-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JXYTUq/5Ho9N0ascrRn0bV7YNX0Y04MHNDx55SpvMpuhf0/RV69/NZiXeqO6eFNK SS2j8bvuQIAmvU5jPKJd5A== /in/edgar/work/20000706/0000950129-00-003594/0000950129-00-003594.txt : 20000920 0000950129-00-003594.hdr.sgml : 20000920 ACCESSION NUMBER: 0000950129-00-003594 CONFORMED SUBMISSION TYPE: 425 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20000706 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CIRCLE INTERNATIONAL GROUP INC /DE/ CENTRAL INDEX KEY: 0000045674 STANDARD INDUSTRIAL CLASSIFICATION: [4731 ] IRS NUMBER: 941740320 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 425 SEC ACT: SEC FILE NUMBER: 000-08664 FILM NUMBER: 668515 BUSINESS ADDRESS: STREET 1: 260 TOWNSEND ST CITY: SAN FRANCISCO STATE: CA ZIP: 94107 BUSINESS PHONE: 4159780600 MAIL ADDRESS: STREET 1: 260 TOWNSEND ST CITY: SAN FRANCISCO STATE: CA ZIP: 94107 FORMER COMPANY: FORMER CONFORMED NAME: HARPER GROUP INC /DE/ DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: EGL INC CENTRAL INDEX KEY: 0001001718 STANDARD INDUSTRIAL CLASSIFICATION: [4731 ] IRS NUMBER: 760094895 STATE OF INCORPORATION: TX FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 425 BUSINESS ADDRESS: STREET 1: 15340 VICKERY DR CITY: HOUSTON STATE: TX ZIP: 77032 BUSINESS PHONE: 281-618-34 MAIL ADDRESS: STREET 1: 15350 VICKERY DR STREET 2: SUITE 510 CITY: HOUSTON STATE: TX ZIP: 77032 FORMER COMPANY: FORMER CONFORMED NAME: EAGLE USA AIRFREIGHT INC DATE OF NAME CHANGE: 19951002 425 1 e425.txt EGL, INC. FOR CIRCLE INTERNATIONAL GROUP, INC. 1 Filed by: EGL, Inc. Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 of the Securities Exchange Act of 1934 Subject Company: Circle International Group, Inc. Commission File No.: 000-08664 Subject Company: EGL, Inc. Commission File No.: 000-27288 [EGL LOGO] [CIRCLE LOGO] 1 2 FORWARD LOOKING STATEMENT AND INVESTOR NOTICE - -------------------------------------------------------------------------------- The statements made in or in connection with this presentation regarding the expected date of closing of the merger, future financial and operating results, target growth rates, benefits of the merger, tax and accounting treatment of the merger, future opportunities, synergies, savings and any other effect, result or aspect of the proposed transaction and any other statements, which are not historical facts, are forward looking statements. Such statements involve risks and uncertainties, including, but not limited to, costs and difficulties related to the integration of acquired businesses, costs, delays, and any other difficulties related to the merger, failure of the parties to satisfy closing conditions, risks and effects of legal and administrative proceedings and governmental regulation, future financial and operational results, competition, general economic conditions, ability to manage and continue growth, risks of international operations and other factors detailed in EGL's and Circle's Forms 10-K and other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. EGL plans to file with the Securities and Exchange Commission ("SEC") a registration statement on Form S-4. In the connection with the merger, EGL and Circle expect to mail a joint proxy statement/prospectus, which will be part of the registration statement, to shareholders of EGL and Circle containing information about the merger. Shareholders of EGL and Circle are urged to read the joint proxy statement/prospectus included in the registration statements when it is filed and any other relevant documents filed with the SEC. The joint proxy statement/prospectus will contain important information about EGL, Circle, the merger, the persons soliciting proxies related