EX-99.(C)(2) 4 a2234727zex-99_c2.htm EX-99.(C)(2)

 

Exhibit (c)(2) PROJECT HEDWIG Preliminary Reference Materials Requested by Special Committee January 25, 2018

 


Hedwig – Illustrative Ownership Summary Current Holdings(2) Investor Information WAC(1) Investor Name Style Report / Position Date (mm) (%) Source: FactSet, Public filings 1 1. 2. 3. Weighted average cost base (“WAC”) estimated based on quarterly position changes and average prices since 31-Dec-99. Total share count and ownership percentages are based off of basic common share count of 12.9mm as of 03-Nov-2017, per Hedwig Q3-2017 10-Q. Includes 2.1mm shares owned by institutions outside of the top institutions listed on this slide. PROJECT HEDWIG Top 15 Non-Privet Institutions Royce & Associates Growth 30-Sep-17 $11.46 Dimensional Fund Advisors Growth 30-Sep-17 14.36 BlackRock Fund Advisors Index 30-Sep-17 12.10 Wellington Management Co. Growth 30-Sep-17 11.23 Franklin Advisory Services Growth 30-Sep-17 10.08 The Vanguard Group Index 30-Sep-17 10.44 First Wilshire Securities Management Value 30-Sep-17 11.31 Pacific Ridge Capital Partners Growth 30-Sep-17 11.94 Kennedy Capital Management Growth 30-Sep-17 13.43 Foundry Partners Growth 30-Sep-17 11.59 Renaissance Technologies Growth 30-Sep-17 11.34 Grace & White Value 30-Sep-17 11.35 Bridgeway Capital Management Value 30-Sep-17 11.23 John G. Ullman & Associates Yield 30-Sep-17 11.45 SSgA Funds Management Index 30-Sep-17 10.93 1.1 8.6% 1.1 8.4% 0.8 6.2% 0.6 4.9% 0.6 4.3% 0.4 3.3% 0.3 2.6% 0.3 2.4% 0.3 2.3% 0.3 2.2% 0.3 2.1% 0.3 1.9% 0.2 1.8% 0.2 1.4% 0.2 1.2% Top 15 Non-Privet Institutions $11.86 6.9 53.6% Privet Value 31-Oct-17 $11.17 1.4 10.6% Summary Strategic & Insider Privet Non-Privet Institutional Holders(3) Unidentified Institutional & Retail 0.3 2.7% 1.4 10.6% 9.1 70.1% 2.2 16.6% Total(2) 12.9 100.0%

 


Hedwig – Turn of Float Analysis SINGLE TURN OF HEDWIG FLOAT ANALYSIS – BASED ON OUTSTANDING FLOAT OF 11.2 MILLION SHARES (DECEMBER 9, 2016 – JANUARY 25, 2018)(1) Current Share Price: US$ 18.53 8% 6% 0% Source: FactSet, Public filings Note: Analysis as of 25-Jan-18. 1. Outstanding float calculated based on common share count of 11.2mm as of 03-Nov-2017 (per Hedwig Q3-2017 10-Q), less 0.3mm of insider holdings, less 1.4mm of Privet holdings. 2 PROJECT HEDWIG 20% 4% 1% 18% 12% 10% 4% 7% 6% 3% 2%

 


