-----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, SzkrVuEE3N6+Q4bFwqfPxo4ALzshiJwBNv1iQcVMyPZNzdmHokG2qd7kg4L9OKDS YR82l2ZI1J21Xk2QHe9DkA== 0000950103-97-000755.txt : 19971218 0000950103-97-000755.hdr.sgml : 19971218 ACCESSION NUMBER: 0000950103-97-000755 CONFORMED SUBMISSION TYPE: SC 13E3 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19971217 SROS: NONE GROUP MEMBERS: MASCOTECH ACQUISITION, INC. GROUP MEMBERS: MASCOTECH INC GROUP MEMBERS: TRIMAS CORPORATION SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: TRIMAS CORP CENTRAL INDEX KEY: 0000842633 STANDARD INDUSTRIAL CLASSIFICATION: METAL FORGING & STAMPINGS [3460] IRS NUMBER: 382687639 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13E3 SEC ACT: SEC FILE NUMBER: 005-40013 FILM NUMBER: 97739913 BUSINESS ADDRESS: STREET 1: 315 E EISENHOWER PKWY CITY: ANN ARBOR STATE: MI ZIP: 48108 BUSINESS PHONE: 3137477025 MAIL ADDRESS: STREET 1: 315 E EISENHOWER PKWY CITY: ANN ARBOR STATE: MI ZIP: 48108 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MASCOTECH INC CENTRAL INDEX KEY: 0000745448 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 382513957 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13E3 BUSINESS ADDRESS: STREET 1: 21001 VAN BORN RD CITY: TAYLOR STATE: MI ZIP: 48180 BUSINESS PHONE: 3132747405 MAIL ADDRESS: STREET 1: 21001 VAN BORN ROAD CITY: TAYLOR STATE: MI ZIP: 48180 FORMER COMPANY: FORMER CONFORMED NAME: MASCO INDUSTRIES INC DATE OF NAME CHANGE: 19930629 SC 13E3 1 - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------- SCHEDULE 13E-3 Rule 13E-3 Transaction Statement (Pursuant to Section 13(e) of the Securities Exchange Act of 1934) ----------------------- TRIMAS CORPORATION (Name of Issuer) ----------------------- MASCOTECH, INC. MASCOTECH ACQUISITION, INC. TRIMAS CORPORATION (Name of Person(s) Filing Statement) ----------------------- Common Stock, $.01 Par Value (Title of Class of Securities) ----------------------- 896215100 (CUSIP Number of Class of Securities) ----------------------- Brian P. Campbell David B. Liner, Esq. TriMas Corporation MascoTech, Inc. 315 East Eisenhower Parkway 21001 Van Born Road Ann Arbor, Michigan 48108 Taylor, Michigan 48180 (313) 747-7025 (313) 274-7405 (Name, Address and Telephone Number of Persons Authorized to Receive Notices and Communications on Behalf of Person(s) Filing Statement) ----------------------- With Copies to: David W. Ferguson, Esq. Jerome M. Schwartz, Esq. Davis Polk & Wardwell Dickinson, Wright, Moon, Van Dusen & Freeman 450 Lexington Avenue 500 Woodward Avenue, Suite 4000 New York, NY 10017 Detroit, Michigan 48226 (212) 450-4000 (313) 223-3628 This statement is filed in connection with (check the appropriate box): a. |_| 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: |_| CALCULATION OF FILING FEE ================================================================================ Transaction Valuation* Amount of Filing Fee** $912,927,132 $182,585 ================================================================================ * Calculated by multiplying $34.50, the per share tender offer price, by 26,461, 656, the sum of the number of shares of Common Stock sought in the Offer and the 327,647 shares of Common Stock subject to options that will be vested and exercisable as of January 16, 1998. ** Calculated as 1/50 of 1% of the 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: $182,585 Filing Party: MascoTech, Inc. Form or Registration No.: Schedule 14D-1 Date Filed: December 17, 1997 - -------------------------------------------------------------------------------- INTRODUCTION This Rule 13e-3 Transaction Statement on Schedule 13E-3 (the "Schedule 13E-3") is being filed by (i) MascoTech, Inc., a Delaware corporation ("Parent"), (ii) MascoTech Acquisition, Inc., a Delaware corporation ("Purchaser") and (iii) TriMas Corporation, a Delaware 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 of the issued and outstanding shares (the "Shares") of common stock, $.01 par value per share, of the Company upon the terms and subject to the conditions set forth in the Offer to Purchase dated December 17, 1997 (the "Offer to Purchase") and the related Letter of Transmittal (which together constitute the "Offer"), copies of which are filed as Exhibits (d)(1) and (d)(2) hereto, respectively. The following Cross Reference Sheet, prepared pursuant to General Instruction F to Schedule 13E-3, shows the location in the Tender Offer Statement on Schedule 14D-1 filed by Parent and Purchaser (the "Schedule 14D-1") with the Securities and Exchange Commission on the date hereof of the information required to be included in this Schedule 13E-3. The information set forth in the Schedule 14D-1, including all exhibits thereto, is hereby expressly incorporated herein by reference as set forth in the Cross Reference Sheet and the responses in this Schedule 13E-3, and such responses are qualified in their entirety by reference to the information contained in the Offer to Purchase and the schedules and annexes thereto. The information contained in this Schedule 13E-3 concerning the Company, including, without limitation, the deliberations of the Company's Board of Directors in connection with the transaction, the opinion of the Company's financial advisor and the Company's capital structure and historical financial statements and projections, was supplied by the Company. Parent and Purchaser take no responsibility for the accuracy of such information. The information contained in this Schedule 13E-3 concerning Parent and Purchaser was supplied by Parent and Purchaser. The Company takes no responsibility for the accuracy of such information. 2 CROSS REFERENCE SHEET WHERE LOCATED ITEM IN SCHEDULE 13E-3 IN SCHEDULE 14D-1 - ------------------------- ----------------- Item 1(a) ..................................................... Item 1(a) Item 1(b) ..................................................... Item 1(b) Item 1(c) ..................................................... Item 1(c) Item 1(d) ..................................................... * Item 1(e) ..................................................... * Item 1(f) ..................................................... * Item 2(a) ..................................................... Item 2(a) Item 2(b) ..................................................... Item 2(b) Item 2(c) ..................................................... Item 2(c) Item 2(d) ..................................................... Item 2(d) Item 2(e) ..................................................... Item 2(e) Item 2(f) ..................................................... Item 2(f) Item 2(g) ..................................................... Item 2(g) Item 3 ........................................................ Item 3 Item 4 ........................................................ * Item 5 ........................................................ Item 5 Item 6(a) ..................................................... Item 4(a) Item 6(b) ..................................................... * Item 6(c) ..................................................... Item 4(b) Item 6(d) ..................................................... * Item 7(a) ..................................................... Item 5 Item 7(b) ..................................................... * Item 7(c) ..................................................... * Item 7(d) ..................................................... * Item 8 ........................................................ * Item 9 ........................................................ * Item 10 ....................................................... Item 6 Item 11 ....................................................... Item 7 Item 12 ....................................................... * Item 13 ....................................................... * Item 14 ....................................................... * Item 15(a) .................................................... * Item 15(b) .................................................... Item 8 Item 16 ....................................................... Item 10(f) Item 17 ....................................................... Item 11 - ------------------- * The Item is located in the Schedule 13E-3 only. 3 Item 1. Issuer and Class of Security Subject to the Transaction (a)-(c) The response to Item 1(a)-(c) of the Schedule 14D-1 is incorporated herein by reference. (d) The information set forth in the Offer to Purchase under "Special Factors--The Merger Agreement", "The Tender Offer--Price Range of Shares; Dividends" and "The Tender Offer--Financing of the Offer and the Merger" is incorporated herein by reference. (e) Not applicable. (f) Not applicable. Item 2. Identity and Background This Statement is filed by Purchaser, Parent and the Company. The response to Item 2 of the Schedule 14D-1 is incorporated herein by reference. The information set forth in the Offer to Purchase under "The Tender Offer--Certain Information as to the Company" is incorporated herein by reference. During the last five years, the Company and, to the best knowledge of the Company, none of the persons listed in Schedule I of the Offer to Purchase has been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting activities subject to, federal or state securities laws or finding any violation of such laws. Item 3. Past Contacts, Transactions or Negotiations The response to Item 3 of the Schedule 14D-1 is incorporated herein by reference. Item 4. Terms of the Transaction (a) The information set forth in the Offer to Purchase on the cover page thereof and under "Introduction", "Special Factors--Background of the Offer", "Special Factors--The Merger Agreement", "The Tender Offer--Terms of the Offer", "The Tender Offer--Acceptance for Payment and Payment for Shares", "The Tender Offer--Procedures for Accepting the Offer and Tendering Shares", "The Tender Offer--Withdrawal Rights", "The Tender Offer--Dividends and Distributions", "The Tender Offer--Certain Conditions of the Offer", "The Tender Offer--Certain Legal Matters" and "The Tender Offer--Miscellaneous" is incorporated herein by reference. (b) The information set forth in the Offer to Purchase under "Special Factors--Interests of Certain Persons in the Offer and the Merger" is incorporated herein by reference. Item 5. Plans or Proposals of the Issuer or Affiliate The response to Item 5 of the Schedule 14D-1 is incorporated herein by reference. Item 6. Source and Amount of Funds or Other Consideration (a) The response to Item 4(a) of the Schedule 14D-1 is incorporated herein by reference. (b) The information set forth in the Offer to Purchase in "The Tender Offer--Fees and Expenses" is incorporated herein by reference. (c) The response to Item 4(b) of the Schedule 14D-1 is incorporated herein by reference. 4 (d) Not applicable. Item 7. Purpose(s), Alternatives, Reasons and Effects (a) The response to Item 5 of the Schedule 14D-1 is incorporated herein by reference. (b) The information set forth in the Offer to Purchase under "Special Factors--Background of the Offer", "Special Factors--Recommendation of the Special Committee and the Company Board; Fairness of the Offer and the Merger" and "Special Factors--Purpose and Structure of the Offer and the Merger; Reasons of Parent for the Offer and the Merger" is incorporated herein by reference. (c)-(d) The information set forth in the Offer to Purchase under "Introduction", "Special Factors--Background of the Offer", "Special Factors--Recommendation of the Special Committee and the Company Board; Fairness of the Offer and the Merger", "Special Factors--Purpose and Structure of the Offer and the Merger; Reasons of Parent for the Offer and the Merger", "Special Factors--Position of Parent and Purchaser Regarding Fairness of the Offer and the Merger", "Special Factors--Plans for the Company After the Offer and the Merger", "The Tender Offer--Certain Federal Income Tax Consequences" and "The Tender Offer--Certain Effects of the Offer" is incorporated herein by reference. Item 8. Fairness of the Transaction (a)-(e) The information set forth in the Offer to Purchase under "Introduction", "Special Factors--Background of the Offer ", "Special Factors--Recommendation of the Special Committee and the Company Board; Fairness of the Offer and the Merger", "Special Factors--Position of Parent and Purchaser Regarding Fairness of the Offer and the Merger" and "Special Factors--Purpose and Structure of the Offer and the Merger; Reasons of Parent for the Offer and the Merger" is incorporated herein by reference. (f) Not applicable. Item 9. Reports, Opinions, Appraisals And Certain Negotiations The information set forth in the Offer to Purchase under "Special Factors--Background of the Offer", "Special Factors--Recommendation of the Special Committee and the Company Board; Fairness of the Offer and the Merger", "Special Factors--Opinion of Financial Advisor to the Special Committee", "Special Factors--Opinion of Financial Advisor to Parent", "Special Factors--Position of Parent and Purchaser Regarding Fairness of the Offer and the Merger" and Annex B is incorporated herein by reference. Item 10. Interest in Securities of the Issuer The response to Item 6 of the Schedule 14D-1 is incorporated herein by reference. The information set forth in the Offer to Purchase under "The Tender Offer--Certain Information Concerning the Company" is incorporated herein by reference. Item 11. Contracts, Arrangements or Understandings with Respect to the Issuer's Securities The response to Item 7 of the Schedule 14D-1 is incorporated herein by reference. The information set forth in the Offer to Purchase under "The Tender Offer--Certain Information Concerning the Company" is incorporated herein by reference. 5 Item 12. Present Intention and Recommendation of Certain Persons with Regard to the Offer and the Merger The information set forth in the Offer to Purchase under "Introduction", "Special Factors--Background of the Offer and the Merger", "Special Factors--Recommendation of the Special Committee and the Company Board; Fairness of the Offer and the Merger" and "Special Factors--Interests of Certain Persons in the Offer and the Merger" is incorporated herein by reference. Item 13. Other Provisions of the Offer and the Merger (a) The information set forth in the Offer to Purchase under "Special Factors--Rights of Stockholders in the Offer and the Merger", "Special Factors--The Merger Agreement" and in Annexes A and C is incorporated herein by reference. (b) Not applicable. (c) Not applicable. Item 14. Financial Information (a) The information set forth in the Offer to Purchase under "The Tender Offer--Certain Information Concerning the Company" and "The Tender Offer--Price Range of Shares; Dividends" is incorporated herein by reference. In addition, the Company's audited financial statements for the fiscal years ended December 31, 1995 and December 31, 1996, and the Company's unaudited financial statements for the period ended September 30, 1997, are attached to the Offer to Purchase as Annexes D and E thereto, respectively. (b) Not applicable. Item 15. Persons and Assets Employed, Retained or Utilized (a) The information set forth in the Offer to Purchase under "Special Factors--Background of the Offer and the Merger", "Special Factors--Recommendation of the Special Committee and the Company Board; Fairness of the Offer and the Merger", "Special Factors--Plans for the Company After the Offer and the Merger" and "The Tender Offer--Certain Effects of the Offer" is incorporated herein by reference. (b) The response to Item 8 of the Schedule 14D-1 is incorporated herein by reference. Item 16. Additional Information The response to Item 10(f) of the Schedule 14D-1 is incorporated herein by reference. Item 17. Material to Be Filed as Exhibits (a)(1) Commitment Letter (including the related term sheet), dated December 10, 1997, from The First National Bank of Chicago, Bank of America NT and NationsBank N.A.* (b)(1) Opinion of BT Wolfensohn dated December 10, 1997 (attached as Annex B to the Offer to Purchase).* (b)(2) Presentation of BT Wolfensohn dated December 10, 1997. (b)(3) Opinion of Salomon Smith Barney dated December 10, 1997. 6 (b)(4) Presentation of Salomon Smith Barney dated December 10, 1997. (c)(1) Registration Agreement, dated as of December 27, 1988, among the Company, Masco Corporation and Parent (incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1992). Amendment dated as of April 21, 1992 (incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1996). Amendment dated as of January 5, 1993 (incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1992). Amendment dated as of May 26, 1994 (incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1994). Amendment dated as of May 15, 1996 (incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1996). (c)(2) Agreement and Plan of Merger, dated as of December 10, 1997, as amended by Amendment No. 1 dated as of December 15, 1997, among the Company, Parent and Purchaser.* (d)(1) Offer to Purchase dated December 17, 1997.* (d)(2) Letter of Transmittal sent to holders of Shares.* (d)(3) Notice of Guaranteed Delivery.* (d)(4) Letter from Salomon Smith Barney to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.* (d)(5) Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.* (d)(6) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.* (d)(7) Summary Advertisement as published in The Wall Street Journal on December 17, 1997.* (d)(8) Text of Press Release issued by Parent and the Company on December 11, 1997.* (d)(9) Text of Press Release issued by Parent on December 17, 1997.* (e) Section 262 of the Delaware General Corporation Law (attached as Annex C to the Offer to Purchase).* (f) Not applicable. (g)(1) Complaint filed in Sapsowitz v. Manoogian et al. (Court of Chancery in the State of Delaware in and for New Castle County, filed December 11, 1997).* (g)(2) Complaint filed in Blue v. TriMas Corporation et al. (Court of Chancery of the State of Delaware in and for New Castle County, filed December 11, 1997).* - ------------------- * Incorporated by reference to the Statement on Schedule 14D-1 filed by Purchaser and Parent on December 17, 1997. 7 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. December 17, 1997 MASCOTECH, INC. By: /s/ David B. Liner -------------------------------------------- Name: David B. Liner Title: Vice President and Corporate Counsel MASCOTECH ACQUISITION, INC. By: /s/ David B. Liner -------------------------------------------- Name: David B. Liner Title: Secretary TRIMAS CORPORATION By: /s/ Brian P. Campbell -------------------------------------------- Name: Brian P. Campbell Title: President 8 EXHIBIT INDEX Exhibit No. Description - ---------- ----------- (b)(2) Presentation of BT Wolfensohn dated December 10, 1997. (b)(3) Opinion of Salomon Smith Barney dated December 10, 1997. (b)(4) Presentation of Salomon Smith Barney dated December 10, 1997. 9 EX-99.B2 2 (B)(2) EXHIBIT (b)(2) Confidential - ------------------------------------------------------------------------------ PROJECT MOTOWN Presentation to the Oversight Committee December 9, 1997 - ------------------------------------------------------------------------------ BT Wolfensohn logo The Information contained in this memorandum regarding Tiger was obtained from Tiger and Mustang 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 Oversight Committee of the Board of Directors of Tiger Corporation only. It is confidential and may not be disclosed or provided to any third parties without the written permission of BT Wolfensohn. This memorandum is prepared as of December 9, 1997 and reflects information made available to us prior to such date. It does include information regarding all of the assessments made by BT Wolfensohn in arriving at its conclusions. Table of Contents Section ------- I. Executive Summary o Summary of Proposed Transaction o Financial Summary of the Proposed Transaction o Summary of Key Transaction Events o Intercompany and Director Relationships o Tiger Stock Price History o Other Considerations II. Review of Tiger o Historical Financial Statements o Summary of Recent Analyst Research o Ownership Profile and Liquidity Analysis III. Valuation Analysis o Selected Public Company Analysis o Selected Precedent Transaction Analysis o Discounted Cash Flow Analysis IV. Pro Forma Combination Analysis V. Appendix o Analysis of Selected Companies o Analysis of Selected Precedent Transactions o Premiums Analysis for Selected Transactions o Summary of Termination Fees for Selected Transactions I. EXECUTIVE SUMMARY Summary of Proposed Transaction
Transaction Mustang, a 37% shareholder and affiliate of Tiger, will offer to acquire all shares not owned by Mustang pursuant to a cash tender offer and second-step merger. The Chairman of Mustang, Mustang and Mustang's largest shareholder (Mustang Corp.) hold in the aggregate approximately 45% of Tiger's shares. Price/Offer $34.50 cash per share for all shares (approximately 25.3 million shares or approximately 63% of outstanding shares) owned by the shareholders other than Mustang. Post-Transaction Tiger to become a wholly-owned subsidiary of Mustang upon completion Ownership of merger. Key Conditions to o Minimum Condition in Tender Offer requiring a majority of public shares Tender and Merger (which shall for such purposes, exclude shares owned by Mustang, Mustang Corp., its Chief Executive Officer and shares that may not be tendered due to restrictions under Company Stock Plans). o Recommendation of Oversight Committee; delivery of fairness opinion; Tiger Board approval; filing of Schedules 14D-1, 14D-9 and 13E-3. o Regulatory consents. Key Representations/ Standard, to include corporate existence, authorization, non-contravention, Warranties capitalization, absence of changes, no undisclosed material liabilities, financial statements, regulatory filings. Financing Commitment letter received by Mustang; financing not a condition to Offer or Closing. Termination Fees; Up to $5 million in reasonable expenses to either Tiger or Mustang if Expenses either terminates the agreement due to a breach of representation, warranty or obligation of the other. $10 million to Mustang if Buyer terminates the agreement in response to Board of Tiger withdrawing or modifying adverse to Buyer its recommendation as a result of an acquisition proposal by a third party and within 12 months of termination of agreement Tiger enters into a transaction agreement with a third party; such fee to be payable only at the consummation of transaction with a third party. No Solicitation Standard, with fiduciary out in event of receipt of bona fide third party acquisition proposal. Timing Announcement expected on or about December 11, 1997; Offer to commence within five days of announcement; tender offer to close in mid-January if Minimum Condition is met; merger to follow.
Financial Summary of the Proposed Transaction ($ in millions, except per share data)
I. Enterprise Value: Common Shares Outstanding 41.3 Gross Equity Value at $34.50/share $1,443.2 Total Options 0.5 Less: Option Proceeds 4.6 ---- -------- Total Shares and Options Outstanding 41.8 Equity Value 1,438.6 ==== -------- Plus: Debt 71.6 Less: Cash 126.0 -------- Total Enterprise Value $1,384.3 ======== II. Transaction Value: Offer Price Per Share $34.50 Shares Subject to Cash Offer 25.30 ------- 872.90 Cancellation of Options, Net 12.90 Rollover of Stock Awards 29.50 ------- Total $915.30 ======= III. Historical Trading Data and Premium: Tiger Price Per Share Offer Premium % ----------- --------------- Last Close (as of 12/5/97) $31.13 10.8% One Week Prior (11/28/97) 31.00 11.3 One Month Prior (11/5/97) 29.56 16.7 Commencement of discussions (9/10/97) 28.19 22.4 52-Week High (12/3/97) 31.63 9.1 52-Week Low (1/30/97) 22.00 56.8 One Year Trailing Weighted Average Price 26.48 30.3
Financial Summary of the Proposed Transaction ($ in millions, except per share data)
IV. Purchase Price Multiples(a) Tiger Transaction Range of Financial Multiples At Range of Selected Selected Precedent Data Offer Price Public Companies Transactions ---------- ------------- ------------------ ------------------- Enterprise Value Multiples LTM Revenues $658.4 2.1x 0.8x-3.4x 0.7x-3.3x LTM EBITDA 138.4 10.0 6.2x-13.6x 7.1x-14.8x LTM EBIT 113.3 12.2 8.5x-16.7x 9.1x-16.3x Equity Value Multiples LTM Net Income $70.1 20.5x 12.2x-24.9x 12.7x-26.8x 1997 Est. Net Income(b) 72.5 19.8 12.7x-23.9x NA 1998 Est. Net Income(b) 80.6 17.8 11.5x-21.6x NA Book Value 541.4 2.7 2.0x-5.2x 1.6x-5.7x 1998 I/B/E/S EPS 1.92 18.0 NA V. Discounted Stand-Alone Cash Flow Analysis Discount Rates: 10.5% - 12.5% $23.07 - $42.17 Terminal Value Assumptions: (a) 8.0 - 10.0x EBITDA (b) Perpetuity Growth Rates 3.0 - 5.0% - ------------ (a) LTM results as of Septmeber 30, 1997. (b) Tiger management projections.