to the merger, and related matters that should be considered by shareholders before making any decision regarding the merger and related transactions. Once they are filed with the SEC, the registration statement, joint proxy statement prospectus and other documents will be available free of charge on the SEC's web site at http://sec.gov and from EGL and Circle. In addition to the registration statement and the joint proxy statement/prospectus, EGL and Circle file annual, quarterly and special reports, proxy statements and other information with the SEC that are also available free of charge at the SEC's web site and from EGL and Circle. In addition, the identity of the people who, under SEC rules, may be considered "participants in the solicitation" of EGL shareholders and Circle shareholders in connection with the proposed merger, and any description of their interests, is available in an SEC filing under Schedule 14A made by both EGL and Circle on July 3, 2000. [EGL LOGO] 2 3 [EGL LOGO] [CIRCLE LOGO] EGL, INC. AND CIRCLE INTERNATIONAL, INC. JULY 2000 3 4 COMBINATION CREATES GLOBAL FREIGHT LEADER - -------------------------------------------------------------------------------- o CREATES THE LEADING GLOBAL HEAVYWEIGHT EXPEDITED FREIGHT AND LOGISTICS COMPANY o TREMENDOUS VALUE PROPOSITION TO CUSTOMERS o COMBINES MARKETING STRENGTHS OF EGL WITH STRONG INTERNATIONAL OPERATING CAPABILITIES OF CIRCLE o BEST MANAGEMENT TEAM IN THE INDUSTRY o COMBINED COMPANY HAS CY 1999 $1.5 BILLION OF REVENUES AND $103 MILLION OF EBITDA o IMMEDIATELY ACCRETIVE TO EARNINGS o TARGETED EARNINGS GROWTH RATE IN THE MID-20'S [EGL LOGO] 4 5 TRANSACTION SUMMARY - -------------------------------------------------------------------------------- o STOCK-FOR-STOCK, TAX-FREE TRANSACTION o POOLING-OF-INTERESTS (NO GOODWILL) o EXCHANGE RATIO OF 1.00 EGL SHARE PER CIRCLE SHARE - PRO FORMA EQUITY SPLIT OF 63% EGL/ 37% CIRCLE o EXPECTED CLOSING DURING FALL 2000 FOLLOWING CUSTOMARY CONDITIONS INCLUDING SHAREHOLDER AND REGULATORY APPROVAL o P GIBERT JOINS EGL BOARD [EGL LOGO] 5 6 SNAPSHOT OF EGL, INC. - -------------------------------------------------------------------------------- o NON-ASSET BASED AIRFREIGHT FORWARDER WITH EXTENSIVE NETWORK IN NORTH AMERICA o OVER 400 LOCATIONS IN 60 COUNTRIES o FOCUS ON EXPEDITED DELIVERIES o PRINCIPAL SERVICES INCLUDE: - AIR FREIGHT FORWARDING - LOCAL PICKUP AND DELIVERY - AIR CHARTER SERVICES o $693 MILLION OF LTM REVENUES AND $58 MILLION OF EBITDA o 75+% OF BUSINESS IS DOMESTIC [EGL LOGO] 6 7 SNAPSHOT OF CIRCLE INTERNATIONAL, INC. - -------------------------------------------------------------------------------- o FOUNDED IN 1898 AS CUSTOMS BROKER o TODAY HAS OVER 4,900 EMPLOYEES WITH 300 OFFICES, AGENTS AND DISTRIBUTION CENTERS IN OVER 100 COUNTRIES o PRINCIPAL PRODUCTS AND SERVICES INCLUDE: - AIR AND OCEAN FORWARDING - INTERNATIONAL AND DOMESTIC - CUSTOMS BROKERAGE - LOGISTICS MANAGEMENT o $847 MILLION OF LTM REVENUES AND $47 MILLION OF LTM EBITDA o 90+% OF BUSINESS HAS INTERNATIONAL COMPONENT [EGL LOGO] 7 8 TRANSACTION RATIONALE - -------------------------------------------------------------------------------- o ONE-STOP GLOBAL LOGISTICS SOLUTION o COMBINES COMPLEMENTARY DOMESTIC AND INTERNATIONAL OPERATIONS o CROSS-SELLING OPPORTUNITIES TO BROADER BLUE-CHIP CUSTOMER BASE o SIGNIFICANT OPERATING EFFICIENCIES o LEVERAGE EGL'S ADVANCED INFORMATION SYSTEMS o COMBINED MARKET CAPITALIZATION OF OVER $1.4 BILLION* WITH SIGNIFICANT FLOAT o STRONG CASH FLOW AND BALANCE SHEET * Based on EGL stock price on June 30, 2000 [EGL LOGO] 8 9 COMPLEMENTARY ORGANIZATIONS - -------------------------------------------------------------------------------- o COMBINES EGL'S 