0000950112-95-002474.txt : 19950926 0000950112-95-002474.hdr.sgml : 19950926 ACCESSION NUMBER: 0000950112-95-002474 CONFORMED SUBMISSION TYPE: SC 13E3/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19950922 SROS: NASD GROUP MEMBERS: COBE LABORATORIES INC GROUP MEMBERS: GAMBRO AB GROUP MEMBERS: INCENTIVE AB GROUP MEMBERS: REN ACQUISITION-USA SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: REN CORP USA CENTRAL INDEX KEY: 0000840491 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SPECIALTY OUTPATIENT FACILITIES, NEC [8093] IRS NUMBER: 621323090 STATE OF INCORPORATION: TN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13E3/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-40674 FILM NUMBER: 95575605 BUSINESS ADDRESS: STREET 1: 6820 CHARLOTTE PIKE CITY: NASHVILLE STATE: TN ZIP: 37209 BUSINESS PHONE: 6153534200 MAIL ADDRESS: STREET 1: 6820 CHARLOTTE PIKE CITY: NASHVILLE STATE: TN ZIP: 37209 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: COBE LABORATORIES INC CENTRAL INDEX KEY: 0000021310 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 952403584 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13E3/A BUSINESS ADDRESS: STREET 1: 12600 W COLFAX AVE STE 500C CITY: LAKEWOOD STATE: CO ZIP: 80215 BUSINESS PHONE: 3032326800 SC 13E3/A 1 REN ACQUISITION CORP. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Schedule 13E-3 Rule 13e-3 Transaction Statement (Amendment No. 1) (Pursuant to Section 13(e) of the Securities Exchange Act of 1934 and Rule 13e-3 (Sec. 240.13e-3) thereunder) REN Corporation-USA (Name of the Issuer) REN Corporation-USA REN Acquisition Corp. (Bidder) COBE Laboratories, Inc. Gambro AB Incentive AB (Name of Person(s) Filing Statement) Common Stock, no par value (Title of Class of Securities) 7596561010 (CUSIP Number of Class of Securities) Mats Wahlstrom Ralph Z. Levy, Jr. COBE Laboratories, Inc. REN Corporation-USA 1185 Oak Street 6820 Charlotte Pike Lakewood, Colorado 80215 Nashville, Tennessee 37209 Telephone: (303) 232-6800 Telephone: (615) 353-4200 (Name, Address and Telephone Number of Person(s) Authorized to Receive Notices and Communications on Behalf of Person(s) Filing Statement) With copies to: Peter D. Lyons, Esq. Scott J. Davis, Esq. Shearman & Sterling Mayer, Brown & Platt 599 Lexington Avenue 190 South LaSalle Street New York, New York 10022 Chicago, Illinois 60603-3441 Telephone: (212) 848-4000 Telephone: (312) 782-0600 This statement is filed in connection with (check the appropriate box). a. [X] The filing of solicitation materials or an information statement subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the Securities Exchange Act of 1934. b. [ ] The filing of a registration statement under the Securities Act of 1933. c. [X] A tender offer. d. [ ] None of the above. Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: [X] CALCULATION OF FILING FEE Transaction Valuation Amount of filing fee $184,011,639.50* $36,802.33** * The Transaction Value is calculated by multiplying $20.00, the per share tender offer price, by 9,544,838, the sum of the number of shares of Common Stock outstanding not already owned by the Bidder and 629,225, the sum of the number of shares of Common Stock subject to options and warrants outstanding as of September 12, 1995 and the number of shares of Common Stock subject to an employee stock purchase program outstanding as of September 30, 1995, and backing out the exercise price of the options and warrants. ** 1/50 of 1% of Transaction Value. [X] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. Amount Previously Paid: $36,802.33 Form or Registration No: Schedule 14D-1/13D (Amendment No. 11) Filing Party: Gambro AB, Incentive AB, COBE Laboratories, Inc. and REN Acquisition Corp. Date Filed: September 19, 1995 Page 1 of 9 Pages Exhibit Index is located on Page 9. INTRODUCTION This Amendment No. 1 to the Rule 13e-3 Transaction Statement on Schedule 13E-3 filed with the Securities and Exchange Commission (the "Commission") on September 22, 1995 (as amended the "Schedule 13E-3") is being filed by REN Acquisition Corp., a Tennessee corporation ("Purchaser"), COBE Laboratories, Inc., a Colorado corporation ("COBE"), Gambro AB, a Swedish corporation ("Gambro"), Incentive AB, a Swedish corporation ("Incentive"), and REN Corporation-USA, a Tennessee corporation (the "Company"), pursuant to Section 13(e) of the Securities Exchange Act of 1934, as amended, and Rule 13e-3 thereunder in connection with the tender offer by Purchaser for all the outstanding shares of common stock, no par value (the "Shares"), of the Company not already beneficially owned by Purchaser or any of its affiliates, upon the terms and subject to the conditions set forth in the Offer to Purchase dated September 12, 1995 (the "Offer to Purchase") and the related Letter of Transmittal (which together constitute the "Offer"), copies of which were filed as Exhibits (d)(1) and (d)(2), respectively, to the Rule 13e-3 Transaction Statement on Schedule 13E-3 filed with the Commission on September 19, 1995. Purchaser is a direct wholly owned subsidiary of COBE, COBE is an indirect wholly owned subsidiary of Gambro and Incentive owns 58% of the voting securities of Gambro. Page 2 of 9 Pages Item 17. Material to be Filed as Exhibits. Item 17 is hereby amended and supplemented as follows: (b)(4) Presentation of Alex. Brown & Sons Incorporated, dated September 12, 1995. Page 3 of 9 Pages SIGNATURES After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: September 22, 1995 REN ACQUISITION CORP. By: /s/ Ralph Z. Levy, Jr. -------------------------------------- Name: Ralph Z. Levy, Jr. Title: Vice President Page 4 of 9 Pages SIGNATURES After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: September 22, 1995 COBE LABORATORIES, INC. By: /s/ Herbert S. Lawson -------------------------------------- Name: Herbert S. Lawson Title: Chief Financial Officer Page 5 of 9 Pages SIGNATURES After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: September 22, 1995 GAMBRO AB By: /s/ Berthold Lindqvist -------------------------------------- Name: Berthold Lindqvist Title: President Page 6 of 9 Pages SIGNATURES After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: September 22, 1995 INCENTIVE AB By: /s/ Mikael Lilius -------------------------------------- Name: Mikael Lilius Title: President Page 7 of 9 Pages SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: September 22, 1995 REN CORPORATION-USA By: /s/ Lawrence J. Centella -------------------------------------- Name: Lawrence J. Centella Title: President and Chief Financial Officer Page 8 of 9 Pages
EXHIBIT INDEX Sequentially Exhibit Numbered No. Description Page ------- ----------- -------------- (b)(4) Presenation of Alex. Brown & Sons Incorporated, dated September 12, 1995.
Page 9 of 9 Pages EX-99.(B)(4) 2 PROJECT FOREST Exhibits in Support of Fairness Opinion to The Special Committee of the Board of Directors of PINE ------------------------- ALEX. BROWN & SONS INCORPORATED September 12, 1995 ------------------------- PROJECT FOREST --------------------------------------------------------------------------- The information contained in this memorandum was obtained from PINE management and other sources that we believe to be reliable, but has not been independently verified. This memorandum has been prepared for the use of the Special Committee of the Board of Directors only. It is confidential and may not be disclosed or provided to any third parties without the written permission of Alex. Brown & Sons Incorporated. This memorandum is prepared as of September 12, 1995 and reflects information made available to us prior to such date. It does not include information regarding all of the assessments made by Alex. Brown in arriving at its conclusions. PROJECT FOREST Table of Contents
Tab --- SUMMARY OF THE PROPOSED TRANSACTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ----------------------------------- ANALYSIS OF PINE ---------------- - Common Stock Price and Volume History . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 - Comparison with Selected Publicly Traded Companies . . . . . . . . . . . . . . . . . . . . 3 PINE VALUATION ANALYSIS ----------------------- - Valuation Based on Selected Publicly Traded Companies . . . . . . . . . . . . . . . . . . . 4 - Valuation Based on Recent Alternate Site Mergers and Acquisitions . . . . . . . . . . . . . 5 - Valuation Based on Premiums Paid in Recent Squeeze-Out Transactions . . . . . . . . . . . . 6 - Discounted Cash Flow Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 BACKGROUND INFORMATION ---------------------- - PINE Historical and Projected Financial Information . . . . . . . . . . . . . . . . . . . . 8 - Selected Publicly Traded Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 - Recent Alternate Site Merger and Acquisition Transactions . . . . . . . . . . . . . . . . . 10 - Premiums Paid in Recent Squeeze-Out Transactions . . . . . . . . . . . . . . . . . . . . . 11 - PINE Ownership Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 - Analysis of Historical ASPEN Investments in PINE . . . . . . . . . . . . . . . . . . . . . 13
PROJECT FOREST Summary of the Proposed Transaction (in thousands, except per share data) ---------------------------------------------------------------------------------------------- - Valuation: ---------- ------------------------------------------------------- Price per Share $20.00 ------------------------------------------------------- Common Shares Outstanding 18,921 Options & Warrants 597 ----------- Total Shares Outstanding 19,518 ----------- Aggregate Equity Value $390,355 less: Option Proceeds 6,604 ------------ ------------------------------------------------------- Implied Equity Purchase Price $383,751 ------------------------------------------------------- plus: Net Debt 6,269 ------------ ------------------------------------------------------- Adjusted Purchase Price $390,020 ------------------------------------------------------- Purchase Price - Multiples: PINE Multiples ---------- ------------ -------------- LTM Revenues (a) $151,422 2.6 x LTM EBITDA (a) 31,738 12.3 LTM EBIT (a) 20,059 19.4 LTM Net Income 11,455 33.5 Calendar 1995 EPS (Company) $0.68 29.4 Calendar 1995 EPS (I/B/E/S) 0.68 29.4 Calendar 1996 EPS (Company) 0.98 20.4 Calendar 1996 EPS (I/B/E/S) 0.88 22.7 - Premium to Market: Premium ------------------ -------------- One Day Prior to Announcement (07/13/95) $15.75 27.0 % One Month Prior Announcement (06/14/95) 14.75 35.6 Year High (b) (07/07/95 & 05/04/95) 16.63 20.3 Year Low (b) (07/15/94) 8.75 128.6 All-Time High (C) (07/07/95 & 05/04/95) 16.63 20.3 ---------------------------------------------------------------------------------------------- Note: LTM as of 06/30/95. (a) Multiples calculated using adjusted purchase price. (b) For the period 07/13/94 to 07/13/95. (c) For the period 11/28/89 to 07/13/95.