Summary of Key Transaction Events o On September 10, 1997, Tiger's Board of Directors was notified by the Chairman of Mustang Corporation that Mustang wished to commence discussions to acquire the shares of Tiger that it did not already own. The Tiger Board authorized the Committee to act and retain its own advisers. o On September 24, 1997, the Committee received a confidential preliminary offer from Mustang, comprised of cash at $33.00 per share for 50% of the shares to be purchased and one share of common stock for the remaining 50% of the shares to be purchased of a newly formed company ("NewCo") designed to effect the mergers of Tiger and Mustang. Mustang indicated that it had no interest in selling its existing interest in Tiger. o After consideration, the Committee sent a letter to Mustang on October 9, rejecting the September 24 offer. o On October 31, 1997, Mustang management and representatives of Smith Barney presented a total transaction alternative proposal, comprised of $33.00 cash per share for at least 50% but not more than 60% of the total transaction consideration and convertible preferred stock ("CPS") of NewCo for the balance of the transaction consideration. The Oversight Committee rejected the revised proposal. o On November 7, 1997, BT Wolfensohn, on behalf of the Oversight Committee, presented a counterproposal to Smith Barney. The proposal was $37.50 with 60% payable in cash, with the balance paid in Mustang convertible preferred stock. o Mustang rejected the counterproposal offered by the Oversight Committee on November 10, 1997. o On November 18, 1997, the Chairman of Mustang contacted the members of the Oversight Committee requesting a meeting to discuss a transaction at mutually acceptable terms. o On November 21, 1997, a member of the Oversight Committee met with the Chairman of Mustang. After extensive discussion and negotiation, a preliminary understanding was reached to pursue a transaction, subject to mutually acceptable terms and conditions, at $34.50 cash per share for the shares of Tiger not owned by Mustang. [ Graphic Omitted Organizational chart titled "Intercompany and Director Relationships" shows relationship between Richard Manooglan (Chairman, Mustang Corp., Mustang, Tiger) and Mustang Corp (Affiliate) directors, Mustang (Offeror) directors and Tiger (Target) directors ] [ Graphic Omitted Chart titled "Tiger Stock Trading History - Tiger 5 Year Stock Chart - High-Low-Close & Volume" was constructed using data from the table below ] Tiger Stock Trading History Security Price History TRIMAS CORP COM 05-Dec-97 TMS 89621510 Common Stock NYSE U.S. Dollar
Date Volume High Low Close 04-Dec-92 1703000 14.500 11.875 14.125 11-Dec-92 128400 14.688 14.063 14.625 18-Dec-92 85000 14.875 14.500 14.500 24-Dec-92 118200 14.500 14.250 14.250 31-Dec-92 71000 14.563 14.250 14.500 08-Jan-93 75000 15.000 14.438 14.813 15-Jan-93 108200 14.938 14.563 14.813 22-Jan-93 91400 14.813 14.250 14.313 29-Jan-93 191000 14.563 14.313 14.313 05-Feb-93 176000 14.563 14.313 14.438 12-Feb-93 470000 15.500 14.438 15.375 19-Feb-93 159600 15.438 14.500 14.813 26-Feb-93 74600 15.438 14.563 15.438 05-Mar-93 159000 16.313 15.375 16.313 12-Mar-93 77000 16.500 15.813 15.938 19-Mar-93 54800 16.125 15.438 15.438 26-Mar-93 89600 15.563 15.313 15.563 02-Apr-93 147000 16.313 15.688 16.188 08-Apr-93 24400 16.063 15.750 16.000 16-Apr-93 29800 16.000 15.625 15.688 23-Apr-93 80600 16.438 15.688 16.375 30-Apr-93 298600 17.875 16.375 17.438 07-May-93 301800 17.375 16.563 16.563 14-May-93 65200 17.250 16.563 17.188 21-May-93 222600 17.375 16.938 16.938 28-May-93 72600 17.375 16.938 17.375 04-Jun-93 14800 17.875 17.438 17.625 11-Jun-93 221400 18.688 17.750 18.375 18-Jun-93 174200 18.375 17.250 18.125 25-Jun-93 129800 18.250 17.813 17.813 02-Jul-93 144600 18.813 17.750 18.438 09-Jul-93 69700 18.500 17.375 17.750 16-Jul-93 72000 20.000 17.875 19.500 23-Jul-93 52500 19.750 18.875 19.000 30-Jul-93 122900 19.125 17.750 17.750 06-Aug-93 236300 17.750 17.500 17.500 13-Aug-93 418600 18.000 17.000 17.500 20-Aug-93 126900 18.000 17.500 17.625 27-Aug-93 131600 18.250 17.500 18.125 03-Sep-93 159500 18.375 17.750 17.875 10-Sep-93 116800 18.375 17.750 18.000 17-Sep-93 265600 18.500 18.000 18.500 24-Sep-93 228900 19.000 18.250 18.250 01-Oct-93 148700 18.875 18.000 18.875 08-Oct-93 105100 19.125 18.250 19.125 15-Oct-93 92900 19.750 19.125 19.625 22-Oct-93 70100 19.875 19.250 19.500 29-Oct-93 276300 20.625 18.625 20.625 05-Nov-93 155900 21.000 18.875 20.750 12-Nov-93 85200 20.875 19.875 20.500 19-Nov-93 263200 21.625 20.625 21.125 26-Nov-93 241300 21.750 21.250 21.625 03-Dec-93 219700 22.250 21.375 21.750 10-Dec-93 269000 22.875 22.000 22.375 17-Dec-93 387000 23.375 22.000 23.250 23-Dec-93 224800 23.125 22.500 22.625 31-Dec-93 298300 24.625 22.625 24.375 07-Jan-94 389400 24.125 22.750 23.125 14-Jan-94 77700 23.500 22.750 23.125 21-Jan-94 150000 23.750 23.000 23.375 28-Jan-94 130100 24.375 23.625 24.125 04-Feb-94 191400 25.500 23.750 25.125 11-Feb-94 351700 26.500 24.750 26.500 18-Feb-94 274000 26.625 25.625 26.500 25-Feb-94 510600 28.250 26.625 27.875 04-Mar-94 472900 28.500 27.750 28.125 11-Mar-94 587900 28.375 25.250 25.750 18-Mar-94 139200 26.250 24.500 25.875 25-Mar-94 122800 25.875 25.000 25.250 31-Mar-94 160700 25.750 25.000 25.125 08-Apr-94 368000 26.000 23.500 26.000 15-Apr-94 337500 27.125 26.000 26.250 22-Apr-94 169700 26.125 24.500 25.250 29-Apr-94 126200 26.125 25.250 25.875 06-May-94 229300 26.875 25.875 25.875 13-May-94 163900 25.750 25.000 25.500 20-May-94 494000 25.500 25.250 25.375 27-May-94 566700 26.000 25.000 26.000 03-Jun-94 36400 26.000 25.375 25.750 10-Jun-94 265200 26.000 25.125 25.375 17-Jun-94 155700 25.125 23.875 23.875 24-Jun-94 545600 24.000 21.625 22.500 01-Jul-94 174700 24.125 22.000 24.000 08-Jul-94 59200 24.000 22.625 23.000 15-Jul-94 742400 23.500 22.000 23.000 22-Jul-94 176000 24.125 22.500 23.500 29-Jul-94 104700 23.500 22.875 23.125 05-Aug-94 185100 23.500 22.875 23.000 12-Aug-94 33700 23.125 22.500 22.625 19-Aug-94 198400 23.875 22.625 23.875 26-Aug-94 52100 24.875 23.125 24.500 02-Sep-94 153400 24.875 23.625 23.750 09-Sep-94 250500 23.500 23.000 23.000 16-Sep-94 142500 23.750 22.625 23.625 23-Sep-94 232500 24.125 22.000 22.000 30-Sep-94 143300 22.875 21.500 22.750 07-Oct-94 222400 22.875 21.500 22.250 14-Oct-94 230200 23.000 21.125 21.250 21-Oct-94 231000 23.500 21.250 23.250 28-Oct-94 45000 23.500 22.875 23.500 04-Nov-94 216100 23.625 21.500 22.750 11-Nov-94 53500 22.750 21.625 21.625 18-Nov-94 251800 22.875 21.500 22.125 25-Nov-94 37600 22.000 21.000 21.000 02-Dec-94 636000 21.125 18.625 20.125 09-Dec-94 441300 20.875 19.750 20.000 16-Dec-94 847600 19.750 18.375 18.625 23-Dec-94 231900 19.250 18.500 19.125 30-Dec-94 151800 20.250 19.000 20.000 06-Jan-95 175800 21.125 20.000 20.625 13-Jan-95 124400 20.500 19.750 20.375 20-Jan-95 96400 21.000 20.000 20.375 27-Jan-95 113500 20.375 19.625 19.750 03-Feb-95 143100 20.750 19.625 20.750 10-Feb-95 103100 22.250 21.000 22.000 17-Feb-95 192800 22.000 20.625 21.000 24-Feb-95 90200 21.625 21.000 21.625 03-Mar-95 90200 22.625 21.375 22.625 10-Mar-95 38900 22.750 22.000 22.250 17-Mar-95 71700 22.250 21.625 21.875 24-Mar-95 86500 22.000 20.375 21.875 31-Mar-95 53400 22.750 21.250 22.250 07-Apr-95 69600 22.375 21.625 22.000 13-Apr-95 148400 22.000 20.875 20.875 21-Apr-95 90300 22.500 21.000 22.375 28-Apr-95 104900 22.500 21.375 21.875 05-May-95 254400 23.250 21.500 22.750 12-May-95 147100 24.375 22.750 23.500 19-May-95 101500 23.750 23.000 23.375 26-May-95 127800 23.625 22.875 23.250 02-Jun-95 240100 23.250 22.375 22.875 09-Jun-95 114000 23.750 22.875 23.000 16-Jun-95 184400 23.625 22.000 22.000 23-Jun-95 226400 22.750 20.250 20.625 30-Jun-95 176800 23.000 20.750 23.000 07-Jul-95 231500 25.000 22.750 25.000 14-Jul-95 159900 25.500 23.375 23.375 21-Jul-95 135500 23.750 22.750 23.625 28-Jul-95 433200 23.750 21.250 21.250 04-Aug-95 539100 21.875 20.000 21.750 11-Aug-95 181800 22.375 21.125 21.625 18-Aug-95 179000 22.375 21.375 22.250 25-Aug-95 57400 22.500 21.250 21.750 01-Sep-95 97900 21.750 21.125 21.250 08-Sep-95 426600 22.750 20.750 22.375 15-Sep-95 317800 22.500 21.625 22.375 22-Sep-95 93500 22.375 21.625 21.750 29-Sep-95 72200 21.750 20.500 20.750 06-Oct-95 71200 21.500 20.500 21.125 13-Oct-95 126900 22.250 20.625 21.625 20-Oct-95 61400 21.875 21.125 21.125 27-Oct-95 332300 21.250 20.625 20.625 03-Nov-95 182600 21.500 20.625 21.000 10-Nov-95 89900 21.250 20.500 20.500 17-Nov-95 156300 21.000 20.375 20.625 24-Nov-95 189000 20.500 20.000 20.125 01-Dec-95 197300 20.125 19.000 19.875 08-Dec-95 215900 20.250 19.250 19.250 15-Dec-95 173400 20.250 19.250 19.375 22-Dec-95 275600 19.625 19.125 19.375 29-Dec-95 147200 19.500 18.375 18.750 05-Jan-96 157600 19.750 18.750 18.875 12-Jan-96 472400 18.875 17.750 18.000 19-Jan-96 479300 18.375 17.500 18.000 26-Jan-96 96700 18.500 16.875 17.750 02-Feb-96 107400 19.000 17.875 18.625 09-Feb-96 405600 18.875 18.125 18.438 16-Feb-96 791300 21.000 18.250 20.750 23-Feb-96 131900 21.875 20.875 21.875 01-Mar-96 373500 24.375 21.750 22.375 08-Mar-96 164300 22.875 21.875 21.875 15-Mar-96 244300 22.750 21.250 22.750 22-Mar-96 153000 23.500 22.125 22.625 29-Mar-96 212800 23.000 21.750 22.000 04-Apr-96 335500 22.625 21.750 22.250 12-Apr-96 673900 22.250 21.125 21.625 19-Apr-96 157200 22.000 20.875 21.625 26-Apr-96 81700 22.875 21.500 22.500 03-May-96 398200 25.000 22.375 25.000 10-May-96 495200 25.375 24.000 25.375 17-May-96 79600 25.500 24.000 24.500 24-May-96 116900 24.500 23.625 23.625 31-May-96 296300 24.000 23.000 23.750 07-Jun-96 213300 24.500 23.250 24.125 14-Jun-96 399000 25.000 23.750 24.625 21-Jun-96 546900 24.500 23.500 23.500 28-Jun-96 630100 23.500 23.125 23.375 05-Jul-96 175900 23.375 23.000 23.250 12-Jul-96 403700 23.375 22.250 22.625 19-Jul-96 234600 22.375 21.375 21.375 26-Jul-96 297200 21.125 19.875 20.375 02-Aug-96 52100 21.875 19.875 21.625 09-Aug-96 233200 23.250 21.875 23.000 16-Aug-96 63000 23.250 22.500 23.250 23-Aug-96 102300 23.750 23.125 23.500 30-Aug-96 89100 23.750 23.250 23.250 06-Sep-96 145800 23.875 23.250 23.875 13-Sep-96 107100 23.875 23.375 23.625 20-Sep-96 221000 24.250 23.250 24.250 27-Sep-96 90700 24.125 23.500 23.625 04-Oct-96 142500 24.750 23.375 24.750 11-Oct-96 46200 24.750 23.375 23.375 18-Oct-96 91100 23.500 22.875 22.875 25-Oct-96 51400 23.875 22.875 23.375 01-Nov-96 36100 23.500 22.375 23.250 08-Nov-96 185500 23.750 22.625 23.000 15-Nov-96 25700 23.250 22.750 23.250 22-Nov-96 317800 24.000 23.125 23.875 29-Nov-96 115600 25.500 23.500 25.375 06-Dec-96 97200 25.375 24.500 24.500 13-Dec-96 53600 24.625 23.625 23.750 20-Dec-96 65800 23.750 22.625 23.500 27-Dec-96 122800 23.500 22.625 23.500 03-Jan-97 353900 24.250 23.375 24.250 10-Jan-97 275200 24.375 22.875 23.375 17-Jan-97 202400 23.250 22.625 23.000 24-Jan-97 177900 23.250 22.375 22.500 31-Jan-97 129300 22.625 22.000 22.250 07-Feb-97 151500 23.500 22.125 23.375 14-Feb-97 1042900 24.000 23.125 24.000 21-Feb-97 462600 24.750 23.875 24.250 28-Feb-97 111800 24.500 24.125 24.375 07-Mar-97 472300 24.750 24.250 24.375 14-Mar-97 254200 24.750 24.000 24.125 21-Mar-97 435200 24.000 23.250 23.500 27-Mar-97 375300 23.750 23.375 23.625 04-Apr-97 321600 24.125 23.125 23.875 11-Apr-97 199800 24.000 23.125 23.375 18-Apr-97 290500 23.375 22.750 23.125 25-Apr-97 62900 23.750 23.000 23.375 02-May-97 110300 25.000 23.375 25.000 09-May-97 181800 27.125 24.875 25.750 16-May-97 123700 26.750 25.750 26.250 23-May-97 76600 28.125 25.750 28.125 30-May-97 162300 28.375 27.750 28.375 06-Jun-97 176300 29.125 28.250 29.125 13-Jun-97 203800 29.625 28.875 29.500 20-Jun-97 251900 31.000 29.500 29.875 27-Jun-97 166900 30.000 27.750 28.188 03-Jul-97 212900 28.750 27.625 28.750 11-Jul-97 170900 29.500 28.875 29.375 18-Jul-97 182800 29.625 29.250 29.563 25-Jul-97 52300 29.438 29.000 29.188 01-Aug-97 143600 29.375 29.000 29.375 08-Aug-97 124900 29.625 28.313 28.625 15-Aug-97 119100 29.000 27.250 27.250 22-Aug-97 143400 28.563 27.063 28.063 29-Aug-97 123600 28.875 28.063 28.625 05-Sep-97 135900 28.500 27.813 28.125 12-Sep-97 254400 30.500 28.000 30.375 19-Sep-97 131800 30.500 30.188 30.188 26-Sep-97 105500 31.563 30.188 30.750 03-Oct-97 95300 31.563 30.438 31.000 10-Oct-97 154100 30.938 29.625 30.063 17-Oct-97 142200 30.438 29.813 30.063 24-Oct-97 126800 30.188 29.813 30.000 31-Oct-97 99400 30.000 28.375 29.250 07-Nov-97 130000 30.188 28.750 29.250 14-Nov-97 113100 30.188 28.563 29.563 21-Nov-97 176000 30.188 29.688 30.000 28-Nov-97 108000 31.000 29.375 31.000 05-Dec-97 157000 31.813 31.000 31.125
[ Graphic Omitted Chart titled "Tiger Stock Trading History - Tiger 5 Year Stock Chart - High-Low-Close" was constructed using data from the table below ] Tiger Stock Trading History 04-Dec-92 14.5 11.875 14.125 11-Dec-92 14.688 14.063 14.625 18-Dec-92 14.875 14.5 14.5 25-Dec-92 14.5 14.25 14.25 01-Jan-93 14.563 14.25 14.5 08-Jan-93 15 14.438 14.813 15-Jan-93 14.938 14.563 14.813 22-Jan-93 14.813 14.25 14.313 29-Jan-93 14.563 14.313 14.313 05-Feb-93 14.563 14.313 14.438 12-Feb-93 15.5 14.438 15.375 19-Feb-93 15.438 14.5 14.813 26-Feb-93 15.438 14.563 15.438 05-Mar-93 16.313 15.375 16.313 12-Mar-93 16.5 15.813 15.938 19-Mar-93 16.125 15.438 15.438 26-Mar-93 15.563 15.313 15.563 02-Apr-93 16.313 15.688 16.188 09-Apr-93 16.063 15.75 16 16-Apr-93 16 15.625 15.688 23-Apr-93 16.438 15.688 16.375 30-Apr-93 17.875 16.375 17.438 07-May-93 17.375 16.563 16.563 14-May-93 17.25 16.563 17.188 21-May-93 17.375 16.938 16.938 28-May-93 17.375 16.938 17.375 04-Jun-93 17.875 17.438 17.625 11-Jun-93 18.688 17.75 18.375 18-Jun-93 18.375 17.25 18.125 25-Jun-93 18.25 17.813 17.813 02-Jul-93 18.813 17.75 18.438 09-Jul-93 18.5 17.375 17.75 16-Jul-93 20 17.875 19.5 23-Jul-93 19.75 18.875 19 30-Jul-93 19.125 17.75 17.75 06-Aug-93 17.75 17.5 17.5 13-Aug-93 18 17 17.5 20-Aug-93 18 17.5 17.625 27-Aug-93 18.25 17.5 18.125 03-Sep-93 18.375 17.75 17.875 10-Sep-93 18.375 17.75 18 17-Sep-93 18.5 18 18.5 24-Sep-93 19 18.25 18.25 01-Oct-93 18.875 18 18.875 08-Oct-93 19.125 18.25 19.125 15-Oct-93 19.75 19.125 19.625 22-Oct-93 19.875 19.25 19.5 29-Oct-93 20.625 18.625 20.625 05-Nov-93 21 18.875 20.75 12-Nov-93 20.875 19.875 20.5 19-Nov-93 21.625 20.625 21.125 26-Nov-93 21.75 21.25 21.625 03-Dec-93 22.25 21.375 21.75 10-Dec-93 22.875 22 22.375 17-Dec-93 23.375 22 23.25 24-Dec-93 23.125 22.5 22.625 31-Dec-93 24.625 22.625 24.375 07-Jan-94 24.125 22.75 23.125 14-Jan-94 23.5 22.75 23.125 21-Jan-94 23.75 23 23.375 28-Jan-94 24.375 23.625 24.125 04-Feb-94 25.5 23.75 25.125 11-Feb-94 26.5 24.75 26.5 18-Feb-94 26.625 25.625 26.5 25-Feb-94 28.25 26.625 27.875 04-Mar-94 28.5 27.75 28.125 11-Mar-94 28.375 25.25 25.75 18-Mar-94 26.25 24.5 25.875 25-Mar-94 25.875 25 25.25 01-Apr-94 25.75 25 25.125 08-Apr-94 26 23.5 26 15-Apr-94 27.125 26 26.25 22-Apr-94 26.125 24.5 25.25 29-Apr-94 26.125 25.25 25.875 06-May-94 26.875 25.875 25.875 13-May-94 25.75 25 25.5 20-May-94 25.5 25.25 25.375 27-May-94 26 25 26 03-Jun-94 26 25.375 25.75 10-Jun-94 26 25.125 25.375 17-Jun-94 25.125 23.875 23.875 24-Jun-94 24 21.625 22.5 01-Jul-94 24.125 22 24 08-Jul-94 24 22.625 23 15-Jul-94 23.5 22 23 22-Jul-94 24.125 22.5 23.5 29-Jul-94 23.5 22.875 23.125 05-Aug-94 23.5 22.875 23 12-Aug-94 23.125 22.5 22.625 19-Aug-94 23.875 22.625 23.875 26-Aug-94 24.875 23.125 24.5 02-Sep-94 24.875 23.625 23.75 09-Sep-94 23.5 23 23 16-Sep-94 23.75 22.625 23.625 23-Sep-94 24.125 22 22 30-Sep-94 22.875 21.5 22.75 07-Oct-94 22.875 21.5 22.25 14-Oct-94 23 21.125 21.25 21-Oct-94 23.5 21.25 23.25 28-Oct-94 23.5 22.875 23.5 04-Nov-94 23.625 21.5 22.75 11-Nov-94 22.75 21.625 21.625 18-Nov-94 22.875 21.5 22.125 25-Nov-94 22 21 21 02-Dec-94 21.125 18.625 20.125 09-Dec-94 20.875 19.75 20 16-Dec-94 19.75 18.375 18.625 23-Dec-94 19.25 18.5 19.125 30-Dec-94 20.25 19 20 06-Jan-95 21.125 20 20.625 13-Jan-95 20.5 19.75 20.375 20-Jan-95 21 20 20.375 27-Jan-95 20.375 19.625 19.75 03-Feb-95 20.75 19.625 20.75 10-Feb-95 22.25 21 22 17-Feb-95 22 20.625 21 24-Feb-95 21.625 21 21.625 03-Mar-95 22.625 21.375 22.625 10-Mar-95 22.75 22 22.25 17-Mar-95 22.25 21.625 21.875 24-Mar-95 22 20.375 21.875 31-Mar-95 22.75 21.25 22.25 07-Apr-95 22.375 21.625 22 14-Apr-95 22 20.875 20.875 21-Apr-95 22.5 21 22.375 28-Apr-95 22.5 21.375 21.875 05-May-95 23.25 21.5 22.75 12-May-95 24.375 22.75 23.5 19-May-95 23.75 23 23.375 26-May-95 23.625 22.875 23.25 02-Jun-95 23.25 22.375 22.875 09-Jun-95 23.75 22.875 23 16-Jun-95 23.625 22 22 23-Jun-95 22.75 20.25 20.625 30-Jun-95 23 20.75 23 07-Jul-95 25 22.75 25 14-Jul-95 25.5 23.375 23.375 21-Jul-95 23.75 22.75 23.625 28-Jul-95 23.75 21.25 21.25 04-Aug-95 21.875 20 21.75 11-Aug-95 22.375 21.125 21.625 18-Aug-95 22.375 21.375 22.25 25-Aug-95 22.5 21.25 21.75 01-Sep-95 21.75 21.125 21.25 08-Sep-95 22.75 20.75 22.375 15-Sep-95 22.5 21.625 22.375 22-Sep-95 22.375 21.625 21.75 29-Sep-95 21.75 20.5 20.75 06-Oct-95 21.5 20.5 21.125 13-Oct-95 22.25 20.625 21.625 20-Oct-95 21.875 21.125 21.125 27-Oct-95 21.25 20.625 20.625 03-Nov-95 21.5 20.625 21 10-Nov-95 21.25 20.5 20.5 17-Nov-95 21 20.375 20.625 24-Nov-95 20.5 20 20.125 01-Dec-95 20.125 19 19.875 08-Dec-95 20.25 19.25 19.25 15-Dec-95 20.25 19.25 19.375 22-Dec-95 19.625 19.125 19.375 29-Dec-95 19.5 18.375 18.75 05-Jan-96 19.75 18.75 18.875 12-Jan-96 18.875 17.75 18 19-Jan-96 18.375 17.5 18 26-Jan-96 18.5 16.875 17.75 02-Feb-96 19 17.875 18.625 09-Feb-96 18.875 18.125 18.438 16-Feb-96 21 18.25 20.75 23-Feb-96 21.875 20.875 21.875 01-Mar-96 24.375 21.75 22.375 08-Mar-96 22.875 21.875 21.875 15-Mar-96 22.75 21.25 22.75 22-Mar-96 23.5 22.125 22.625 29-Mar-96 23 21.75 22 05-Apr-96 22.625 21.75 22.25 12-Apr-96 22.25 21.125 21.625 19-Apr-96 22 20.875 21.625 26-Apr-96 22.875 21.5 22.5 03-May-96 25 22.375 25 10-May-96 25.375 24 25.375 17-May-96 25.5 24 24.5 24-May-96 24.5 23.625 23.625 31-May-96 24 23 23.75 07-Jun-96 24.5 23.25 24.125 14-Jun-96 25 23.75 24.625 21-Jun-96 24.5 23.5 23.5 28-Jun-96 23.5 23.125 23.375 05-Jul-96 23.375 23 23.25 12-Jul-96 23.375 22.25 22.625 19-Jul-96 22.375 21.375 21.375 26-Jul-96 21.125 19.875 20.375 02-Aug-96 21.875 19.875 21.625 09-Aug-96 23.25 21.875 23 16-Aug-96 23.25 22.5 23.25 23-Aug-96 23.75 23.125 23.5 30-Aug-96 23.75 23.25 23.25 06-Sep-96 23.875 23.25 23.875 13-Sep-96 23.875 23.375 23.625 20-Sep-96 24.25 23.25 24.25 27-Sep-96 24.125 23.5 23.625 04-Oct-96 24.75 23.375 24.75 11-Oct-96 24.75 23.375 23.375 18-Oct-96 23.5 22.875 22.875 25-Oct-96 23.875 22.875 23.375 01-Nov-96 23.5 22.375 23.25 08-Nov-96 23.75 22.625 23 15-Nov-96 23.25 22.75 23.25 22-Nov-96 24 23.125 23.875 29-Nov-96 25.5 23.5 25.375 06-Dec-96 25.375 24.5 24.5 13-Dec-96 24.625 23.625 23.75 20-Dec-96 23.75 22.625 23.5 27-Dec-96 23.5 22.625 23.5 03-Jan-97 24.25 23.375 24.25 10-Jan-97 24.375 22.875 23.375 17-Jan-97 23.25 22.625 23 24-Jan-97 23.25 22.375 22.5 31-Jan-97 22.625 22 22.25 07-Feb-97 23.5 22.125 23.375 14-Feb-97 24 23.125 24 21-Feb-97 24.75 23.875 24.25 28-Feb-97 24.5 24.125 24.375 07-Mar-97 24.75 24.25 24.375 14-Mar-97 24.75 24 24.125 21-Mar-97 24 23.25 23.5 28-Mar-97 23.75 23.375 23.625 04-Apr-97 24.125 23.125 23.875 11-Apr-97 24 23.125 23.375 18-Apr-97 23.375 22.75 23.125 25-Apr-97 23.75 23 23.375 02-May-97 25 23.375 25 09-May-97 27.125 24.875 25.75 16-May-97 26.75 25.75 26.25 23-May-97 28.125 25.75 28.125 30-May-97 28.375 27.75 28.375 06-Jun-97 29.125 28.25 29.125 13-Jun-97 29.625 28.875 29.5 20-Jun-97 31 29.5 29.875 27-Jun-97 30 27.75 28.188 04-Jul-97 28.75 27.625 28.75 11-Jul-97 29.5 28.875 29.375 18-Jul-97 29.625 29.25 29.563 25-Jul-97 29.438 29 29.188 01-Aug-97 29.375 29 29.375 08-Aug-97 29.625 28.313 28.625 15-Aug-97 29 27.25 27.25 22-Aug-97 28.563 27.063 28.063 29-Aug-97 28.875 28.063 28.625 05-Sep-97 28.5 27.813 28.125 12-Sep-97 30.5 28 30.375 19-Sep-97 30.5 30.188 30.188 26-Sep-97 31.563 30.188 30.75 03-Oct-97 31.563 30.438 31 10-Oct-97 30.938 29.625 30.063 17-Oct-97 30.438 29.813 30.063 24-Oct-97 30.188 29.813 30 31-Oct-97 30 28.375 29.25 07-Nov-97 30.188 28.75 29.25 14-Nov-97 30.188 28.563 29.563 21-Nov-97 30.188 29.688 30 05-Dec-97 31 29.375 31 05-Dec-97 31.813 31 31.125 1. 