Midstate sees mammoth number of mergers, acquisitions in 2006

Central Penn Business Journal, Feb 2, 2007 by Reardon, Dennis

REGION

Here's a roundup of top firms, deals

Three companies were especially busy dealmakers in 2006. Armstrong World Industries Inc.'s emergence from bankruptcy protection in October capped a busy year for the Lancaster County manufacturer. Cumberland County-based Harsco Corp. landed at least 23 contracts worth a total of about $300 million for its industrial-services work. And Hersha Hospitality Trust, a Harrisburg-based owner and manager of hotels nationwide, aggressively added to its portfolio of properties.

Here's a recap of their doings throughout last year.

Armstrong

Armstrong World Industries, a Manor Township-based maker of floors, ceilings and cabinets, ended six years of bankruptcy protection Oct. 2. The company must establish a trust to pay asbestos personal-injury claimants. Armstrong filed for bankruptcy in 2000 under the weight of asbestos-related lawsuits.

In September, the company transferred 47 acres of its Lancaster flooring plant to EDC Finance Corp., on behalf of Franklin & Marshall College and Lancaster General Hospital. The college and hospital plan to redevelop and use the Liberty Street site.

Armstrong will continue to make flooring products near the site.

EDC Finance is part of the Economic Development Company of Lancaster County.

In the spring, Armstrong sold a 585,000-square-foot distribution facility in East Lampeter Township to Lancaster Ventures. The property at 2913 Spooky Nook Road sold for more than $20 million.

In March, it acquired two hardwood-flooring manufacturers: Capella Engineered Wood of Mississippi, and HomerWood of Crawford County.

In January, it announced changes to its defined-benefit pension plan. The changes are expected to reduce Armstrong's retirementrelated expenses by about $13 million in 2006 and by $15 million in 2007.

The changes, effective March 1, will affect only salaried employees who don't do production work.

Harsco

A division of Harsco Corp., an industrial-services and -products company based in Wormleysburg, received three multiyear contracts worth $100 million in September. Harsco's MultiServ division will provide various services at steel mills in Brazil and Argentina by working for steel companies Arcelor and Acindar Industria Argentina de Aceros. MultiServ will handle incoming scrap and haul molten iron among furnaces.

The division also won multiyear contracts worth more than $45 million at three American steel mills in April.

Kentucky-based North American Stainless awarded one of the contracts. U.S. Steel awarded the other two for work at a U.S. Steel facility in Michigan and another in Alabama.

MultiServ also received $17 million worth of business at steel mills in France, Italy and Brazil in May. The company will work for Ascometal in France, Acesita in Italy and Ferriera Valsider in Brazil.

Harsco Track Technologies, another Harsco division, landed two contracts in November worth $75 million from the United Kingdom's Network Rail, which owns and operates Britain's railways. HTT will maintain and operate railway-repair machines.

Hersha

In December, Hersha Hospitality Trust agreed to buy seven Hyatt Summerfield Suites hotels for about $169 million from LodgeWorks of Kansas.

The hotels are in White Plains, N.Y.; Bridgewater, NJ.; Gaithersburg, Md.; Charlotte, N.C.; Scottsdale, Ariz.; and near San Francisco.

Hersha is a real estate investment trust with local headquarters in Harrisburg.

In May, the company bought four Boston-area hotels for $44 million. The facilities are the Holiday Inn Express Cambridge, the Residence Inn and Comfort Inn in North Dartmouth, and the Hawthorn Suites in Franklin.

In January, Hersha agreed to buy three hotels in Philadelphia, the New York City area and northern Virginia for about $76 million.

The company acquired an 80 percent equity interest in the Hampton Inn Philadelphia in an agreement with Affordable Hospitality Associates. Hersha also agreed to buy the Hilton Garden Inn at JFK Airport from Metro JFK Associates and agreed to buy Tyson's Corner Residence Inn in Vienna, Va.

Finally, in January, Hersha purchased three Philadelphia-area hotels for $40.5 million in cash. It bought the Courtyard Philadelphia in Langhorne and two Fairfield Inn & Suites hotels, one in Bethlehem and the other in Mount Laurel, N.J.

BY DENNIS REARDON

dennisr@journalpub.com