franchises in 21 states from Florida to California. There are currently more than 50 Obee's locations open and under development. OBFC has commitments from a nationwide network of area developers to open an additional 1,000 stores over the next ten years.

People's shareholders back merger with Superior Bank

Sarasota-based People's Community Bancshares Inc. stockholders approved the merger of People's with Superior Bancorp.

"We are almost done, and we feel a great sense of accomplishment for our stockholders in putting together this partnership," Neil D. McCurry Jr., People's Community Bancshares' president and CEO said in a release.

"It is clear that our stockholders understand the value this partnership will bring to the West Coast of Florida. The additional resources that the combined company will bring to our customers will generate new revenue opportunities that we believe will increase our shareholders' value."

The merger is scheduled to close later this month.

Superior Bancorp is a $2.4 billion thrift holding company headquartered in Birmingham, Ala. The principal subsidiary of Superior Bancorp is Superior Bank, a southeastern community federal savings bank. Superior Bank with 60 branches: 38 locations in Alabama and 22 locations in Florida. Superior Bank currently has 11 new branches planned for Northeast Alabama and Florida through 2008.

Upon completion of the merger with People's, Superior Bank will become a $2.8 billion community bank with 63 banking offices from Venice, Florida to Huntsville, Alabama.

Sudbrook named CEO for Partners

Robert R. Sudbrook has been appointed president and CEO of Naples-based Partners Bank, a subsidiary of Partners Financial Corp. He will handle all activities in the bank's Naples and Collier County operations.

"We are pleased to be able to attract such a knowledgeable banking professional to run the day-to-day operations of the bank," John Wolf, chairman of Partners Bank, said in a press release. "Bob has over two decades of CEO experience in managing community bank operations and we are confident that he is the perfect person to lead our organization forward. We will be relying on his vast experience in establishing our presence in the Naples market."

Sudbrook began his banking career with Hawkeye Bancorporation in Des Moines, Iowa. His career continued until 2000 and the sale of Centennial Bank to Provident Bank in Cincinnati. For the past seven years, Sudbrook has served as a banking consultant and as a director of a Greater Cincinnati bank.

Founded in 2005, Partners Bank has more than $64 million in total assets and two full-service banking centers in Collier County.