6/29/93 - Tiger issues $100 million convertible subordinated debentures due August 1, 2003. 2. 11/23/93 - Tiger announces acquisition of Lamons Metal Gasket Company for $60 million cash, plus contingent payments. 3. 3/94 - 9/94 - Mustang sells 540,000 shares of Tiger at $22.88 - $27.25. 4. 10/18/95 - First of Michigan initiates coverage of Tiger with a "buy" rating. 5. 1/15/96 - Tiger raised to short-term "outperform" from "market perform" by Everen Securities. 6. 2/29/96 - Tiger downgraded to short-term "market perform" from "outperform" by Everen Securities. 7. 6/28/96 - Legg Mason initiates coverage of Tiger with an "outperform-2" rating. 6/96 - 11/96 - Tiger acquires Queensland Towbars Pty. Ltd., The Englass Group, Heinrich Stolz GmbH and Beaumont Bolt & Gasket Co. for an aggregate $54.2 million of cash and assumed liabilities. 8. 2/97 - 3/97 - Tiger redeems 5% convertible debentures due 2003. [ Graphic Omitted Chart titled "Tiger Stock Trading History - TIGER vs. S&P 500 vs. COMPOSITE GROUP - indexed to December 1, 1996" was constructed using data from the table below ] Tiger Stock Trading History Tiger S&P 500 Composite 29-Nov-96 100 100 100 30-Nov-96 100 99.939 100.282 01-Dec-96 98.522 98.845 99.1 02-Dec-96 99.015 98.425 97.731 03-Dec-96 98.522 98.33 98.484 04-Dec-96 96.552 97.699 96.749 05-Dec-96 97.044 99.041 98.243 10-Dec-96 96.059 98.748 97.497 11-Dec-96 95.567 97.848 96.341 12-Dec-96 94.089 96.342 94.996 13-Dec-96 93.596 96.251 94.528 16-Dec-96 91.133 95.239 93.788 17-Dec-96 91.626 95.908 92.831 18-Dec-96 89.655 96.634 94.052 19-Dec-96 90.64 98.513 94.983 20-Dec-96 92.611 98.923 96.618 23-Dec-96 89.163 98.666 96.058 24-Dec-96 89.655 99.209 96.369 26-Dec-96 90.148 99.841 97.558 27-Dec-96 92.611 99.97 98.021 30-Dec-96 92.611 99.581 98.482 31-Dec-96 94.089 97.849 98.412 02-Jan-97 94.089 97.357 96.762 03-Jan-97 95.567 98.812 97.229 06-Jan-97 95.074 98.762 97.016 07-Jan-97 95.074 99.499 97.721 08-Jan-97 94.089 98.863 97.471 09-Jan-97 91.626 99.713 97.957 10-Jan-97 92.118 100.328 98.59 13-Jan-97 91.133 100.329 98.419 14-Jan-97 91.626 101.564 99.381 15-Jan-97 89.163 101.345 98.051 16-Jan-97 90.148 101.682 98.364 17-Jan-97 90.64 102.53 98.928 20-Jan-97 90.148 102.6 99.239 21-Jan-97 91.133 103.395 99.466 22-Jan-97 90.148 103.859 98.938 23-Jan-97 89.655 102.713 97.798 24-Jan-97 88.67 101.783 96.999 27-Jan-97 87.685 101.057 96.504 28-Jan-97 87.685 101.057 97.048 29-Jan-97 86.7 102.045 97.494 30-Jan-97 87.685 103.586 99.069 31-Jan-97 87.685 103.849 99.735 03-Feb-97 88.67 103.925 98.901 04-Feb-97 89.163 104.259 99.99 05-Feb-97 90.148 102.808 99.246 06-Feb-97 92.611 103.055 100.109 07-Feb-97 92.118 104.298 100.799 10-Feb-97 92.611 103.753 100.138 11-Feb-97 94.089 104.302 100.413 12-Feb-97 94.089 106.043 100.616 13-Feb-97 94.089 107.239 101.916 14-Feb-97 94.581 106.798 102.759 18-Feb-97 97.537 107.829 102.815 19-Feb-97 97.044 107.327 102.226 20-Feb-97 97.044 106.047 101.946 21-Feb-97 95.567 105.911 101.2 24-Feb-97 95.567 107.035 102.233 25-Feb-97 96.552 107.276 101.86 26-Feb-97 96.552 106.428 101.526 27-Feb-97 96.059 105.026 100.738 28-Feb-97 96.059 104.465 100.272 03-Mar-97 97.537 105.058 100.316 04-Mar-97 97.537 104.482 100.125 05-Mar-97 96.552 105.94 100.679 06-Mar-97 96.552 105.487 101.669 07-Mar-97 96.059 106.334 102.298 10-Mar-97 97.537 107.481 102.989 11-Mar-97 96.552 107.176 104.25 12-Mar-97 96.059 106.24 104.35 13-Mar-97 94.581 104.298 103.262 14-Mar-97 95.074 104.775 104.627 17-Mar-97 94.089 105.111 104.705 18-Mar-97 93.596 104.312 104.416 19-Mar-97 92.611 103.798 104.621 20-Mar-97 92.118 103.386 103.724 21-Mar-97 92.611 103.577 103.725 24-Mar-97 92.611 104.474 104.225 25-Mar-97 92.118 104.234 103.447 26-Mar-97 92.611 104.423 102.361 27-Mar-97 93.103 102.227 100.956 31-Mar-97 92.611 100.013 98.974 01-Apr-97 95.074 100.346 100.183 02-Apr-97 93.596 99.087 100.018 03-Apr-97 93.596 99.115 99.119 04-Apr-97 94.089 100.116 100.804 07-Apr-97 93.596 100.675 101.41 08-Apr-97 94.089 101.202 101.334 09-Apr-97 94.089 100.473 101.153 10-Apr-97 92.118 100.174 100.988 11-Apr-97 92.118 97.441 98.588 14-Apr-97 90.64 98.244 98.724 15-Apr-97 90.64 99.696 100.281 16-Apr-97 91.133 100.86 101.454 17-Apr-97 91.133 100.627 102.126 18-Apr-97 91.133 101.231 102.631 21-Apr-97 91.626 100.443 102.184 22-Apr-97 92.611 102.324 103.596 23-Apr-97 91.133 102.195 104.042 24-Apr-97 92.611 101.87 104.258 25-Apr-97 92.118 101.103 103.649 28-Apr-97 94.581 102.106 103.924 29-Apr-97 96.552 104.892 105.428 30-Apr-97 97.044 105.855 105.445 01-May-97 97.044 105.483 106.143 02-May-97 98.522 107.391 107.551 05-May-97 102.463 109.672 110.738 06-May-97 103.941 109.345 109.473 07-May-97 101.478 107.741 108.638 08-May-97 100.493 108.354 108.751 09-May-97 101.478 108.951 109.537 12-May-97 104.434 110.652 111.470 13-May-97 102.956 110.054 110.61 14-May-97 104.434 110.438 111.283 15-May-97 101.97 111.21 111.885 16-May-97 103.448 109.607 110.654 19-May-97 104.434 110.072 111.453 20-May-97 105.419 111.181 111.314 21-May-97 105.911 110.876 110.619 22-May-97 108.867 110.388 111.299 23-May-97 110.837 111.89 113.292 27-May-97 111.823 112.244 113.573 28-May-97 110.837 111.914 113.949 29-May-97 110.345 111.5 114.302 30-May-97 111.823 112.055 114.639 02-Jun-97 111.823 111.802 114.942 03-Jun-97 114.286 111.685 115.458 04-Jun-97 113.3 110.976 115.167 05-Jun-97 114.286 111.414 115.437 06-Jun-97 114.778 113.34 116.297 09-Jun-97 115.764 113.988 116.9 10-Jun-97 116.256 114.299 117.083 11-Jun-97 115.764 114.868 117.036 12-Jun-97 115.764 116.705 119.657 13-Jun-97 116.256 117.998 119.889 16-Jun-97 118.227 118.081 119.046 17-Jun-97 119.704 118.15 118.274 18-Jun-97 120.197 117.442 118.859 19-Jun-97 122.168 118.622 119.519 20-Jun-97 117.734 118.715 119.711 23-Jun-97 118.227 116.063 117.612 24-Jun-97 116.749 118.404 119.354 25-Jun-97 114.778 117.433 118.138 26-Jun-97 111.576 116.731 117.394 27-Jun-97 111.084 117.21 119.077 30-Jun-97 110.837 116.924 117.375 01-Jul-97 110.837 117.702 118.982 02-Jul-97 112.315 119.42 121.131 03-Jul-97 113.3 121.122 121.237 07-Jul-97 115.271 120.499 120.964 08-Jul-97 115.271 121.364 121.413 09-Jul-97 115.764 119.883 120.219 10-Jul-97 115.517 120.708 121.52 11-Jul-97 115.764 121.091 122.326 14-Jul-97 116.01 121.315 122.725 15-Jul-97 116.01 122.29 125.122 16-Jul-97 116.502 123.721 126.133 17-Jul-97 116.502 123.063 126.77 18-Jul-97 116.502 120.908 124.901 21-Jul-97 115.517 120.597 124.183 22-Jul-97 115.517 123.376 126.92 23-Jul-97 115.517 123.717 127.002 24-Jul-97 115.271 124.211 127.148 25-Jul-97 115.025 124.011 125.995 28-Jul-97 115.517 123.702 125.981 29-Jul-97 114.532 124.474 127.962 30-Jul-97 115.271 125.795 128.643 31-Jul-97 115.025 126.059 128.33 01-Aug-97 115.764 125.114 127.326 04-Aug-97 115.764 125.532 127.596 05-Aug-97 116.01 125.805 127.549 06-Aug-97 115.025 126.855 128.999 07-Aug-97 115.271 125.649 128.064 08-Aug-97 112.808 123.318 124.771 11-Aug-97 112.808 123.775 125.142 12-Aug-97 113.3 122.392 124.318 13-Aug-97 112.315 121.796 123.922 14-Aug-97 111.823 122.159 124.428 15-Aug-97 107.389 118.994 122.697 18-Aug-97 110.345 120.537 123.718 19-Aug-97 109.852 122.323 124.484 20-Aug-97 111.084 124.085 126.314 21-Aug-97 111.33 122.196 124.468 22-Aug-97 110.591 121.998 125.16 25-Aug-97 110.837 121.55 125.351 26-Aug-97 113.547 120.607 124.958 27-Aug-97 113.054 120.697 123.803 28-Aug-97 112.069 119.372 122.935 29-Aug-97 112.808 118.817 123.063 02-Sep-97 111.823 122.53 123.497 03-Sep-97 111.084 122.567 124.308 04-Sep-97 111.084 122.965 124.215 05-Sep-97 110.837 122.725 124.127 08-Sep-97 111.084 123.009 124.307 09-Sep-97 112.315 123.328 123.645 10-Sep-97 111.084 121.401 122.086 11-Sep-97 112.315 120.55 121.152 12-Sep-97 119.704 122.046 122.457 15-Sep-97 119.458 121.499 122.184 16-Sep-97 119.704 124.916 125.026 17-Sep-97 119.212 124.567 124.745 18-Sep-97 119.704 125.134 124.769 19-Sep-97 118.966 125.559 124.654 22-Sep-97 119.704 126.209 124.634 23-Sep-97 119.704 125.747 124.765 24-Sep-97 120.443 124.763 123.846 25-Sep-97 120.443 123.895 123.325 26-Sep-97 121.182 124.861 124.465 29-Sep-97 121.429 125.933 124.847 30-Sep-97 120.197 125.133 125.445 01-Oct-97 122.168 126.207 126.322 02-Oct-97 121.921 126.874 127.321 03-Oct-97 122.168 127.477 126.896 06-Oct-97 121.921 128.489 128.368 07-Oct-97 119.704 129.867 129.291 08-Oct-97 118.719 128.641 128.499 09-Oct-97 118.227 128.216 129.376 10-Oct-97 118.473 127.735 128.486 13-Oct-97 118.227 127.883 128.345 14-Oct-97 117.734 128.171 128.693 15-Oct-97 118.227 127.569 129.282 16-Oct-97 119.951 126.183 127.924 17-Oct-97 118.473 124.721 127.156 20-Oct-97 118.227 126.233 128.706 21-Oct-97 118.719 128.435 130.857 22-Oct-97 118.473 127.935 130.084 23-Oct-97 118.227 125.583 127.888 24-Oct-97 118.227 124.388 127.979 27-Oct-97 116.256 115.848 121.857 28-Oct-97 113.547 121.774 122.502 29-Oct-97 113.3 121.418 122.618 30-Oct-97 113.547 119.373 121.124 31-Oct-97 115.271 120.818 123.132 03-Nov-97 114.778 124.038 125.287 04-Nov-97 115.764 124.271 126.358 05-Nov-97 116.502 124.536 127.249 06-Nov-97 118.719 123.911 128.225 07-Nov-97 115.271 122.521 126.939 10-Nov-97 116.01 121.678 126.247 11-Nov-97 115.517 122.015 124.739 12-Nov-97 117.241 119.675 123.425 13-Nov-97 114.286 121.088 123.949 14-Nov-97 116.502 122.632 124.636 17-Nov-97 118.227 124.99 126.155 18-Nov-97 118.719 123.937 124.782 19-Nov-97 118.719 124.777 125.305 20-Nov-97 118.719 126.678 127.187 21-Nov-97 118.227 127.221 127.226 24-Nov-97 116.749 125.052 125.957 25-Nov-97 118.966 125.6 125.883 26-Nov-97 120.936 125.709 126.631 28-Nov-97 122.168 126.205 127.473 01-Dec-97 124.138 128.764 129.244 02-Dec-97 124.384 128.356 129.341 05-Dec-97 124.631 129.028 127.976 04-Dec-97 123.645 128.544 127.833 05-Dec-97 122.66 129.956 129.392 [ Graphic Omitted Chart titled "Tiger Stock Trading History - TIGER vs. S&P 500 vs. COMPOSITE GROUP - indexed to August 29, 1997" was constructed using data from the table below ] Tiger Stock Trading History Composite TIGER S&P 500 29-Aug-97 100 100 100 02-Sep-97 100.363 99.127 103.125 03-Sep-97 101.008 98.472 103.156 04-Sep-97 100.946 98.472 103.491 05-Sep-97 100.86 98.253 103.289 08-Sep-97 100.997 98.472 103.528 09-Sep-97 100.463 99.563 103.797 10-Sep-97 99.202 98.472 102.175 11-Sep-97 98.445 99.563 101.459 12-Sep-97 99.488 106.114 102.717 15-Sep-97 99.266 105.895 102.257 16-Sep-97 101.558 106.114 105.133 17-Sep-97 101.344 105.677 104.84 18-Sep-97 101.368 106.114 105.316 19-Sep-97 101.271 105.459 105.674 22-Sep-97 101.271 106.114 106.221 23-Sep-97 101.376 106.114 105.832 24-Sep-97 100.66 106.769 105.004 25-Sep-97 100.246 106.769 104.274 26-Sep-97 101.171 107.424 105.086 29-Sep-97 101.496 107.642 105.989 30-Sep-97 101.977 106.55 105.315 01-Oct-97 102.687 108.297 106.219 02-Oct-97 103.502 108.079 106.781 03-Oct-97 103.159 108.297 107.289 06-Oct-97 104.346 108.079 108.14 07-Oct-97 105.091 106.114 109.3 08-Oct-97 104.444 105.24 108.268 09-Oct-97 105.16 104.803 107.91 10-Oct-97 104.441 105.022 107.506 13-Oct-97 104.338 104.803 107.63 14-Oct-97 104.616 104.367 107.872 15-Oct-97 105.097 104.803 107.365 16-Oct-97 104.001 106.332 106.199 17-Oct-97 103.361 105.022 104.968 20-Oct-97 104.613 104.803 106.241 21-Oct-97 106.359 105.24 108.095 22-Oct-97 105.747 105.022 107.673 23-Oct-97 103.978 104.803 105.694 24-Oct-97 104.06 104.803 104.688 27-Oct-97 99.111 103.057 97.501 28-Oct-97 99.611 100.655 102.488 29-Oct-97 99.711 100.437 102.189 30-Oct-97 98.498 100.655 100.468 31-Oct-97 100.133 102.183 101.684 03-Nov-97 101.887 101.747 104.394 04-Nov-97 102.765 102.62 104.59 05-Nov-97 103.471 103.275 104.813 06-Nov-97 104.266 105.24 104.287 07-Nov-97 103.224 102.183 103.117 10-Nov-97 102.657 102.838 102.408 11-Nov-97 101.423 102.402 102.692 12-Nov-97 100.363 103.93 100.722 13-Nov-97 100.776 101.31 101.911 14-Nov-97 101.331 103.275 103.211 17-Nov-97 102.545 104.803 105.195 18-Nov-97 101.448 105.24 104.309 19-Nov-97 101.879 105.24 105.016 20-Nov-97 103.393 105.24 106.616 21-Nov-97 103.427 104.803 107.073 24-Nov-97 102.399 103.493 105.248 25-Nov-97 102.345 105.459 105.709 26-Nov-97 102.944 107.205 105.8 28-Nov-97 103.623 108.297 106.218 01-Dec-97 105.053 110.044 108.372 02-Dec-97 105.134 110.262 108.028 03-Dec-97 104.033 110.48 108.594 04-Dec-97 103.914 109.607 108.186 05-Dec-97 105.2 108.734 109.374 [ Graphic Omitted Chart titled "Tiger Volume at Price December 1, 1996 - December 5, 1997" was constructed using data from the table below ] Tiger Volume at Price December 1, 1996 - December 5, 1997 At or Below At this Price This Price $23 0.047 0.047 $24 0.342 0.389 $25 0.161 0.55 $26 0.02 0.57 $27 0.021 0.591 $28 0.019 0.61 $29 0.125 0.735 $30 0.145 0.88 $31 0.102 0.982 $32 0.018 1.00 Other Considerations
Considerations ---------------------------------------------------------- 1. Principal alternative -- continuation as a o Share values captured in discounted cash flow analysis public company with existing affiliate relationships 2. Other alternatives (unlikely or problematic) (a) Recapitalization (i) Special Dividend; pro rata stock o Likely adverse tax consequences repurchase (ii) Buyout of Mustang shares o Mustang repeatedly stated no interest in selling its ownership position (iii) Self tender for public shares o Problematic for 37% holder (Mustang) o Price of self-tender vs. current offer proposed by Mustang o Liquidity of stock stub post-tender (b) Third Party Offer o Unlikely due to current stock ownership positions of Mustang, Chairman of Mustang, Mustang Corp. o No standstill for Mustang or its affiliates
II. REVIEW OF TIGER Tiger Historical Summary Financials ($ in millions, except per share data) Income Statements
For Years Ended December 31, ---------------------------------------------------------- CAGR/ LTM 1992(a) 1993 1994 1995 1996 AVG. 9/30/97 --------- --------- --------- --------- --------- ------- --------- Net Revenues(b) $388.2 $443.2 $535.5 $553.5 $600.2 11.5% $658.4 EBITDA 75.5 88.5 112.0 120.2 127.2 13.9% 138.4 EBIT 58.6 70.0 91.4 98.7 104.3 15.5% 113.3 Net Income $29.8 $38.0 $50.1 $56.0 $61.4 19.8% $70.1 ======== ======= ======= ======= ======= ======= Earnings Per Share $0.87 $1.05 $1.35 $1.51 $1.66 17.5% $1.78 ======== ======= ======= ======= ======= ======= Margins - ------- EBITDA Margin 19.5% 20.0% 20.9% 21.7% 21.2% 21.0% EBIT Margin 15.1% 15.8% 17.1% 17.8% 17.4% 17.2% Net Income Margin 7.7% 8.6% 9.4% 10.1% 10.2% 10.6% Growth Rates - ------------ Net Revenue 14.4% 14.2% 20.8% 3.4% 8.4% 13.6% EBITDA 11.1% 17.2% 26.6% 7.3% 5.8% 11.6% EBIT 8.6% 19.4% 30.6% 8.0% 5.7% 11.7% Net Income 47.0% 27.6% 31.8% 11.8% 9.6% 18.5% Earnings Per Share 29.9% 20.7% 28.6% 11.9% 9.9% 11.9% - --------------------------------- Source: Tiger 10-K, 10-Q filings. (a) EBITDA, EBIT and Net Income exclude extraordinary charge of $5.7 million related to the early extinguishment of debt. (b) In late 1993, the Company acquired Lamons Metal Gasket Co. from Mustang for $60.3 million, adding approximately $48.3 million to revenue in 1994. In 1996, the Company also acquired The Englass Group, Heinrich Stolz, Queensland Towbars and Beaumont Bolt & Gasket Company, adding approximately $45.0 million to 1997 revenue estimates.