PROJECT FOREST PINE Weekly Price and Volume Data from 12/01/89 to 09/08/95 "PLOT POINTS FOR GRAPH TO BE SUPPLIED" PROJECT FOREST PINE Daily Price and Volume Data from 07/15/94 to 09/08/95 "PLOT POINTS FOR GRAPH TO BE SUPPLIED" PROJECT FOREST PINE Daily Price and Volume Data from 07/14/95 to 09/08/95 "PLOT POINTS FOR GRAPH TO BE SUPPLIED" PROJECT FOREST PINE Daily Price Data from 7/14/95 to 9/8/95 "PLOT POINTS FOR GRAPH TO BE SUPPLIED" PROJECT FOREST Weekly price data from 12/1/89 to 9/8/95 "PLOT POINTS FOR GRAPH TO BE SUPPLIED" PROJECT FOREST Weekly price data from 7/15/94 to 9/8/95 "PLOT POINTS FOR GRAPH TO BE SUPPLIED" PROJECT FOREST Summary Financial Comparison (a)
-------------------------------------------------------------------------------------------------- Renal Treatment PINE Centers, Inc. Vivra, Inc. ----------------------- -------------------- -------------- Street Company Street Street Estimate Estimate Estimate (b) Estimate ---------- ---------- --------------------- -------------- Revenue Growth: Q2'95 (A) 35.7 % --- 67.1 % 31.4 % 1995 (E) 22.5 26.9 % 40.6 22.1 1996 (E) 18.8 19.5 24.4 14.8 EPS Growth (c): Q2'95 (A) 67.7 % --- 87.5 % 16.7 % 1995 (E) 51.0 51.0 % 48.4 19.0 1996 (E) 29.4 43.3 27.0 16.2 3-5 Year Estimated 23.8 --- 26.7 17.9 EBITDA Margin: 1994 (A) 19.6 % --- 20.7 % 21.8 % 1995 (E) 22.9 21.7 % 23.1 21.8 (d) -------------------------------------------------------------------------------------------------- (a) All estimates are based on UBS Securities' research report "Dialysis Industry" dated May 11, 1995 unless otherwise noted. (b) Pro Forma for the March 1995 acquisition of Healthcare Corporation. (c) Estimates based on I/B/E/S consensus data. (d) Assumes depreciation and amortization are 4.0% of estimated revenue.
PROJECT FOREST Summary Valuation Comparison ------------------------------------------------------------------------------------------------------------------------ Renal Treatment PINE Centers, Inc. Vivra, Inc. --------- ------------------- -------------- Day Prior to Announcement: Stock Price as of 07/13/95 $15.75 $24.50 $27.88 1996 P/E (a) 17.5 x 15.7 x 13.9 x 1996 P/E to Growth Rate (b) 73.5 % 58.8 % 77.5 % % Change Since Announcement: Stock Price as of 09/08/95 $19.19 $31.88 $33.38 % Change Since Announcement 21.8 % 30.1 % 19.7 % 1996 P/E (c) 21.8 x 19.9 x 16.7 x % Change Since Announcement 24.6 % 26.8 % 20.2 % 1996 P/E to Growth Rate (b) 91.6 % 74.6 % 93.1 % ------------------------------------------------------------------------------------------------------------------------ (a) Based on I/B/E/S consensus EPS estimates of $0.90, $1.56 and $2.01 at July 1995 for PINE, Renal Treatment Centers, Inc. (RXTC) and Vivra, Inc. (V), respectively. (b) Based on I/B/E/S consensus growth rate estimates of 23.8%, 26.7% and 17.9% at July 1995 and 09/08/95 for PINE, RXTC and V, respectively. (c) Based on I/B/E/S consensus EPS estimates of $0.88, $1.60 and $2.00 at 09/08/95 for PINE, RXTC and V, respectively.
PROJECT FOREST PINE Valuation Analysis Based On Selected Publicly Traded Companies "PLOT POINTS FOR GRAPH TO BE SUPPLIED" PROJECT FOREST
PINE Valuation Analysis Based On Selected Publicly Traded Companies (dollars in thousands) ----------------------------------------------------------------------------------------------------------------------------- Prices and Estimates as of 09/08/95 ---------------------------------------- PINE Kidney Dialysis Selected Alternate Site ------------------ Company Multiples Company Multiples (a) Multiples ------------------- ---------------------------------- Statistics @ $20.00 RXTC V Mean Range ---------- -------- -------- -------- --------- -------------------- Valuation Based on Latest Twelve Month Statistics ------------------------------------------------- Revenues $151,422 2.6 x 3.0 x 2.3 x 2.7 x 1.4 x - 3.7 x Operating Cash Flow 31,738 12.3 x 13.2 x 10.9 x 10.6 x 8.9 x - 13.2 x Operating Income 20,059 19.4 x 19.9 x 13.2 x 14.6 x 11.7 x - 19.9 x Net Income 11,445 33.5 x 28.9 x 21.3 x 23.6 x 18.1 x - 28.9 x Valuation Based on Projected Statistics --------------------------------------- Cal. 1995 Net Income (Company) $13,034 29.4 x 25.3 x 19.4 x 20.7 x 16.5 x - 25.3 x Cal. 1995 Net Income (I/B/E/S) 13,048 29.4 x 25.3 x 19.4 x 20.7 x 16.5 x - 25.3 x Cal. 1996 Net Income (Company) 18,766 20.4 x 19.9 x 16.7 x 16.9 x 13.7 x - 19.9 x Cal. 1996 Net Income (I/B/E/S) 16,885 22.7 x 19.9 x 16.7 x 16.9 x 13.7 x - 19.9 x ----------------------------------------------------------------------------------------------------------------------------- Note: LTM as of 06/30/95. (a) Alternate Site Companies include: American Medical Response, Inc. (EMT), HEALTHSOUTH Corporation (HRC), Lincare Holdings Inc. (LNCR), Renal Treatment Centers, Inc. (RXTC), Surgical Care Affiliates, Inc. (SCA) and Vivra Incorporated (V). (b) Implied valuation based on revenues, operating cash flow and operating income are adjusted by subtracting net debt of $6.3 million.
PROJECT FOREST PINE Valuation Analysis Based On Selected Publicly Traded Companies (dollars in thousands) ----------------------------------------------------------------------------------------------------------------------------------- Prices and Estimates as of 07/13/95 --------------------------------------------- PINE Kidney Dialysis Selected Alternate Site ----------------------- Company Multiples Company Multiples(a) Multiples ------------------ ----------------------------------------- Statistics @ $20.00 RXTC V Mean Range ---------- --------- ---- ------- ---- ------------------------ Valuation Based on Latest Twelve Month Statistics ------------------------------------------------- Revenues $151,422 2.6 x 2.3 x 1.9 x 2.4 x 1.3 x - 3.7 x Operating Cash Flow 31,738 12.3 x 10.4 x 8.8 x 9.3 x 8.8 x - 10.4 x Operating Income 20,059 19.4 x 15.6 x 10.7 x 12.8 x 10.7 x - 15.6 x Net Income 11,445 33.5 x 22.2 x 17.8 x 20.7 x 17.8 x - 24.1 x Valuation Based on Projected Statistics --------------------------------------- Cal. 1995 Net Income (Company) $13,034 29.4 x 19.9 x 16.2 x 18.2 x 16.2 x - 21.1 x Cal. 1995 Net Income (I/B/E/S) 13,048 29.4 x 19.9 x 16.2 x 18.2 x 16.2 x - 21.1 x Cal. 1996 Net Income (Company) 18,766 20.4 x 15.7 x 13.9 x 14.9 x 13.8 x - 16.9 x Cal. 1996 Net Income (I/B/E/S) 17,269 22.2 x 15.7 x 13.9 x 14.9 x 13.8 x - 16.9 x -----------------------------------------------------------------------------------------------------------------------------------
Note: LTM as of 06/30/95. (a) Alternate Site Companies include: American Medical Response, Inc. (EMT), HEALTHSOUTH Corporation (HRC), Lincare Holdings Inc. (LNCR), Renal Treatment Centers, Inc. (RXTC), Surgical Care Affiliates, Inc. (SCA) and Vivra Incorporated (V). (b) Implied valuation based on revenues, operating cash flow and operating income are adjusted by subtracting net debt of $6.3 million.
