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Small healthcare auctions see progress -sources


By Soyoung Kim and Jessica HallOct 18 (Reuters) - Several small-to-mid-sized healthcare assets have garnered interest from private equity firms, with Medtronic Inc’s Physio-Control unit fetching bids after past efforts to sell the business failed, sources said.In February, Medtronic said it had restarted the process of finding a buyer for its Physio-Control unit, which makes automated external defibrillators. The unit has about $450 million per year in revenue.Although the Medtronic unit has failed to find a buyer in the past, it now has received interest from private equity firms in an auction process that is “pretty far along,” said a source familiar with the situation, who declined to be named because he was not authorized to speak to the media.Private equity firms have been active in healthcare this year, as they bet on rising use of services by aging populations in the United States, Europe and elsewhere.Medtronic said it was proceeding with the divestiture as planned, but declined further comment.Meanwhile, World Courier Ground, which provides quick delivery services for medical samples, legal briefs and financial documents, has been put up for sale, sources said. The sources could not be identified because the talks were not public.The courier business has attracted a wide array of interest from private equity firms and rival delivery services, said the source.World Courier could not be immediately reached for comment.Meanwhile, Press Ganey Associates Inchas attracted takeover interest from firms including TPG Capital LPHellman & Friedman, sources said.Press Ganey collects data and performs surveys that medical centers and hospitals use to improve service, cut costs and increase patient care.Press Ganey, which has about $100 million in EBITDA (earnings before interest, taxes, depreciation and amortization), could fetch at least 10-times EBTIDA in a sale, sources said.Press Ganey, TPG and Hellman & Friedman were not immediately available to comment.Another healthcare auction, PRA International, fell apart a few weeks ago, sources said. It is possible that a bidder could come back with a low offer to try to scoop up the asset as a bargain, one source said.PRA, a contract research company, could not be immediately reached for comment. Contract research organizations provide drug research services to pharmaceutical and biotechnology companies.The last big private equity deal in healthcare was also for a contract research company, Pharmaceutical Product Development Inc . PPD was acquired for $3.9 billion in cash by Carlyle GroupHellman & Friedman.

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UPDATE 1-India Hero Motocorp Q2 beats f’casts, confident of sales growth


* Co says sold record number of two wheelers in Q2Oct 18 (Reuters) - Hero MotoCorp , India’s largest motorcycle maker, reported a better-than-expected 19 percent rise in quarterly profit, and said it is confident of growing sales despite concerns over rising inflation and fuel costs in Asia’s third-largest economy.High interest rates that have dented car sales are expected to benefit two-wheeler manufacturers, with many first-time buyers plumbing for motorcycles or scooters in the world’s second-fastest growing major auto market.”We remain confident of carrying forward the buoyancy in our sales. We expect our retail volumes to peak during the festive month of October,” Hero MotoCorp CEO Pawan Munjal said in a statement. He added the company was expanding capacity to meet the expected demand.Industry motorcycle sales in September rose 20 percent from a year previous, against a 1.8 percent fall in domestic car sales, industry data showed this month.Hero MotoCorp, which ended a 26-year joint venture with Japan’s Honda Motors this year, said it sold a record 1.5 million two-wheelers during the quarter, a growth of 20 percent from a year earlier. The company has targeted sales of over six million vehicles in this fiscal year, Munjal had said in July.The New Delhi-based firm reported net profit of 6.04 billion rupees ($123 million) for its fiscal second quarter ended September, up from 5.06 billion rupees a year earlier. Net sales rose 28 percent to 57.84 billion rupees.Analysts on average expected net profit 5.6 billion rupees on revenue of 58 billion rupees, according to Thomson Reuters I/B/E/S.Raw material costs increased by more than a quarter to 42.64 billion rupees.Earlier this year, Hero Investments agreed to buy Honda’s 26 percent stake in the joint venture, formerly known as Hero Honda, for around $851 million.The deal gave Hero freedom to explore new products and export opportunities in markets where Honda has a presence, a move it had been barred from while in the joint venture, but marked its former partner as a competitor for domestic sales.It also faces growing competition from rivals such as Bajaj Auto .Shares in Hero MotoCorp ended down 0.4 percent on Tuesday ahead of the results, after rising as much as 1.1 percent, in a Mumbai market that fell 1.6 percent.Hero MotoCorp shares, valued at $8.1 billion, are down 0.1 percent this year, compared with a more than 13 percent in the sector index and a decline of over 18 percent in the benchmark index . ($1=49.3 Indian rupees)

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UPDATE 1-VMware Q3 profit beats Street