Tiger Historical Summary Financials ($ in millions) Balance Sheets
As of December 31, --------------------------------------------------- 1992 1993 1994 1995 1996 9/30/97 ------ ------ ------ ------ ------ ------- Assets Current Assets Cash & Equivalents $64.8 $69.8 $107.7 $92.4 $105.9 $126.0 Receivables 46.6 58.7 64.2 71.2 80.4 93.4 Inventories 60.8 76.7 79.6 85.5 92.2 89.7 Other Current Assets 9.0 9.8 11.8 2.5 4.1 5.3 ------- ------- ------- ------- ------- ------- Total Current Assets 181.1 215.0 263.2 251.6 282.6 314.3 Property & Equipment 144.9 162.2 168.4 173.7 194.5 194.7 Other Long-Term Assets 140.6 186.9 182.7 191.1 219.5 218.1 ------- ------- ------- ------- ------- ------- Total Assets $466.6 $564.1 $614.3 $616.4 $696.7 $727.1 ======= ======= ======= ======= ======= ======= Liabilities & Shareholders' Equity Current Liabilities Accounts Payable $16.9 $20.3 $21.6 $24.4 $33.8 $29.4 Current Portion of Long-Term Debt 0.1 0.3 0.3 -- -- -- Other Current Liabilities 32.4 30.6 33.8 29.7 45.4 37.2 ------- ------- ------- ------- ------- ------- Total Current Liabilities 49.3 51.2 55.6 54.1 79.2 66.5 Deferred Income Taxes & Other 23.4 29.2 29.5 36.4 39.9 47.5 Long-Term Debt 178.5 238.9 238.6 187.2 187.1 71.6 ------- ------- ------- ------- ------- ------- Total Liabilities 251.2 319.3 323.7 277.7 306.2 185.7 Shareholders' Equity Preferred Stock $0.1 -- -- -- -- -- Total Shareholders' Equity 215.4 244.9 290.6 338.7 390.5 541.4 ------- ------- ------- ------- ------- ------- Total Liabilities & Shareholders' Equity $466.6 $564.1 $614.3 $616.4 $696.7 $727.1 ======= ======= ======= ======= ======= ======= - --------------------------------- Source: Tiger 10-K, 10-Q filings.
Summary of Recent Analyst Research
Earnings Target Estimates Institution House/ Share -------------- Analyst Date Recommendation Price 1997 1998 Commentary - --------------------- ------- -------------- ---------- ------ ------ ------------------------------------------------ Salomon Smith Barney/ 12/1/97 "3L-Neutral" $30.00 $1.75 $1.95 "We believe that the shares are fairly valued at Donald Zwyer 15x estimated 1998 EPS and re-initiate coverage with a neutral/low risk rating." Roney & Co. 8/14/97 "Buy" $35.00 $1.71 $1.97 "Selling to literally dozens of niche markets and producing hundreds of products, Tiger is well insulated from both general economic trends and individual industry risk. As a result, earnings are highly predictable... Tiger trades at a substantial multiple discount to both the market and comparable companies, a discount that is unjustified by the Company's growth record, prospects and superior financial condition. We expect investors to benefit from both earnings growth and multiple expansion over the next twelve months." Barrington Research 8/6/97 "1-Buy" NA $1.77 $1.98 NA Associates/ Walter Liptak Lehman Brothers/ 6/25/97 "2-Outperform" $34.00 $1.78 $2.00 "Looking forward we believe a renewal of Harriet C. Baldwin 17.0x 1998 acquisition activity - and a pickup in EPS Baldwin EPS momentum - is coming. . . Historically, estimate of acquisitions have been an important source of $2.00 growth. We believe that the announcement of a sizable acquisition (accretive)could be the next catalyst for the shares. . . Year-to-date shares have outperformed the brisk pace of the market. . . We expect full year EPS at $1.78, up 15% versus $1.55 in 1996 - and compared to 9% EPS growth in 1996. We anticipate revenue growth at Tiger to accelerate to 12% in 1997, compared to 8% in 1996, driven by the 8% in 1996, once acquired product lines reach Tiger standards."
Ownership Profile
Institutional Shares % of Insider Shares % of Options Holdings Held Outstanding Holdings Held Outstanding Held - ------------------------------ --------- ----------- ---------------- --------- ------------- ------- T. Rowe Price 3,975,000 9.6% Herbert S. Amster 22,500 0.05% 0 Fidelity 3,921,400 9.5 Brian P. Campbell 1,194,753 2.85 220,000 Cramer Rosenthal McGly 1,128,378 2.7 Peter C. DeChants 39,950 0.10 24,000 David L. Babson & Co. 989,040 2.4 William E. Meyers 59,907 0.14 15,189 First Chicago NBD Corp. 824,966 2.0 Douglas P. Roosa 6,320 0.02 0 Skyline Asset Mgmt. 530,500 1.3 Helmut F. Stern 500,000 1.23 0 Ohio St. Teachers Ret. Fund 500,000 1.2 ----------------- --------- ------ ------- Invista Capital Mgmt Inc. 421,500 1.0 Total 1,823,430 4.41% 259,189 Zurich Kemper Investments 400,000 1.0 First Pacific Advisors 391,769 0.9 Barclays Bank Plc 355,821 0.9 Dalton Greiner Hartman 262,900 0.6 Shares % of Mellon Bank 234,014 0.6 Affiliate Holdings Held Outstanding Wright Investors Service 222,900 0.5 --------------------- ----------- ----------- College Retirement Equities 196,100 0.5 Columbia Management Co. 170,000 0.4 Mustang Corp. 1,583,708 3.8% Delaware Management Co. 147,000 0.4 Mustang 15,191,109 36.8 Putnam Investment Mgmt. 143,332 0.3 Richard A. Manoogian 1,801,852 4.4 Vanguard Group Inc. 124,100 0.3 --------------------- ---------- ---- First Manhattan Co. 119,950 0.3 Total 18,576,669 45.0% Palisade Capital Mgmt. 116,848 0.3 Schwartz Investment Counsel 115,437 0.3 Bankers Trust NY Corp. 109,400 0.3 Pekin Singer & Shapiro 105,520 0.3 Recapitulation: Geneva Capital Mgmt Lt. 103,000 0.2 -------------------- Welch & Forbes Inc. 87,970 0.2 Affiliate Holdings 18,576,669 45.0% ANB Investment 71,780 0.2 Institutional Holdings 16,955,998 41.0 Conseco Inc. 68,000 0.2 Insider Holdings 1,823,430 4.4 Princor Management Corp. 61,100 0.1 Retail and Other 3,969,021 9.6 Wilshire Assoc. Inc. 58,700 0.1 ------------------------ ---------- ----- State Street Corp. 50,400 0.1 Total Shares Outstanding 41,325,118 100.0% Others (Each holding less than 50,000 shares) 624,973 1.5 - ------------------------------ ---------- ----- Total 16,955,998 41.0%
Liquidity Analysis of Tiger Shares Outstanding 41,325,118 Float(a) 20,815,062 Adjusted Float(b) 9,976,278 Average Daily Trading Volume 30-day 29,968 60-day 27,423 90-day 28,502 180-day 30,324 Average Daily Turnover(c) 30-day 0.1% 60-day 0.1 90-day 0.1 180-day 0.1 Average Daily Adjusted Turnover(c) 30-day 0.3% 60-day 0.3 90-day 0.3 180-day 0.3 Number of Research Analysts 7 [ Graphic Omitted Chart titled "TIGER 1 YEAR STOCK CHART High-Low-Close & Volume" was constructed using data from the table below ] Volume High Low Close 05-Dec-96 9100 25 24.875 25 06-Dec-96 3800 24.875 24.5 24.5 09-Dec-96 800 24.625 24.5 24.625 10-Dec-96 33300 24.625 24.375 24.375 11-Dec-96 14500 24.25 24.125 24.25 12-Dec-96 3000 24.25 23.875 23.875 13-Dec-96 2000 23.75 23.625 23.75 16-Dec-96 9900 23.75 23.125 23.125 17-Dec-96 11100 23.375 23 23.25 18-Dec-96 10200 23.25 22.75 22.75 19-Dec-96 25000 23.125 22.625 23 20-Dec-96 9600 23.5 23 23.5 23-Dec-96 9200 23.375 22.625 22.625 24-Dec-96 9700 22.75 22.625 22.75 26-Dec-96 27700 23 22.75 22.875 27-Dec-96 76200 23.5 23 23.5 30-Dec-96 8100 23.625 23.375 23.5 31-Dec-96 8100 23.875 23.375 23.875 02-Jan-97 189200 23.875 23.75 23.875 03-Jan-97 148500 24.25 23.75 24.25 06-Jan-97 5600 24.375 24.125 24.125 07-Jan-97 56300 24.25 24.125 24.125 08-Jan-97 91700 24.125 23.75 23.875 09-Jan-97 89800 24 23.25 23.25 10-Jan-97 31800 23.375 22.875 23.375 13-Jan-97 26100 23.25 23 23.125 14-Jan-97 19800 23.25 23.125 23.25 15-Jan-97 21700 23 22.625 22.625 16-Jan-97 4000 23.125 22.625 22.875 17-Jan-97 130800 23 22.875 23 20-Jan-97 7200 22.875 22.75 22.875 21-Jan-97 138700 23.25 22.875 23.125 22-Jan-97 7000 23 22.875 22.875 23-Jan-97 2800 22.875 22.75 22.75 24-Jan-97 22200 22.75 22.375 22.5 27-Jan-97 11200 22.625 22.25 22.25 28-Jan-97 43900 22.5 22.25 22.25 29-Jan-97 25000 22.5 22 22 30-Jan-97 25700 22.25 22 22.25 31-Jan-97 23500 22.25 22.125 22.25 03-Feb-97 26000 22.75 22.125 22.5 04-Feb-97 56200 22.75 22.5 22.625 05-Feb-97 16100 22.875 22.625 22.875 06-Feb-97 46800 23.5 22.875 23.5 07-Feb-97 6400 23.375 23.25 23.375 10-Feb-97 24400 23.5 23.125 23.5 11-Feb-97 751500 24 23.625 23.875 12-Feb-97 32500 23.875 23.75 23.875 13-Feb-97 121500 23.875 23.75 23.875 14-Feb-97 113000 24 23.875 24 18-Feb-97 210800 24.75 23.875 24.75 19-Feb-97 81200 24.75 24.5 24.625 20-Feb-97 76700 24.625 24.5 24.625 21-Feb-97 93900 24.625 24.25 24.25 24-Feb-97 8900 24.375 24.125 24.25 25-Feb-97 56600 24.5 24.375 24.5 26-Feb-97 23000 24.5 24.25 24.5 27-Feb-97 11100 24.5 24.25 24.375 28-Feb-97 12200 24.375 24.125 24.375 03-Mar-97 97200 24.75 24.25 24.75 04-Mar-97 29000 24.75 24.625 24.75 05-Mar-97 120200 24.75 24.375 24.5 06-Mar-97 108200 24.625 24.5 24.5 07-Mar-97 117700 24.5 24.25 24.375 10-Mar-97 77100 24.75 24.25 24.75 11-Mar-97 45300 24.75 24.375 24.5 12-Mar-97 37500 24.5 24.375 24.375 13-Mar-97 23600 24.375 24 24 14-Mar-97 70700 24.125 24 24.125 17-Mar-97 32000 24 23.75 23.875 18-Mar-97 45500 24 23.75 23.75 19-Mar-97 59200 23.875 23.5 23.5 20-Mar-97 113600 23.875 23.375 23.375 21-Mar-97 184900 23.5 23.25 23.5 24-Mar-97 115300 23.625 23.375 23.5 25-Mar-97 146000 23.625 23.375 23.375 26-Mar-97 43900 23.625 23.5 23.5 27-Mar-97 70100 23.75 23.5 23.625 31-Mar-97 49200 23.5 23.125 23.5 01-Apr-97 33600 24.125 23.5 24.125 02-Apr-97 52000 24 23.625 23.75 03-Apr-97 144800 23.875 23.75 23.75 04-Apr-97 42000 23.875 23.625 23.875 07-Apr-97 40800 23.875 23.625 23.75 08-Apr-97 10100 23.875 23.75 23.875 09-Apr-97 75100 24 23.75 23.875 10-Apr-97 69100 23.875 23.375 23.375 11-Apr-97 4700 23.375 23.125 23.375 14-Apr-97 31700 23.25 22.75 23 15-Apr-97 158700 23.25 22.875 23 16-Apr-97 49100 23.375 22.75 23.125 17-Apr-97 41800 23.375 23.125 23.125 18-Apr-97 9200 23.375 23.125 23.125 21-Apr-97 9000 23.25 23 23.25 22-Apr-97 14100 23.5 23.125 23.5 23-Apr-97 24200 23.75 23 23.125 24-Apr-97 12100 23.5 23.25 23.5 25-Apr-97 3500 23.625 23.375 23.375 28-Apr-97 23500 24 23.375 24 29-Apr-97 15900 24.5 24 24.5 30-Apr-97 28300 24.625 24.25 24.625 01-May-97 31300 24.875 24.625 24.625 02-May-97 11300 25 24.625 25 05-May-97 29800 26.125 24.875 26 06-May-97 49200 27.125 26 26.375 07-May-97 21500 26.625 25.625 25.75 08-May-97 39500 26.125 25.5 25.5 09-May-97 41800 25.875 25.25 25.75 12-May-97 31200 26.5 25.875 26.5 13-May-97 13200 26.75 26.125 26.125 14-May-97 17100 26.5 26.25 26.5 15-May-97 7900 26.25 25.75 25.875 16-May-97 54300 26.25 25.875 26.25 19-May-97 11900 26.5 25.75 26.5 20-May-97 13800 26.875 26.375 26.75 21-May-97 11500 27.25 26.875 26.875 22-May-97 3800 27.625 27 27.625 23-May-97 35600 28.125 27.625 28.125 27-May-97 109000 28.375 27.875 28.375 28-May-97 14400 28.375 27.875 28.125 29-May-97 6100 28.125 27.875 28 30-May-97 32800 28.375 27.75 28.375 02-Jun-97 6300 28.375 28.25 28.375 03-Jun-97 58600 29.125 28.375 29 04-Jun-97 25200 28.875 28.625 28.75 05-Jun-97 38800 29 28.5 29 06-Jun-97 47400 29.125 28.875 29.125 09-Jun-97 54800 29.5 29.125 29.375 10-Jun-97 73600 29.5 28.875 29.5 11-Jun-97 5300 29.5 29.375 29.375 12-Jun-97 38100 29.375 29.125 29.375 13-Jun-97 32000 29.625 29.25 29.5 16-Jun-97 42100 30 29.5 30 17-Jun-97 64900 30.5 30 30.375 18-Jun-97 37500 30.625 30.375 30.5 19-Jun-97 62200 31 30.5 31 20-Jun-97 45200 30.625 29.875 29.875 23-Jun-97 15000 30 29.625 30 24-Jun-97 11900 29.875 29.375 29.625 25-Jun-97 46500 29.5 29.125 29.125 26-Jun-97 34800 29 28.188 28.313 27-Jun-97 58700 28.438 27.75 28.188 30-Jun-97 66900 28.125 27.875 28.125 01-Jul-97 23000 28.125 28 28.125 02-Jul-97 67600 28.625 27.625 28.5 03-Jul-97 55400 28.75 28.375 28.75 07-Jul-97 35800 29.25 28.875 29.25 08-Jul-97 49600 29.344 29.188 29.25 09-Jul-97 32100 29.438 29.25 29.375 10-Jul-97 37600 29.5 29.313 29.313 11-Jul-97 15800 29.438 29.25 29.375 14-Jul-97 25200 29.5 29.25 29.438 15-Jul-97 63900 29.438 29.313 29.438 16-Jul-97 34200 29.625 29.375 29.563 17-Jul-97 22600 29.563 29.5 29.563 18-Jul-97 36900 29.563 29.25 29.563 21-Jul-97 7900 29.438 29.25 29.313 22-Jul-97 7800 29.313 29.25 29.313 23-Jul-97 17000 29.313 29.25 29.313 24-Jul-97 16200 29.25 29 29.25 25-Jul-97 3400 29.25 29.125 29.188 28-Jul-97 29400 29.313 29.063 29.313 29-Jul-97 2900 29.25 29.063 29.063 30-Jul-97 23500 29.25 29 29.25 31-Jul-97 20200 29.25 29.125 29.188 01-Aug-97 67600 29.375 29.063 29.375 04-Aug-97 37600 29.375 29.188 29.375 05-Aug-97 43500 29.625 29.375 29.438 06-Aug-97 4600 29.438 29.188 29.188 07-Aug-97 18000 29.25 28.75 29.25 08-Aug-97 21200 29.25 28.313 28.625 11-Aug-97 16200 28.625 28 28.625 12-Aug-97 44100 29 28.688 28.75 13-Aug-97 17900 28.75 28.5 28.5 14-Aug-97 12500 28.438 28.25 28.375 15-Aug-97 28400 28 27.25 27.25 18-Aug-97 48500 28 27.063 28 19-Aug-97 34100 28.125 27.75 27.875 20-Aug-97 14000 28.25 27.875 28.188 21-Aug-97 11600 28.563 28.25 28.25 22-Aug-97 35200 28.063 27.75 28.063 25-Aug-97 6900 28.125 28.063 28.125 26-Aug-97 18800 28.813 28.188 28.813 27-Aug-97 28500 28.875 28.625 28.688 28-Aug-97 29400 28.75 28.313 28.438 29-Aug-97 40000 28.625 28.5 28.625 02-Sep-97 39600 28.5 28.25 28.375 03-Sep-97 15900 28.25 27.813 28.188 04-Sep-97 21400 28.375 28.125 28.188 05-Sep-97 59000 28.25 28 28.125 08-Sep-97 8100 28.375 28.063 28.188 09-Sep-97 94800 28.5 28.063 28.5 10-Sep-97 6700 28.5 28.125 28.188 11-Sep-97 111700 28.5 28 28.5 12-Sep-97 33100 30.5 28.438 30.375 15-Sep-97 62300 30.375 30.25 30.313 16-Sep-97 17700 30.438 30.313 30.375 17-Sep-97 38800 30.5 30.188 30.25 18-Sep-97 2500 30.5 30.375 30.375 19-Sep-97 10500 30.438 30.188 30.188 22-Sep-97 18400 31.563 30.188 30.375 23-Sep-97 15900 30.688 30.313 30.375 24-Sep-97 18400 30.75 30.25 30.563 25-Sep-97 40400 30.625 30.25 30.563 26-Sep-97 12400 30.75 30.5 30.75 29-Sep-97 3800 30.813 30.625 30.813 30-Sep-97 13600 30.625 30.438 30.5 01-Oct-97 24300 31 30.5 31 02-Oct-97 24300 31.563 30.688 30.938 03-Oct-97 29300 31 30.938 31 06-Oct-97 12600 30.938 30.75 30.938 07-Oct-97 22000 30.625 30.313 30.375 08-Oct-97 58500 30.25 29.625 30.125 09-Oct-97 15200 30.125 30 30 10-Oct-97 45800 30.188 29.875 30.063 13-Oct-97 4500 30 29.938 30 14-Oct-97 37700 30 29.813 29.875 15-Oct-97 25500 30 29.813 30 16-Oct-97 27200 30.438 29.875 30.438 17-Oct-97 47300 30.438 30 30.063 20-Oct-97 30500 30.063 30 30 21-Oct-97 42700 30.188 29.875 30.125 22-Oct-97 14600 30.063 29.938 30.063 23-Oct-97 18900 30 29.813 30 24-Oct-97 20100 30.063 29.938 30 27-Oct-97 35400 30 29.5 29.5 28-Oct-97 30800 28.938 28.375 28.813 29-Oct-97 4200 28.813 28.625 28.75 30-Oct-97 9800 28.813 28.5 28.813 31-Oct-97 19200 29.313 29.188 29.25 03-Nov-97 15500 29.5 28.75 29.125 04-Nov-97 9300 29.375 28.75 29.375 05-Nov-97 7600 29.563 29.313 29.563 06-Nov-97 26100 30.188 29.625 30.125 07-Nov-97 71500 30 29.188 29.25 10-Nov-97 24100 29.5 28.938 29.438 11-Nov-97 1900 29.438 29.313 29.313 12-Nov-97 53800 30.188 29.063 29.75 13-Nov-97 29400 29 28.563 29 14-Nov-97 3900 29.625 29.063 29.563 17-Nov-97 12000 30 29.688 30 18-Nov-97 8900 30.125 29.938 30.125 19-Nov-97 1300 30.125 30.125 30.125 20-Nov-97 42900 30.125 30 30.125 21-Nov-97 110900 30.188 29.938 30 24-Nov-97 9800 29.875 29.563 29.625 25-Nov-97 9100 30.188 29.375 30.188 26-Nov-97 53200 30.688 30.125 30.688 28-Nov-97 35900 31 30.688 31 01-Dec-97 59600 31.563 31.125 31.5 02-Dec-97 2300 31.75 31.563 31.563 03-Dec-97 45600 31.813 31.625 31.625 04-Dec-97 1200 31.5 31.375 31.375 05-Dec-97 48300 31.375 31 31.125
Divestiture Days Required Based on 25% of % % Current Average Daily Trading Volume Institutional Investors Float Outstanding Holdings 30-Day 60-Day 90-Day 180-Day - ----------------------------- -------- ----------- -------- --------- --------- --------- --------- T. Rowe Price 19.1% 9.5% 3,975,000 530.6 579.8 557.9 524.3 Fidelity 18.8 9.6 3,921,400 523.4 572.0 550.3 517.3 Cramer Rosenthal McGly 5.4 2.7 1,128,378 150.6 164 6 158.4 148.8 David L. Babson & Co. 4.8 2.4 989,040 132.0 144.3 138.8 130.5 First Chicago NBD 4.0 2.0 824,966 110.1 120.3 115.8 108.8 Skyline Asset Management 2.5 1.3 530,500 70.8 77.4 74.5 70.0 Ohio State Teachers Retirement 2.4 1.2 500,000 66.7 72.9 70.2 66.0 Fund Invista Capital Management 2.0 1.0 421,500 56.3 61.5 59.2 55.6 Zurich Kemper Investments, Inc. 1.9 1.0 400,000 53.4 58.3 56.1 52.8 First Pacific Advisors 1.9 0.9 391,769 52.3 57.1 55.0 51.7 ----- ----- ---------- 62.9% 31.7% 13,082,553 - -------------------- Note: Share price data through December 5, 1997. (a) Float represents shares outstanding, less Mustang, Mustang Corp., management and director holdings. (b) Adjusted Float represents Float less five largest institutional investors. (c) Average Daily Turnover = Avg. Daily Trading Volume/Float. (d) Adjusted Daily Turnover = Avg. Daily Trading Volume/Adjusted Float.