PROJECT FOREST PINE Valuation Analysis Based On Selected Publicly Traded Companies (dollars in thousands, except per share data) ------------------------------------------------------------------------------------------------------------------------- Prices and Estimates as of 09/08/95 --------------------------------------------- Implied Price Per Share(a) ----------------------------------------------------------------- PINE Kidney Dialysis Companies Selected Alternate Site Companies (b) ------------------------- ------------------------------------- Statistics RXTC V Mean Range ---------- ---- --------- ---------- ------------------------- Valuation Base on Latest Twelve Month Statistics ------------------------------------------------ Revenues $151,422 $22.93 $17.82 $20.95 $10.94 - $28.74 Operating Cash Flow 31,738 21.55 17.73 17.25 14.45 - 21.55 Operating Income 20,059 20.49 13.63 15.03 12.08 - 20.49 Net Income 11,445 17.29 12.83 14.17 10.98 - 17.29 Valuation Based on Projected Statistics --------------------------------------- Cal. 1995 Net Income (Company) $13,034 $17.23 $13.28 $14.14 $11.34 - $17.23 Cal. 1995 Net Income (I/B/E/S) 13,048 17.25 13.29 14.15 11.35 - 17.25 Cal. 1996 Net Income (Company) 18,766 19.49 16.37 16.61 13.49 - 19.49 Cal. 1996 Net Income (I/B/E/S) 16,885 17.57 14.76 14.98 12.17 - 17.57 ----------------------------------------------------------------------------------------------------------------------
Note: LTM as of 06/30/95. (a) Implied valuation based on revenues, operating cash flow and operating income are adjusted by subtracting net debt of $6.3 million. (b) Alternate Site Companies include: American Medical Response, Inc. (EMT), HEALTHSOUTH Corporation (HRC), Lincare Holdings Inc. (LNCR), Renal Treatment Centers, Inc. (RXTC), Surgical Care Affiliates, Inc. (SCA) and Vivra Incorporated (V). PROJECT FOREST PINE Valuation Analysis Based On Recent Alternate Site Mergers and Acquisition "PLOT POINTS FOR GRAPH TO BE SUPPLIED"
PROJECT FOREST PINE Valuation Analysis Based On Recent Alternate Site Mergers and Acquisitions (dollars in thousands, except per share data) --------------------------------------------------------------------------------------------------------------------------- PINE --------------------------------- Recent Alternate Site Mergers and Acquisitions Multiples & ----------------------------------------------- Premiums Statistics @ $20.00 Mean Range ---------- --------------- ------ ------------------------------- Valuation Based on Latest Twelve Month Statistics ------------------------------------------------- Revenues $151,422 2.6 x 2.0 x 0.6 x - 3.8 x Operating Cash Flow 31,738 12.3 x 14.6 x 8.3 x - 30.0 x Operating Income 20,059 19.4 x 22.9 x 11.4 x - 49.3 x Net Income 11,445 33.5 x 36.5 x 18.0 x - 61.5 x Valuation Based on Projected Statistics --------------------------------------- Forward Net Income (Company) $16,991 22.6 x 22.0 x 15.5 x - 34.5 x Forward Net Income (I/B/E/S) 15,697 24.4 x 22.0 x 15.5 x - 34.5 x Valuations Based on Premiums Paid --------------------------------- One Day Prior Price $15.75 27.0 % 39.6 % 0.9% 109.2 % One Month Prior Price 14.75 35.6 % 50.7 % (5.4%) 150.0 % ---------------------------------------------------------------------------------------------------------------------------
Note: LTM as of 06/30/95. (a) Implied valuation based on revenues, operating cash flow and operating income are adjusted by subtracting net debt of $6.3 million.
PROJECT FOREST PINE Valuation Analysis Based On Recent Alternate Site Mergers and Acquisitions (dollars in thousands, except per share data) -------------------------------------------------------------------------------------------------------- Implied Price Per Share (a) PINE ---------------------------------------------- Statistics Mean Range ---------- --------------- -------------------------- Valuation Based on Latest Twelve Month Statistics ------------------------------------------------- Revenues $151,422 $15.25 $4.20 - $29.64 Operating Cash Flow 31,738 23.72 13.46 - 48.83 Operating Income 20,059 23.56 11.71 - 50.70 Net Income 11,445 21.73 10.86 - 36.41 Valuation Based on Projected Statistics --------------------------------------- Forward Net Income (Company) $16,991 $19.48 $13.84 - $30.36 Forward Net Income (I/B/E/S) 15,697 18.03 12.81 - 28.08 Valuation Based on Premiums Paid -------------------------------- One Day Prior Price $15.75 $21.99 $15.89 - $32.95 One Month Prior Price 14.75 22.23 13.95 - 36.88 --------------------------------------------------------------------------------------------------------
Note: LTM as of 06/30/95. (a) Implied valuation based on revenues, operating cash flow and operating income are adjusted by subtracting net debt of $6.3 million. PROJECT FOREST Valuation Based on Premiums Paid in Recent Squeeze-Out Transactions (a) "PLOT POINTS FOR GRAPH TO BE SUPPLIED"
PROJECT FOREST Valuations Based on Premiums Paid in Recent Squeeze-Out Transactions (a) ---------------------------------------------------------------------------------------------------------------------------------- Squeeze-Out Transactions from 1/1/90 to Present (31 deals) ---------------------------------------------------------- Premium Paid Implied Price Per Share PINE -------------------------------------------- --------------------------------------------------- Price Mean Median Range Mean Median Range ----- ---- ------ -------------------------- -------- -------- ----------------------- One Day Prior to Announcement $15.75 26.6 % 24.3 % (9.8) % - 66.7 % $19.94 $19.58 $14.21 - $26.26 One Month Prior to Announcement 14.75 32.7 28.9 (16.5) - 88.6 19.58 19.01 12.32 - 27.82 ----------------------------------------------------------------------------------------------------------------------------------
(a) Source: Securities Data Corporation. Includes squeeze-out transactions greater than $25 million since 1990 in which acquiror owned between 50-90% of target prior to transaction and sought a post-deal ownership of at least 97%. PROJECT FOREST PINE Discounted Cash Flow Analysis - Base Case Implied Equity Valuation Per Share ---------------------------------- Discount Multiple of 2000 EBITDA after MI ($91.9 million) --------------------------------------------------- Rate 7 x 8 x 9 x -------- -------- -------- -------- 11.0% $22.18 $24.91 $27.63 13.0% $20.31 $22.79 $25.27 15.0% $18.63 $20.89 $23.15 PROJECT FOREST PINE Discounted Cash Flow Analysis - Base Case (dollars in thousands, except per share data)
Fiscal Year Ended December 31, Q4 '95 (E) 1996 (E) 1997 (E) 1998 (E) 1999 (E) 2000 (E) ---------- --------- --------- -------- -------- -------- Revenue $42,925 $199,928 $239,368 $287,648 $345,448 $411,918 Growth Rate 19.5% 19.7% 20.2% 20.1% 19.2% EBIT 6,413 31,650 39,965 48,519 59,338 71,906 EBIT Margin 14.9% 15.8% 16.7% 16.9% 17.2% 17.5% EBIT After Tax (a) 3,784 18,673 23,579 28,626 35,009 42,424 plus: Depreciation & Amortization 3,260 13,834 15,688 17,870 20,391 23,165 less: Change in Non-Cash Working Capital 418 (b) 2,978 3,076 3,765 4,508 5,184 less: Minority Interest After-Tax 198 727 930 1,196 1,522 1,889 less: Total Capital Expenditures 3,250 (c) 13,555 22,701 27,514 32,234 35,268 -------- -------- -------- --------- -------- -------- Cash Flows to Capital $3,178 $15,247 $12,560 $14,021 $17,137 $23,249 ======== ======== ======== ========= ======== ======== ---------------------------------------------------------------------------------------------------------------------------- NPV of Terminal Value less: Discount NPV Cash Multiple of 2000 EBITDA after MI ($91.9 million) Net Debt Implied Equity Valuation ------------------------------------------------ ------------------------------------- Rate (d) Flows 7 x 8 x 9 x @ 06/30/95 7 x 8 x 9 x -------- -------- ------------------------------------------------ ---------- -------- -------- -------- 11.0% $60,838 $371,813 $424,929 $478,045 $6,269 $426,381 $479,497 $532,613 13.0% $57,567 $338,538 $386,901 $435,264 $6,269 $389,837 $438,199 $486,562 15.0% $54,569 $308,749 $352,856 $396,963 $6,269 $357,049 $401,156 $445,263 Discount Implied Equity Valuation Per Share ------------------------------------- Rate 7 x 8 x 9 x -------- -------- -------- -------- 11.0% $22.18 $24.91 $27.63 13.0% $20.31 $22.79 $25.27 15.0% $18.63 $20.89 $23.15 ----------------------------------------------------------------------------------------------------------------------------------
(a) Assumes a 41.0% tax rate. (b) Assumes 25% of projected annual change in non-cash working capital. (c) Assumes 25% of total projected 1995 capital expenditures ($13.0 million) spent in 4th Q. (d) Discounted to September 30, 1995.
PROJECT FOREST PINE Historical and Projected Income Statements (in thousands, except per share amounts) -------------------------------------------------------------------------------------------------------------------------------- 1993(a) 1994 1995(E) 1996(E) 1997(E) -------- -------- -------- -------- -------- Revenue: Dialysis services $ 93,866 $120,428 $153,742 $183,758 $220,008 Laboratory services 11,322 11,386 13,529 16,171 19,361 -------- -------- -------- -------- -------- 105,188 131,815 167,271 199,928 239,368 -------- -------- -------- -------- -------- Prime labor 24,777 28,669 35,032 40,985 47,874 Prime Supplies 29,403 36,700 48,233 57,779 69,177 -------- -------- -------- -------- -------- 54,179 65,369 83,265 98,765 117,051 Direct Sales Commissions 0 38 268 200 239 -------- -------- -------- -------- -------- Contribution I 51,009 66,408 83,738 100,964 122,078 -------- -------- -------- -------- -------- Other variable costs 2,530 2,975 3,696 2,999 3,591 -------- -------- -------- -------- -------- Contribution II 48,479 63,433 80,042 97,965 118,487 -------- -------- -------- -------- -------- Bad Debts 2,042 2,823 3,385 3,959 4,739 Other ops expense 721 153 (310) 320 383 Profit sharing 0 198 384 460 551 G&A 15,834 11,084 11,508 13,755 16,469 Capacity cost 17,724 23,374 28,810 33,988 40,693 -------- -------- -------- -------- -------- EBITDA 12,157 25,800 36,265 45,484 55,653 -------- -------- -------- -------- -------- Depreciation 5,639 6,089 7,637 8,619 9,933 Amortization 4,242 4,790 4,948 5,215 5,755 -------- -------- -------- -------- -------- EBIT 2,277 14,922 23,680 31,650 39,965 -------- -------- -------- -------- -------- Net interest (revenue) expense 550 841 513 (1,388) (3,540) Income before min. int. & taxes 1,727 14,081 23,167 33,038 43,505 -------- -------- -------- -------- -------- Income tax expense 933 5,570 9,498 13,545 17,837 Minority interest after tax 0 0 635 727 930 -------- -------- -------- -------- -------- Net income $794 $8,511 $13,034 $18,766 $24,738 ======== ======== ======== ======== ======== EPS $0.04 $0.45 $0.68 $0.98 $1.29 ======== ======== ======== ======== ======== Weighted shares outstanding 18,777 18,899 19,105 19,188 19,188 Margins: -------------------------------------------------------------------------------------------------------------------------------- Contribution II (Gross) 46.1% 48.1% 47.9% 49.0% 49.5% EBITDA 11.6% 19.6% 21.7% 22.8% 23.3% EBIT 2.2% 11.3% 14.2% 15.8% 16.7% Net income 0.8% 6.5% 7.8% 9.4% 10.3% Growth Rates: -------------------------------------------------------------------------------------------------------------------------------- Revenue (Dialysis) 28.3% 27.7% 19.5% 19.7% Revenue (Laboratory) 0.6% 18.8% 19.5% 19.7% Revenue (Total) 25.3% 26.9% 19.5% 19.7% EBITDA 112.2% 40.6% 25.4% 22.4% EBIT NM 58.7% 33.7% 26.3% Net income NM 53.2% 44.0% 31.8% EPS NM 51.5% 43.3% 31.8% -------------------------------------------------------------------------------------------------------------------------------- 1998(E) 1999(E) 2000(E) -------- -------- -------- Revenue: Dialysis services $264,383 $317,508 $378,601 Laboratory services 23,266 27,941 33,317 -------- -------- -------- 287,648 345,448 411,918 -------- -------- -------- Prime labor 57,530 69,090 82,384 Prime Supplies 81,980 98,453 117,397 -------- -------- -------- 139,509 167,542 199,780 Direct Sales Commissions 144 173 206 -------- -------- -------- Contribution I 147,995 177,733 211,932 -------- -------- -------- Other variable costs 4,315 5,182 6,179 -------- -------- -------- Contribution II 143,680 172,551 205,753 -------- -------- -------- Bad Debts 5,695 6,840 8,156 Other ops expense 460 553 659 Profit sharing 662 795 947 G&A 21,574 25,909 30,894 Capacity cost 48,900 58,726 70,026 -------- -------- -------- EBITDA 66,389 79,729 95,071 -------- -------- -------- Depreciation 11,435 13,146 15,039 Amortization 6,435 7,245 8,126 -------- -------- -------- EBIT 48,519 59,338 71,906 -------- -------- -------- Net interest (revenue) expense (5,728) (7,656) (10,720) Income before min. int. & taxes 54,247 66,994 82,626 -------- -------- -------- Income tax expense 22,241 27,468 33,877 Minority interest after tax 1,196 1,522 1,889 -------- -------- -------- Net income $30,810 $38,004 $46,861 ======== ======== ======== EPS $1.61 $1.98 $2.44 ======== ======== ======== Weighted shares outstanding 19,188 19,188 19,188 Margins: ----------------------------------------------------------------------------------------- Contribution II (Gross) 50.0% 50.0% 50.0% EBITDA 23.1% 23.1% 23.1% EBIT 16.9% 17.2% 17.5% Net income 10.7% 11.0% 11.4% Growth Rates: ------------------------------------------------------------------------------------------ Revenue (Dialysis) 20.2% 20.1% 19.2% Revenue (Laboratory) 20.2% 20.1% 19.2% Revenue (Total) 20.2% 20.1% 19.2% EBITDA 19.3% 20.1% 19.2% EBIT 21.4% 22.3% 21.2% Net income 24.5% 23.4% 23.3% EPS 24.5% 23.4% 23.3% -----------------------------------------------------------------------------------------
(a) Excludes $7.8 million of extraordinary and non-recurring expenses. Assumes a 11% incremental tax rate on add-backs.
