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VOL. 7 | NO. 7 | Saturday, February 08, 2014

Daily Digest

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Wright Medical Buys Solana, Plans to Acquire OrthoPro

Arlington-based Wright Medical Group Inc. has closed on its agreement to acquire Solana Surgical LLC of Memphis and has entered into a definitive agreement to acquire OrthoPro LLC of Salt Lake City, the company announced Thursday, Jan. 30.

Under the terms of the Solana acquisition, Wright acquires all of Solana’s outstanding equity for about $90 million, consisting of $47.6 million in cash and $42.4 in Wright common stock.

The same basic arrangement applies to OrthoPro for $36 million in cash, with $32.5 million paid at closing and up to $3.5 million more in cash contingent on revenue milestones included in the agreement.

The OrthoPro agreement is expected to close in a year, according to a statement from Wright.

Both companies add to Wright’s foot and ankle portfolio, increasing the company’s focus on the surgical podiatric market.

Wright Medical executives are expected to provide more details about the acquisitions, as well as what the coming integration will mean for Wright’s relocation from Arlington to Memphis, during the company’s Feb. 24 earnings conference call.

Smith & Nephew to Buy ArthroCare in $1.5B Deal

British medical technology company Smith & Nephew plans to buy U.S. medical device maker ArthroCare in a $1.5 billion deal that it says will strengthen its sports medicine business.

Smith & Nephew said Monday it will pay $48.25 in cash for each share of ArthroCare Corp., which is based in Austin, Texas.

Smith & Nephew PLC said ArthroCare's expertise in shoulder joint repair will complement its strength in knee repair.

ArthroCare has 35.4 million shares outstanding, counting options and restricted stock, according to Smith & Nephew spokesman Charles Reynolds. Smith & Nephew values the deal at $1.7 billion counting ArthroCare's cash. It expects the acquisition to close by the middle of the year.

ArthroCare makes surgical devices, instruments and implants and employs about 1,800 people. The company announced on Jan. 7 that it will pay a $30 million fine to resolve an investigation by the U.S. Department of Justice into alleged securities fraud by its former management.

The Justice Department also is charging the company with one count of conspiracy to commit securities fraud and wire fraud, but it has entered into a two-year deferred prosecution agreement with ArthroCare. If the company meets requirements set by the Justice Department, it won't bring charges against the company.

ArthroCare has said that deal will end the Justice Department's investigation, which was first made public in December 2008.

Smucker Files $16 Million Permit for Plant Expansion

The J.M. Smucker Co. has filed a $16 million permit with the city-county Office of Construction Code Enforcement as part of its planned plant expansion at 4789 Cromwell Ave. in Oakhaven.

No contractor or architect was listed on the permit, which is the first in Smucker’s plan to invest $41 million to upgrade its peanut butter production lines.

The Economic Development Growth Engine of Memphis and Shelby County in mid-January unanimously granted the Orrville, Ohio-based company an amended payment-in-lieu-of-taxes agreement for 15 years on personal property and 13 years on real property.

In addition to 42 new positions, which will have an average wage of $52,545, created through the expansion, Smucker will maintain its existing 61 employees.

The approved tax freeze will save Smucker $13 million, but the company will still pay an estimated $16.2 million in taxes to the city and county over the length of the PILOT. The company said 25 percent of the company’s planned $21.5 million in discretionary spending will be with women- and minority-owned businesses.

Kemmons Wilson School Becomes Independent

The University of Memphis is making the 10-year old Kemmons Wilson School of Hospitality and Resort Management an independent school within the university.

The school has its own bachelor’s degree curriculum with 60 credit hours of coursework. The coursework had been a third of that previously.

With the autonomy, the school will also offer concentrations in event management, lodging, and food and beverage services.

The Kemmons Wilson School had been a part of the Fogelman College of Business and Economics since it was founded.

The school is housed in a full-service hotel and conference center on the university campus and is named for the late founder of Holiday Inn.

His son, Kemmons Wilson Jr., said in a statement that the school’s goal is “a real-world environment within an academic setting.”

Dr. Radesh Palakurthi, professor and director of the school, said the status as a separate school means it has achieved “the critical mass it needs to offer a more focused program in hospitality and resort management.”

Gibson Guitar Launches ‘Government’ Brand

Gibson Guitar Corp. has launched a “Government Series” Les Paul guitar commemorating federal agents raiding the Gibson factories in Nashville and Memphis.

The guitar – which is available in a “Government Tan” color – is made from wood confiscated during the raids in Nashville.