Negative One-Day Premium Transactions Stock Reaction One Day After Ann. Stock Consider-ation Ann. Date Target Company Unaffected Share Price 30-Day VWAP 90-Day VWAP 180-Day VWAP Financial Strategic Going Private Status Acquirer Company Industry 1-Day 13E-3 Buyer Buyer Dec-17 Kindred Healthcare, Inc. Pending Humana, Inc.; TPG Capital LLC; Hospital/Nursing Management (5.3%) 5.8% 13.6% 24.9% 5.1% 0.5% n.a. No No Yes Yes Dec-17 Fairmount Santrol Holdings, Pending Unimin Corp. Construction Materials (84.9%) (84.9%) (84.1%) (81.0%) (82.7%) (0.4%) n.a. No No Yes Yes Oct-17 Inventure Foods, Inc. Complete UTZ Quality Foods LLC Food: Specialty/Candy (10.3%) (10.3%) (14.7%) (0.7%) (6.4%) 0.3% n.a. No No Yes Yes Aug-17 TerraVia Holdings, Inc. Complete Corbion NV Chemicals: Specialty (3.8%) (3.8%) (18.2%) (47.0%) (74.3%) 14.7% n.a. No No Yes No Jul-17 Western Refining Logistics LP Complete Tesoro Logistics LP Oil & Gas Pipelines (2.2%) (2.2%) (1.3%) 0.2% 6.5% (1.2%) 100.0% No No Yes No Jul-17 Rocket Fuel, Inc. Complete Vector Capital Management LP; Information Technology Services (3.3%) (3.3%) (7.3%) (30.4%) (11.5%) (2.2%) n.a. No No Yes Yes Jun-17 Universal Stainless & AlloyPending Synalloy Corp. Steel (4.9%) (4.9%) 1.1% 9.9% 22.6% (0.5%) 74.9% No No Yes No May-17 Straight Path Communications, Pending Verizon Communications, Inc. Specialty Telecommunications (17.8%) 404.0% 64.1% 203.8% 323.1% 0.9% 100.0% No No Yes No Feb-17 DigitalGlobe, Inc. Complete MacDonald, Dettwiler & Associates Specialty Telecommunications (0.1%) 18.0% 14.7% 15.8% 25.4% 0.8% 48.5% No No Yes No Jan-17 Midcoast Energy Partners LP Complete Enbridge Energy Co., Inc. Gas Distributors (8.6%) (8.6%) 7.4% 5.1% 1.1% --n.a. Yes No Yes Yes Dec-16 Tangoe, Inc. Complete Marlin Management Co. LLC; Packaged Software (21.0%) (21.0%) (19.8%) (22.9%) (22.0%) (4.4%) n.a. No No Yes Yes Nov-16 EarthLink Holdings Corp. Complete Windstream Holdings, Inc. Internet Software/Services (4.8%) 13.0% (2.1%) (6.7%) (4.3%) (5.9%) 100.0% No No Yes No Nov-15 Breeze-Eastern LLC Complete TransDigm Group, Inc. Aerospace & Defense (6.6%) (6.6%) 7.2% 30.8% 51.5% 0.8% n.a. No No Yes No Jun-15 Martha Stewart Living Complete Sequential Brands Group, Inc. /Old/ Publishing: Books/Magazines (11.9%) 21.0% 17.1% 11.7% 25.9% 0.7% 50.5% No No Yes No Jun-15 The Ryland Group, Inc. Complete Standard Pacific Corp. Homebuilding (0.4%) (0.4%) 1.4% (4.5%) 4.9% 5.2% 100.0% No No Yes No Apr-15 Baltic Trading Ltd. Complete Genco Shipping & Trading Ltd. Marine Shipping (1.3%) (1.3%) 5.9% (17.1%) (50.9%) 3.0% 100.0% No No Yes No Mar-15 Aruba Networks, Inc. Complete Hewlett-Packard Co. Computer Peripherals (0.6%) 34.4% 37.6% 30.2% 28.6% (1.0%) n.a. No No Yes No Oct-14 Wright Medical Group, Inc. Complete Tornier NV Medical Specialties (23.7%) 28.0% 3.1% 7.3% 13.6% (0.9%) 100.0% No No Yes No Oct-14 Atlas Energy LP Complete Targa Resources Corp. Oil & Gas Pipelines (4.0%) (4.0%) (27.2%) (28.8%) (27.7%) (5.2%) 70.7% No No Yes No Oct-14 Oiltanking Partners LP Complete Enterprise Products Partners LP Wholesale Distributors (1.1%) (1.1%) (2.9%) 2.2% 15.2% (0.3%) 100.0% No No Yes No May-14 PetroLogistics LP Complete Flint Hills Resources LLC Chemicals: Specialty (3.0%) 8.0% (4.4%) (0.1%) 2.3% 0.6% n.a. No No Yes Yes Nov-13 Nielsen Consumer Insights, Complete Nielsen Holdings NV Miscellaneous Commercial Services (1.9%) (1.9%) 3.9% 4.8% 11.1% 0.5% n.a. No No Yes No Oct-13 Consolidated Graphics, Inc. Complete R.R. Donnelley & Sons Co. Commercial Printing/Forms (2.5%) (2.5%) 7.6% 14.0% 31.1% (0.1%) 44.4% No No Yes No Oct-13 International Minerals Corp. Complete Hochschild Mining Plc Precious Metals (7.7%) 20.0% n.a. n.a. n.a. 10.0% n.a. No No Yes No Jul-13 Optimer