PROJECT FOREST PINE Projected Balance Sheets (dollars in thousands) ----------------------------------------------------------------------------------------------------------------------------------- 1995(E) 1996(E) 1997(E) 1998(E) 1999(E) 2000(E) --------- --------- --------- --------- --------- --------- Assets: Cash $6,884 $23,676 $39,255 $57,852 $81,028 $112,490 Accounts receivable 27,497 32,865 39,348 47,285 56,786 67,713 Inventories 4,117 4,778 5,720 6,874 8,255 9,844 Other current assets 5,438 5,438 5,438 5,438 5,438 5,438 -------- -------- -------- -------- -------- -------- Total current assets 43,935 66,757 89,762 117,449 151,507 195,485 Intangibles 51,512 52,978 60,727 71,291 84,303 98,195 Other assets 8,162 8,162 8,162 8,162 8,162 8,162 PP&E 48,279 46,534 45,798 44,879 43,710 41,921 -------- -------- -------- -------- -------- ------- Total assets $151,888 $174,432 $204,450 $241,781 $287,682 $343,763 ======== ======== ======== ======== ======== ======== Total Liabilities & Equity: Short term debt 87 87 87 87 87 87 Operating liabilities 19,000 22,051 26,401 31,726 38,101 45,432 -------- -------- -------- -------- -------- -------- Total current liabilities 19,087 22,138 26,488 31,813 38,188 45,519 -------- -------- -------- -------- -------- -------- Long term debt 0 0 0 0 0 0 Minority interest 635 1,362 2,292 3,488 5,010 6,899 Deferred taxes 4,389 4,389 4,389 4,389 4,389 4,389 Equity 127,777 146,543 171,281 202,091 240,095 286,955 -------- -------- -------- -------- -------- -------- Total liabilities & equity $151,888 $174,432 $204,450 $241,781 $287,682 $343,763 -------- -------- -------- -------- -------- -------- Selected Financial Data: ---------------------------------------------------------------------------------------------------------------------------------- Current Ratio 2.3x 3.0x 3.4x 3.7x 4.0x 4.3x Working Capital $24,848 $44,619 $63,274 $85,636 $113,319 $149,965 Non-Cash Working Capital $18,051 $21,030 $24,105 $27,871 $32,378 $37,562 Debt to Equity 0.1% 0.1% 0.1% 0.0% 0.0% 0.0% Debt to Total Capitalization 0.1% 0.1% 0.1% 0.0% 0.0% 0.0% Tangible Book Value $76,265 $93,565 $110,554 $130,799 $155,792 $188,760 Accounts Receivable Days Sales Outstanding 60.0 60.0 60.0 60.0 60.0 60.0 ----------------------------------------------------------------------------------------------------------------------------------
PROJECT FOREST PINE Projected Cash Flow Statements (in thousands) ----------------------------------------------------------------------------------------------------------------------------------- 1995(E) 1996(E) 1997(E) 1998(E) 1999(E) 2000(E) --------- --------- --------- --------- --------- --------- Beginning cash $644 $6,884 $23,676 $39,255 $57,852 $81,028 Net income 13,034 18,766 24,738 30,810 38,004 46,861 Depreciation 7,637 8,619 9,933 11,435 13,146 15,039 Amortization 4,948 5,215 5,755 6,435 7,245 8,126 Minority interest 635 727 930 1,196 1,522 1,889 --------- --------- --------- --------- --------- --------- Operating cash flows 26,254 33,326 41,356 49,876 59,918 71,914 --------- --------- --------- --------- --------- --------- Change in A/R (5,186) (5,368) (6,483) (7.936) (9,501) (10,927) Change in inventory (735) (661) (943) (1,154) (1,381) (1,588) Change in operating liabilities 4,249 3,051 4,350 5,325 6,375 7,331 Change in other assets (5,000) 0 0 0 0 0 --------- --------- --------- --------- --------- --------- Net operating cash flows 19,583 30,348 38,280 46,111 55,410 66,730 --------- --------- --------- --------- --------- --------- Baseline cap. ex. (3,000) (3,000) (3,000) (3,000) (3,000) (3,000) Same center equipment adds. 0 (1,958) (2,639) (3,063) (3,667) (4,406) --------- --------- --------- --------- --------- --------- Free cash flow 16,583 25,389 32,641 40,048 48,743 59,324 --------- --------- --------- --------- --------- --------- Acquisition intangibles (9,000) (6,681) (13,504) (16,999) (20,256) (22,019) Acquisition tangibles (1,000) (742) (1,500) (1,889) (2,251) (2,447) Acquisition upgrades 0 (644) (1,302) (1,640) (1,954) (2,124) Development tangibles 0 (530) (755) (924) (1,107) (1,273) --------- --------- --------- --------- --------- --------- Net change in cash 6,583 16,793 15,579 18,597 23,176 31,463 --------- --------- --------- --------- --------- --------- Borrowing (repayment) (343) 0 0 0 0 0 Ending cash (loan) $6,884 $23,676 $39,255 $57,852 $81,028 $112,490 ========= ========= ========= ========= ========= =========
PROJECT FOREST PINE Historical Income Statements (in thousands, except per share amounts) ----------------------------------------------------------------------------------------------------------------------------------- Fiscal Year Ended December 31, Six Months Ended June 30, ------------------------------------------ ------------------------- 1992 1993 1994 1994 1995 ------- -------- -------- -------- -------- Revenue: Dialysis services $70,345 $93,866 $120,428 $56,309 $73,793 Laboratory services 10,469 11,322 11,386 5,616 7,739 80,814 105,188 131,815 61,925 81,532 ------- -------- -------- -------- -------- Direct Operating expense: Dialysis services 45,170 70,503 85,862 41,289 54,437 Laboratory services 8,823 6,552 5,579 2,901 2,802 -------- -------- -------- -------- -------- 53,993 77,055 91,441 44,190 57,239 -------- -------- -------- -------- -------- Gross operating profit: Dialysis services 25,175 23,363 34,567 15,020 19,356 Laboratory services 1,646 4,770 5,807 2,715 4,937 -------- -------- -------- -------- -------- 26,821 28,133 40,374 17,735 24,293 Indirect operating expense: General, administrative, and operations support 8,185 13,011 11,361 5,629 5,534 Employee severance --- 1,723 --- --- --- Stock-based compensation --- 4,224 --- --- --- Write-Off of organization and development cost 123 968 --- --- --- Provision to carry assets at estimated fair value --- 800 --- --- --- Depreciation and amortization 7,003 9,880 10,879 5,269 6,069 Bad debt expense 1,151 2,042 2,823 1,202 1,542 Equity in loss of investee --- 323 270 --- --- Loss of unconsolidated subsidiary --- --- --- 95 62 Loss on disposal of assets 276 600 119 --- --- -------- -------- -------- -------- -------- Income (loss) from operations 10,082 (5,439) 14,922 5,540 11,086 Non-operating (income) expense: Interest income (1,037) (227) (203) (106) (229) Interest expense 2,653 777 1,044 493 642 Write-Off of costs of suspended financings 170 --- --- --- --- -------- ------- ------- ------ ------- Income (loss) before income tax expense 8,296 (5,989) 14,081 5,153 10,673 Income tax expense (benefit) 2,942 (2,230) 5,570 2,030 4,375 Minority interest in income of consolidated subsidiary net of income tax expense of $167 241 Net income (loss) $ 5,355 ($3,758) $ 8,511 $ 3,123 $ 6,057 ======= ========= ======== ======== ======== Net income (loss) per common share and common share equivalent $0.38 ($0.20) $0.45 $0.17 $0.32 ======= ========= ======== ======== ======== Weighted average common shares and common share equivalents outstanding 14,472 18,777 18,899 18,869 19,022 ======= ========= ======== ======== ========
PROJECT FOREST PINE Historical Balance Sheets (in thousands) ---------------------------------------------------------------------------------------------------------------------------------- Fiscal Year Ended December 31, Six Months Ended June 30, ------------------------------------------ ------------------------- 1992 1993 1994 1994 1995 ------- -------- -------- -------- -------- Assets: Current assets: Cash and cash equivalents $15,672 $655 $644 $929 $92 Accounts receivable, net 19,351 20,677 22,252 19,301 20,488 Estimated third-party settlements, net 1,274 530 40 306 431 Inventory 2,613 2,683 3,382 3,304 3,922 Income taxes receivable --- 1,888 --- --- --- Prepaid expense 544 1,483 974 1,109 1,622 Current deferred taxes, net 738 2,957 3,079 1,957 3,729 Other current assets 1,576 2,424 1,385 1,177 227 ------- -------- -------- -------- -------- Total current assets 41,717 32,296 31,776 28,083 30,506 Property, plant and equipment, net 31,628 41,198 51,916 49,621 35,163 Intangible assets, net 47,615 30,524 47,460 48,297 56,448 Notes receivable 476 574 1,795 332 2,667 Other assets 360 1,348 1,368 1,789 5,703 ------- -------- -------- -------- -------- Total assets $121,797 $126,140 $134,314 $128,121 $150,487 ======== ======== ======== ======== ======== Liability & Shareholders' Equity: Current Liabilities Bank notes payable --- --- --- --- $75 Current position of long-term debt and capital lease obligations 2,413 442 87 25 92 Accounts payable 5,430 3,221 6,541 7,280 8,722 Accrued expenses 3,077 3,496 2,939 2,430 4,383 Accrued wages and benefits 1,866 2,580 3,751 3,011 3,842 Notes payable 7,025 --- --- --- --- Income taxes payable 984 1,521 2,013 399 -------- -------- -------- -------- -------- Total current liabilities 20,795 9,738 14,839 14,760 18,313 Long-term debt and capital lease obligations, less current maturities 458 10,704 342 4,058 5,394 Deferred taxes, net 1,732 1,180 4,301 1,180 4,974 Other liabilities 32 26 89 39 Minority interest in consolidated subsidiaries 623 -------- --------- ------- ------ -------- Total long-term liabilities 2,721 11,910 4,732 3,277 10,991 Redeemable common stock 1,513 71 47 47 24 Shareholders' equity Common stock; no par value 94,540 100,898 108,841 101,268 102,229 Additional paid in capital 4,224 4,224 4,224 4,224 Retained earnings 3,897 139 8,650 3,262 14,706 Less unearned stock grant compensation (1,170) (839) (18) (717) ------- -------- -------- -------- -------- Total shareholders' equity 97,268 104,421 114,697 108,037 121,159 Total liabilities and shareholders' equity $121,797 $126,140 $134,314 $128,121 $150,487 ======== ======== ======== ======== ========