"Great Gibson electric guitars have long been a means of fighting the establishment, so when the powers that be confiscated stocks of tonewoods from the Gibson factory in Nashville – only to return them once there was a resolution and the investigation ended – it was an event worth celebrating,” Gibson said in a statement.

The Nashville-based guitar maker was raided by U.S. Fish and Wildlife Service agents on allegations it violated the Lacey Act, which requires U.S. companies to comply with other countries’ environmental export restrictions. While denying wrongdoing, Gibson agreed to pay a $300,000 penalty and other fines.

The Government Series II Les Paul, which will sell for around $1,099, features a pickguard that is “hot-stamped in gold with the Government Series graphic – a bald eagle hoisting a Gibson guitar neck.”

Fred's Says Bad Weather Hurt Sales, Profits

Fred's Inc. said Thursday that its sales were hurt in January by bad weather that also cut into the retailer's profit for the quarter.

The discount retailer said that the rough weather disrupted consumers' shopping habits and led to the closure of more than 120 stores during the final week of the month.

Fred's, based in Memphis, Tenn., operates 704 discount general merchandise stores in the southeastern U.S.

The company said that its revenue from stores open for at least a year fell 1.8 percent in January. That measure is a closely watched gauge that strips away the impact of recently opened or closed stores. Analysts polled by Thomson Reuters were anticipating a 1 percent decline.

Fred's adjusted its January results to eliminate the first week of the month to make it comparable with those of the prior year.

CEO Bruce Efird said that prior to the last week of January, the company's sales were running in the middle of the company's forecast but fell sharply in that final week due to bad weather. He said that the drop in sales should reduce the company's earnings for its fourth quarter by 3 cents per share.

Fred's now expects earnings between 13 and 16 cents per share for its fourth quarter. Analysts polled by FactSet were anticipating earnings of 18 cents per share.

$2M Building Permit Filed for Indoor Sports Facility

Developer Wes Misenhelter has filed a $2 million building permit application for the indoor sports facility he is building on 237 Woodland Lake Drive in Cordova.

The application filed with the city-county Office of Construction Code Enforcement lists the size of the sportsplex at 45,094 square feet. No architect or contractor is listed.

Misenhelter last year bought the 5.6-acre site east of Grays Creek on Walnut Grove Road to build Wesscorp Sports & Office Property. The development will include a climate-controlled indoor sports facility with turf soccer field and three separate areas for sports programs. The site also has two outparcels dedicated for office and medical development.

Misenhelter filed a $2.3 million construction deed of trust through BankTennessee on Jan. 8, and the sports facility is expected to be fully operational in July.

Prudential Collins-Maury Joins Coldwell System

Prudential Collins-Maury has joined the Coldwell Banker Real Estate system and will now be known as Coldwell Banker Collins-Maury.

“I started the process of exploring affiliation with the Coldwell Banker brand over the last six months and included our management team in the process,” said Doug Collins, president and CEO of Coldwell Banker Collins-Maury. “At the end of the review process, Coldwell Banker was a unanimous decision.”

Collins, a former president of the Memphis Area Association of Realtors, shared the news with his staff Tuesday, Feb. 4.

The Collierville-based firm, which has nearly 100 agents working in offices in Collierville, Memphis and Southaven, is coming off a strong year in which its sales volume increased by 16 percent to more than $243 million, the best year in the company’s history.

High School Hoops Tourney Coming to FedExForum

Some of the best high school basketball teams from Shelby County will compete at FedExForum for bragging rights in the SCIAA Fever Basketball Tournament Sunday, Feb. 9.

Formerly known as the MIAA City Championships, 2014 will mark the inaugural SCIAA Fever tournament, a winner-take-all style tournament dating back to the 1960s. Past stars of the MIAA City Championships include Memphis’ own Larry Finch, Larry Spicer, John Gunn, James Bradley, Andre Turner, Todd Day, Cedric Henderson, Penny Hardaway and Elliot Perry.

The tournament will consist of three girls games and three boys games. Tipoff will begin at 12:15 p.m. with a 16A girls game and conclude that evening with the 16AAA boys game featuring White Station High School, Tennessee’s top-ranked team and the No. 4 team in the nation.

During the marquee match with White Station High School, the SCIAA will present the Court of Legends, a special presentation honoring NBA athletes from Shelby County, including Todd Daye, Elliot Perry, Penny Hardaway and Keith Lee. Tickets, which start at $12 and are valid for all six games, are available through Ticketmaster and the FedExForum box office.

Ashley Furniture Outlet to Close

The Ashley Furniture HomeStore Outlet location at 5228 Summer Ave. inside Perimeter Center is closing its doors due to a “lost lease.”