III. VALUATION ANALYSIS [ Graphic Omitted Chart titled "Selected Public Company Analysis Summary Implied Tiger Share Price (a)" was constructed using data from the table below ] - -------------------- (a) LTM results through September 30, 1997. Composite group includes Aeroquip-Vickers, Inc., Barnes Group Incorporated, Blount International, Inc., Cincinnati Milacron Inc., Cooper Industries, Danaher Corporation, Dover Corporation, Federal Signal Corporation, GenCorp Inc., Illinois Tool Works, Kaydon Corporation, Mark IV Industries, Pentair Inc., Regal-Beloit Corporation and Teleflex Inc. Selected Public Company Analysis Summary
Tiger Tiger Transaction Publicly Traded Company Multiples Implied Equity Valuation (Per Share)(b) Results Multiples at ------------------------------------- ---------------------------------------- (mm) Offer Price Mean Median Range Mean Median Range ------- ------------ -------- -------- -------------- -------- -------- ---------------- LTM Revenues $658.4 2.1x 1.5x 1.4x 0.8x - 3.4x $24.91 $23.33 $13.89 - $54.81 LTM EBITDA 138.4 10.0 9.0 8.5 6.2 - 13.6 31.08 29.43 21.82 - 46.30 LTM EBIT 113.3 12.2 11.8 11.3 8.5 - 16.7 33.25 31.90 24.32 - 46.52 LTM Net Income 70.1 20.5 17.2 15.7 12.2 - 24.9 28.83 26.32 20.45 - 41.74 1997E EPS 1.76 19.6 17.3 16.3 12.7 - 23.9 30.45 28.69 22.35 - 42.06 1998E EPS 1.92 18.0 15.2 14.4 11.5 - 21.6 29.18 27.65 22.08 - 41.47 Book Value 541.4 2.7 3.4 3.3 2.0 - 5.2 44.00 42.71 25.89 - 67.30 - --------------------- (a) LTM results through September 30, 1997. (b) Includes net cash of $54.3 million; 41.8 million fully diluted shares. See Appendix for Public Company Transaction Analysis.
[ Graphic Omitted Chart titled "Selected Precedent Transactions Summary Implied Tiger Share Price" was constructed using data from the table on the following page ] - -------------------- (a) LTM results through September 30, 1997. See Appendix for Analysis of Selected Precedent Transactions. Selected Precedent Transactions
Tiger Tiger Transaction Precedent Transation Multiples Implied Equity Valuation (Per Share)(b) Results Multiples at ------------------------------------- ----------------------------------------- (mm) Offer Price Mean Median Range Mean Median Range ------- ------------ -------- -------- ---------------- -------- -------- ------------------ LTM Revenues $658.4 2.1x 1.3x 1.1x 0.7x - 3.3x $21.76 $18.61 $12.32 - $53.24 LTM EBITDA 138.4 10.0 9.3 8.7 7.1 - 14.8 32.07 30.09 24.79 - 50.28 LTM EBIT 113.3 12.2 12.6 12.4 9.1 - 16.3 35.42 34.88 25.94 - 45.44 LTM Net Income 70.1 20.5 19.0 17.5 12.7 - 26.8 31.85 29.33 21.29 - 44.92 Book Value 541.4 2.7 3.0 2.4 1.6 - 5.7 38.83 31.06 20.71 - 73.77 - --------------------- (a) LTM results through September 30, 1997. (b) Includes net cash of $54.3 million; 41.8 million fully diluted shares. See Appendix for Selected Precedent Transaction Analysis.
Summary Discounted Cash Flow Analysis
Per Share Value Range ------------------------------------------------------- Terminal Value Method Perpetuity Growth Method --------------------- ------------------------ Results: Case One $32.96 - $42.11 $25.80 - $41.68 Case Two 29.51 - 37.57 22.80 - 36.43 1994 Actual - 1997 Est. Case One 1997 - 2002 Case Two 1997 - 2002 ------------------------- ---------------------- ---------------------- Assumptions: Revenue Growth 7.5% 7.5% 7.5% Operating Income (EBIT) Growth 8.2% 10.8% 7.5% EBIT Margin % 17.4% 20.2% (2002) 17.4% (2002) Case One: Tiger management five-year projections. Case Two: Tiger management five-year projections, adjusted for constant EBIT margin assumption per discussions with the Oversight Committee.
DISCOUNTED CASH FLOW ANALYSIS BT WOLFENSOHN Project Motown (In Thousands Except Per Share Amounts) CASE 1
1998 1999 2000 2001 2002 ---- ---- ---- ---- ---- Cash Provided by Operations Earnings Before Interest and Taxes (EBIT) $124,899.0 $139,668.0 $158,477.0 $175,569.0 $193,132.0 Taxes @ 38.0% (48,449.6) (54,061.8) (61,209.3) (67,704.2) (74,378.2) Unlevered Net Income $76,449.4 $85,606.2 $97,267.7 $107,864.8 $118,753.8 +Depreciation and Amortization $27,765.0 $33,341.0 $34,629.0 $31,057.0 $30,603.0 +Change in Deferred Taxes 2,000.0 2,000.0 2,000.0 2,000.0 2,000.0 +After-tax Proceeds from Asset Sales 0.0 0.0 0.0 0.0 0.0 -Net Additions to Property, Plant and Equipment (37,222.0) (37,795.0) (35,095.0) (29,997.0) (30,121.0) -Net Change in Non-cash Working Capital (4,242.9) (1,873.3) (8,305.9) (6,120.9) (5,183.4) Total Cash Flow Provided By Operations $64,749.5 $81,278.8 $90,495.9 $104,803.8 $116,052.4 Unlevered Operating Free Cash Flow After-tax $64,749.5 $81,278.8 $90,495.9 $104,803.8 $116,052.4 Earnings Before Interest, Taxes, Depreciation & Amortization (EBITDA) 152,664.0 173,009.0 193,106.0 206,626.0 223,735.0 Terminal Value at 8.0x EBITDA --- --- --- --- $1,789,880.0 Terminal Value at 9.0x EBITDA --- --- --- --- 2,013,615.0 Terminal Value at 10.0x EBITDA --- --- --- --- 2,237,350.0 Five Year Net Free Cash Flows at 8.0x EBITDA $64,749.5 $81,278.8 $90,495.9 $104,803.8 $1,905,932.4 Net Free Cash Flows at 9.0x EBITDA 64,749.5 81,278.8 90,495.9 104,803.8 2,129,667.4 Net Free Cash Flows at 10.0x EBITDA 64,749.5 81,278.8 90,495.9 104,803.8 2,353,402.4 Perpetuity Method Terminal Value - ------------------------------------ 10.5% 11.5% 12.5% 3.0% $1,593,786.4 $1,406,282.1 $1,258,252.4 4.0% 1,856,838.6 1,609,260.1 1,419,935.4 5.0% 2,215,546.0 1,874,692.8 1,624,733.7
FIVE YEAR NET PRESENT VALUE ANALYSIS TERMINAL EXIT VALUE METHOD ENTERPRISE EQUITY PER VALUE VALUE (a) SHARE NPV @ 10.5% $1,419,431.3 $1,489,755.1 $35.61 8.0x EBITDA NPV @ 11.5% $1,362,483.9 $1,432,807.7 $34.25 NPV @ 12.5% $1,308,419.2 $1,378,743.0 $32.96 NPV @ 10.5% $1,555,238.5 $1,625,562.3 $38.86 9.0x EBITDA NPV @ 11.5% $1,492,309.2 $1,562,633.0 $37.36 NPV @ 12.5% $1,432,576.2 $1,502,900.0 $35.93 NPV @ 10.5% $1,691,045.6 $1,761,369.4 $42.11 10.0x EBITDA NPV @ 11.5% $1,622,134.6 $1,692,458.4 $40.46 NPV @ 12.5% $1,556,733.2 $1,627,057.0 $38.90
FIVE YEAR NET PRESENT VALUE ANALYSIS ENTERPRISE EQUITY PER PERPETUITY VALUE METHOD VALUE VALUE (a) SHARE NPV @ 10.5% $1,300,402.6 $1,366,157.6 $32.66 3.0% Growth Rate NPV @ 11.5% $1,139,895.8 $1,205,650.8 $28.82 NPV @ 12.5% $1,013,403.6 $1,079,158.6 $25.80 NPV @ 10.5% $1,460,075.2 $1,525,830.2 $36.48 4.0% Growth Rate NPV @ 11.5% $1,257,676.6 $1,323,431.6 $31.64 NPV @ 12.5% $1,103,126.2 $1,168,881.2 $27.94 NPV @ 10.5% $1,677,810.6 $1,743,565.6 $41.68 5.0% Growth Rate NPV @ 11.5% $1,411,697.7 $1,477,452.7 $35.32 NPV @ 12.5% $1,216,774.7 $1,282,529.7 $30.66
DISCOUNTED CASH FLOW ANALYSIS BT WOLFENSOHN Project Motown (In Thousands Except Per Share Amounts) CASE 2
1998 1999 2000 2001 2002 ---- ---- ---- ---- ---- Cash Provided by Operations Earnings Before Interest and Taxes (EBIT) $124,899.0 $133,808.7 $145,068.9 $155,514.7 $166,390.5 Taxes @ 38.0% (48,449.6) (51,835.3) (56,114.2) (60,083.6) (64,216.4) Unlevered Net Income $76,449.4 $81,973.4 $88,954.7 $95,431.1 $102,174.1 +Depreciation and Amortization $27,765.0 $33,341.0 $34,629.0 $31,057.0 $30,603.0 +Change in Deferred Taxes 2,000.0 2,000.0 2,000.0 2,000.0 2,000.0 +After-tax Proceeds from Asset Sales 0.0 0.0 0.0 0.0 0.0 -Net Additions to Property, Plant and Equipment (37,222.0) (37,795.0) (35,095.0) (29,997.0) (30,121.0) -Net Change in Non-cash Working Capital (4,242.9) (1,873.3) (8,305.9) (6,120.9) (5,183.4) Total Cash Flow Provided By Operations $64,749.5 $77,646.0 $82,182.8 $92,370.2 $99,472.7 Unlevered Operating Free Cash Flow After-tax $64,749.5 $77,646.0 $82,182.8 $92,370.2 $99,472.7 Earnings Before Interest, Taxes, Depreciation & Amortization (EBITDA) 152,664.0 167,149.7 179,697.9 186,571.7 196,993.5 Terminal Value at 8.0x EBITDA --- --- --- --- $1,575,948.1 Terminal Value at 9.0x EBITDA --- --- --- --- 1,772,941.6 Terminal Value at 10.0x EBITDA --- --- --- --- 1,969,935.1 Five Year Net Free Cash Flows at 8.0x EBITDA $64,749.5 $77,646.0 $82,182.8 $92,370.2 $1,675,420.7 Net Free Cash Flows at 9.0x EBITDA 64,749.5 77,646.0 82,182.8 92,370.2 1,872,414.3 Net Free Cash Flows at 10.0x EBITDA 64,749.5 77,646.0 82,182.8 92,370.2 2,069,407.8 Perpetuity Method Terminal Value - -------------------------------- 10.5% 11.5% 12.5% 3.0% $1,366,091.5 $1,205,374.9 $1,078,493.3 4.0% 1,591,563.0 1,379,354.6 1,217,077.6 5.0% 1,899,024.0 1,606,866.5 1,392,617.6
FIVE YEAR NET PRESENT VALUE ANALYSIS TERMINAL EXIT VALUE METHOD ENTERPRISE EQUITY PER VALUE VALUE (a) SHARE NPV @ 10.5% $1,262,034.6 $1,332,358.4 $31.85 8.0 x EBITDA NPV @ 11.5% $1,211,762.6 $1,282,086.4 $30.65 NPV @ 12.5% $1,164,030.4 $1,234,354.2 $29.51 NPV @ 10.5% $1,381,609.6 $1,451,933.4 $34.71 9.0 x EBITDA NPV @ 11.5% $1,326,070.9 $1,396,394.7 $33.38 NPV @ 12.5% $1,273,347.8 $1,343,671.6 $32.12 NPV @ 10.5% $1,501,184.6 $1,571,508.4 $37.57 10.0 x EBITDA NPV @ 11.5% $1,440,379.1 $1,510,702.9 $36.11 NPV @ 12.5% $1,382,665.2 $1,452,989.0 $34.73
FIVE YEAR NET PRESENT VALUE ANALYSIS ENTERPRISE EQUITY PER PERPETUITY VALUE METHOD VALUE VALUE (a) SHARE NPV @ 10.5% $1,134,651.7 $1,200,406.7 $28.70 3.0% Growth Rate NPV @ 11.5% $996,732.3 $1,062,487.3 $25.40 NPV @ 12.5% $887,978.4 $953,733.4 $22.80 NPV @ 10.5% $1,271,512.8 $1,337,267.8 $31.97 4.0% Growth Rate NPV @ 11.5% $1,097,686.5 $1,163,441.5 $27.81 NPV @ 12.5% $964,882.8 $1,030,637.8 $24.64 NPV @ 10.5% $1,458,141.6 $1,523,896.6 $36.43 5.0% Growth Rate NPV @ 11.5% $1,229,703.4 $1,295,458.4 $30.97 NPV @ 12.5% $1,062,295.0 $1,128,050.0 $26.97
Project Motown BT WOLFENSOHN Assumptions Discounted Cash Flow Analysis CASE 1 (In Thousands Except Per Share Amounts)
HISTORICAL FISCAL YEAR ENDED December 31, ------------------------------------------------------------- 1994 1995 1996 1997 ---------- ---------- ---------- ---------- Sales $535,480.0 $553,491.0 $600,230.0 $664,983.0 % Growth 20.8% 3.4% 8.4% 10.8% Gross Profit 173,960.0 182,021.0 196,850.0 216,932.0 Margin % 32.5% 32.9% 32.8% 32.6% EBITDA 111,980.0 120,161.0 127,220.0 141,704.0 Margin % 20.9% 21.7% 21.2% 21.3% EBIT 91,400.0 98,681.0 104,290.0 115,729.0 Margin % 17.1% 17.8% 17.4% 17.4% EBITA(1) 93,470.0 100,661.0 106,430.0 118,279.0 Margin % 17.5% 18.2% 17.7% 17.8% Cash Taxes(2) 38.00% (35,518.6) (38,251.2) (40,443.4) (44,946.0) Unlevered Net Income 55,881.4 60,429.8 63,846.6 70,783.0 Depreciation & Amortization(3) 20,580.0 21,480.0 22,930.0 25,975.0 % of Sales 3.8% 3.9% 3.8% 3.9% Amortization 5,350.0 5,040.0 5,280.0 6,200.0 % of Sales 1.0% 0.9% 0.9% 0.9% Non-Deductible 2,070.0 1,980.0 2,140.0 2,550.0 Capital Expenditures 24,310.0 23,470.0 54,160.0 45,156.0 % of Sales 4.5% 4.2% 9.0% 6.8% Working Capital 100,180.0 105,070.0 97,550.0 115,976.0 % of Sales 18.7% 19.0% 16.3% 17.4% Growth % 4.9% 7.2% 18.9% Fully Diluted Shares: (000s)(4) 41,831.2 Net Debt @ 12/31/97 ($65,755.0) Cash Proceeds from Options $4,568.8 PROJECTED FISCAL YEAR ENDED December 31, --------------------------------------------------------------------- 1998 1999 2000 2001 2002 ---------- ---------- ---------- ---------- ---------- Sales $716,480.0 $767,590.0 $832,184.0 $892,106.0 $954,495.0 % Growth 7.7% 7.1% 8.4% 7.2% 7.0% Gross Profit 236,079.0 256,421.0 280,999.0 304,028.0 328,293.0 Margin % 32.9% 33.4% 33.8% 34.1% 34.4% EBITDA 152,664.0 173,009.0 193,106.0 206,626.0 223,735.5 Margin % 21.3% 22.5% 23.2% 27.7% 23.4% EBIT 124,899.0 139,668.0 158,447.0 175,569.0 193,132.0 Margin % 17.4% 18.2% 19.0% 19.7% 20.2% EBITA(1) 127,499.0 142,268.0 161,077.0 178,169.0 195,732.0 Margin % 17.8% 18.5% 19.4% 20.0% 20.5% Cash Taxes(2) 38.00% (48,449.6) (54,061.8) (61,209.3) (67,704.2) (74,328.2) Unlevered Net Income 76,449.4 85,606.2 97,267.7 107,864.8 118,753.8 Depreciation & Amortization(3) 27,765.0 33,341.0 34,629.0 31,057.0 30,603.0 % of Sales 3.9% 4.3% 4.2% 3.5% 3.2% Amortization 6,250.0 6,150.0 6,150.0 6,150.0 6,150.0 % of Sales 0.9% 0.8% 0.7% 0.7% 0.6% Non-Deductible 2,600.0 2,600.0 2,600.0 2,600.0 2,600.0 Capital Expenditures 37,222.0 37,950.0 35,095.0 29,997.0 30,121.0 % of Sales 5.2% 4.9% 4.2% 3.4% 3.2% Working Capital 120,218.9 122,092.2 130,398.1 136,519.0 141,702.5 % of Sales 16.8% 15.9% 15.7% 15.3% 14.8% Growth % 3.7% 1.6% 6.8% 4.7% 3.8% - ------------ (1) EBITA equals earnings before interest and non-deduction amortization. (2) Cash tax is based on the effective tax rate of 38%. (3) Depreciation and Amortization includes both deductible and non-deductible amortization. (4) Includes 506,047 shares held under option. Cash proceeds from options equals $4,568,805.
Project Motown BT WOLFENSOHN Assumptions Discounted Cash Flow Analysis CASE 2 (In Thousands Except Per Share Amounts)
HISTORICAL FISCAL YEAR ENDED December 31, ------------------------------------------------------------- 1994 1995 1996 1997 ---------- ---------- ---------- ---------- Sales $535,480.0 $553,491.0 $600,230.0 $664,983.0 % Growth 20.8% 3.4% 8.4% 10.8% Gross Profit 173,960.0 182,021.0 196,850.0 216,932.0 Margin % 32.5% 32.9% 32.8% 32.6% EBITDA 111,980.0 120,161.0 127,220.0 141,704.0 Margin % 20.9% 21.7% 21.2% 21.3% EBIT 91,400.0 98,681.0 104,290.0 115,729.0 Margin % 17.1% 17.8% 17.4% 17.4% EBITA(1) 93,470.0 100,661.0 106,430.0 118,279.0 Margin % 17.5% 18.2% 17.7% 17.8% Cash Taxes(2) 38.00% (35,518.6) (38,251.2) (40,443.4) (44,946.0) Unlevered Net Income 55,881.4 60,429.8 63.846.6 70,783.0 Depreciation & Amortization(3) 20,580.0 21,480.0 22,930.0 25,975.0 % of Sales 3.8% 3.9% 3.8% 3.9% Amortization 5,350.0 5,040.0 5,280.0 6,200.0 % of Sales 1.0% 0.9% 0.9% 0.9% Non-Deductible 2,070.0 1,980.0 2,140.0 2,550.0 Capital Expenditures 24,310.0 23,470.0 54,160.0 45,156.0 % of Sales 4.5% 4.2% 9.0% 6.8% Working Capital 100,180.0 105,070.0 97,550.0 115,976.0 % of Sales 18.7% 19.0% 16.3% 17.4% Growth % 4.9% 7.2% 18.9% Fully Diluted Shares: (000s)(4) 41,831.2 Net Debt @ 12/31/97 ($65,755.0) Cash Proceeds from Options $4,568.8 PROJECTED FISCAL YEAR ENDED December 31, ------------------------------------------------------------------ 1998 1999 2000 2001 2002 ---------- ---------- ---------- ---------- ---------- Sales $716,480.0 $767,590.0 $832,184.0 $892,106.0 $954,495.0 % Growth 7.7% 7.1% 8.4% 7.2% 7.0% Gross Profit 236,079.0 256,421.0 280,999.0 304,028.0 328,293.0 Margin % 32.9% 33.4% 33.8% 34.1% 34.4% EBITDA 152,664.0 173,009.0 193,106.0 206,626.0 223,735.5 Margin % 21.3% 22.5% 23.2% 27.7% 23.4% EBIT 124,899.0 139,668.0 158,477.0 175,569.0 193,132.0 Margin % 17.4% 18.2% 19.0% 19.7% 20.2% EBITA(1) 127,499.0 136,408.7 147,668.9 158,114.7 168,990.5 Margin % 17.8% 17.8% 17.7% 17.7% 17.7% Cash Taxes(2) 38.00% (48,449.6) (51,835.3) (56,114.2) (60,083.6) (64,216.4) Unlevered Net Income 76,449.4 81,973.4 88,954.7 95,431.1 102,174.1 Depreciation & Amortization(3) 27,765.0 33,341.0 34,629.0 31,057.0 30,603.0 % of Sales 3.9% 4.3% 4.2% 3.5% 3.2% Amortization 6,250.0 6,150.0 6,150.0 6,150.0 6,150.0 % of Sales 0.9% 0.8% 0.7% 0.7% 0.6% Non-Deductible 2,600.0 2,600.0 2,600.0 2,600.0 2,600.0 Capital Expenditures 37,222.0 37,950.0 35,095.0 29,997.0 30,121.0 % of Sales 5.2% 4.9% 4.2% 3.4% 3.2% Working Capital 120,218.9 122,092.2 130,398.1 136,519.0 141,702.5 % of Sales 16.8% 15.9% 15.7% 15.3% 14.8% Growth % 3.7% 1.6% 6.8% 4.7% 3.8% - ------------ (1) EBITA equals earnings before interest and non-deduction amortization. (2) Cash tax is based on the effective tax rate of 38%. (3) Depreciation and Amortization includes both deductible and non-deductible amortization. (4) Includes 506,047 shares held under option. Cash proceeds from options equals $4,568,805.
IV. PRO FORMA COMBINATION ANALYSIS Pro Forma Combination Analysis Pro Forma Mustang Balance Sheet as of 12/31/97 ($ in millions)
Transaction Mustang Tiger(a) Mustang(a) Adjustments Pro Forma ---------- ---------- ---------- ---------- Assets Cash $61.4 $25.0 ($15.6)(b) $70.8 Other Current Assets 182.0 245.2 427.2 ------ -------- ----------- -------- Total Current Assets 243.4 270.2 498.0 Fixed Assets 202.7 411.5 614.2 Investments 5.2 296.3 (139.2)(c) 162.3 Intangible Assets 176.1 117.6 470.1 (d) 763.8 Other Assets 35.7 20.0 6.6 (e) 62.3 ------ -------- ----------- -------- Total Assets $663.1 $1,115.6 321.9 $2,100.6 ====== ======== =========== ======== Liabilities and Stockholders' Equity Accounts Payable $29.2 $52.7 $81.9 Other Current Liabilities 35.8 84.7 120.5 ------ -------- ----------- -------- Total Current Liabilities 65.0 137.4 202.4 Existing Debt -- 520.2 (210.2)(f) 310.0 Acquisition Debt -- -- 1,095.2 (g) 1,095.2 Other Liabilities 44.5 183.2 (39.0)(h) 188.7 ------ -------- ----------- -------- Total Liabilities 109.5 841.0 846.3 1,796.8 Common Equity 553.6 274.6 (524.4)(i) 304.8 ------ -------- ----------- -------- Total Liabilities and Stockholders' Equity $663.1 $1,115.6 321.9 $2,100.6 ====== ======== =========== ======== - -------------------- (a) From company projections received from Tiger and Mustang, respectively. For Tiger, cash is shown net of debt balances. (b) Assumed use of excess cash to finance transaction. (c) Reversal of carrying value of Tiger investment held by Mustang. (d) Net additional transaction goodwill calculated as adjusted purchase price less deferred tax of $39.0 million and adjusted book value not already held by Mustang. (e) Deferred of financing fees. (f) Assumes Mustang refinances existing bank debt with acquisition debt. Mustang to keep $310 million convertible subordinated notes outstanding. (g) Acquisition debt, including refinancing of existing bank debt. (h) Reversal of deferred tax liability. (i) Elimination of Tiger equity; net of shares issued in rollover of Tiger stock award plan.