PROJECT FOREST PINE Historical Statements of Cash Flows (in thousands) ----------------------------------------------------------------------------------------------------------------------------------- Six Months Ended Fiscal Year Ended December 31, June 30, --------------------------------- --------------------- 1992 1993 1994 1994 1995 ------- -------- -------- -------- -------- Cash flows from operating activities: Net income (loss) $5,355 ($3,758) $8,511 $3,123 $6,057 Adjustments to reconcile net income (loss) to net cash --- --- --- --- --- provided by operating activities --- --- --- --- --- Depreciation and amortization expense 7,003 9,830 10,879 5,269 6,069 Amortization of unearned stock grant compensation 351 330 273 122 18 Write-Off of costs of suspended financings 170 --- --- --- --- Stock based compensation --- 4,224 --- --- --- Provision to carry equipment at estimated fair value --- 800 --- --- --- Loss on asset disposals 276 600 119 --- --- Equity in loss of investee --- 323 270 --- --- Write-Off of organization and development cost 123 968 --- --- --- Deferred income taxes 339 (1,771) 1,999 --- 23 Effects on cash of change in operating assets and liabilities, net of --- --- --- --- --- effects from acquisitions --- --- --- --- --- Accounts receivable and estimated third party settlements (8,845) (583) (1,105) 1,600 1,392 Inventory (784) (70) 699 (621) (540) Income taxes receivable --- (1,888) 1,883 --- --- Prepaid expenses and other current assets 409 (1,786) 1,547 3,508 515 Notes receivable and other assets (665) (1,609) 190 1 (5,207) Accounts payable 1,242 (2,209) 3,321 4,059 2,181 Accrued payroll, expenses and income taxes (3,769) (1,391) 2,197 1,391 948 Other, net (28) (5) --- --- --- ------- ------- ------ ------ ------ Net cash provided by (used in) operating activities 1,171 2,055 29,339 18,452 11,456 ------ ------- ------ ------ ------ Cash flows from investing activities: Proceeds from sale of short-term investments 90,123 --- --- --- --- Purchase of short-term investments (39,834) --- --- --- --- Purchases of property, plant and equipment (11,831) (14,574) (19,635) (11,229) (6,334) Acquisitions net of cash acquired (30,775) (1,850) --- --- (10,837) Intangible assets acquired (3,774) (6,763) (1,272) (235) (1,136) Net book value of assets sold 125 --- 2,854 --- 2 ------- -------- -------- -------- -------- Net cash provided by (used in) investing activities 4,035 (23,187) (18,053) (11,464) (18,305) ------- --------- --------- --------- --------- Cash flows from financing activities: Repayment of repurchase agreement (90,123) --- --- --- --- Proceeds from repurchase agreement 39,834 --- --- --- --- Proceeds from issuance of long-term debt 34,025 16,675 34,883 4,000 44,100 Principal payments on long-term debt and capital lease obligations (39,772) 6,280 (45,599) (11,062) (38,168) Issuance of notes payable --- --- (1,500) --- --- Repayment of notes payable (143) (7,025) --- --- --- Net proceeds from issuance of common stock 63,372 --- 192 --- --- Proceeds from common stock options and warrants exercised 362 2,795 887 306 365 Redemption of redeemable common stock (196) --- --- (159) --- Redemption of common stock (850) --- (159) --- --- ------- --------- --------- --------- --------- Net cash provided by (used in) financing activities 6,509 6,165 (11,297) (6,715) 6,297 ------- --------- --------- --------- --------- Net increase (decrease) in cash and cash equivalents 11,721 (14,967) (11) 273 (552) Cash and cash equivalents at beginning of year 3,900 13,622 655 655 644 ------- --------- --------- --------- --------- Cash and cash equivalents at end of year $15,621 $655 $614 $928 $92 ======== ========= ========= ========= =========
PROJECT FOREST
PINE Quarterly Historical & Projected Financial Statements (in thousands, except per share data) 1993 1994 ----------------------------------------------- -------------------------------------------------- Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Q4 Full Year ------- ------- ------- -------- --------- ------- ------- ------- ------- ---------- Results (a) : Total Revenue $25,475 $26,296 $23,229 $30,187 $105,188 $30,287 $31,638 $34,123 $35,767 $131,815 Dialysis Services Revenue 22,825 23,491 20,361 27,189 93,866 27,437 28,872 31,250 32,870 120,428 Laboratory Services Revenue 2,650 2,805 2,868 2,998 11,322 2,850 2,766 2,873 2,897 11,386 EBITDA 5,032 4,883 (2,470) 4,712 12,157 4,845 5,964 7,395 7,597 25,800 EBIT 2,818 2,587 (5,100) 1,970 2,277 2,251 3,288 4,665 4,717 14,922 Net Income 1,631 1,287 (3,173) 1,048 794 1,238 1,885 2,666 2,722 8,511 EPS 0.09 0.07 -0.17 0.06 0.04 0.07 0.10 0.14 0.14 0.45 Shares Outstanding 18,725 18,676 18,832 18,805 18,777 18,858 18,886 18,907 18,903 18,899 Other Data: ------------------------------------------------------------------------------ -------------------------------------------------- Treatments 122,319 130,099 142,550 150,527 545,495 151,098 159,416 165,649 170,789 646,952 Dialysis Revenue per Treatment $187 $181 $143 $181 $172 $182 $181 $189 $192 $186 Margins: ------------------------------------------------------------------------------ -------------------------------------------------- Gross Margin 33.2 % 31.9 % 12.4 % 27.9 % 26.7% 28.3 % 28.9 % 32.1% 32.7 % 30.6 % EBITDA Margin 19.8 18.6 -10.6 15.6 11.6 16.0 18.8 21.7 21.2 19.6 EBIT Margin 11.1 9.8 -22.0 6.5 2.2 7.4 10.4 13.7 13.2 11.3 Net Margin 6.4 4.9 -13.7 3.5 0.8 4.1 6.0 7.8 7.6 6.5 Growth Rates: ------------------------------------------------------------------------------ --------------------------------------------------- Year over Year Revenue --- --- --- --- --- 18.9 % 20.3 % 46.9 % 18.5 % 25.3 % EBITDA --- --- --- --- --- -3.7 22.1 NM 61.2 112.2 EBIT --- --- --- --- --- -20.1 27.1 NM 139.4 NM Net Income --- --- --- --- --- -24.0 46.4 NM 159.7 NM EPS --- --- --- --- --- -24.6 44.8 NM 158.4 NM Current over Prior Quarter Revenue --- 3.2 % -11.7 % 30.0 % --- 0.3% 4.5 % 7.9 % 4.8 % --- EBITDA --- -3.0 NM NM --- 2.8 23.1 24.0 2.7 --- EBIT --- -8.2 NM NM --- 14.3 46.1 41.9 1.1 --- Net Income --- -21.1 NM NM --- 18.2 52.2 41.4 2.1 --- EPS --- -20.9 NM NM --- 17.8 52.0 41.3 2.1 --- 1995 ------------------------------------------------------ Q1 Q2 Q3E(b) Q4E(b) Full Year E(b) ------------------------------------------------------ Results (a) : Total Revenue $38,614 $42,918 $42,871 $42,925 $167,328 Dialysis Services Revenue 35,079 38,714 39,404 39,453 152,650 Laboratory Services Revenue 3,535 4,204 3,467 3,472 14,678 EBITDA 7,936 8,811 9,156 9,337 35,241 EBIT 5,074 5,604 5,906 6,077 22,662 Net Income 2,873 3,184 3,425 3,586 13,068 EPS 0.15 0.17 0.18 0.19 0.68 Shares Outstanding 19,016 19,028 19,155 19,155 19,088 Other Data: ----------------------------------------------------------------------------------------- Treatments 184,516 209,670 NA NA 805,431 Dialysis Revenue per Treatment $190 $185 NA NA $190 Margins: ----------------------------------------------------------------------------------------- Gross Margin 29.7 % 29.9 50.4 % 50.4 % 12.9 % EBITDA Margin 20.6 20.5 21.4 21.8 21.1 EBIT Margin 13.1 13.1 13.8 14.2 13.5 Net Margin 7.4 7.4 8.0 8.4 7.8 Growth Rates: ----------------------------------------------------------------------------------------- Year over Year Revenue 27.5 % 35.7 % 25.6 % 20.0 % 26.9 % EBITDA 63.8 47.7 26.1 22.9 36.6 EBIT 125.4 70.4 20.7 28.8 51.9 Net Income 132.0 68.9 23.8 31.7 53.5 EPS 130.1 67.7 26.6 31.9 52.0 Current over Prior Quarter Revenue 8.0 % 11.1 -0.1 % 0.1% --- EBITDA 4.5 11.0 3.9 2.0 --- EBIT 7.6 10.4 5.4 2.9 --- Net Income 5.5 10.8 7.6 4.7 --- EPS 4.9 10.8 7.6 5.6 --- ----------------------------------------------------------------------------------------- (a) Financial Information does not include non-recurring items and subtracts pre-tax minority interest expense from EBIT and EBITDA. (b) Source: Company estimates.