The store, located near Summer and White Station Road, launched a closing sale on Thursday, Feb. 6. The sale will feature a large selection of furniture, bedding and accessories sold at discounts of up to 90 percent.

A statement about the store closing did not mention a specific closing date, and the Summer Avenue closing does not affect the three other Memphis-area Ashley stores.

“The lost lease in this location in no way reflects on the brand,” said Shawn Roberts, regional vice president of Ashley HomeStore Outlet, in a statement.

Council OKs ‘Tax Dead’ Anti-Blight Program

The Memphis City Council on Tuesday, Feb. 4, approved an anti-blight grant program for “tax dead” properties – properties with more in back taxes and associated fees than the property is appraised for or could ever be sold for.

The five-year pilot program, which was approved last month by the Shelby County Commission, offers up to $200,000 a year to fund grants to community development organizations in the amount of the back taxes and fees due, which are then paid back to the city and county. The program would offer another pool of $100,000 a year in grants to pay property taxes on the properties for the next five years.

The program now goes to the Tennessee attorney general’s office for legal review, then back to both city and county bodies for another vote.

In other action, council members sent back to committee a proposal by Bill Boyd that would have waived the new monthly streetlight fees on Memphis Light, Gas and Water bills for recently annexed residents of South Cordova in areas without street lights.

Other council members said they were prepared to seek similar waivers for residents in their districts in similar situations. And the council may consider some kind of waiver for residents of planned unit developments in which homeowners pay a fee for streetlights as part of a homeowners group.

Harrison Creek Apts. Sell for $4.4 Million

The 382-unit Villages at Harrison Creek apartment complex on Jackson Avenue in Raleigh has been purchased by an Illinois-based entity named AMG Memphis LLC for $4.4 million.

AMG bought the Class C complex in a Jan. 31 special warranty deed from JK Financial LLC and SK Financial LLC, which had acquired it in a 2011 foreclosure sale for $3.9 million.

The purchase includes three main parcels and 0.2 acres of vacant land on the east side of Jackson Avenue north of Gragg Avenue.

The largest parcel, 3807 Jackson, is a 6.76-acre site containing 208 apartment units built in 1964 and totaling 154,984 square feet. The Shelby County Assessor of Property’s 2013 appraisal is $1.8 million.

The 3923 Jackson Ave. parcel is 2.9 acres and contains 98 units totaling 63,206 square feet. The phase was completed in 1966 and has an appraised value of $1.2 million.

Last, the 3881 Jackson Ave. parcel is 2.6 acres and contains 76 units totaling 45,168 square feet. The phase was completed in 1964 and has an appraised value of $1.2 million.

In conjunction with the purchase, AMG Memphis LLC filed a $3.2 million deed of trust, assignment of leases and rents, and security agreement through Thorofare Asset Based Lending Fund III LP. Adam M. Glickman signed the trust deed as manager of AMG Memphis.

Pearl Shaw Named to Tenn. Lottery Board

Gov. Bill Haslam has appointed Pearl Shaw to serve on the board of the Tennessee Education Lottery Corp.

Pearl Shaw is co-author, along with Mel Shaw, of “Prerequisites for Fundraising Success: The 18 Things You Need to Know as Fundraising Professional, Board Member, or Volunteer” and “The Fundraiser’s Guide to Soliciting Gifts.”

The Shaws also write the “FUNdraising Good Times” column that runs Tuesdays in The Daily News.

St. Louis School Files Permit for New Facility

St. Louis Catholic School has filed a $2.4 million building permit application for a multipurpose building on its campus at 5192 Shady Grove Road.

The permit application filed with the city-county Office of Construction Code Enforcement lists the building as including administrative offices, a multiuse room, snack bar and recreation-type facility. Philadelphia, Miss.-based W.G. Yates & Sons Construction Co., which has an office on Poplar Avenue, is listed as general contractor.

Started by the Dominican sisters in 1957, the Catholic school is on the northwest corner of Shady Grove and South White Station Road, adjacent to St. Louis Catholic Church. In March 2012, the school broke ground on a junior high wing that added eight classrooms, a science lab, music room and other amenities.

St. Louis currently has more than 500 students in preschool through eighth grade, according to the school’s website.

MCA Design Contest Winners Announced

After hours of design and construction time, two open houses and more than 8,000 votes cast, a contest that allowed Memphis College of Art students to redesign real apartments has come to a close.

Voters awarded the Double M team of Bailey Brocato and Ethely Lyons first place in the ReStore for More design contest, a competition created by Memphis College of Art, The Venue Apartments and the Habitat for Humanity of Greater Memphis ReStore, which sells a variety of donated goods to support Habitat’s mission to provide housing for families in need.