* Sees Q4 rev $1.03 bln to $1.06 bln vs est $1.03 blnOct 17 (Reuters) - Business software maker VMware Inc on Monday posted quarterly profit ahead of market estimates, helped by growth in the Asia Pacific market, and it forecast fourth-quarter revenue above analysts’ expectations.VMware, whose software is used to build cloud computing data centers and boost the efficiency of personal computers and servers, forecast fourth-quarter revenue of $1.03 billion to $1.06 billion.Analysts were expecting revenue of $1.03 billion, according to Thomson Reuters I/B/E/S.Net income for the third quarter more than doubled to $177.5 million, or 41 cents a share, from $84.6 million, or 20 cents a share, a year ago.Excluding items, the company earned 53 cents a share.Revenue rose 32 percent to $941.9 million.Analysts, on average, had expected the company to earn 50 cents a share, excluding items, on revenue of $929.4 million.Shares of the company fell to $84.99 after closing at $89.52 on the New York Stock Exchange.

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UPDATE 1-VMware Q3 profit beats Street


* Sees Q4 rev $1.03 bln to $1.06 bln vs est $1.03 blnOct 17 (Reuters) - Business software maker VMware Inc on Monday posted quarterly profit ahead of market estimates, helped by growth in the Asia Pacific market, and it forecast fourth-quarter revenue above analysts’ expectations.VMware, whose software is used to build cloud computing data centers and boost the efficiency of personal computers and servers, forecast fourth-quarter revenue of $1.03 billion to $1.06 billion.Analysts were expecting revenue of $1.03 billion, according to Thomson Reuters I/B/E/S.Net income for the third quarter more than doubled to $177.5 million, or 41 cents a share, from $84.6 million, or 20 cents a share, a year ago.Excluding items, the company earned 53 cents a share.Revenue rose 32 percent to $941.9 million.Analysts, on average, had expected the company to earn 50 cents a share, excluding items, on revenue of $929.4 million.Shares of the company fell to $84.99 after closing at $89.52 on the New York Stock Exchange.

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US will not bar BP from next offshore lease sale


* Republicans question agency’s authority over contractorsBy Ayesha RascoeWASHINGTON, Oct 13 (Reuters) - BP will be allowed to participate in an upcoming U.S. offshore oil and gas lease sale despite its role in the largest offshore oil spill in U.S. history, a top government regulator said on Thursday.Michael Bromwich, head of the newly formed Bureau of Safety and Environmental Enforcement, said his agency determined that it would not be appropriate to ban BP from obtaining new leases to drill offshore.”They don’t have a deeply flawed record offshore,” Bromwich told reporters after testifying at a House Natural Resources committee hearing.”The question is, ‘Do you administer the administrative death penalty based on one incident?’ and we’ve concluded that’s not appropriate.”The department has scheduled a lease sale in December, offering more than 20 million acres for development in the western Gulf of Mexico.It will be the first offshore lease sale since an explosion on the Deepwater Horizon rig last year killed 11 workers and ruptured BP’s Macondo well, spewing more than 4 million barrels of oil into the Gulf of Mexico.In the days after the accident, observers raised the possibility that the government may bar BP from moving ahead with its offshore drilling program in response to the disaster.SLAP ON THE WRISTRepresentative Edward Markey, the top Democrat on the House committee, said he thinks the government should reconsider its decision not to suspend BP.He also called for Congress to raise the fines that companies face for violating offshore drilling regulations.The drilling enforcement agency issued citations on Wednesday against BP and its top contractors, Transocean and Halliburton , for last year’s drilling accident. By law, the companies face fines of up to $35,000 a day, per incident for the violations.Based on that statute and length of time between the explosion and the capping of the Macondo well, Markey said that BP would face at most $21 million in fines for its seven citations. He said Halliburton and Transocean would each face at most $12 million in fines.Markey said he thinks the fines are not high enough, with BP’s potential penalties representing just seven hours of profit for the company by his estimates.”That fine obviously does not even begin to approach the amount needed to be a deterrent against a repeat of this tragedy. That fine is a slap on the wrist,” Markey said at the hearing.Bromwich agreed that the penalties need to be raised, reiterating his call that civil fines should at least be in the six-figure range.The agency has not offered details on the amount of fines the companies may face. Bromwich said the agency will have to determine what time period would be used to assess fines for each citation.Some Republican lawmakers at the hearing questioned the agency’s authority to issue citations to contractors. Traditionally, the agency has only regulated well operators.Bromwich said government lawyers believe the agency can go after contractors based on statutes in the Outer Continental Shelf Lands Act.