PROJECT FOREST Summary Market Statistics ------------------------------------------------------------------------------------------------------------------------------------ Enterprise Value Multiple of Latest Twelve Months Market Value Multiple of 1996 P/E as ------------------------------------ --------------------------------------- Cash Operating Book LTM Cal '95 Cal '96 a % of Company Revenues Flow (a) Income (a) Value EPS EPS EPS Growth Rate ------- -------- -------- ---------- ----- --- ------- ------- ----------- American Medical Response, Inc. 1.4 x 10.4 x 14.8 x 2.4 x 25.2 x 22.1 x 17.8 x 79.3 % HEALTHSOUTH Corporation 2.1 x 9.7 x 14.8 x 3.8 x 26.4 x 21.1 x 16.9 x 75.7 % Lincare Holdings Inc. 3.7 x 8.9 x 11.7 x 4.4 x 18.1 x 16.5 x 13.7 x 66.1 % Renal Treatment Centers, Inc. 3.0 x 13.2 x 19.9 x 3.8 x 28.9 x 25.3 x 19.9 x 74.6 % Surgical Care Affiliates, Inc. 3.7 x 10.5 x 13.2 x 4.1 x 21.6 x 19.6 x 16.6 x 98.4 % Vivra Incorporated 2.3 x 10.9 x 13.2 x 2.8 x 21.3 x 19.4 x 16.7 x 93.1 % --------------------------------------------------------------------------------------------------------------------------------- Mean: 2.7 x 10.6 x 14.6 x 3.6 x 23.6 x 20.7 x 16.9 x 81.2 % --------------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------------- PINE at market price 2.5 x 11.8 x 18.7 x 3.0 x 32.0 x 28.2 x 21.8 x 91.6 % --------------------------------------------------------------------------------------------------------------------------------- PINE at offer price 2.6 x 12.3 x 19.4 x 3.2 x 33.3 x 29.4 x 22.7 x 95.5 % --------------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------------- *estimate extrapolated from the 3-5 year growth rate. (a) After minority interest.
PROJECT FOREST Summary Market Statistics (dollars in millions, except for per share data) =============================================================================================================================== Market Statistics ----------------------------------------------------------------------------------- 52-Week Current Stock Price --------------------- Price as a % Market Enterprise Company 09/08/95 High Low of High Value Value ------------------------------------ --------- -------- --------- ----------- -------- ---------- American Medical Response, Inc. $29.13 $29.38 $22.50 99.1% $578.9 $547.1 HEALTHSOUTH Corporation $22.63 $24.50 $16.13 92.3% $1,974.3 $3,255.7 Lincare Holdings Inc. $29.00 $35.25 $23.00 82.3% $841.2 $875.7 Renal Treatment Centers, Inc. $31.88 $32.75 $16.75 97.3% $357.3 $390.8 Surgical Care Affiliates, Inc. $23.13 $24.75 $17.00 93.4% $909.0 $946.3 Vivra Incorporated $33.38 $35.88 $25.50 93.0% $845.6 $753.8 ------------------------------------------------------------------------------------------------------------------------------- Mean: 91.9% ------------------------------------------------------------------------------------------------------------------------------- PINE at market price $19.19 $20.00 $9.25 95.9% $367.9 $374.2 ------------------------------------------------------------------------------------------------------------------------------- PINE at offer price $20.00 $20.00 $9.25 100.0% $383.8 $390.0 ------------------------------------------------------------------------------------------------------------------------------- ==================================================================================================================================== Valuation Benchmarks ----------------------------------------------------------------------------------------- Enterprise Value as a Multiple of Market Value Multiple of 1996 P/E as ----------------------------- ------------------------------------------- a % of Company Revenue Cash Flow(a) Trailing EPS Cal'95 EPS Cal'96 EPS Growth Rate ------------------------------------ -------- --------------- ------------- ---------- ---------- ----------- American Medical Response, Inc. 1.4 x 10.4 x 25.2 x 22.1 x 17.8 x 79.3% HEALTHSOUTH Corporation 2.1 x 9.7 x 26.4 x 21.1 x 16.9 x 75.7% Lincare Holdings Inc. 3.7 x 8.9 x 18.1 x 16.5 x 13.7 x 86.1% Renal Treatment Centers, Inc. 3.0 x 13.2 x 28.9 x 25.3 x 19.9 x 74.6% Surgical Care Affiliates, Inc. 3.7 x 10.5 x 21.6 x 19.6 x 16.6 x 98.4% Vivra Incorporated 2.3 x 10.9 x 21.3 x 19.4 x 16.7 x 93.1% --------------------------------------------------------------------------------------------------------------------------------- Mean: 2.7 x 10.6 x 25.6 x 28.7 x 16.9 x 81.2% --------------------------------------------------------------------------------------------------------------------------------- PINE at market price 2.5 x 11.8 x 32.0 x 28.2 x 21.8 x 91.6% --------------------------------------------------------------------------------------------------------------------------------- PINE at offer price 2.6 x 12.3 x 33.3 x 29.4 x 22.7 x 95.5% ---------------------------------------------------------------------------------------------------------------------------------
Growth Rates Margins (LTM) ------------------------------------------------------------------- ------------ Historical (Most Recent Stub) Projected ----------------------------- --------------------------------- Cash Company Revenue EPS Fwd. Cal' Year(b) 3-5 Year Flow (a) -------------------------------- --------------- ---------- -------------------- ----------- ---------- American Medical Response, Inc. 53.4% 20.5% 24.2% 22.4% 13.6% HEALTHSOUTH Corporation 22.7% 29.3% 25.2% 22.3% 22.2% Lincare Holdings Inc. 37.9% 42.7% 20.5% 20.7% 41.7% Renal Treatment Centers, Inc. 71.9% 83.2% 27.0% 26.7% 22.3% Surgical Care Affiliates, Inc. 18.2% 47.8% 17.8% 16.9% 35.0% Vivra Incorporated 31.4% 17.1% 16.2% 17.9% 21.1% ----- ----- ----- ----- ----- Mean: 30.2% 40.1% 21.8% 21.2% 26.0% ----- ----- ----- ----- ----- ----- ---------------------------------------------------------------------------------------------------------------------------- PINE at market price 31.7% 88.2% 29.4% 23.8% 21.0% ---------------------------------------------------------------------------------------------------------------------------- PINE at offer price 31.7% 88.2% 29.4% 23.8% 21.0% ---------------------------------------------------------------------------------------------------------------------------- Margins (LTM) Returns Debt Divided by --------------------- -------------------------- -------------------------------- Operating Net Return on Return on Book Capitali- Cash Company Income (a) Income Assets Equity Value zation Flow -------------------------------- ----------- ------- --------- ---------- --------- ---------- ------- American Medical Response, Inc. 9.5% 4.6% 5.7% 7.3% 6.0% 5.6% 26.7% HEALTHSOUTH Corporation 14.3% 4.9% 3.6% 14.2% 262.0% 72.4% 403.9% Lincare Holdings Inc. 31.6% 19.2% 18.4% 23.8% 18.5% 13.6% 35.8% Renal Treatment Centers, Inc. 14.8% 8.6% 8.1% 12.0% 37.1% 27.1% 119.5% Surgical Care Affiliates, Inc. 28.0% 16.3% 11.3% 19.0% 33.1% 24.8% 80.8% Vivra Incorporated 17.3% 10.3% 9.4% 11.2% 1.1% 1.1% 3.0% ----- ----- ---- ----- ----- ----- ------ Mean: 19.3% 10.7% 9.4% 14.6% 39.6% 24.4% 112.0% ----- ----- ----- ---- ----- ----- ----- ------ ----------------------------------------------------------------------------------------------------------------------------------- PINE at market price 13.2% 7.6% 7.6% 9.4% 5.3% 5.0% 20.0% ----------------------------------------------------------------------------------------------------------------------------------- PINE at offer price 13.2% 7.6% 7.6% 9.4% 5.3% 5.0% 20.0% ----------------------------------------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------------------------------------