Pharmaceuticals, Inc. Complete Cubist Pharmaceuticals LLC Pharmaceuticals: Major (20.0%) (20.0%) (25.2%) (25.4%) (13.5%) (5.9%) n.a. No No Yes No Jul-13 Talon Therapeutics, Inc. Complete Spectrum Pharmaceuticals, Inc. Pharmaceuticals: Major (84.9%) (84.9%) (86.1%) (87.8%) (89.3%) n.a. n.a. No No Yes No Aug-12 Comverse Technology, Inc. Complete Verint Systems, Inc. Telecommunications Equipment (35.4%) (35.4%) (33.8%) (38.3%) (40.7%) 1.2% 97.0% No No Yes No May-11 Integral Systems, Inc. Complete Kratos Defense & Security Solutions, Information Technology Services (13.2%) 16.6% (9.9%) (7.9%) 8.6% (0.7%) 60.5% No No Yes No Mar-11 Encore Energy Partners LP Complete Vanguard Natural Resources LLC Oil & Gas Production (5.2%) 4.4% (3.6%) 0.0% 6.6% (1.0%) 100.0% No No Yes No Feb-11 Clinical Data, Inc. Complete Forest Laboratories, Inc. Medical Specialties (11.5%) 19.2% 18.4% 47.8% 71.3% (0.8%) n.a. No No Yes No Feb-11 Frontier Oil Corp. Complete Holly Corp. Oil Refining/Marketing (4.0%) (4.0%) 25.5% 53.6% 76.5% (1.4%) 100.0% No No Yes No Feb-11 Zoran Corp. Complete CSR Plc Semiconductors (1.4%) 40.0% (1.1%) 12.7% 9.2% 15.2% 31.8% No No Yes No Feb-11 Hughes Communications, Inc. Complete EchoStar Corp. Specialty Telecommunications (1.7%) 31.0% 14.0% 47.6% 83.5% 0.3% n.a. No No Yes No Feb-11 Retail Ventures, Inc. Complete DSW, Inc. Department Stores (0.9%) (0.9%) 1.1% 4.2% 29.5% 12.9% 100.0% No No Yes No Dec-10 Compellent Technologies, Inc. Complete Dell, Inc. Computer Peripherals (3.3%) (3.3%) 7.3% 38.6% 68.4% (0.4%) n.a. No No Yes No Jun-10 Valeant Pharmaceuticals Complete Biovail Corp. Pharmaceuticals: Major (6.8%) (6.8%) 182.2% 172.3% 185.2% 8.5% 60.8% No No Yes No Apr-10 Arena Resources, Inc. Complete SandRidge Energy, Inc. Oil & Gas Production (1.8%) 16.8% n.a. n.a. n.a. 7.2% 86.4% No No Yes No Source: FactSet, company filings, news releases Note: No negative premium deal is directly comparable to the transaction under consideration by the Company. Note: Includes all pending / completed deals involving US targets with deal value between $100mm - $5,000mm; excludes companies in FIG and Real Estate industries. 1. VWAP metrics are based on trading days. 3 PROJECT HEDWIG Denotes going private transactions with a financial buyer. Mar-10 infoGROUP, Inc.Complete CCMP Capital AdvisorsData Processing Services(2.0%)22.0%1.9%(0.3%) 11.6%(0.6%)n.a.NoYesNoYes Oct-10 American Commercial Lines, Complete Platinum Equity LLCMarine Shipping(0.9%)(0.9%) 13.9%28.8%38.5%(0.6%)n.a.NoYesNoYes Oct-10 Polymer Group, Inc.Complete The Blackstone Group LPTextiles(19.3%)(19.3%) (14.9%)(9.3%)(4.8%)(2.3%)n.a.NoYesNoYes Feb-11 Emergency Medical Services Complete Clayton Dubilier & Rice LLCOther Transportation(9.4%)18.8%(4.2%)8.5%16.9%0.6%n.a.NoYesNoYes Mar-11 Lawson Software, Inc.Complete Infor Global Solutions EuropeanPackaged Software(2.2%)14.0%10.2%19.1%28.6%6.0%n.a.NoYesNoYes Aug-12 Deltek, Inc.Complete Thoma Bravo LLCPackaged Software(7.2%)24.0%(3.0%)11.8%18.6%--n.a.NoYesNoYes Sep-13 R.G. Barry Corp.Complete The Blackstone Group LP; Mill Road Apparel/Footwear(0.6%)(0.6%) 14.1%17.8%30.0%0.5%n.a.NoYesNoYes Aug-13 Globecomm Systems, Inc.Complete Wasserstein & Co. LPSpecialty Telecommunications(1.7%)21.9%(1.4%)6.3%11.8%(0.2%)n.a.NoYesNoYes Aug-15 Belk, Inc.Complete Sycamore Partners Management LP Department Stores(2.9%)3.5%1.9%1.9%22.2%--n.a.NoYesNoYes May-17 West Corp.Complete Apollo Global Management LLCMiscellaneous Commercial Services (2.5%)17.5%(4.4%)(4.1%)(1.0%)(4.1%)n.a.NoYesNoYes Jul-17 NCI, Inc.Complete H.I.G. Capital LLC (Private Equity) Information Technology Services(5.2%)(5.2%)(0.1%)21.2%35.2%--n.a.NoYesNoYes Deal Information Premium Paid(1) Other Transaction Information