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UPDATE 1-Honda’s Thai production underwater as floods hit Japan firms


* Toyota to close 3 plants until at least Oct 15, Nissan still open* Nikon, Canon, Nippon Meat Packers also affectedTOKYO, Oct 12 (Reuters) - Honda Motor Co said its Thai plant remains under water as flooding in the centre of the country worsens, closing down 4.7 percent of its global output and hammering other Japanese firms that have made the nation their Southeast Asian production hub.The flooding, in some ways reminiscent of the March 11 earthquake and tsunami that destroyed factories and crumpled supply chains in Japan, has forced local and foreign companies to shutter plants or evacuate personnel as waters rise.Among Japan’s big three automakers, Honda risks losing the most from the floods.Toyota Motor Corp has been forced to curtail production because of disruption to its supply of parts rather than any physical damage to its own facilities, while Nissan said it may experience some disruption.”Cars at the facility (in Ayutthaya, central Thailand) appear to be floating,” Honda spokesman Tomohiro Okada said.As no one is allowed into the area, Honda is still unable to assess the damage to production machinery or give any estimate of when output, halted since Oct. 4, can restart, he added.”We think resuming production will take some time,” Nomura analyst Masataka Kunugimoto wrote in a report.If it takes three months, that would mean lost production of 60,000 vehicles and could shave 25 billion yen ($325 million) off operating profit, he estimated. For the year to March 31, Honda expects operating profit of 270 billion yen.Honda’s Thai plant supplies parts to other factories in the region, so the damage may infect its supply chain and hurt output in other locations unless it can rustle up parts from elsewhere.”Capacity utilisation in Japan is already high to meet post-earthquake recovery demand, so Honda’s Japanese plants may not be able to supply sufficient volumes,” Kunugimoto said in his report.Toyota said on Wednesday that it would close its three Thai plants, which account for around 8 percent of its global production, until at least Oct. 15 because of a dearth of parts.Nissan’s plant will operate normally until Thursday, a spokesman said, but output from Friday remains “a question mark”.Other Japanese firms affected by the floods include Nikon Corp , which was forced to halt production of cameras in Thailand, while Canon said it would be unable to operate its printer plant in Ayutthaya until at least Friday because of flooding.Nippon Meat Packers , Japan’s leading maker of ham and sausages, said on Wednesday that two of its plants in the region had been closed since Saturday and it was not yet sure when they would reopen.Shares of Honda fell 2.2 percent, compared with a 0.4 percent decline in the benchmark Nikkei average. Toyota fell 0.3 percent, Nissan dropped 1.6 percent and Nikon lost 3.5 percent. Canon ended the day 0.3 percent lower with Nippon Meat Packers losing 1.5 percent.

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UPDATE 1-Bain to buy Japan restaurant chain for $3.4 bln -source


* At $3.4 bln, would be biggest fund buyout in Japan since 2008 crisisTOKYO, Oct 12 (Reuters) - U.S. private equity firm Bain Capital plans to finalise a deal to buy Japanese restaurant chain Skylark Co from a unit of Nomura Holdings Inc for about 260 billion yen ($3.4 billion), a source with knowledge of the matter said.At that price the transaction would mark the biggest private equity buyout in Japan since the 2008 financial crisis and highlight a revival of deal making following Japan’s devastating March 11 earthquake and tsunami.Bain Capital began talks with Nomura Principal Finance to buy Skylark last year. Negotiations were put on hold after the March earthquake and slowed again in August after an outbreak of dysentery traced to Skylark restaurants.Talks between Bain and Nomura Principal are in the final stages and the two sides aim to reach an agreement by the end of the month before Nomura Holdings reports its earnings for the July-September quarter, the source said, speaking on condition of anonymity because the deal is not yet public.Nomura Holdings, Japan’s largest brokerage, said in a statement that media reports on the deal did not represent announcements by the company.Officials at Bain and Skylark declined to comment.In dollar terms, the $3.4 billion price tag is the same as in March, before the earthquake delayed the deal.Nomura Principal, the broker’s buyout unit, has been unloading portfolio companies, agreeing to sell ball bearing maker Tsubaki Nakashima Co to Carlyle Group for about $800 million earlier this year.Nomura Principal originally invested in Skylark in 2006 through a management buyout with UK private equity firm CVC Capital Partners . It currently controls a 77.8 percent stake in the restaurant chain along with other investors with money in a Nomura fund.

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News Corp urges shareholders to re-elect board


ISS, which advises large institutional investors on proxy voting, had criticized the board’s lack of independence and poor stewardship even as News Corp reeled from the fallout of a phone hacking scandal at its London-based News of the World tabloid.News Corp hit back against the criticism. ISS’ “disproportionate focus on the News of the World matter is misguided,” the company said, but acknowledged the scandal could affect the wider business’ operations.ISS had called for shareholders to vote News Corp Chief Executive Officer Rupert Murdoch, his two sons James and Lachlan, and 10 other directors off the board in the Oct. 21 election.The proxy advisory firm was also critical of the compensation package for Rupert Murdoch even as the phone hacking scandal threatened to destabilize the business.News Corp told shareholders its CEO’s compensation reflected the performance of the company during a successful period.