The Modern West team of Laura Miller and Jess Vandenberg finished second, and the Handmade American team of Sam Herwehe and Evan Lebaroff captured third place. The Venue Apartments awarded $1,000 and six months of free rent to the first-place team, $600 to the second-place team and $300 to the third-place team.

The contest allowed students to showcase what they’ve learned in the classroom on a real-world canvas. The Venue provided the three teams with $500 for materials and $50 for supplies, plus a $100 gift certificate and a discount at the Memphis ReStore. The teams were also given a “mystery item” – an identical chest of drawers – to incorporate into their designs.

Fred’s Offering Free Blood Pressure Screenings

Fred’s Pharmacy is offering free blood pressure screenings at all 360 of its pharmacies during February.

To encourage participation, fred’s will donate $1 to the American Heart Association for each screening.

The campaign is the beginning a long-term effort by the company to help educate people about being conscious about their heart’s health, and each person screened will have an “I am Heart Smart” name card displayed at the pharmacy to show the progress of the campaign in that location.

In addition to the free screenings and financial donation, fred’s Pharmacy also has partnered with the American Heart Association to create a special website, freds.toolsfortheheart.org, that features a “My Life Check” evaluation.

Black Girls CODE to Host Web Design Workshop

The Memphis chapter of Black Girls CODE will host its first workshop for the 2014 program year Feb. 22 at the Whitehaven branch library, 4120 Millbranch Road.

This class will focus on how to build a website. Check-in will start at 9 a.m., and class starts at 10 a.m.

Thanks to a grant from the Memphis Chapter of the Society of Information Management, the Whitehaven branch is partnering with Black Girls CODE to offer scholarships to 50 girls ages 10 to 17.

Bartlett Mayor’s Son to Lead McDonald Insurance

Brooks McDonald is leading McDonald Insurance of Bartlett following the retirement of his father, Keith McDonald, after 32 years of running the firm.

The younger McDonald is a 10-year insurance industry veteran. The business has 10 employees and a satellite office in Covington, Tenn.

Keith McDonald continues to serve as Bartlett mayor and will seek re-election to another four-year term in the November Bartlett elections.

Target Taking Actions on Security, Exec Says

An executive of Target Corp. said Tuesday the retailer has taken actions to shore up security following the massive breach of millions of consumers' data during the holiday season.

The testimony at a Senate hearing by John Mulligan, executive vice president and chief financial officer at the No. 2 U.S. discounter, also revealed that Target discovered an additional 25 cash registers infected by malicious software on Dec. 18. The company had said earlier that it had removed all the malware from its system by Dec. 15.

Mulligan's testimony before the Senate Judiciary Committee was the first public appearance by a Target executive addressing the issue since the breach that occurred between Nov. 27 and mid-December. An estimated 40 million credit and debit card accounts were affected.

Mulligan said Target is "deeply sorry" for the effect of the data theft on consumers, and he acknowledged that their confidence in the Minneapolis-based company has been shaken.

Sen. Patrick Leahy, D-Vt., the panel's chairman, said the erosion of consumers' confidence — with data breaches on the rise affecting retailers, Internet companies and others — could hinder the U.S. economy's recovery.

Nichols Named New Deputy District Attorney

Jennifer Nichols is the new deputy district attorney general in the Shelby County District Attorney General’s office.

District Attorney General Amy Weirich appointed Nichols to the No. 2 position in the county prosecutor’s office Monday, Feb. 3, succeeding Carter Myers, who is retiring after 30 years in the office.

Nichols has been chief prosecutor for the office’s Special Victims Unit. She joined the Shelby County prosecutor’s office in 1991 after earning her law degree from Cumberland School of Law at Samford University in Birmingham and practicing law in Florida.

She and Weirich shared an office at the start of their careers as prosecutors.

Victorian Village to Host Fundraiser Feb. 23

Victorian Village Inc. on Feb. 23 will host a fundraiser dinner called A Taste of Elegance, a farm-to-table period dinner benefiting Victorian Village Inc. Community Development Corp.

The event will be held inside three of the Victorian homes on Adams Avenue. The Mallory-Neely House will provide the backdrop for the charcuterie course, the 1871 Woodruff-Fontaine House will host a dinner and the newly renovated James Lee House will offer desserts.

The menu will be period-inspired, and Victorian dress is welcomed. Tickets are $125 and can be purchased at victorianvillageinc.org.

All three homes will be open for tours during the event.