 


Negative One-Day Premium Transactions (cont’d) Summary of Premiums / Discounts for All Transactions Summary of Premiums / Discounts for Going Private Transactions with Financial Buyer Hedwig Metrics(1) Price 1-Day Price 30-Day VWAP 90-Day VWAP 180-Day VWAP Summary of Other Transaction Information Buyer Classification for the 48 transactions: Financial buyer: Private strategic buyer: Public strategic buyer with all cash consideration: Public strategic buyer with a stock component: 11 7 10 20 Parameters Announcement between 01-Jan-2010 to 12-Jan-2018 Closed or pending transactions Transaction Value: $100mm - $5bn U.S. Public Company Targets Excludes FIG and Real Estate Industries Total Transactions: 921 Number of Transactions with Implied One Day Premiums at a Discount: 48 Percentage of Total Transactions: 5.1% Source: FactSet, company filings, news releases Note: VWAP metrics are based on trading days. 1. Share prices and VWAPs calculated as of 25-Jan-2018. 2. Price before Privet’s 13D amendment describing interest in a transaction. 4 PROJECT HEDWIG Indicative Unaffected Share (2) Share Price Metric $17.75 $18.53 $16.50 $17.80 $16.85 $15.19 Premium / (Discount) to Indicative Price ($17.75) --(4.2%) 7.6% (0.3%) 5.3% 16.9% Unaffected Share Stock Reaction 1-Day Price 30-Day VWAP 90-Day VWAP 180-Day VWAP One Day after Ann. Mean: (4.5%) 8.0% 1.2% 8.5% 17.3% (0.1%) Median: (2.4%) 8.7% (0.0%) 7.4% 17.7% --Unaffected Share Stock Reaction 1-Day Price 30-Day VWAP 90-Day VWAP 180-Day VWAP One Day after Ann. Mean: (9.9%) 9.7% 2.3% 9.6% 19.4% 1.1% Median: (4.0%) (0.7%) 1.1% 5.0% 11.7% --

 


Disclaimer This presentation, and any supplemental information (written or oral) or other documents provided in connection therewith (collectively, the “materials”), are provided solely for the information of the Board of Directors (the “Board”) of Hardinge Inc. (the “Company”) by BMO in connection with the Board’s consideration of a potential transaction (the “Transaction”) involving the Company. This presentation is incomplete without reference to, and should be considered in conjunction with, any supplemental information provided by and discussions with BMO in connection therewith. Any defined terms used herein shall have the meanings set forth herein, even if such defined terms have been given different meanings elsewhere in the materials. The materials are for discussion purposes only. BMO expressly disclaims any and all liability which may be based on the materials and any errors therein or omissions therefrom. 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In the ordinary course of business, certain of BMO’s affiliates and employees, as well as investment funds in which they may have financial interests or with which they may co-invest, may acquire, hold or sell, long or short positions, or trade or otherwise effect transactions, in debt, equity, and other securities and financial instruments (including loans and other obligations) of, or investments in, one or more parties that may be involved in the Transaction and their respective affiliates or any currency or commodity that may be involved in the Transaction. BMO provides mergers and acquisitions, restructuring and other advisory and consulting services to clients. BMO’s personnel may make statements or provide advice that is contrary to information contained in the materials. BMO’s or its affiliates’ proprietary interests may conflict with the Company’s interests. BMO may have advised, may seek to advise and may in the future advise one or more participants in the Transaction and/or other companies mentioned in the materials. All values in this document are in US$ unless otherwise specified 5 PROJECT HEDWIG