78 DOMESTIC LOCATIONS WITH CIRCLE'S 245 INTERNATIONAL LOCATIONS o BLUE CHIP CUSTOMER LISTS WITH SURPRISINGLY LITTLE OVERLAP o JOINS EGL'S MARKETING STRENGTHS WITH CIRCLE'S INTERNATIONAL OPERATIONAL EXPERTISE o CIRCLE TO UTILIZE EGL'S DOMESTIC LINE-HAUL AND PICK-UP AND DELIVERY SYSTEMS o EGL ELIMINATES INTERNATIONAL AGENT PROFIT SPLIT [EGL LOGO] 9 10 COMBINED NETWORK COVERS THE WORLD - -------------------------------------------------------------------------------- 6 CONTINENTS - 60 COUNTRIES - OVER 400 LOCATIONS [MAP OF WORLD IDENTIFYING COUNTRIES WHERE EGL AND/OR CIRCLE ARE LOCATED AND THE NUMBER OF OFFICES IN EACH COUNTRY] Canada (8) Norway United States (70) Scotland Mexico (5) Netherlands Bermuda Sweden Jamaica Finland Dominican Republic Denmark Guatemala Ireland El Salvador United Kingdom (4) Honduras France Nicaragua Spain Costa Rica Portugal Virgin Islands Germany Netherlands Antilles Belgium Venezuela Switzerland Panama Austria Ecuador Italy Peru Greece Bolivia Cyprus Paraguay Egypt Brazil (3) South Africa Chile (3) Poland Argentina Czech Republic Uruguay Hungary Israel Kuwait United Arab Emirates Saudi Arabia Pakistan India Sri Lanka Korea China Japan Hong Kong Thailand Vietnam Malaysia Singapore Indonesia Taiwan Philippines Guam Australia New Zealand [EGL LOGO] 10 11 SCHEDULED AIR CARGO NETWORK - -------------------------------------------------------------------------------- [Map identifying U.S. cities where EGL and/or Circle have air cargo operations] [EGL LOGO] 11 12 NATIONWIDE TRUCKING NETWORK - -------------------------------------------------------------------------------- [Map identifying North American locations of trucking network] [EGL LOGO] 12 13 ENHANCED SERVICE OFFERING FOCUSED ON CUSTOMER - -------------------------------------------------------------------------------- o LOCAL PICK-UP AND DELIVERY o DOMESTIC EXPEDITED FREIGHT - UNIQUE AIR FREIGHT SYSTEM - COMPLEMENTARY NATIONWIDE GROUND NETWORK o INTERNATIONAL AIR FREIGHT o INTERNATIONAL OCEAN FREIGHT o CUSTOMS BROKERAGE o LOGISTICS SOLUTIONS o GLOBAL TRACKING AND TRACING GOAL: SEAMLESS WORLDWIDE NETWORK [EGL LOGO] 13 14 SIGNIFICANT OPPORTUNITIES FOR COST SAVINGS - --------------------------------------------------------------------------------
Anticipated Annual Savings ---------------------- $ millions 2001 2002 - ---------- ----- ------ Headquarters $ 6.5 $ 14.0 US Field Facilities $ 1.5 $ 2.0 Margin Recapture $ 2.0 $ 4.0 ----- ------ $10.0 $ 20.0 ===== ======
o COST SAVINGS OPPORTUNITIES INCLUDE: - CORPORATE OVERHEAD - SLIGHT DUPLICATION OF US LOCATIONS - MARGIN CAPTURE BY REDUCING USE OF AGENTS AND OUTSIDE CONTRACTORS o ESTIMATED $10 MILLION OF SAVINGS DURING 2001 o ESTIMATED $20+ MILLION OF ANNUAL SAVINGS AVAILABLE THEREAFTER [EGL LOGO] 14 15 DEEPENS MANAGEMENT TEAM - -------------------------------------------------------------------------------- o GOOD KNOWLEDGE LEVEL OF BOTH ORGANIZATIONS o NEW COMPANY WILL HAVE THE "BEST OF THE BEST" MANAGEMENT EXPERTISE - SENIOR MANAGEMENT - SALES AND MARKETING - OPERATIONS - IT SYSTEMS [EGL LOGO] 15 16 BROADENS BLUE CHIP ACCOUNT BASE - -------------------------------------------------------------------------------- EGL and Circle have very little overlap in their customer base
EGL EAGLE GLOBAL LOGISTICS CIRCLE INTERNATIONAL -------------------------- -------------------- Alcoa Fujikura Avon Cisco Bayer COMPAQ COMPAQ Continental Airlines Cummins Dayton Hudson Daimler Chrysler Dell General Electric General Motors Goodyear Harley-Davidson Honda Hasbro IBM Lucent Merck Merisel Plamex Nintendo Proctor & Gamble Nokia Smithkline Qualcom 3M United Technologies Visteon