Pro Forma Combination Analysis Pro Forma Mustang Income Statements and Cash Flow Summary ($ in millions)
For years ended December 31,(a) ---------------------------------------------------------------- 1998 1999 2000 2001 2002 -------- -------- -------- -------- -------- Revenue $1,691.5 $1,842.6 $2,007.2 $2,125.9 $2,249.9 EBITDA 322.2 360.2 396.8 420.3 447.9 EBIT 234.2 264.9 298.6 324.2 350.8 Net Income $96.7 $119.5 $146.4 $167.3 $190.1 ======== ======== ======== ======== ======== Capital Expenditures 97.2 82.8 83.0 73.2 75.5 Depreciation and Amortization 88.0 95.3 98.2 96.1 97.1 Revenue Growth 7.3% 7.3% 7.3% 7.3% 7.3% EBITDA Margin 19.0% 19.5% 19.8% 19.8% 19.9% EBIT Margin 13.8% 14.4% 14.9% 15.3% 15.6% Net Income Margin 5.7% 6.5% 7.3% 7.9% 8.5% - -------------------- Source: Management projections for Tiger, Mustang, respectively.
Pro Forma Combination Analysis Pro Forma Balance Sheets ($ in millions)
Projected as of December 31, --------------------------------------------------------------------- 1998 1999 2000 2001 2002 ---------- ---------- ---------- ---------- ---------- Assets Cash $25.0 $25.0 $25.0 $25.0 $25.0 Other Current Assets 447.7 470.4 513.8 539.9 568.8 -------- -------- -------- -------- -------- Total Current Assets 472.7 495.4 538.8 564.9 593.8 Fixed Assets 652.9 669.7 683.9 690.3 697.9 Investments 173.9 187.4 197.6 214.3 219.4 Intangible Assets 770.2 746.5 724.4 702.4 680.3 Other Assets 62.6 54.9 56.9 58.8 60.7 -------- -------- -------- -------- -------- Total Assets $2,132.2 $2,154.0 $2,201.8 $2,230.7 $2,252.1 ======== ======== ======== ======== ======== Liabilities and Stockholders' Equity Accounts Payable $87.1 $92.5 $102.1 $103.0 $115.6 Other Current Liabilities 127.6 135.6 148.0 156.0 163.9 -------- -------- -------- -------- -------- Total Current Liabilities 214.6 228.2 250.1 259.0 279.5 Acquisition Debt 1,000.4 888.5 767.1 619.1 430.8 Convertible Subordinated Debt 310.0 310.0 310.0 310.0 310.0 Other Liabilities 196.8 218.3 241.0 264.5 287.6 -------- -------- -------- -------- -------- Total Liabilities 1,721.9 1,644.9 1,568.2 1,452.6 1,307.9 Common Equity 410.3 509.1 633.6 778.0 944.2 -------- -------- -------- -------- -------- Total Liabilities and Stockholders' Equity $2,132.2 $2,154.0 $2,201.8 $2,230.7 $2,252.1 ======== ======== ======== ======== ======== - --------------------- Source: Management projections for Tiger, Mustang, respectively.
Pro Forma Transaction Analysis Pro Forma Capitalization and Coverage Analysis ($ in millions)
Projected(a) ---------------------------------------------------------------------------------- At Close 1998 1999 2000 2001 2002 ---------- ---------- ---------- ---------- ---------- ---------- Total Senior/Bank Debt $1,095.2 $1,000.1 $888.2 $766.8 $618.8 $430.5 Total Debt (incl. Convertible debt) 1,405.2 1,310.1 1,198.2 1,076.8 928.8 740.5 Total Senior Bank Debt/EBITDA 3.9x 3.1x 2.5x 1.9x 1.5x 1.0x Total Debt (incl. Convertible debt)/EBITDA 5.0x 4.1x 3.3x 2.7x 2.2x 1.7x Total Interest Expense $90.8 $84.0 $75.4 $66.9 $56.6 EBITDA/Interest Expense 3.5x 4.3x 5.3x 6.3x 7.9x EBITDA - CapEx/Interest Expense 2.5x 3.3x 4.2x 5.2x 6.6x Debt/Equity/Ratio (Pre-Convert) 4.6x 3.4x 2.5x 1.8x 1.2x 0.8x (Post-Convert) 1.8x 1.4x 1.1x 0.8x 0.6x 0.4x Debt/Total Cap. (Pre-Convert) 82.2% 77.4% 71.3% 64.0% 55.3% 44.6% (Post-Convert) 64.1 59.1 52.9 45.5 36.8 25.9 - -------------------- (a) Based on management projections provided by Tiger and Mustang, respectively. Closing assumed as of 12/31/97; multiples based on LTM (9/30/97) results. Assumes $4 million in annual pre-tax cost savings, interest rate on acquisition debt of 7.0% and a marginal tax rate of 37%.
APPENDIX Analysis of Selected Public Companies ($ in millions, except per share data)
Current Current Share 52 Week Price as a Total Price ---------------------- % of 52- Market Firm Company Name 12/5/97 High Low Week High Value Value - ---------------------------- ------------- ---------- ---------- ---------- ---------- --------- (cont'd below) TIGER $31.125 22.000 31.625 98.4% $1,286.3 $1,231.9 Aeroquip-Vickers, Inc. $51.688 33.000 57.500 89.9% $1,455.4 $1,763.7 Barnes Group Incorporated $26.500 19.000 30.000 88.3% $537.6 $573.4 Blount International, Inc. $50.957 36.000 53.688 94.9% $953.9 $1,004.6 Cincinnati Milacron Inc. $27.938 18.000 29.688 94.1% $1,115.3 $1,473.7 Cooper Industries $51.625 38.500 57.438 89.9% $6,246.8 $7,525.7 Danaher Corp. $60.563 39.625 60.813 99.6% $3,540.0 $3,736.8 Dover $69.313 48.250 72.625 95.4% $7,707.1 $8,308.9 Federal Signal Corporation $20.188 20.188 27.375 73.7% $920.5 $1,185.2 GenCorp Inc. $24.500 17.500 31.000 79.0% $1,007.0 $1,157.6 Illinois Tool Works $56.063 38.375 56.313 99.6% $13,985.0 $14,827.0 Kaydon Corporation $33.813 20.938 34.125 99.1% $1,149.3 $1,072.9 Mark IV Industries $23.000 19.875 28.000 82.1% $1,465.3 $2,197.6 Pentair Inc. $37.625 27.125 39.625 95.0% $1,432.8 $1,970.5 Regal-Beloit Corporation $28.000 18.250 32.625 85.8% $583.0 $787.0 Teleflex $39.250 23.375 39.375 99.7% $1,452.7 $1,685.2 (table continued) Firm Value Market Value as a Multiple of: as a Multiple of: ---------------------------------------- ------------------------------------------------------- LTM LTM LTM LTM Net 1997E 1998E Book Dividend Revenues EBITDA EBIT Income EPS EPS Value Yield -------- -------- ------- ------- ------- ------- ------- --------- TIGER $658.4 $138.4 $113.3 $70.1 $1.76 $1.92 $541.4 0.90 1.9x 8.9x 10.9x 18.3x 17.7x 16.2x 2.4x Aeroquip-Vickers, Inc. $2,099.4 $273.2 $206.4 $112.4 $4.06 $4.38 $491.3 1.55 0.8x 6.5x 8.5x 12.9x 12.7x 11.8x 3.0x Barnes Group Incorporated $627.8 $92.5 $65.4 $39.5 $1.95 $2.00 $179.8 2.53 0.9x 6.2x 8.8x 13.6x 13.6x 13.3x 3.0x Blount International, Inc. $686.7 $117.9 $94.2 $56.8 $3.03 $3.55 $300.0 0.56 1.5x 8.5x 10.7x 16.8x 16.8x 14.4x 3.2x Cincinnati Milacron Inc. $1,854.1 $176.6 $124.5 $73.7 $2.00 $2.25 $452.3 1.72 0.8x 8.3x 11.8x 15.1x 14.0x 12.4x 2.5x Cooper Industries $5,333.2 $885.8 $663.7 $433.3 $3.16 $3.55 $2,523.7 2.56 1.4x 8.5x 11.3x 14.4x 16.3x 14.5x 2.5x Danaher Corp. $1,982.5 $329.3 $255.2 $146.5 $2.55 $2.90 $870.4 0.17 1.9x 11.3x 14.6x 24.2x 23.8x 20.9x 4.1x Dover $4,370.5 $709.9 $569.0 $379.1 $3.40 $3.80 $1,625.6 1.10 1.9x 11.7x 14.6x 20.3x 20.4x 18.2x 4.7x Federal Signal Corporation $912.9 $124.6 $104.7 $64.0 $1.29 $1.48 $293.4 3.32 1.3x 9.5x 11.3x 14.4x 15.6x 13.6x 3.1x GenCorp Inc. $1,532.8 $184.8 $125.0 $82.4 $1.70 $2.03 $264.0 2.45 0.8x 6.3x 9.3x 12.2x 14.4x 12.1x 3.8x Illinois Tool Works $5,168.2 $1,093.1 $903.4 $561.1 $2.35 $2.60 $2,666.0 0.86 2.9x 13.6x 16.4x 24.9x 23.9x 21.6x 5.2x Kaydon Corporation $315.7 $102.5 $90.7 $58.3 $1.83 $2.06 $266.3 1.06 3.4x 10.5x 11.8x 19.7x 18.5x 16.4x 4.3x Mark IV Industries $2,132.0 $304.6 $232.5 $106.3 $1.73 $2.00 $741.2 0.70 1.0x 7.2x 9.5x 13.8x 13.3x 11.5x 2.0x Pentair Inc. $1,742.4 $227.1 $160.6 $79.7 $2.04 $2.38 $542.8 1.44 1.1x 8.7x 12.3x 18.0x 18.4x 15.8x 2.6x Regal-Beloit Corporation $543.8 $112.2 $89.0 $37.1 $1.81 $2.15 $181.2 1.71 1.4x 7.0x 8.8x 15.7x 15.5x 13.0x 3.2x Teleflex $1,074.6 $146.1 $100.7 $66.0 $1.80 $2.11 $450.9 1.02 1.6x 11.5x 16.7x 22.0x 21.8x 18.6x 3.2x ---------------------------------------------------------------------------------------------------------------- TIGER 1.9x 8.9x 10.9x 18.3x 17.7x 16.2x 2.4x 0.90% ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- High: 3.4x 13.6x 16.7x 24.9x 23.9x 21.6x 5.2x 3.32% Low: 0.8 6.2 8.5 12.2 12.7 11.5 2.0 0.17 Mean: 1.5 9.0 11.8 17.2 17.3 15.2 3.4 1.42 Median: 1.4 8.5 11.3 15.7 16.3 14.4 3.3 1.10 ---------------------------------------------------------------------------------------------------------------- - -------------------- Note: High, Low, Mean and Median calculations exclude Tiger.
PROJECT MOTOWN Preliminary Draft - Confidential - ------------------------------------------------------------------------------ Comparative Growth Rates and Margins for Selected Public Companies
3 Year Compound Annual Growth Rates EBITDA Margin EBIT Margin ----------------------------------------- -------------------------- --------------------------- Revenue EBITDA EBIT Net Income EPS Latest Year 4 Year Average Latest Year 4 Year Average ------- ------ ---- ---------- --- ----------- -------------- ----------- -------------- TIGER 10.6% 12.9% 14.2% 17.3% 16.5% 21.2% 20.9% 17.4% 17.0% Aeroquip-Vickers, Inc. 7.3% 16.1% 23.0% 46.9% 47.9% 12.1% 11.2% 8.7% 7.7% Barnes Group Incorporated 5.8% 26.4% 46.9% 64.5% 61.2% 13.8% 11.3% 9.3% 6.9% Blount International, Inc.(a) NA NA NA NA NA 17.9% 17.5% 14.2% 13.9% Cincinnati Milacron Inc. 18.9% 31.5% 34.9% 39.4% 18.3% 9.6% 8.6% 6.6% 5.9% Cooper Industries 3.4% 2.7% 2.6% 7.0% 5.0% 16.4% 16.9% 12.0% 12.4% Danaher Corp. 26.2% 32.9% 37.4% 39.1% 36.9% 15.6% 15.0% 12.0% 11.1% Dover Corp. 18.0% 26.1% 28.5% 29.1% 29.4% 16.3% 14.5% 13.2% 11.4% Federal Signal Corporation 16.6% 16.9% 17.2% 15.9% 16.2% 13.5% 13.6% 11.5% 11.5% GenCorp Inc. -7.4% 0.4% 7.8% 16.0% 13.7% 11.8% 10.2% 7.5% 5.9% Illinois Tool Works 16.5% 25.0% 29.4% 33.0% 28.9% 19.6% 18.0% 16.0% 14.2% Kaydon Corp. 16.4% 18.4% 21.2% 22.2% 24.0% 31.2% 30.3% 27.2% 25.3% Mark IV Industries 29.4% NA 28.9% 37.9% 24.6% 14.1% 13.9% 10.8% 10.6% Pentair Inc. 18.3% 28.9% 28.0% 37.8% 31.5% 12.9% 11.6% 9.1% 8.2% Regal-Beloit Corp. 6.0% 12.3% 15.3% 1.4% 0.9% 17.6% 16.8% 14.2% 13.3% Teleflex 11.8% 13.7% 14.6% 19.3% 17.3% 15.0% 14.4% 10.8% 10.2% - ------------------------------------------------------------------------------------------------------------------------------- TIGER (b) 10.6% 12.9% 14.2% 17.3% 16.5% 21.2% 20.9% 17.4% 17.0% - ------------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------------- High: 29.4% 32.9% 46.9% 64.5% 61.2% 31.2% 30.3% 27.2% 25.3% Low: -7.4% 0.4% 2.6% 1.4% 0.9% 9.6% 8.6% 6.6% 5.9% Mean: 13.4% 19.3% 24.0% 29.3% 25.4% 15.8% 14.9% 12.2% 11.2% Median: 16.5% 18.4% 25.5% 31.1% 24.3% 15.0% 14.4% 11.5% 11.1% - ------------------------------------------------------------------------------------------------------------------------------- - ------------ (a) Due to discontinued operations and the change in fiscal year ending from February to December, the company does not report proforma historic information prior to year 1995. (b) High, Low, Mean and Median calculations exclude Tiger.
Summary Description of Selected Public Companies Tiger Tiger is an international diversified manufacturer of proprietary products. The Company manufactures industrial container closures, specialty dispensing and packaging products, pressured gas cylinders, specialty industrial gaskets, towing systems products, specialty fasteners and other products. The Company's products are sold in commercial, industrial and consumer niche markets. Aeroquip-Vickers Inc. Aeroquip-Vickers manufactures engineered hydraulic, motion control and plastic components and systems. The Company markets its brand name products to industrial, automotive and aerospace and defense customers worldwide through manufacturing operations in 18 countries. Barnes Group Barnes Group operates through its subsidiaries Bowman Distribution, Associated Spring and Barnes Aerospace. The Company's products include: precision springs and custom metal parts, fasteners, automotive replacement parts, spray chemicals, adhesives, sealants, machined parts and jet engine components. The Company operates internationally. Blount International, Blount International manufactures outdoor products, industrial, power and sporting equipment. Inc. The Company's products include saw chains, sprockets, chain maintenance equipment, timber harvesting and log loading equipment, industrial tractors, rotation bearings and power transmission components. Cincinnati Milacron, Cincinnati Milacron operates in three business segments: plastics machinery, machine tools Inc. and industrial products. The Company produces household products, packaging, medical supplies and electronics for manufacturers of cars, planes and industrial equipment as well as computer controls and software for factory automation. The Company markets worldwide. Cooper Industries, Cooper manufactures electrical, industrial and automotive products. The Company's products Inc. include non-power hand tools, industrial tools, automobile lamps, brakes, compression equipment for oil and natural gas applications, rotary drilling equipment, mining and construction machinery and electrical power transformers. The Company distributes these products worldwide. Danaher Corp. Danaher manufactures tools and components and process/environmental controls. Products include mechanics hand tools, drill chucks, diesel engine retarders, wheel service equipment, leak detection sensors for underground fuel storage tanks, motion, temperature, pressure, level, flow and power reliability and quality control devices. Dover Corp. Dover manufactures a variety of specialized industrial products marketed nationally to the building, petroleum, electronics, aerospace and other industries. Products include elevators, petroleum production equipment, surface mount electronic assembly products, automotive lifts, kettlers, steamers, refrigeration and air conditioning systems and food service equipment. Federal Signal Corp. Federal Signal produces and supplies public safety, signaling and communications equipment internationally. The Company manufactures tire rescue products, street sweeping and vacuum loader vehicles, parking control equipment, custom on-premise signage, carbide cutting tools, precision punches and related die components. GenCorp, Inc. GenCorp manufactures aerospace and defense systems, automotive components and polymer-based products. The Company produces defense electronics, armor automotive suspension systems, plastic body panels, plastics, latex wallcovering, tennis balls and racquetballs. Illinois Toolworks, Illinois Tool manufactures construction fasteners and packaging systems. The Company Inc. produces plastic and metal fasteners, consumer and industrial packaging systems, non-destructive testing equipment, electronic switches, adhesives, gear measuring instruments and coating systems. The Company sells to the aerospace, appliance, automotive, truck, computer and electronics markets. Kaydon Corp. Kaydon designs, manufactures and sells custom engineered products to the replacement parts, heavy industry, defense, construction, instrumentation and aerospace industries. Products include anti-friction bearings, bearing systems, filters, high performance rings, filter housings, sealing rings and shaft seals. Mark IV Industries, Mark IV manufactures engineered systems and components utilizing mechanical and fluid Inc. power transmission, fluid transfer and filtration technologies. The Company sells the products to automotive and industrial customers worldwide. Pentair, Inc. Pentair is a diversified manufacturing company. The Company operates in three markets: electrical and electronic enclosures; professional tools and equipment and water products. Pentair manufactures and distributes its products in North America, Europe and Asia. Regal-Beloit Corp. Regal-Beloit supplies power transmission equipment, perishable cutting tools, electric motors and generators, and related products. The Company's manufacturing, sales and service facilities are located throughout the United States and in Europe and the Far East. Teleflex, Inc. Teleflex designs, manufactures and distributes products and services for the aerospace, commercial, medical, auto, marine and industrial markets. The Company markets mechanical, electrical, electromechanical and hydraulic control equipment.
Analysis of Selected Precedent Transactions ($ in millions, except per share data)
Announce- Total ment Acquiror/ Equity Enterprise Date Target Target Description Value Value - -------- -------------------------------------- ------------------------- -------- ----------(cont'd below) 10/10/97 Kennametal, Inc./ Manufactures cutting $623.2 $943.2 Greenfield Industries(a) tools, carbide products 08/28/97 Applied Power Inc./ Manufactures rubber $141.9 $140.8 Versa Technologies Inc.(b) components, molds 07/25/97 Constellation Capital Partners/ Manufactures industrial $121.9 $417.8 Imo Industries Inc.(c) controls, pumps 06/16/97 United Dominion Industries Ltd./ Manufactures $249.0 $294.8 Core Industries electronic equipment 05/12/97 Koch Engineering Co. (Koch Inds.)/ Manufactures $250.0 $250.0 Glitsch International Inc.(d) stainless steel packings 02/26/97 Regal-Beloit Corp./ Manufactures $278.0 $248.3 Marathon Electric Manufacturing electric motors 07/01/96 Precision Castparts/ Manufactures wheel $200.0 $300.0 NEWFLO Corp. valves, fittings and pumps 06/14/96 Varlen Corp./ Manufactures ball and $168.0 $164.9 Brenco Inc. roller bearings 04/02/96 Allegheny Ludlum Corp./ Manufactures aviation $2,102.1 $2,442.4 Teledyne Inc. products (table continued) TEV Equity Value as a Multiple of: as a Multiple of: ------------------------------------------ ------------------------ LTM LTM LTM LTM Book Revenues EBITDA EBIT Income Value - ----------------------- -------- -------- -------- -------- -------- 10/10/97 $527.0 $81.3 $60.5 $25.3 $200.7 1.8x 11.6x 15.6x 24.6x 3.1x 08/28/97 $95.3 $14.8 $11.0 $6.8 $46.7 1.5x 9.5x 12.8x 20.8x 3.0x 07/25/97 $473.4 $45.5 $25.6 $7.6 ($69.4) 0.9x 9.2x 16.3x 16.1x NM 06/16/97 $255.1 $32.9 $23.0 $15.4 $112.2 1.2x 9.0x 12.8x 16.2x 2.2x 05/12/97 $300.0 NA NA NA NA 0.8x NA NA NA NA 02/26/97 $245.2 $34.4 $27.2 $17.8 $115.0 1.0x 7.2x 9.1x 15.6x 2.4x 07/01/96 $211.5 $37.2 $29.1 $7.5 ($3.1) 1.4x 8.1x 10.3x 26.8x NM 06/14/96 $124.8 $19.6 $15.0 $9.6 $66.1 1.3x 8.4x 11.0x 17.5x 2.5x 04/02/96 $2,611.0 $303.5 $232.9 $125.9 $432.2 0.9x 8.0x 10.5x 16.7x 4.9x - --------------------- Note: Based on available information for announced transactions from January 1, 1994 - December 5, 1997, with deal values greater than $100 mm, from Securities Data Corp. using the following SIC codes - 3533, 1791, 3443, 3053, 3496, 5013, 5084, 7538,7539, 3714, 2822, 2452, 3452, 3545, 3565, 3711, 3544, 3531, 3562, 3569, 3592, 3621, 3679, 3494, 3491, 3052, 3647, 3559, 3545, 3469, 3519, 3561, 3069, 3799, 2672. (a) Excludes pre-tax charge of $4 million ($2.5 million after-tax) in one-time restructuring charges. (b) Excludes pre-tax loss of $0.8 million on sale of businesses ($0.7 million after-tax). (c) Excludes unusual items related to disposition of assets and restructuring charges. Annualized LTM net income to represent continuing operations. (d) Source: Bloomberg News, May 26, 1997. Equity value is approximated.
Analysis of Selected Precedent Transactions ($ in millions, except per share data)
Announce- Total ment Acquiror/ Equity Enterprise Date Target Target Description Value Value - ----------------------- ------------------------------- --------------------------- --------- ----------- (cont'd below) 03/07/96 Danaher Corp./ Manufactures metal $213.0 $193.1 Acme-Cleveland Corp.(a) cutting tools 01/22/96 Farnell Electronics PLC/ Manufactures wheel $2,722.7 $2,685.8 Premier Industrial Corp. electronic parts/equipment 12/12/95 Tomkins PLC/ Manufactures auto, $1,160.0 $1,400.0 Gates Corp.(b) industrial belts 09/12/95 Textron Inc./ Manufactures fasteners $179.0 $217.2 Elco Industries Inc. and hardware 10/03/94 Mark IV Industries Inc./ Manufactures oil, fuel $277.0 $323.1 Purolator Products Co. and air filters (table continued) TEV Equity Value as a Multiple of: as a Multiple of: Announce- --------------------------------------- --------------------- ment LTM LTM LTM LTM Net Book Date Revenues EBITDA EBIT Income Value - ----------------------- ---------- -------- -------- -------- ------- 03/07/96 $129.7 $18.5 $13.8 $9.7 $107.8 1.5x 10.5x 14.0x 22.0x 2.0x 01/22/96 $818.2 $181.1 $172.4 $108.1 $473.6 3.3x 14.8x 15.6x 25.2x 5.7x 12/12/95 $1,582.9 NA NA $80.4 NA 0.9x NA NA 14.4x NA 09/12/95 $249.3 $30.5 $19.1 $9.9 $73.7 0.9x 7.1x 11.4x 18.0x 2.4x 10/03/94 $460.4 $40.7 $26.9 $21.8 $177.7 0.7x 7.9x 12.0x 12.7x 1.6x ----------------------------------------------------------------------------------- Median: 1.1x 8.7x 12.4x 17.5x 2.4x Mean: 1.3 9.3 12.6 19.0 3.0 High: 3.3 14.8 16.3 26.8 5.7 Low: 0.7 7.1 9.1 12.7 1.6 ----------------------------------------------------------------------------------- - --------------------- Note: Above selected transactions include change of control transactions. Based on available information for announced transactions from January 1, 1994 - December 5, 1997, with deal values greater than $100 mm, from Securities Data Corp. using the following SIC codes - 3533, 1791, 3443, 3053, 3496, 5013, 5084, 7538,7539, 3714, 2822, 2452, 3452, 3545, 3565, 3711, 3544, 3531, 3562, 3569, 3592, 3621, 3679, 3494, 3491, 3052, 3647, 3559, 3545, 3469, 3519, 3561, 3069, 3799, 2672. (a) EBIT, EBITDA and Net Income exclude non-recurring charges for purchased research and development write-off and unsolicited tender offer expenses. (b) Source: Extel Financial limited, January 30, 1996. Net Revenue and Net Income based on annualized third quarter results for Gates Corp.