Dunavant Transportation Hires Recruitment Specialist

Dunavant Transportation Group has hired Darlene Beasley as its new driver recruitment and relations manager, responsible for the recruitment and retention of drivers for its Dunavant Sea Lane Express subsidiary.

Dunavant Transportation Group acquired Sea Lane Express, which specializes in regional trucking and intermodal drayage operations, in 2011. The company currently has terminal operations in intermodal and port cities including Atlanta and Savannah, Ga., Norfolk, Va., Charleston, S.C., Charlotte and Wilmington, N.C., and Nashville.

Beasley, who most recently served as the regional manager of field recruiting for Comcar Industries, will analyze each terminal’s needs for driver recruitment based on customers’ freight requirements.

Grizzlies’ Joerger Named Conference Coach of Month

Memphis Grizzlies coach Dave Joerger was named the Western Conference Coach of the Month for January.

Joerger guided Memphis to an NBA-best 12-3 record (.800) during the month of January, as the Grizzlies won five consecutive games and nine of their last 10 to close out the month. Memphis tied its franchise record for January wins and finished just one victory shy of the franchise record for wins in any month (13 in March 2004 and April 2012).

The Grizzlies also won six consecutive road games from Jan. 5-31, the second-longest road winning streak in franchise history. The Grizzlies held all six opponents to 90 points or fewer, including allowing just 77 points on the road against the Milwaukee Bucks on Jan. 15 in the second game of a back-to-back.

Memphis emerged as one of the stingier defenses in the month of January, holding opponents to 91.5 points per game on just .431 shooting from the field and .311 shooting from behind the arc. After the return of center Marc Gasol from injury on Jan. 14, Memphis held opponents to a league-low 86.3 points per game.

Tennessee VW Workers to Hold Union Vote

The United Auto Workers says employees at Volkswagen's Chattanooga plant will vote Feb. 12-14 on whether they want the union to represent them.

The Detroit-based UAW said Monday that the National Labor Relations Board set the election.

The vote follows an agreement between the UAW and the Germany-based automaker, which decided not to challenge a unionization vote.

UAW President Bob King says a statement that Volkswagen "is known globally for its system of cooperation with unions and works councils." The UAW says the Chattanooga plant is VW's only major U.S. facility without a union.

Last month, the National Labor Relations Board determined that the UAW and Volkswagen didn't violate federal labor laws last year during the process of moving toward a union representation vote.

Board Changes Stance on Teacher Licensing

The Tennessee Board of Education has changed its stance on rules effecting the licensing of teachers.

In August, the board voted for the policy brought by the state Education Department to use student growth measured through standardized test scores, or value-added data, to determine renewing teaching licenses.

The board voted at the time to delay implementation of the new rules until 2015.

But The Tennessean reports the board voted last week to step away from the new policy. The vote was on first reading and the board is scheduled to take up the issue again in April.

Many teachers opposed the changes because they were concerned that flawed scores could cause qualified teachers to mistakenly lose their licenses.

Despite the board's new position, the Tennessee Education Association, the state's largest teachers' union, says it will still push a measure this legislative session that would prevent the state from taking teachers' licenses based on "any statistical estimate utilizing standardized test scores."

Miss. Senate OKs Adding 'In God We Trust' to Seal

The Mississippi Senate voted Friday to add "In God We Trust" to the state seal, as requested by Republican Gov. Phil Bryant.

Currently, it has an eagle and the words, "The Great Seal of the State of Mississippi" without a slogan.

Senate Bill 2681 passed the Senate 48-0, with four senators absent. It moves to the House for more work.

The bill is called the "Mississippi Religious Freedom Restoration Act," and it says government may not burden a person's right to practice religion.

Its chief sponsor is Republican Sen. Phillip Gandy, who is minister of Liberty Baptist Church in Waynesboro. Gandy said he has heard no examples of Mississippi government trying to limit religion, but he has talked to some conservative Christians – particularly Pentecostals and Baptists – who are concerned.

"Times are changing, and Christians are afraid of a lot of different things. And some of that is reality, possibly, and some is perception. But we want to do what we can," Gandy told The Associated Press after the bill passed.

Some senators, including Democrat David Jordan of Greenwood, pointed out during the debate that the U.S. Constitution already guarantees freedom of religion.

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 90 90 9,968
MORTGAGES 90 90 12,965
FORECLOSURE NOTICES 35 35 2,573
BUILDING PERMITS 154 154 23,678
BANKRUPTCIES 70 70 9,603
BUSINESS LICENSES 9 9 3,612
UTILITY CONNECTIONS 161 161 14,124
MARRIAGE LICENSES 24 24 3,087

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