BIGGEST MERGERS & ACQUISITIONS

Buyer: America Online Inc. (Dulles)
Seller: Mirabilis Ltd. (Tel Aviv, Israel)
Deal: $407 million

America Online, the cyberspace giant headquartered near Washington Dulles International Airport, snatched up one of the web world's hottest commodities when it acquired 2-year-old Mirabilis. The Israeli company's ICQ "chat" software allows users to transmit text messages, files, even audio and video signals as fast as the Internet can carry them. AOL says about 4.6 million people a day use the software.

ICQ is notoriously easy to use and resides in the "background" of the user's PC environment, meaning that other programs can run easily while ICQ waits for incoming messages. Its idiot-proof operation has led to unprecedented popularity for this kind of software.

But Mark Minasi, a Chesapeake writer and Internet analyst who has authored 15 computer books, wonders whether ICQ's quality might be of only secondary interest to AOL.

"AOL already had this stuff [chat software], so what exactly are they getting out of it? ... First of all, if you get ICQ, you need a personal ICQ number, which is yours and yours only," Minasi says. These numbers are maintained on a computer somewhere, and a company like AOL can turn a central registry of users into a marketing bonanza. Minasi suspects it's also the Microsoft approach. "If you own everything, buy up all the competition, eventually you have a large enough market share that you can turn around and start changing the rules."

So was the purchase worth the $407 million price tag? Rick Maurer, an Arlington-based management consultant, says he wouldn't bet against AOL. "AOL has been really savvy in how it positions itself," Maurer says. "A few years back, everyone was looking at the growth of the web and saying, 'They're gonna be out of business.' But look where they are now."

AOL is now preparing to finalize what could be the Stalingrad of on-line industry deals -- its proposed $4.2 billion acquisition of Netscape.

Players: Assisting in the deal were Morgan Stanley Dean Witter as financial adviser, accountant Ernst & Young, with auditing of ICQ usage statistics by Coopers & Lybrand.

Buyer: General Dynamics Corp. (Falls Church)
Seller: Nassco Holdings Inc. (San Diego, Calif.)
Deal: $370 million

Details: The Navy gets its major vessels -- that is, anything more menacing than a minesweeper -- from just six private U.S. shipyards. Defense behemoth General Dynamics has now secured three of those: Maine's Bath Iron Works, Connecticut's Electric Boat, and Nassco. Nassco's shipyard produces auxiliary ships -- the one aspect of defense shipbuilding over which General Dynamics lacked control, except for the nuclear aircraft carrier capability that resides only at Newport News, says Ronald O'Rourke, a naval research specialist at the Library of Congress' think tank, the Congressional Research Service. And with the proposed merger between Newport News and Avondale, it would appear that consolidation has spread.

O'Rourke says he's "not particularly surprised to see a merger among the three [yards] outside the General Dynamics group." The Nassco deal gave them an incentive to go back and examine their business strategy. For Nassco, being absorbed by General Dynamics gives it a way to avoid the "dire consequences" that face specialized defense companies as Pentagon spending follows a long-term trend downward.

Players: Assisting in the deal were Houlihan Lokey Howard & Zukin and PaineWebber. Legal counsel came from Jenner & Block and Latham & Watkins. The accountant was Arthur Andersen, and the trustee was Wells Fargo Bank.

Buyer: Global TeleSystems Group Inc. (McLean)
Seller: NetSource Europe ASA (Kristiansand, Norway)
Deal: $249.7 million

Details: "This is our opening salvo," says Robert Capozzi. Global's vice president of investor relations and corporate communications says the company has business services in Western Europe squarely in its sights. NetSource's presence spans eight Western European countries, and it is "a fast-growing company with ... a back-office strength we found appealing," Capozzi says. Global's more recently announced proposed merger with Esprit is similar, but Esprit is "much larger and more developed."

Players: Financial advisers were Lehman Brothers, legal counsel came from Simpson, Thatcher & Bartlett, and Ernst & Young was the accountant.

Buyer: Huntsman Packaging Corp. (Salt Lake City, Utah)
Seller: Blessings Corp. (Newport News)
Deal: $212.7 million

Details: Blessings is a leading producer and converter of polyethylene and polypropylene films, diapers, feminine hygiene products, hospital supplies and more. Huntsman, which boasts of producing hundreds of millions of pounds of film and flexible packaging annually, announced that it acquired Blessings to broaden what products it can offer and how it can produce them.