Premium Analysis for Selected Transactions
Date Target Name/ Acquiror Name/ Announced Business Description Business Description Synopsis - --------- ----------------------- ------------------------ ------------------------------------(cont'd below) 03/02/90 Shearson Lehman American Express American Express, the 61% owner Brothers Holdings/ Company/ of Shearson Lehman Hutton Securities brokerage Financial, investment Holdings, acquired the 39% that it firm services did not already own for 0.48 American Express shares per Shearson share, or $360 million, sweetened from 0.426 shares, or $319.52 million. Based on American Express' $26.875 closing price on 3/26/90, the last full trading day prior to announcement, each share of Shearson was valued at $12.90. 07/06/90 Mack Trucks Inc./ Renault Vehicules Renault Vehicules Industriels, a unit Manufactures trucks, Industriels/ of France's Regie Nationale des tractors Manufactures trucks Usines Renault, acquired the 40% of and buses Mack Trucks it did not own through a tender offer of $6.25 per share, or $103.7 million. 01/16/90 Subaru of America Inc./ Fuji Heavy Industries Fuji Heavy Industries (FHI) acquired Automobile wheels and Ltd./ the 50.4% of Subaru of America parts Manufactures cars, (SOA) it did not already own for trucks, airplanes $8.5 in cash per share, or $210.56 million. 01/03/91 Ocean Drilling & Murphy Oil Corporation/ Murphy Oil (MO) acquired the Exploration/ Oil and gas exploration, remaining 39% of Ocean Drilling & Oil and gas exploration, production Exploration (ODECO) that it did not production already own in a hostile $391.8 million tender. MO, which offered 0.55 shares for each of ODECO's 20,094,000 shares, accepted 17,585,499 of the shares through a tender offer. (table continued) Closing Price/ % Premium Final --------------------------------------------- Transaction Announcement Date: Price 1 day prior 1 week prior 4 weeks prior - ------------------ ----------- ----------- ------------ ------------- 03/02/90 $12.90 $13.00 $10.88 $12.00 (0.8%) 18.6% 7.5% 07/06/90 $6.25 $5.25 $5.25 $5.13 19.0% 19.0% 22.0% 01/16/90 $8.50 $5.13 $5.25 $5.75 65.9% 61.9% 47.8% 01/03/91 $19.39 $17.00 $15.63 $17.75 14.1% 24.1% 9.2% - -------------------- Note: Based on announced/completed domestic transactions since 1/1/90 with deal value greater than $100 million, acquiror with existing ownership position exceeding 40%, where information is available from SDC, as of December 5, 1997. Premium Analysis for Selected Transactions (continued) Date Target Name/ Acquiror Name/ Announced Business Description Business Description Synopsis - --------- ----------------------- ------------------------ ------------------------------------ (cont'd below) 02/06/91 Hamilton Oil BHP Holdings (USA) BHP Holdings (USA), a unit of Corporation/ Inc. (Broken Hill)/ Broken Hill Proprietary, acquired the Oil and gas exploration, Oil and gas exploration, remaining 49.9% of Hamilton Oil production production that it did not already own through a tender offer valued at $524.3 million. BHP purchased 7,412,697 shares through the tender offer and acquired the rest by merger in which shareholders received a choice of $40 in cash or $40 in Broken Hill American Depository Receipts per share. 05/01/91 United Artists Tele-Communications Tele-Communications (TC) acquired Entertainment/ Inc./ the remaining 46% of United Artists Owns and operates Operates cable TV Entertainment (UAE) in a sweetened movie theaters systems $1.189 billion stock and cash offer. TC offered 1.02 shares, up from 0.95, for each UAE share. Based on TC's closing stock price of $15.875 on June 6, the stock portion was valued at $16.19 per share, or a total $1.037 billion. 08/17/92 PHLCORP Inc./ Leucadia National Leucadia National (LN), a unit of Life insurance company Corporation/ Unitah National, acquired the Provides Insurance remaining 36.98% or 5,428,127 services shares, of PHLCORP that it did not already own for $139.94 million in LN common stock. LN exchanged 0.406 common shares for each remaining share of PHL. Based on LN's closing price of $63.50 on October 9, the last full trading day prior to the announcement, each PHL share was valued at $25.78. (table continued) Closing Price/ % Premium Final --------------------------------------------- Transaction Announcement Date: Price 1 day prior 1 week prior 4 weeks prior - ------------------ ----------- ----------- ------------ ------------- 02/06/91 $40.00 $33.75 $33.00 $30.50 18.5% 21.2% 31.1% 05/01/91 $16.19 $13.50 $13.25 $12.88 19.9% 22.2% 25.7% 08/17/92 $25.78 $23.00 $22.38 $20.00 12.1% 15.2% 28.9% - -------------------- Note: Based on announced/completed domestic transactions since 1/1/90 with deal value greater than $100 million, acquiror with existing ownership position exceeding 40%, where information is available from SDC, as of December 5, 1997. Premium Analysis for Selected Transactions (continued) Date Target Name/ Acquiror Name/ Announced Business Description Business Description Synopsis - --------- ----------------------- ------------------------ ------------------------------------ (cont'd below) 09/09/92 American Fructose American Maize-Products Co./ American Maize-Products (AM) Corp./ Produces corn; acquired the remaining 57.34% Manufactures corn manufactures stake (4.046 million and syrups, starches tobacco products 1.054 million Class A and B common shares, respectively) in American Fructose (AF) in an amended stock swap valued at $130.29 million. AM offered 1 A share per AF A share and 1 B share per AF B share, or $22.475 in cash, AM's average Class A share price for the 5 days prior to completion. 11/13/92 Brand Companies Inc./ Rust International Inc./ Rust International (RI), 56% held by Hazardous-waste Provide engineering Waste Management's Chemical abatement services services Waste Management (CW), acquired the remaining 9.9 million shares, or 44% of Brand it did not own for an amended $185 million. RI offered a choice of 1 share or $18.75 in cash per share held. Holders of 6.9 million shares chose cash, totaling $129 million, while 3 million opted for stock valued at $56 million, based on RI's closing stock price of $19.75 on May 10, the first full trading day for RI. 07/28/94 Chemical Waste WMX Technologies WMX Technologies acquired the Management Inc./ Inc./ remaining 44.9 million common Provides Hazardous Provides Chemical shares, or 21.4%, it did not already waste management waste management own in Chemical Waste services services Management (CWM) in a transaction valued at an amended $397.365 million. CWM's shareholders received $8.85 in $1,000 principal amount convertible subordinated notes for each share held, amended from 0.27 WMX shares for each CWM share held. (table continued) Closing Price/ % Premium Final --------------------------------------------- Transaction Announcement Date: Price 1 day prior 1 week prior 4 weeks prior - ------------------ ----------- ----------- ------------ ------------- 09/09/92 $25.50 $21.00 $20.63 $19.75 21.4% 23.6% 29.1% 11/13/92 $18.75 $17.88 $16.50 $17.88 4.9% 13.6% 4.9% 07/28/94 $8.85 $8.00 $8.13 $8.75 10.6% 8.9% 1.1% - -------------------- Note: Based on announced/completed domestic transactions since 1/1/90 with deal value greater than $100 million, acquiror with existing ownership position exceeding 40%, where information is available from SDC, as of December 5, 1997. Premium Analysis for Selected Transactions (continued) Date Target Name/ Acquiror Name/ Announced Business Description Business Description Synopsis - --------- ----------------------- ------------------------ ------------------------------------ (cont'd below) 01/18/95 Arcadian Partners LP/ Arcadian Corp./ Arcadian acquired the remaining Manufactures Manufactures 55% of the outstanding preference phosphatic phosphatic units of Arcadian Partners (AP) it did fertilizers fertilizers not already own for an amended $29 per preference unit, or a total value of $428.4 million. Consideration consisted of $14.5 in cash and $14.5 in Arcadian capped convertible preferred stock. 02/27/95 CCP Insurance Inc./ Conseco Inc./ Conseco acquired the remaining Insurance company Insurance holding 12.49 million shares, or 52% company interest on a fully-diluted basis, that it did not already own in CCP Insurance for an amended $23.25 in cash per share, or a total value of $273.677 million. 04/05/95 Club Med Inc./ Club Mediterranee SA/ Club Mediterranee (CM) merged Operates vacation Operates travel agency, with Club Med in a transaction resorts hotel resorts valued at $153.4 million concurrent with the completion of its tender offer for the remaining 4.794 million shares, or 33% stake, that it did not already own in Club Med for an amended $32 in cash per share, by accepting 4,717,450 shares, or a 32.5% stake, raising CM's interest to 99.5%. 04/07/95 LIN Broadcasting McCaw Cellular McCaw Cellular Communications (McCaw Cellular)/ Communications (MC), a unit of AT&T, exercised its Provides cellular (AT&T)/ option to acquire the remaining communication Provides cellular 48%, or 24 million shares, of LIN services communication Broadcasting (LIN) it did not already services own for an amended $129.90 in cash per share, or a total of $3.209 billion. (table continued) Closing Price/ % Premium Final --------------------------------------------- Transaction Announcement Date: Price 1 day prior 1 week prior 4 weeks prior - ------------------ ----------- ----------- ------------ ------------- 01/18/95 $29.00 $24.75 $23.88 $23.00 17.2% 21.5% 26.1% 02/27/95 $23.25 $19.38 $17.88 $18.88 20.0% 30.1% 23.2% 04/05/95 $32.00 $22.63 $22.88 $22.13 41.4% 39.9% 44.6% 04/07/95 $129.90 $109.88 $108.50 $108.50 18.2% 19.7% 19.7% - -------------------- Note: Based on announced/completed domestic transactions since 1/1/90 with deal value greater than $100 million, acquiror with existing ownership position exceeding 40%, where information is available from SDC, as of December 5, 1997. Premium Analysis for Selected Transactions (continued) Date Target Name/ Acquiror Name/ Announced Business Description Business Description Synopsis - --------- ----------------------- ------------------------ ------------------------------------ (cont'd below) 05/15/95 Bic Corporation (BIC BIC SA/ BIC acquired the remaining 22% SA)/ Manufactures pens and stake it did not already own in BIC Manufactures writing lighters Corporation for an amended $40.50 instruments in cash per share, or a total value of $212.625 million. BIC had originally offered $36.50 in cash per share, or a total value of $191.625 million. 07/14/95 REN Corporation - USA COBE Laboratories COBE Laboratories, a majority-held (COBE Labs Inc.)/ (Gambro AB)/ unit of Gambro, acquired the Owns, operates kidney Manufactures medical remaining 47% of REN Corp. - USA dialysis centers equipment (REN) it did not already own in a transaction valued at $182.09 million. 08/25/95 GEICO Corporation Berkshire Hathaway Berkshire Hathaway acquired the (Berkshire Inc./ remaining 47.4% stake, which it did Hathaway)/ Property, casualty not already own, in GEICO for $70 Insurance and financial insurance company in cash per share, or a total value of services $2.306 billion. The transaction had been subject to regulatory approval, including that of the state insurance regulators. 05/27/96 SyStemix Inc. (Novartis Novartis AG/ Novartis completed its tender offer AG)/ Manufactures for the remaining 6,233,311 Manufactures, develops pharmaceuticals common shares or 26.8% of cellular processes SyStemix shares outstanding, that it did not already own, for an amended $19.5 in cash per share, or a total value of $107.56 million. 01/13/97 Zurich Reinsurance Zurich Versicherungs Zurich Versicherungs acquired the Centre/ GmbH/ remaining 34% stake, or Insurance agency Insurance holding 8.86 million common shares, that it company did not already own in its Zurich Reinsurance Center Holdings subsidiary, for $36 per share, or a total of $316.981 million. (table continued) Closing Price/ % Premium Final --------------------------------------------- Transaction Announcement Date: Price 1 day prior 1 week prior 4 weeks prior - ------------------ ----------- ----------- ------------ ------------- 05/15/95 $40.50 $35.75 $36.00 $31.50 13.3% 12.5% 28.6% 07/14/95 $20.00 $15.75 $16.63 $15.88 27.0% 20.3% 26.0% 08/25/95 $70.00 $55.75 $56.88 $55.88 25.6% 23.1% 25.3% 05/27/96 $19.50 $18.63 $11.50 $12.25 4.7% 69.6% 59.2% 01/13/97 $36.00 $30.75 $30.38 $32.25 17.1% 18.5% 11.6% - -------------------- Note: Based on announced/completed domestic transactions since 1/1/90 with deal value greater than $100 million, acquiror with existing ownership position exceeding 40%, where information is available from SDC, as of December 5, 1997. Premium Analysis for Selected Transactions (continued) Date Target Name/ Acquiror Name/ Announced Business Description Business Description Synopsis - --------- ----------------------- ------------------------ ------------------------------------ (cont'd below) 01/30/97 AST Research Inc./ Samsung Electronics Samsung Electronics (SE) acquired Manufactures Co. Ltd./ the remaining 51% interest, or computers; Manufactures consumer 35 million common shares, which it develops software electronics did not already own, in AST Research (AST) for $5.40 in cash per share, or a total value of $495.8 million, including the assumption of approximately $307 million in liabilities. 06/02/97 Acordia Inc. (Anthem Anthem Inc./ Anthem acquired the remaining Inc.)/ Insurance company 33.2%, or 4.32 million common Provides insurance shares, that it did not already own, brokerage services in Acordia, for $40 in cash per share, or a total value of $193.155 million. 08/29/97 Rexel Inc./ Rexel SA (Pinault-Printemps)/ Rexel SA (RE), a majority-owned Manufactures electrical Manufactures radios, unit of Pinault-Printemps Redoute, components televisions completed a sweetened tender offer to acquire the remaining 51.28% interest, or 13,865,019 common shares, which it did not already own, in Rexel Inc. (RI) for $22.5 in cash per share, or a total value of $302.028 million, by accepting 11.644 million shares, or 84% of RI's shares outstanding. (table continued) Closing Price/ % Premium Final --------------------------------------------- Transaction Announcement Date: Price 1 day prior 1 week prior 4 weeks prior - ------------------ ----------- ----------- ------------ ------------- 01/30/97 $5.40 $4.63 $5.00 $4.50 16.8% 8.0% 20.0% 06/02/97 $40.00 $35.50 $35.88 $31.75 12.7% 11.5% 26.0% 08/29/97 $22.50 $18.88 $17.81 $18.50 19.2% 26.3% 21.6% ---------------------------------------------------- Mean: 18.6% 24.1% 24.5% Median: 17.2 20.8 25.5 High: 65.9 69.6 59.2 Low: (0.8) 8.0 1.1 ---------------------------------------------------- - -------------------- Note: Based on announced/completed domestic transactions since 1/1/90 with deal value greater than $100 million, acquiror with existing ownership position exceeding 40%, where information is available from SDC, as of December 5, 1997.
PROJECT MOTOWN Preliminary Draft - Confidential - ------------------------------------------------------------------------------ Summary of Termination Fees for Selected Transactions (dollars in millions)
Date Date Announced Effective Target Name Acquiror Name Equity Value - --------- --------- ------------------------------- ------------------------------ ------------ (cont'd below) 01/22/96 - Kansas City Power & Light Co UtiliCorp United Inc $1,688.4 02/13/96 09/18/96 Citicasters(American Finl Grp) Jacor Communications Inc 617.6 02/23/96 07/01/96 Cray Research Inc Silicon Graphics Inc 783.0 03/29/96 08/07/96 MediSense Inc Abbott Laboratories 817.3 06/11/96 07/23/96 Community Health Systems Inc Forstmann Little & Co 1,080.0 06/28/96 10/02/96 National Re Corp General Re Corp 907.9 08/26/96 12/17/96 American Travellers Corp Conseco Inc 882.7 09/02/96 03/06/97 Arcadian Corp Potash Corp of Saskatchewan 1,198.3 10/28/96 01/15/97 Loctite Corp Henkel KGaA 1,973.2 01/07/97 02/25/97 American Medical Response Inc MedTrans Inc(Laidlaw Inc) 1,011.1 01/15/97 08/06/97 Value Health Inc Columbia/HCA Healthcare Corp 1,132.0 01/23/97 05/19/97 Amphenol Corp Kohlberg Kravis Roberts & Co 1,162.7 02/18/97 06/27/97 Destec Energy Inc NGC Corp 1,222.4 02/28/97 08/01/97 Healthsource Inc CIGNA Corp 1,402.7 04/14/97 11/12/97 APL Ltd Neptune Orient Lines Ltd 877.6 04/14/97 - Wyndham Hotel Corp Patriot Amer Hosp/Patriot Amer 621.2 04/21/97 05/28/97 Goulds Pumps Inc ITT Industries Inc 803.3 05/05/97 06/13/97 Vivra Inc Incentive AB 1,640.2 05/08/97 11/04/97 Living Centers of America Inc Apollo Management LP 809.9 06/06/97 10/14/97 Telco Communications Group Inc Excel Communications Inc 1,037.1 06/09/97 07/15/97 Prime Service Inc Atlas Copco North America Inc 906.0 06/16/97 10/10/97 Multicare Cos Inc Genesis Eldercare Acquisition 888.5 07/17/97 09/29/97 Octel Communications Corp Lucent Technologies Inc 1,815.4 07/24/97 09/15/97 Nellcor Puritan-Bennett Mallinckrodt Inc 1,858.4 08/12/97 - LIN Television Corp Hicks Muse Tate & Furst Inc 1,690.5 09/05/97 11/26/97 Medic Computer Systems Inc Misys PLC 915.5 09/11/97 - Fieldcrest Cannon Inc Pillowtex Corp 468.2 09/12/97 - Western National Corp American General Corp 2,115.7 10/10/97 11/19/97 Greenfield Industries Inc Kennametal Inc 742.8 11/21/97 - BDM International Inc TRW Inc 819.2 (table continued) Termination Pooling Target's Acquiror's Fee as a Date of Termination Termination Termination % of Announced Interests Fee Fee Fee Equity Value - --------- --------- ----------- ----------- ----------- ------------ 01/22/96 No $53.0 $58.0 $58.0 3.4% 02/13/96 No 20.0 - 20.0 3.2 02/23/96 No 25.0 - 25.0 3.2 03/29/96 No 17.5 - 17.5 2.1 06/11/96 No 45.0 - 45.0 4.2 06/28/96 No 25.0 25.0 25.0 2.8 08/26/96 No 20.0 - 20.0 2.3 09/02/96 No 25.0 - 25.0 2.1 10/28/96 No 40.0 - 40.0 2.0 01/07/97 No 17.5 - 17.5 1.7 01/15/97 No 45.0 - 45.0 4.0 01/23/97 No 37.5 - 37.5 3.2 02/18/97 No 65.0 - 65.0 5.3 02/28/97 No 45.0 - 45.0 3.2 04/14/97 No 25.0 - 25.0 2.8 04/14/97 No 30.0 30.0 30.0 4.8 04/21/97 No 22.0 - 22.0 2.7 05/05/97 No 50.0 - 50.0 3.0 05/08/97 No 20.0 - 20.0 2.5 06/06/97 No 20.0 - 20.0 1.9 06/09/97 No 27.2 - 27.2 3.0 06/16/97 No 25.0 - 25.0 2.8 07/17/97 No 50.0 - 50.0 2.8 07/24/97 No 45.0 - 45.0 2.4 08/12/97 No 64.0 - 64.0 3.8 09/05/97 No - 18.0 18.0 2.0 09/11/97 No 15.0 - 15.0 3.2 09/12/97 No 7.5 - 7.5 0.4 10/10/97 No 30.0 - 30.0 4.0 11/21/97 No 35.0 - 35.0 4.3 ---------------------------- High: 5.3% Low: 0.4% Mean: 3.0% Median: 2.9% ---------------------------- - ------------ Source: Securities Data Corporation as of 12/5/97; cash transactions from 1/1/96 to 12/5/97 with deal value between $750 million and $2 billion, where termination fees were disclosed.