(a) After minority interest. (b) Forward calendar growth rate represents growth from Cal'95 to Cal'96 EPS. Caption> PROJECT FOREST Recent Mergers and Acquisitions of Alternate Site Companies, 1/1/90 to Present (purchase price in thousands) Aggregate Purchase Price Equity Aggregate as a Multiple of Trailing: ------------------------------ Date Target Company Purchase Purchase Cash Oper. Ann. Acquiror Price Price [a] Revenue Flow Income ------- ----------------------------------------------- ------------ ------------- -------- ------- --------- Apr-95 Rehability Corporation $93,508 $126,653 0.7 x 11.8 x 20.3 x Living Centers of America, Inc. Apr-95 The Hillhaven Corporation $1,065,994 $1,645,413 1.1 x 10.0 x 15.1 x Vencor, Inc. Mar-95 Abbey Healthcare Group Incorporated[1] $405,922 $691,449 1.6 x 8.7 x 15.6 x Homedco Group, Inc. Jan-95 Surgical Health Corporation[2] $151,105 $237,939 2.2 x 11.6 x 27.2 x HEALTHSOUTH Corporation Sep-94 ReLife, Inc. $181,336 $200,631 1.8 x 10.0 x 12.5 x HEALTHSOUTH Rehabilitation Corp. Mar-94 Home Nutritional Services, Inc. [3] $93,355 $109,240 0.8 x 18.9 x 49.3 x W.R. Grace & Co. Oct-93 RehabClinics, Inc.[4] $195,362 $244,458 3.6 x 22.6 x 33.7 x NovaCare, Inc. Sep-93 Total Pharmaceutical Care, Inc. $199,751 $185,962 2.3 x 11.2 x 14.2 x Abbey Healthcare Group Incorporated May-93 Lifetime Corporation[5] $368,425 $511,305 0.6 x 8.3 x 11.4 x The Olsten Corporation Apr-93 Home Intensive Care, Inc.[6] $105,982 $105,852 1.1 x 14.7 x 25.0 x W.R. Grace & Co. Jun-92 Critical Care America, Inc. $871,755 $798,786 3.0 x 14.5 x 16.4 x Medical Care America, Inc. Nov-91 Orthopaedic Services, Inc.[7] $252,212 $251,130 3.8 x 30.0 x 36.6 x NovaCare, Inc. Dec-90 Care Plus, Inc. $137,083 $137,699 2.8 x 17.2 x 20.6 x New England Critical Care, Inc. -------------------------------------------------------------------------------- MEAN: $317,061 $403,578 2.0 x 14.6 x 22.9 x MEDIAN: $195,362 $237,939 1.8 x 11.8 x 20.3 x -------------------------------------------------------------------------------- LOW: $93,355 $105,852 0.6 x 8.3 x 11.4 x HIGH: $1,065,994 $1,645,413 3.8 x 30.0 x 49.3 x --------------------------------------------------------------------------------
PROJECT FOREST Recent Mergers and Acquisitions of Alternate Site Companies, 1/1/90 to Present (purchase price in thousands) Equity Purchase Price as a Multiple of: Premium to Market --------------------------------------- --------------------- Trailing Forward Latest Day Month Net Inc. Net Inc. Bk. Value Prior Prior Target Business Description ----------- ------------ ----------- -------- --------- ---------------------------------- 34.5 x 17.2 x 10.6 x 12.2% 15.0% Provides comprehensive outpatient rehabilitation services. 18.0 x 20.9 x 2.8 x 41.0% 54.5% Provides long-term care, sub-acute and rehabilitation services. 43.9 x 16.0 x 2.5 x 23.7% 28.2% Provides home health care services and products. NM NA 4.4 x NA NA Operates outpatient surgery centers. 21.3 x 15.5 x 2.8 x 32.2% 65.5% Provides rehabilitation services in a system with 46 facilities in 12 states. NM 31.4 x 1.6 x 79.2% 57.0% Provides home infusion therapy services. 53.5 x 30.3 x 2.8 x 8.6% 15.8% Provides therapy services at 180 outpatient clinics in 22 states. 24.1 x 17.1 x 2.3 x 73.6% 76.9% Provides home infusion therapy services in 12 states. 27.4 x 20.2 x 2.6 x 109.2% 150.0% Delivery of home health care and supplemental health care staffing. 51.6 x 18.9 x 4.2 x 53.1% 73.2% Home infusion therapy and kidney dialysis services. 28.3 x 21.9 x 3.9 x 0.9% -5.4% Provides home infusion therapy services. 61.5 x 34.5 x 4.2 x 10.6% 7.8% Provides orthotic and prosthetic rehabilitation services. 37.3 x 20.0 x 4.9 x 31.1% 69.7% Home infusion therapy services. ----------------------------------------------------------------- MEAN: 36.5 x 22.0 x 3.8 x 39.6% 50.7% MEDIAN: 34.5 x 20.1 x 2.8 x 31.6% 55.7% ----------------------------------------------------------------- LOW: 18.0 x 15.5 x 1.6 x 0.9% -5.4% HIGH: 61.5 x 34.5 x 10.6 x 109.2% 150.0% ----------------------------------------------------------------- ------------------------------------------------------------------ [a] Defined as Equity Purchase Price plus debt less cash and equivalents.
PROJECT FOREST -------------- Recent Mergers and Acquisitions of Alternate Site Companies, 1/1/90 to Present ------------------------------------------------------------------------------ (dollars in thousands) -------------------- Equity Aggregate Date Target Company Purchase Total Purchase Cash Ann. Acquiror Price Debt Cash Price(a) Revenues Flow ---- ---------------------------------------- -------- ----- ---- ------ -------- ---- Apr-95 Rehability Corporation $93,508 $36,808 $3,663 $126,653 $169,524 $10,709 Living Centers of America, Inc. Apr-95 The Hillhaven Corporation $1,065,994 $628,384 $48,965 $1,645,413 $1,449,403 $164,896 Vencor, Inc. Mar-95 Abbey Healthcare Group Incorporated[1] $405,922 $286,829 $1,302 $691,449 $443,838 $79,232 Homedco Group, Inc. Jan-95 Surgical Health Corporation[2] $151,105 $89,620 $2,786 $237,939 $108,258 $20,483 HEALTHSOUTH Corporation Sep-94 ReLife, Inc. $181,336 $30,156 $10,861 $200,631 $114,541 $20,072 HEALTHSOUTH Rehabilitation Corp. Mar-94 Home Nutritional Services, Inc.[3] $93,355 $21,233 $5,348 $109,240 $132,030 $5,788 W.R. Grace & Co. Oct-93 RehabClinics, Inc.[4] $195,362 $56,120 $7,024 $244,458 $67,339 $10,803 NovaCare, Inc. Sep-93 Total Pharmaceutical Care, Inc. $199,751 $0 $13,789 $185,962 $79,703 $16,665 Abbey Healthcare Group Incorporated May-93 Lifetime Corporation[5] $368,425 $160,759 $17,879 $511,305 $903,511 $61,837 The Olsten Corporation Apr-93 Home Intensive Care, Inc.[6] $105,982 $7,280 $7,410 $105,852 $94,210 $7,205 W.R. Grace & Co. Jun-92 Critical Care America, Inc. $871,755 $4,337 $77,306 $798,786 $264,081 $55,232 Medical Care America, Inc. Nov-91 Orthopaedic Services, Inc.[7] $252,212 $10,746 $11,828 $251,130 $65,767 $8,365 NovaCare, Inc. Dec-90 Care Plus, Inc. $137,083 $1,461 $845 $137,699 $49,056 $7,988 New England Critical Care, Inc. MEAN: $317,061 $111,144 $16,077 $403,578 $303,174 $36,098 MEDIAN: $195,362 $33,482 $7,410 $237,939 $114,541 $16,665 ---------------------------------------------------------------------------------------- LOW: $93,355 $1,461 $845 $105,852 $49,056 $5,788 HIGH: $1,065,994 $628,384 $77,306 $1,645,413 $1,449,403 $164,896 Trailing ---------------------- Date Target Company Oper. Net Forward Book Ann. Acquiror Income Income Income Value ---- ---------------------------------------- ------ ------ ------ ----- Apr-95 Rehability Corporation $6,242 $2,714 $5,448 $8,837 Living Centers of America, Inc. Apr-95 The Hillhaven Corporation $108,879 $59,350 $50,903 $375,592 Vencor, Inc. Mar-95 Abbey Healthcare Group Incorporated[1] $44,358 $9,249 $25,335 $164,721 Homedco Group, Inc. Jan-95 Surgical Health Corporation[2] $18,755 $779 NA $34,183 HEALTHSOUTH Corporation Sep-94 ReLife, Inc. $16,091 $8,527 $11,693 $64,355 HEALTHSOUTH Rehabilitation Corp. Mar-94 Home Nutritional Services, Inc.[3] $2,215 ($340) $2,973 $58,144 W.R. Grace & Co. Oct-93 RehabClinics, Inc.[4] $7,260 $3,651 $6,457 $68,787 NovaCare, Inc. Sep-93 Total Pharmaceutical Care, Inc. $13,089 $8,274 $11,681 $87,521 Abbey Healthcare Group Incorporated May-93 Lifetime Corporation[5] $44,957 $13,455 $18,205 141,410 The Olsten Corporation Apr-93 Home Intensive Care, Inc.[6] $4,242 $2,053 $5,620 $25,138 W.R. Grace & Co. Jun-92 Critical Care America, Inc. $48,649 $30,836 $39,716 $221,711 Medical Care America, Inc. Nov-91 Orthopaedic Services, Inc.[7] $6,865 $4,100 $7,313 $59,726 NovaCare, Inc. Dec-90 Care Plus, Inc. $6,673 $3,676 $6,862 $27,732 New England Critical Care, Inc. MEAN: $24,483 $11,256 $16,017 $102,912 MEDIAN: $8,755 $4,100 $9,497 $64,355 ------------------------------------------------------------- LOW: $2,215 ($340) $2,973 $8,837 HIGH: $108,879 $59,350 $50,903 $375,592
-------------------------------- (a) Defined as Equity Purchase Price plus debt less cash and equivalents. PROJECT FOREST Recent Mergers and Acquisitions of Alternate Site Companies, 1/1/90 to Present Footnotes 1 One day prior price based on 1/30/95 closing stock price. LTM source: Abbey S-4 registration statement of 3/27/95. 2 EBIT and EBITDA are after minority interests. All numbers exclude merger costs and net income is fully taxed at 40%. 3 Healthdyne announced on 01/06/94 that it plans to start a partial exchange offer for 2.15 million shares of the outstanding common stock of Home Nutritional Services. 4 Assumes 500,000 warrants to buy RehabClinics at an exercise price of $17.10. 5 Lifetime originally approached by Abbey Healthcare Group 03/23/93 and it closed at $17.63 1 day prior to this initial proposal. 6 W.R. Grace & Co. made original offer on 01/14/93. 7 Orthopaedic Services income data extrapolated from nine months ended 09/91.