[EGL LOGO] 16 17 CONSERVATIVE CAPITALIZATION POST-MERGER - -------------------------------------------------------------------------------- AS OF MARCH 31, 2000 (IN MILLIONS)
EGL CIRCLE COMBINED % --- ------ -------- ------ Cash & Equivalents $ 30.9 $ 69.3 $100.2 Total Debt $ 0.0 $ 50.5 $ 50.5 10.7% Minority Interest 0.3 9.9 10.2 2.2 Common Equity 166.9 246.3 413.2 87.2 ------ ------ ------ ----- Total Capitalization $167.2 $306.7 $473.9 100.0% ====== ====== ====== =====
[EGL LOGO] 17 18 COMBINED INCOME STATEMENT - AS REPORTED - -------------------------------------------------------------------------------- LTM ENDED MARCH 31, 2000 (IN MILLIONS)
EGL CIRCLE COMBINED(1) --------- --------- ----------- Revenues $ 692.7 $ 874.4 $ 1,540.1 Gross Profit 289.0 340.4 629.4 % Margin 41.7% 40.2% 40.9% EBITDA 57.8 46.5 104.3 % Margin 8.3% 5.5% 6.8% Operating Income 50.5 29.5 80.0 % Margin 7.3% 3.5% 5.2% Net Income 31.8 24.7 56.5 % Margin 4.6% 2.9% 3.7% --------- --------- ----------- EPS $ 1.03 $ 1.42 $ 1.16 Accretion % 12.6%
(1) COMBINED RESULTS ARE SHOWN EXCLUSIVE OF ANY COST SYNERGIES OR TRANSACTION OR RESTRUCTURING CHARGES. COMBINED RESULTS ARE NOT NECESSARILY INDICATIVE OF ACTUAL RESULTS. 18 19 INTEGRATION STRATEGY - -------------------------------------------------------------------------------- o DEDICATED INTEGRATION TEAM TO BE FORMED, LED BY K. WERTHEIMER, AND INCLUDING MEMBERS FROM EGL AND CIRCLE o INCENTIVE PROGRAMS DEVELOPED TO RETAIN ALL KEY PERSONNEL o US OPERATIONS TO BE MIGRATED TO PROVEN EGL WORLDPORT SYSTEM o INTERNATIONAL OPERATIONS TO BE MIGRATED TO EGL DEVELOPED TALON SYSTEM THAT WILL INCLUDE INTERCOMPANY AUTOMATED SETTLEMENT PROCESS [EGL LOGO] 19 20 ADVANCED TECHNOLOGY WITH A COMPETITIVE EDGE - -------------------------------------------------------------------------------- ALL INFORMATION SERVICES AND OPERATING TECHNOLOGY INTERNET ENABLED o EAGLE ADVISOR o TALON o DIGITAL IMAGING o EAGLE SCAN o WWW.EAGLEUSA.COM o EAGLE'S NEST o WORLDPORT o EAGLE SHIP THE RESULT: MAXIMUM PRODUCTIVITY / CONNECTIVITY / COMPETITIVENESS FOR EAGLE AND OUR CUSTOMERS [EGL LOGO] 20 21 IT ORGANIZATION - -------------------------------------------------------------------------------- WILL HAVE ARGUABLY THE BEST IT MANAGEMENT TEAM IN THE INDUSTRY: o DAN DIGREGORIO, CTO o BOB TOWLE, VP MIS o CYNTHIA STODDARD, CIO - WILL BE RETAINED FOR AN EXTENDED PERIOD o ANTONIO MARIN, SVP MIS - RECENT RECRUIT FROM RELIANT ENERGY WITH SUBSTANTIAL INTERNATIONAL MIS EXPERIENCE IN DEPLOYING SYSTEMS o CLIVE HUCKINS, VP MIS - RECENT RECRUIT FROM BRITISH AIRWAYS WITH SUBSTANTIAL EXPERIENCE IN DEVELOPING LARGE SYSTEMS [EGL LOGO] 21 22 WHY WILL THIS MERGER WORK WHEN OTHERS HAVE NOT? - -------------------------------------------------------------------------------- o NEEDS MET: MANAGEMENT TEAM, INTERNATIONAL INFRASTRUCTURE o EXCELLENT STRATEGIC FIT WITH MINIMAL OVERLAP: OPERATIONALLY STRONG INTERNATIONAL CIRCLE WITH SALES DRIVEN DOMESTIC EAGLE o EAGLE HAS THE IT SYSTEMS TO MIGRATE TOWARD SO EVERYONE IS ON THE SAME PLATFORM o WE KNOW EACH OTHER o TREMENDOUS OPPORTUNITY FOR COST AND MARGIN SYNERGIES [EGL LOGO] 22 23 CLOSING POINTS . . . - -------------------------------------------------------------------------------- o MAKES EAGLE LESS RELIANT ON US ECONOMY & CREATES A VERY COST EFFECTIVE ORGANIZATION o OPPORTUNITY TO ENGAGE EAGLE SALES ORGANIZATION WITH CIRCLE INTERNATIONAL OPERATIONS o REDUCES RISK OF EAGLE'S INTERNATIONAL EXPANSION PLANS AND OF CIRCLE MANAGEMENT CHANGE o COMPANY CAN GENERATE VERY HEALTHY LEVEL OF CASH FLOW WITH A VERY STRONG BALANCE SHEET o MOVE FROM SMALL CAP TO MID-CAP WITH IMPROVED FLOAT DOES NOT CHANGE THE MODEL THAT HAS PROVEN SO SUCCESSFUL - NON-ASSET BASED [EGL LOGO] 23 24 [EGL LOGO] [CIRCLE LOGO] 24 -----END PRIVACY-ENHANCED MESSAGE-----