Buyer: Richfood Holdings Inc. (Mechanicsville)
Seller: Dart Group Corp. (Landover, Md.)
Deal: $193.3 million

Details: Richfood, the largest company of its kind in the mid-Atlantic, wanted more grocery retail strength, so it acquired Dart, the owner of 37 Shopper's Food Warehouse stores in the Washington metropolitan area. But Dart, a diversified retailer, came with extras: Crown Books, Trak Auto and Total Beverage. From the get-go, Richfood made clear its intention to divest the "non-core" businesses under the Dart umbrella, and has already sold Total Beverage, a chain of beer, wine and soda superstores. The other two business units are still on the market.

Players: Financial advisers were Donaldson, Lufkin & Jenrette for Richfood and Wasserstein Perella Group for Dart. Legal advisers were Hunton & Williams for Richfood and Morris, Nichols, Arsht & Tunnell for Dart. The accountant was Arthur Andersen.

Buyer: Hagler Bailly Inc. (Arlington)
Seller: Putnam Hayes & Bartlett Inc. (Cambridge, Mass.)
Deal: $135.3 million

Details: Henri-Claude Bailly's ambitions for his management consulting firm are impressive: 400 percent growth within six years. But the president and CEO also wants to make sure that Hagler Bailly commands respect for its skills and expertise and attracts the best new talent to its ranks. The merger with Putnam is a key step on that path, Bailly says. Hagler Bailly is now the largest management consulting firm that deals exclusively with the energy industry.

Players: Financial advisers were Donaldson, Lufkin & Jenrette. The accounting firm was Ernst & Young.

Buyer: Primus Telecommunications Group Inc. (McLean)
Seller: TresCom International Inc. (Fort Lauderdale, Fla.)
Deal: $132.4 million

Details: Thanks in large part to TresCom, which focuses on international long-distance traffic originating in the United States and terminating in the Caribbean and Central and South America, Primus saw its 1998 third-quarter net revenue increase 59 percent from the same period in 1997, according to Securities and Exchange Commission filings. Standard & Poor's, however, sees a risk in such a large expansion: "TresCom's wholesale customer base included a low-margin, high-credit-risk segment that has since been pruned back."

Players: Assisting in the deal were BT Alex. Brown, Wolfensohn and Robinson-Humphrey. Accountants were Deloitte & Touche for Primus and Ernst & Young for TresCom.

Buyer: Dominion Resources Inc. (Richmond)
Seller: Archer Resources Ltd. (Calgary, Alberta)
Deal: $119 million

Details: With this acquisition Dominion Resources, parent company of Virginia Power, expanded into Canada and increased its natural gas production capability by about 50 percent. Archer's name was changed to Dominion Energy Canada Ltd.

Players: Financial advisers were Lehman Brothers, legal counsel came from Baker & Botts. Lehman Brothers, Lehman Brothers Canada and CIBC Wood Gundy Securities managed the deal.

Buyer: RCN Corp. (Princeton, N.J.)
Seller: Erol's Internet Inc. (Springfield)
Deal: $83.5 million

Details: RCN is a new, regional player in the "bundling" craze, in which electronic services are packaged and sold together. The purchase of Erol's and the accounts of its 293,000 subscribers strengthens the Internet service portion of RCN's bundle. With a large new captive audience stretching from Washington to Boston, RCN can now directly market local phone service and a soon-to-come 110-channel cable TV package, all through a joint venture with a Pepco subsidiary.

Players: Assisting in the deal were Davis Polk & Wardwell of New York and Venable, Baetjer & Howard of McLean.

Buyer: One Valley Bancorp Inc. (Charleston, W.Va.)
Seller: Summit Bankshares Inc. (Raphine)
Deal: $61.5 million stock swap

Details: The Charleston bank holding company One Valley notes that with the purchase of Summit, holding company for the Bank of Rockbridge, One Valley adds nine locations, making it the eighth-largest bank in the state. One Valley began its move into Virginia in 1996 and had accumulated 37 branches in western Virginia and in the Shenandoah Valley before the Summit deal.

Players: Ernst & Young was the accountant on the project.

This report was compiled by Robert Greiner with assistance from Houlian Lokey's Mergerstat.