Hartford Business Journal

6 Hartford Business Journal • October 17, 2016 www.HartfordBusiness.com TOP STORY CT Children's, Yale New Haven in talks to create regional pediatric-care system Connecticut Children's Medical Center last week announced it has agreed to discuss a partnership with Yale New Haven Hospital to create a new Con- necticut and regional system of pediatric care. In a written statement, the Hartford-based care provider said its "talks are at an early stage and are ongoing," and that both Connecticut Children's and Yale have a vision to build a pediatric-care system that has national prominence. The talks come at a time when hospital mergers have become the norm in Connecticut, as care providers adapt to changing payment systems and pressures to improve care quality while also lowering costs. In a January interview with the Hartford Business Journal, Connecticut Children's CEO James Shmerling acknowledged the financial hurdles his hospital needed to overcome. One of the hospital's biggest challenges is that more than half of its pa- tients are on Medicaid, which doesn't fully cover actual costs. In fiscal 2015, however, Connecticut Children's reported a $23.6 million operating surplus. ECONOMY & LABOR Survey: Businesses cultivating patience for CT economy Nearly half of Connecticut business leaders expect stable conditions for their firms over the next quarter, a new economic survey from the Connecticut Busi- ness and Industry Association has found. The 2016 CBIA/Farmington Bank 2nd Quarter Economic and Credit Avail- ability Survey reports that 49 percent of companies expect conditions to remain unchanged in the short term compared with the previous quarter. Just over one-third — 35 percent — said conditions would improve, a 5 percent increase from the first quarter survey, while 17 percent expect their firm's outlook to worsen, a 2 percent decrease. The same holds true roughly for workforce predictions, with 53 percent of company leaders expecting no change. About 32 percent say their workforces will grow, while 14 percent expect to cut positions. Report: CT households still struggling to make ends meet More than one in four individuals in Connecticut households work while earn- ing less than what is needed to thrive financially, according to the latest United Way ALICE Report. Two years ago, United Way introduced ALICE, which stands for — Asset Lim- ited Income Constrained Employed — to place a spotlight on a large population of residents in Connecticut, a wealthier state, who are working, but have dif- ficulty affording the basic necessities. ALICE and poverty households combined account for 38 percent of house- holds in the state that struggle to make ends meet. A total of 361,521 Con- necticut households fall into what the study describes as the ALICE population. These households earn more than the official U.S. poverty level, but less than the basic cost of living. This is more than 2.5 times the number of households that fall below the federal poverty level. MANUFACTURING Stanley Black & Decker to buy Newell Tools for nearly $2B New Britain's Stanley Black & Decker is acquiring Newell Tools and its Irwin and Lenox brands for approximately $1.95 billion, the companies announced. In his first big move since becoming Stanley's new president and CEO this summer, Jim Loree said the deal represents the company's first major acquisi- tion since 2013. Newell Tools is a large manufacturer of hand tools and accessories, with approxi- mately $760 million in revenues and more than 2,500 employees, Loree said. The business and its brands will complement Stanley's global tools and storage business under Senior Vice President and Group Executive Jeff Ansell's leadership, Loree said. The acquisition fits into the company's growth strategy, said Loree, which is to "leverage our scale and scope in terms of our manufacturing processes, our culture of innovation and our relationships with our key customers. … We are charting a course toward doubling the size of the company by 2022." The transaction is expected to close in the first half of 2017, pending regula- tory approvals. ENERGY & UTILITIES Avon Water Co. to join CT Water Service in $32M deal The Avon Water Co. and Connecticut Water Service Inc. have reached an agree- ment to join forces, in a deal expected to close in April 2017, the firms announced. Connecticut Water is a parent holding company based in Clinton and con- ducts its regulated water operations in Connecticut and Maine through its oper- ating subsidiaries, The Connecticut Water Co. and The Maine Water Co. Avon Water serves about 4,800 customers in the Farmington Valley com- munities of Avon, Farmington and Simsbury, and is located near Connecticut Water's existing operations in Avon and Farmington. The agreement provides for the payment of stock consideration valued at approximately $26.2 million and a cash payment of $6.2 million for a total pay- ment to shareholders of $32.4 million. The deal requires approval by sharehold- ers and regulators in Connecticut and Maine. INSURANCE Aetna to limit telework, cut back workforce Hartford health insurer Aetna has informed employees it will cut back on a long-standing practice of allowing telework, offer voluntary early retirement and reduce part of its workforce focused on state healthcare exchanges. Aetna is in the midst of seeking to acquire Humana, a combination the U.S. Department of Justice is challenging, and has recently indicated it will pull out of Obamacare exchanges in some states. Aetna has offered telework, which allows flexible hours working outside of the office, since at least 2005. Aetna spokesman Matt Clyburn said that despite priding itself on being a leader in telework, "Our goal is to figure out how we can work together in the best way. Any changes involve how we can innovate and work toward contin- ued growth." Aetna is also offering voluntary early retirements and eliminating 800 jobs no longer needed to support participation in state healthcare exchanges. Windsor insurer merging with Penn Mutual Horsham, Pa.-based Penn Mutual Life Insurance Co. is combining with Wind- sor's Vantis Life Insurance Co., while retaining their respective brands, manage- ment teams and headquarters. The deal is expected to expand Penn Mutual's presence in the industry by lever- aging Vantis Life's bank-focused distribution model. Vantis Life will become a whol- ly-owned affiliate of Penn Mutual, a Pennsylvania mutual life insurer since 1847. The deal, which is contingent upon regulatory approval, allows Penn Mutual to expand the reach of its life insurance and annuity products through Vantis Life's direct-to-consumer and bank channels, complementing the adviser net- work that already does business with Penn Mutual. BY THE NUMBERS $68.3M The amount of annual revenue the state of Connecticut is projected to lose once Springfield's MGM Casino opens in the fall of 2018. 38% The percentage of the 361,521 Connecticut households that earn less than the basic cost of living, according to the latest United Way ALICE Report. $133M The budget deficit that state budget director Ben Barnes projected in a Sept. 6 memo to agency heads asking them to keep their spending requests lean, according to the CT Mirror. 35% The percentage of the 117 Connecticut businesses recently surveyed by the Connecticut Business and Industry Association that said they predict economic conditions in the state will improve in the short term. TOP 5 MOST READ on HartfordBusiness.com ■ UTC reducing pension obligations by $1.77B ■ OFA: MGM casino impact on CT revenues likely to increase ■ Report: Rocky Hill shows strongest economic growth in region ■ Henkel bringing Arizona operations to CT ■ Moody's downgrades Hartford's debt rating STAY CONNECTED For breaking and daily Greater Hartford business news go to www.HartfordBusiness.com. HBJ on Twitter: @HartfordBiz HBJ on Facebook: www.facebook.com/HartfordBiz HBJ on LinkedIn: www.linkedin.com/company/ the-Hartford-Business-Journal Daily e-newsletters: HBJ Today, CT Morning Blend www.HartfordBusiness.com/subscribe Weekly e-newsletters: CT Green Guide Weekly, CT Health Care Weekly www.HartfordBusiness.com/subscribe WEEK IN REVIEW James Shmerling, CEO, Connecticut Children's Medical Center P H O T O | H B J F I L E

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