PROJECT FOREST -------------- Premiums Paid in Recent Squeeze-Out Transactions (a) ------------------------------------------------ -------------------------------------------------------------------------------------------------------------------------- Percentage Shares -------------------------- Date Ownership Announced Target Acquiror At Ann. Acquired --------- ---------------------------------------- -------------------------------- -------- ------- 01/24/90 Copperweld Corp(Imetal SA) Imetal SA 55.6% 44.4% 03/02/90 Shearson Lehman Brothers Hldgs American Express Co. 68.4 39.0 05/17/90 DST Systems Inc. Kansas City Southern Inds. Inc. 87.1 11.5 07/06/90 Mack Trucks Inc. Renault Vehicules Industriels 60.4 40.0 07/12/90 TVX Broadcast Group Inc. Paramount Communications 79.0 21.0 07/31/90 Freeport-McMoRan Oil and Gas Freeport McMoRan Inc. 81.5 18.5 08/16/90 Academy Insurance Group Inc. Academy Mergerco Inc. 50.0 50.0 10/23/90 ERC Environmental and Energy Ogden Corp. 61.2 38.8 01/03/91 Ocean Drilling & Exploration Murphy Oil Corp. 61.1 39.0 02/06/91 Hamilton Oil Corp. BHP Hldgs(USA)Inc(Broken Hill) 51.7 48.3 03/01/91 Metcalf & Eddy Cos. Inc. Air & Water Technologies Corp. 82.0 18.0 05/01/91 United Artists Entertainment Tele-Communications Inc. 53.2 46.0 06/13/91 Weigh-Tronix(Staveley Indus) Staveley Industries PLC 55.8 44.3 09/18/91 Arkla Exploration Co. Arkla Inc. 82.0 18.0 10/16/91 American Television & Commun Time Warner 81.9 18.0 02/06/92 Spelling Entertainment Inc. Charter Co.(American Financial) 82.3 18.0 03/02/92 Grace Energy Corp. WR Grace & Co. 83.4 16.6 08/17/92 PHLCORP Inc. Leucadia National Corp. 63.1 36.9 04/26/93 Southeastern Public Service Co. DWG Corp(Triarc Companies Inc.) 71.0 29.0 06/17/93 Hadson Energy Resources Corp. Apache Corp. 61.8 33.5 10/13/93 Medical Marketing Group Inc. Medco Containment Services Inc. 51.5 45.8 02/17/94 Scripps Howard Broadcasting Co. EW Scripps(Edward Scripps Tr) 86.0 14.0 06/06/94 Ogden Projects Inc.(Ogden Corp.) Ogden Corp. 84.2 15.8 07/28/94 Chemical Waste Management Inc. WMX Technologies Inc. 78.5 21.4 08/24/94 Castle & Cooke Homes Inc. Dole Food Co. Inc. 81.7 17.0 09/08/94 Contel Cellular Inc(Contel) GTE Corp 90.0 10.0 12/28/94 Fleet Mortgage Group Inc. Fleet Financial Group Inc. 81.0 19.0 04/05/95 Club Med Inc. Club Mediterranee SA 67.0 32.5 05/19/95 Bic Corp (BIC SA) BIC SA 78.0 Pending 07/06/95 Grand Gaming Corp. Grand Casinos 77.8 Pending 08/25/95 GEICO Corp. (Berkshire Hathaway) Berkshire Hathaway Inc. 51.0 Pending Percentage Shares Premium Paid ----------------- Purchase Deal -------------------- Date Post-Deal Price per Value One Day One Month Announced Target Sought Ownership Share ($ mil.) Prior Prior --------- ---------------------------------------- ------ --------- --------- ------- ------- --------- 01/24/90 Copperweld Corp(Imetal SA) 44.4% 100.0% $17.00 $78.0 47.8 % 33.3 % 03/02/90 Shearson Lehman Brothers Hldgs 31.6 100.0 12.90 360.0 (0.8) 7.5 05/17/90 DST Systems Inc. 12.9 98.6 15.9 39.1 24.3 51.0 07/06/90 Mack Trucks Inc. 39.6 100.0 6.25 103.7 19.0 22.0 07/12/90 TVX Broadcast Group Inc. 21.0 100.0 9.50 61.4 26.7 85.4 07/31/90 Freeport-McMoRan Oil and Gas 18.5 100.0 10.88 46.2 36.0 47.5 08/16/90 Academy Insurance Group Inc. 50.0 100.0 1.33 46.8 21.1 21.1 10/23/90 ERC Environmental and Energy 38.8 100.0 15.13 33.6 37.5 44.1 01/03/91 Ocean Drilling & Exploration 38.9 100.0 19.39 391.8 14.0 9.2 02/06/91 Hamilton Oil Corp. 48.3 100.0 40.00 524.3 18.5 31.1 03/01/91 Metcalf & Eddy Cos. Inc. 18.0 100.0 19.25 51.0 22.2 24.2 05/01/91 United Artists Entertainment 44.8 97.9 16.19 1,189.0 19.9 25.7 06/13/91 Weigh-Tronix(Staveley Indus) 44.2 97.8 22.00 25.3 41.9 44.3 09/18/91 Arkla Exploration Co. 18.0 100.0 15.44 92.6 22.3 31.4 10/16/91 American Television & Commun 18.1 100.0 82.50 1,699.5 66.7 88.6 02/06/92 Spelling Entertainment Inc. 17.7 100.0 7.25 43.0 52.6 45.0 03/02/92 Grace Energy Corp. 16.6 100.0 19.00 77.3 24.6 7.8 08/17/92 PHLCORP Inc. 36.9 100.0 25.78 139.9 12.1 28.9 04/26/93 Southeastern Public Service Co. 29.0 100.0 25.60 86.1 65.2 61.3 06/17/93 Hadson Energy Resources Corp. 38.2 100.0 15.00 39.3 26.3 25.0 10/13/93 Medical Marketing Group Inc. 48.5 100.0 27.75 122.5 (9.8)b (16.5)(b) 02/17/94 Scripps Howard Broadcasting Co. 14.0 100.0 82.80 115.9 5.5 10.4 06/06/94 Ogden Projects Inc.(Ogden Corp.) 15.8 100.0 18.38 110.3 5.8 20.5 07/28/94 Chemical Waste Management Inc. 21.5 100.0 8.85 397.4 10.6 1.1 08/28/94 Castle & Cooke Homes Inc. 18.3 100.0 15.75 81.5 35.5 55.6 09/08/94 Contel Cellular Inc(Contel) 10.0 100.0 25.50 254.3 43.7 36.0 12/28/94 Fleet Mortgage Group Inc. 19.0 100.0 20.00 188.1 19.4 18.5 04/05/95 Club Med Inc. 33.0 99.5 32.00 153.4 41.4 44.6 05/19/95 Bic Corp (BIC SA) 22.0 100.0 40.50 212.6 13.3 28.6 07/06/95 Grand Gaming Corp. 22.2 100.0 5.06 36.5 34.9 55.7 08/25/95 GEICO Corp. (Berkshire Hathaway) 49.0 100.0 70.00 2,322.8 25.6 25.3 Number of Deals 31 -------------------------- Mean 26.6 % 32.7 % ---------------------------------------------- Median 24.3 28.9 ---------------------------------------------- High 66.7 88.6 ---------------------------------------------- Low (9.8) (16.5) ---------------------------------------------- -------------------------------------------------------------------------------------------------------------------------- (a) Source: Securities Data Corporation. Includes squeeze-out transactions greater than $25 million since 1990 in which acquiror owned between 50-90% of target prior to transaction and sought a post-deal ownership of at least 97%. (b) Based on one day and one month prior prices from date of announcement of Merck/Medco merger.
PROJECT FOREST PINE Ownership Profile
Percent of Percent of Institutional Holdings (a) Shares Held Outstanding Inside Holdings (b) Shares Held (c) Outstanding -------------------------- ----------- ----------- ------------------- --------------- ----------- Putnam Investment Mgmt 873,415 4.6% J. Kenneth Jacobs (Director) 76,100 0.4% Wasatch Advisors Inc 695,281 3.7% Lawrence J. Centella (CEO) 5,666 0.0% Nicholas-Applegate Cap. 326,300 1.7% Mats Wahlstrom (Chairman) 2,500 0.0% Wells Fargo Inst. Tr Na 169,981 0.9% Herbert S. Lawson (Director) 1,500 0.0% College Retire Equities 168,900 0.9% Ralph Z. Levy, Jr. (E-VP) 1,066 0.0% Pilgrim Baxter & Assocs 148,700 0.8% M. Stephen Harrison (E-VP) 1,066 0.0% RCM Capital Management 85,000 0.4% Lowell F. Martin (VP Managed Care) 881 0.0% Lutheran Brotherhood 76,200 0.4% Bradley S. Wear (CFO) 416 0.0% Bankers Trust N Y Corp 73,100 0.4% Others 10,000 0.1% Mellon Bank Corporation 63,900 0.3% ----------- --------- Mackenzie Financial Corp 60,000 0.3% Total 99,195 0.5% Conseco Inc 58,000 0.3% Travelers Inc 57,004 0.3% Percent of Southern Fiduciary Group 51,800 0.3% 5% Holders (b) Shares Held Outstanding Rosenberg Inst. Eq. Mgmt 40,300 0.2% -------------- ----------- ----------- First Union Corporation 40,000 0.2% COBE Laboratories, Inc. 10,036,221 53.0% Calif Public Emp. Ret. 31,600 0.2% Northern Trust Corp 29,700 0.2% Others 287,888 1.5% Institutional Holdings 3,337,069 17.6% --------- ------- Inside Holdings 99,195 0.5% Total 3,337,069 17.6% 5% Holders 10,036,221 53.0% Other Public Shares 5,448,686 28.8% ----------- --------- Total Shares Outstanding (d) 18,921,171 100.0%
(a) Source: Spectrum Institutional Filings as of 8/18/95. (b) Source: Company Proxy dated April 18, 1995. (c) Excludes outstanding options and warrants. (d) Source: Company as of 8/O4/95, excludes 596,575 options and warrants outstanding. PROJECT FOREST Analysis of ASPEN Investment in PINE from 12/01/89 - 09/08/95 "PLOT POINTS FOR GRAPH TO BE SUPPLIED"