EX-99.B3 3 EXHIBIT (B)(3) EXHIBIT (b)(3) SALOMON SMITH BARNEY - -------------------- A Member of TravelersGroup December 10, 1997 The Board of Directors MascoTech, Inc. 21001 Van Born Road Taylor, Michigan 48180 Members of the Board: You have requested our opinion as to the fairness, from a financial point of view, to MascoTech, Inc. ("MascoTech") of the consideration to be paid pursuant to the terms and subject to the conditions set forth in the Agreement and Plan of Merger, dated as of December 10, 1997 (the "Merger Agreement"), by and among MascoTech, MascoTech Acquisition, Inc., a wholly owned subsidiary of MascoTech ("Merger Sub"), and TriMas Corporation ("TriMas"). As more fully described in the Merger Agreement and subject to the terms and conditions set forth therein, (i) MascoTech will cause Merger Sub to commence a tender offer to purchase all outstanding shares of the common stock, par value $0.01 per share, of TriMas (the "TriMas Common Stock" and, such tender offer, the "Tender Offer") at a purchase price of $34.50 per share to the seller in cash (the "Purchase Price"), and (ii) subsequent to the Tender Offer, Merger Sub will be merged with and into TriMas (the "Merger" and, together with the Tender Offer, the "Transaction") and each outstanding share of TriMas Common Stock not previously tendered will be converted into the right to receive the Purchase Price. In arriving at our opinion, we reviewed the Merger Agreement and held discussions with certain senior officers, directors and other representatives and advisors of MascoTech and certain senior officers and other representatives and advisors of TriMas concerning the businesses, operations and prospects of MascoTech and TriMas. We examined certain publicly available business and financial information relating to MascoTech and TriMas as well as certain financial forecasts and other information and data for MascoTech and TriMas which were provided to or otherwise discussed with us by the managements of MascoTech and TriMas, including information relating to certain strategic implications and operational benefits anticipated by the management of MascoTech to result from the Transaction. We reviewed the financial terms of the Transaction as set forth in the Merger Agreement in relation to, among other things: current and historical market prices and trading volumes of TriMas Common Stock; the historical and projected earnings and other operating data of TriMas; and the capitalization and financial condition of TriMas. We also evaluated the potential pro forma financial impact of the Transaction on MascoTech. In addition to the foregoing, we conducted such other analyses and examinations and considered such other financial, economic and market criteria as we deemed appropriate in arriving at our opinion. In rendering our opinion, we have assumed and relied, without independent verification, upon the accuracy and completeness of all financial and other information and data publicly available or furnished to or otherwise reviewed by or discussed with us. With respect to financial forecasts and other information and data provided to or otherwise reviewed by or discussed with us, we have been advised by the respective managements of MascoTech and TriMas that such forecasts and other information and data were reasonably prepared on bases reflecting the best currently available estimates and judgments of such managements as to the future financial performance of MascoTech and TriMas and the best currently available estimates and judgments of the management of MascoTech as to the strategic implications and operational benefits anticipated to result from the Transaction. We have not made or been provided with an independent evaluation or appraisal of the assets or liabilities (contingent or otherwise) of MascoTech or TriMas nor have we made any physical inspection of the properties or assets of MascoTech or TriMas. We have not been asked to consider, and our opinion does not address, the relative merits of the Transaction as compared to any alternative business strategies that might exist for MascoTech or the effect of any other transaction in which MascoTech might engage. Our opinion is necessarily based upon information available to us, and financial, stock market and other conditions and circumstances existing and disclosed to us, as of the date hereof. Smith Barney Inc. and Salomon Brothers Inc (collectively doing business as Salomon Smith Barney) have acted as financial advisors to MascoTech in connection with the Transaction and will receive a fee for such services, a significant portion of which is contingent upon the consummation of the Transaction. We have in the past provided investment banking services to MascoTech and are currently providing investment banking services to affiliates of MascoTech unrelated to the proposed Transaction, for which services we have received compensation. In the ordinary course of our business, we and our affiliates may actively trade or hold the securities of MascoTech and TriMas for our own account or for the account of our customers and, accordingly, may at any time hold a long or short position in such securities. In addition, we and our affiliates (including Travelers Group Inc. and its affiliates) may maintain relationships with MascoTech and TriMas. Our advisory services and the opinion expressed herein are provided for the information of the Board of Directors of MascoTech in its evaluation of the proposed Transaction and is not intended to be and does not constitute a recommendation to any stockholder. Our opinion may not be published or otherwise used or referred to, nor shall any public reference to Salomon Smith Barney be made, without our prior written consent. Based upon and subject to the foregoing, our experience as investment bankers, our work as described above and other factors we deemed relevant, we are of the opinion that, as of the date hereof, the Purchase Price to be paid in the Transaction is fair, from a financial point of view, to MascoTech. Very truly yours, /s/ SALOMON SMITH BARNEY SALOMON SMITH BARNEY EX-99.B4 4 EXHIBIT (B)(4) EXHIBIT (b)(4) - -------------------------------------------------------------------------------- CONFIDENTIAL Project Yacht PRESENTATION TO THE BOARD OF DIRECTORS December 10, 1997 SALOMON SMITH BARNEY - -------------------------------------------------------------------------------- Confidential Project Yacht - -------------------------------------------------------------------------------- CONFIDENTIAL ------------ The following pages contain material that was provided to the Board of Directors of Sloop (the "Company") by Salomon Smith Barney in the context of meetings of the Board of Directors held to evaluate the potential transaction involving Schooner. The accompanying material was compiled or prepared on a confidential basis solely for use by the Board of Directors and not with a view toward public disclosure under state and federal securities laws or otherwise. The information contained in this material was obtained from the Company, Schooner and other sources. Any estimates and projections for the Company and Schooner contained herein have been prepared by managements of the Company or Schooner or are based upon such estimates and projections, and involve numerous and significant substantive determinations, which may or may not be correct. No representation or warranty, expressed or implied, is made as to the accuracy or completeness of such information and nothing contained herein is, or shall be relied upon as, a representation, whether as to the past or the future. Neither the Company nor Salomon Smith Barney nor any of their respective legal or financial advisors or accountants takes any responsibility for the accuracy or completeness of any of the material when used by persons other than the Board of Directors of the Company. Salomon Smith Barney does not intend to revise these materials subsequent to the date hereof. Confidential Project Yacht - ------------------------------------------------------------------------------- Table of Contents Tab --- Trading Analysis .......................................................... A Stand Alone Financial Analysis ............................................ B Transaction Overview ...................................................... C Valuation Analysis ........................................................ D Pro Forma Effect of the Transaction ....................................... E Exhibits Comparable Company Analysis ............................................... F Precedent Transactions Analysis ........................................... G Discounted Cash Flow Analysis ............................................. H - --------------------------------------------------------------------------- Trading Analysis - --------------------------------------------------------------------------- [Graphic Omitted The data below were used in constructing the graph titled Schooner LTM Price Volume Performance] TriMas Closing Trading Date Price Volume ---- ----- ------- 9-Dec-96 $24.63 800 10-Dec-96 24.375 33,300 11-Dec-96 24.25 14,500 12-Dec-96 23.875 3,000 13-Dec-96 23.75 2,000 16-Dec-96 23.125 9,900 17-Dec-96 23.25 11,100 18-Dec-96 22.75 10,200 19-Dec-96 23 25,000 20-Dec-96 23.5 9,600 23-Dec-96 22.625 9,200 24-Dec-96 22.75 9,700 25-Dec-96 22.75 NA 26-Dec-96 22.875 27,700 27-Dec-96 23.5 76,200 30-Dec-96 23.5 8,100 31-Dec-96 23.875 8,100 1-Jan-97 23.875 NA 2-Jan-97 23.875 189,200 3-Jan-97 24.25 148,500 6-Jan-97 24.125 5,600 7-Jan-97 24.125 56,300 8-Jan-97 23.875 91,700 9-Jan-97 23.25 89,800 10-Jan-97 23.375 31,800 13-Jan-97 23.125 26,100 14-Jan-97 23.25 19,800 15-Jan-97 22.625 21,700 16-Jan-97 22.875 4,000 17-Jan-97 23 130,800 20-Jan-97 22.875 7,200 21-Jan-97 23.125 138,700 22-Jan-97 22.875 7,000 23-Jan-97 22.75 2,800 24-Jan-97 22.5 22,200 27-Jan-97 22.25 11,200 28-Jan-97 22.25 43,900 29-Jan-97 22 25,000 30-Jan-97 22.25 25,700 31-Jan-97 22.25 23,500 3-Feb-97 $22.50 26,000 4-Feb-97 22.625 56,200 5-Feb-97 22.875 16,100 6-Feb-97 23.5 46,800 7-Feb-97 23.375 6,400 10-Feb-97 23.5 24,400 11-Feb-97 23.875 751,500 12-Feb-97 23.875 32,500 13-Feb-97 23.875 121,500 14-Feb-97 24 113,000 17-Feb-97 24 NA 18-Feb-97 24.75 210,800 19-Feb-97 24.625 81,200 20-Feb-97 24.625 76,700 21-Feb-97 24.25 93,900 24-Feb-97 24.25 8,900 25-Feb-97 24.5 56,600 26-Feb-97 24.5 23,000 27-Feb-97 24.375 11,100 28-Feb-97 24.375 12,200 3-Mar-97 24.75 97,200 4-Mar-97 24.75 29,000 5-Mar-97 24.5 120,200 6-Mar-97 24.5 108,200 7-Mar-97 24.375 117,700 10-Mar-97 24.75 77,100 11-Mar-97 24.5 45,300 12-Mar-97 24.375 37,500 13-Mar-97 24 23,600 14-Mar-97 24.125 70,700 17-Mar-97 23.875 32,000 18-Mar-97 23.75 45,500 19-Mar-97 23.5 59,200 20-Mar-97 23.375 113,600 21-Mar-97 23.5 184,900 24-Mar-97 23.5 115,300 25-Mar-97 23.375 146,000 26-Mar-97 23.5 43,900 27-Mar-97 23.625 70,100 28-Mar-97 23.625 NA 31-Mar-97 $23.50 49,200 1-Apr-97 24.125 33,600 2-Apr-97 23.75 52,000 3-Apr-97 23.75 144,800 4-Apr-97 23.875 42,000 7-Apr-97 23.75 40,800 8-Apr-97 23.875 10,100 9-Apr-97 23.875 75,100 10-Apr-97 23.375 69,100 11-Apr-97 23.375 4,700 14-Apr-97 23 31,700 15-Apr-97 23 158,700 16-Apr-97 23.125 49,100 17-Apr-97 23.125 41,800 18-Apr-97 23.125 9,200 21-Apr-97 23.25 9,000 22-Apr-97 23.5 14,100 23-Apr-97 23.125 24,200 24-Apr-97 23.5 12,100 25-Apr-97 23.375 3,500 28-Apr-97 24 23,500 29-Apr-97 24.5 15,900 30-Apr-97 24.625 28,300 1-May-97 24.625 31,300 2-May-97 25 11,300 5-May-97 26 29,800 6-May-97 26.375 49,200 7-May-97 25.75 21,500 8-May-97 25.5 39,500 9-May-97 25.75 41,800 12-May-97 26.5 31,200 13-May-97 26.125 13,200 14-May-97 26.5 17,100 15-May-97 25.875 7,900 16-May-97 26.25 54,300 19-May-97 26.5 11,900 20-May-97 26.75 13,800 21-May-97 26.875 11,500 22-May-97 27.625 3,800 23-May-97 28.125 35,600 26-May-97 $28.13 NA 27-May-97 28.375 109,000 28-May-97 28.125 14,400 29-May-97 28 6,100 30-May-97 28.375 32,800 2-Jun-97 28.375 6,300 3-Jun-97 29 58,600 4-Jun-97 28.75 25,200 5-Jun-97 29 38,800 6-Jun-97 29.125 47,400 9-Jun-97 29.375 54,800 10-Jun-97 29.5 73,600 11-Jun-97 29.375 5,300 12-Jun-97 29.375 38,100 13-Jun-97 29.5 32,000 16-Jun-97 30 42,100 17-Jun-97 30.375 64,900 18-Jun-97 30.5 37,500 19-Jun-97 31 62,200 20-Jun-97 29.875 45,200 23-Jun-97 30 15,000 24-Jun-97 29.625 11,900 25-Jun-97 29.125 46,500 26-Jun-97 28.313 34,800 27-Jun-97 28.188 58,700 30-Jun-97 28.125 66,900 1-Jul-97 28.125 23,000 2-Jul-97 28.5 67,600 3-Jul-97 28.75 55,400 4-Jul-97 28.75 NA 7-Jul-97 29.25 35,800 8-Jul-97 29.25 49,600 9-Jul-97 29.375 32,100 10-Jul-97 29.313 37,600 11-Jul-97 29.375 15,800 14-Jul-97 29.438 25,200 15-Jul-97 29.438 63,900 16-Jul-97 29.563 34,200 17-Jul-97 29.563 22,600 18-Jul-97 29.563 36,900 21-Jul-97 $29.31 7,900 22-Jul-97 29.313 7,800 23-Jul-97 29.313 17,000 24-Jul-97 29.25 16,200 25-Jul-97 29.188 3,400 28-Jul-97 29.313 29,400 29-Jul-97 29.063 2,900 30-Jul-97 29.25 23,500 31-Jul-97 29.188 20,200 1-Aug-97 29.375 67,600 4-Aug-97 29.375 37,600 5-Aug-97 29.438 43,500 6-Aug-97 29.188 4,600 7-Aug-97 29.25 18,000 8-Aug-97 28.625 21,200 11-Aug-97 28.625 16,200 12-Aug-97 28.75 44,100 13-Aug-97 28.5 17,900 14-Aug-97 28.375 12,500 15-Aug-97 27.25 28,400 18-Aug-97 28 48,500 19-Aug-97 27.875 34,100 20-Aug-97 28.188 14,000 21-Aug-97 28.25 11,600 22-Aug-97 28.063 35,200 25-Aug-97 28.125 6,900 26-Aug-97 28.813 18,800 27-Aug-97 28.688 28,500 28-Aug-97 28.438 29,400 29-Aug-97 28.625 40,000 1-Sep-97 28.625 NA 2-Sep-97 28.375 39,600 3-Sep-97 28.188 15,900 4-Sep-97 28.188 21,400 5-Sep-97 28.125 59,000 8-Sep-97 28.188 8,100 9-Sep-97 28.5 94,800 10-Sep-97 28.188 6,700 11-Sep-97 28.5 111,700 12-Sep-97 30.375 33,100 15-Sep-97 $30.31 62,300 16-Sep-97 30.375 17,700 17-Sep-97 30.25 38,800 18-Sep-97 30.375 2,500 19-Sep-97 30.188 10,500 22-Sep-97 30.375 18,400 23-Sep-97 30.375 15,900 24-Sep-97 30.563 18,400 25-Sep-97 30.563 40,400 26-Sep-97 30.75 12,400 29-Sep-97 30.813 3,800 30-Sep-97 30.5 13,600 1-Oct-97 31 24,300 2-Oct-97 30.938 24,300 3-Oct-97 31 29,300 6-Oct-97 30.938 12,600 7-Oct-97 30.375 22,000 8-Oct-97 30.125 58,500 9-Oct-97 30 15,200 10-Oct-97 30.063 45,800 13-Oct-97 30 4,500 14-Oct-97 29.875 37,700 15-Oct-97 30 25,500 16-Oct-97 30.438 27,200 17-Oct-97 30.063 47,300 20-Oct-97 30 30,500 21-Oct-97 30.125 42,700 22-Oct-97 30.063 14,600 23-Oct-97 30 18,900 24-Oct-97 30 20,100 27-Oct-97 29.5 35,400 28-Oct-97 28.813 30,800 29-Oct-97 28.75 4,200 30-Oct-97 28.813 9,800 31-Oct-97 29.25 19,200 3-Nov-97 29.125 15,500 4-Nov-97 29.375 9,300 5-Nov-97 29.563 7,600 6-Nov-97 30.125 26,100 7-Nov-97 29.25 71,500 10-Nov-97 $29.44 24,100 11-Nov-97 29.313 1,900 12-Nov-97 29.75 53,800 13-Nov-97 29 29,400 14-Nov-97 29.563 3,900 17-Nov-97 30 12,000 18-Nov-97 30.125 8,900 19-Nov-97 30.125 1,300 20-Nov-97 30.125 42,900 21-Nov-97 30 110,900 24-Nov-97 29.625 9,800 25-Nov-97 30.188 9,100 26-Nov-97 30.688 53,200 27-Nov-97 30.688 NA 28-Nov-97 31 35,900 1-Dec-97 31.5 59,600 2-Dec-97 31.563 2,300 3-Dec-97 31.625 45,600 4-Dec-97 31.375 1,200 5-Dec-97 31.125 48,300 8-Dec-97 31 106,200 [Graphic Omitted The data below were used in constructing the graph titled LTM Trading Performance Summary] Schooner Sloop Comps S&P 400 ---------- --------- --------- --------- 9-Dec-96 100.00% 100.00% 100.00% 100.00% 10-Dec-96 99.00% 98.50% 99.40% 99.60% 11-Dec-96 98.50% 99.30% 98.70% 98.90% 12-Dec-96 97.00% 97.00% 98.60% 97.50% 13-Dec-96 96.40% 97.00% 97.70% 97.30% 16-Dec-96 93.90% 97.00% 96.90% 96.20% 17-Dec-96 94.40% 98.50% 95.20% 96.70% 18-Dec-96 92.40% 98.50% 96.50% 97.60% 19-Dec-96 93.40% 97.80% 97.50% 99.30% 20-Dec-96 95.40% 98.50% 98.70% 99.60% 23-Dec-96 91.90% 97.00% 98.90% 99.40% 24-Dec-96 92.40% 94.80% 99.50% 100.00% 25-Dec-96 92.40% 94.80% 99.50% 100.00% 26-Dec-96 92.90% 95.50% 100.20% 100.60% 27-Dec-96 95.40% 97.00% 102.10% 100.70% 30-Dec-96 95.40% 94.80% 102.70% 100.30% 31-Dec-96 97.00% 97.80% 103.70% 98.70% 1-Jan-97 97.00% 97.80% 103.70% 98.70% 2-Jan-97 97.00% 99.30% 101.60% 98.40% 3-Jan-97 98.50% 100.00% 101.80% 99.90% 6-Jan-97 98.00% 106.00% 101.20% 99.90% 7-Jan-97 98.00% 110.40% 102.60% 100.70% 8-Jan-97 97.00% 110.40% 102.80% 99.90% 9-Jan-97 94.40% 111.20% 103.20% 100.70% 10-Jan-97 94.90% 111.20% 103.50% 101.60% 13-Jan-97 93.90% 117.90% 103.20% 101.50% 14-Jan-97 94.40% 116.40% 104.40% 102.60% 15-Jan-97 91.90% 114.20% 103.40% 102.30% 16-Jan-97 92.90% 111.20% 103.40% 102.80% 17-Jan-97 93.40% 110.40% 103.50% 103.60% 20-Jan-97 92.90% 113.40% 104.40% 103.60% 21-Jan-97 93.90% 112.70% 105.00% 104.40% 22-Jan-97 92.90% 112.70% 105.00% 104.70% 23-Jan-97 92.40% 114.20% 103.10% 103.50% 24-Jan-97 91.40% 111.20% 102.20% 102.60% 27-Jan-97 90.40% 111.90% 101.60% 101.90% 28-Jan-97 90.40% 112.70% 101.50% 101.90% 29-Jan-97 89.30% 114.20% 101.70% 102.90% 30-Jan-97 90.40% 114.90% 102.80% 104.50% 31-Jan-97 90.40% 115.70% 103.40% 104.70% 3-Feb-97 91.40% 114.90% 103.10% 104.70% 4-Feb-97 91.90% 115.70% 103.80% 104.90% 5-Feb-97 92.90% 115.70% 104.60% 103.30% 6-Feb-97 95.40% 114.90% 104.60% 103.50% 7-Feb-97 94.90% 114.90% 105.60% 104.70% 10-Feb-97 95.40% 112.70% 104.90% 104.00% 11-Feb-97 97.00% 113.40% 104.70% 104.60% 12-Feb-97 97.00% 113.40% 104.60% 106.50% 13-Feb-97 97.00% 113.40% 105.90% 107.50% 14-Feb-97 97.50% 113.40% 106.70% 106.90% 17-Feb-97 97.50% 113.40% 106.70% 106.90% 18-Feb-97 100.50% 112.70% 106.30% 107.90% 19-Feb-97 100.00% 113.40% 106.60% 107.40% 20-Feb-97 100.00% 111.20% 106.00% 106.30% 21-Feb-97 98.50% 111.90% 105.60% 106.10% 24-Feb-97 98.50% 111.90% 106.10% 107.20% 25-Feb-97 99.50% 111.90% 106.30% 107.40% 26-Feb-97 99.50% 109.00% 105.90% 106.70% 27-Feb-97 99.00% 112.70% 106.20% 105.30% 28-Feb-97 99.00% 113.40% 105.90% 104.80% 3-Mar-97 100.50% 114.20% 105.30% 105.30% 4-Mar-97 100.50% 112.70% 106.00% 104.60% 5-Mar-97 99.50% 113.40% 106.00% 106.10% 6-Mar-97 99.50% 113.40% 106.90% 105.50% 7-Mar-97 99.00% 120.10% 108.10% 106.10% 10-Mar-97 100.50% 123.10% 108.30% 107.30% 11-Mar-97 99.50% 126.90% 109.30% 107.10% 12-Mar-97 99.00% 125.40% 108.60% 106.20% 13-Mar-97 97.50% 124.60% 107.30% 104.60% 14-Mar-97 98.00% 125.40% 108.50% 105.10% 17-Mar-97 97.00% 124.60% 107.80% 105.50% 18-Mar-97 96.40% 125.40% 107.30% 104.80% 19-Mar-97 95.40% 123.90% 107.40% 104.20% 20-Mar-97 94.90% 123.90% 107.50% 103.80% 21-Mar-97 95.40% 118.70% 106.80% 103.80% 24-Mar-97 95.40% 120.10% 106.40% 104.60% 25-Mar-97 94.90% 120.10% 105.60% 104.40% 26-Mar-97 95.40% 124.60% 105.00% 105.00% 27-Mar-97 95.90% 123.90% 104.50% 102.90% 28-Mar-97 95.90% 123.90% 104.50% 102.90% 31-Mar-97 95.40% 122.40% 103.40% 100.90% 1-Apr-97 98.00% 125.40% 103.80% 101.00% 2-Apr-97 96.40% 123.90% 103.70% 99.90% 3-Apr-97 96.40% 124.60% 102.80% 99.80% 4-Apr-97 97.00% 123.90% 103.40% 101.00% 7-Apr-97 96.40% 126.10% 104.20% 101.50% 8-Apr-97 97.00% 127.60% 104.50% 101.80% 9-Apr-97 97.00% 126.90% 103.80% 101.20% 10-Apr-97 94.90% 126.90% 103.60% 100.90% 11-Apr-97 94.90% 126.10% 102.20% 98.20% 14-Apr-97 93.40% 124.60% 102.20% 99.10% 15-Apr-97 93.40% 123.90% 102.80% 100.60% 16-Apr-97 93.90% 119.40% 104.20% 102.00% 17-Apr-97 93.90% 119.40% 103.80% 101.60% 18-Apr-97 93.90% 119.40% 104.30% 102.40% 21-Apr-97 94.40% 116.40% 103.70% 101.70% 22-Apr-97 95.40% 117.90% 104.50% 103.70% 23-Apr-97 93.90% 118.70% 105.60% 103.60% 24-Apr-97 95.40% 117.90% 106.20% 103.30% 25-Apr-97 94.90% 116.40% 106.00% 102.40% 28-Apr-97 97.50% 112.70% 106.20% 103.20% 29-Apr-97 99.50% 114.20% 107.10% 105.90% 30-Apr-97 100.00% 114.20% 108.10% 106.90% 1-May-97 100.00% 115.70% 108.90% 106.50% 2-May-97 101.50% 115.70% 111.00% 108.30% 5-May-97 105.60% 117.20% 113.00% 110.80% 6-May-97 107.10% 118.70% 112.40% 110.20% 7-May-97 104.60% 116.40% 111.90% 108.90% 8-May-97 103.60% 114.20% 112.40% 109.50% 9-May-97 104.60% 118.70% 113.40% 110.00% 12-May-97 107.60% 119.40% 115.60% 111.80% 13-May-97 106.10% 120.10% 115.40% 111.30% 14-May-97 107.60% 119.40% 115.00% 111.50% 15-May-97 105.10% 119.40% 115.70% 112.50% 16-May-97 106.60% 120.10% 114.80% 110.90% 19-May-97 107.60% 118.70% 114.90% 111.50% 20-May-97 108.60% 123.10% 114.10% 112.50% 21-May-97 109.10% 124.60% 115.30% 112.50% 22-May-97 112.20% 126.10% 115.80% 111.90% 23-May-97 114.20% 127.60% 117.90% 113.40% 26-May-97 114.20% 127.60% 117.90% 113.40% 27-May-97 115.20% 139.60% 117.50% 114.20% 28-May-97 114.20% 139.60% 117.70% 113.70% 29-May-97 113.70% 135.80% 118.50% 113.30% 30-May-97 115.20% 133.60% 117.40% 113.50% 2-Jun-97 115.20% 133.60% 118.50% 113.30% 3-Jun-97 117.80% 130.60% 119.00% 112.90% 4-Jun-97 116.80% 128.40% 118.70% 112.10% 5-Jun-97 117.80% 126.90% 119.00% 112.50% 6-Jun-97 118.30% 122.40% 119.50% 114.40% 9-Jun-97 119.30% 126.10% 119.50% 115.30% 10-Jun-97 119.80% 126.90% 120.80% 115.50% 11-Jun-97 119.30% 121.60% 120.70% 116.00% 12-Jun-97 119.30% 121.60% 122.50% 117.90% 13-Jun-97 119.80% 122.40% 122.50% 119.20% 16-Jun-97 121.80% 120.90% 121.30% 119.30% 17-Jun-97 123.40% 121.60% 121.20% 119.40% 18-Jun-97 123.90% 122.40% 120.60% 118.30% 19-Jun-97 125.90% 122.40% 120.60% 119.50% 20-Jun-97 121.30% 120.10% 119.80% 119.70% 23-Jun-97 121.80% 118.70% 117.70% 117.00% 24-Jun-97 120.30% 120.10% 119.60% 119.40% 25-Jun-97 118.30% 120.90% 119.00% 118.60% 26-Jun-97 115.00% 122.40% 117.60% 117.90% 27-Jun-97 114.50% 123.50% 118.60% 118.40% 30-Jun-97 114.20% 124.60% 117.50% 118.30% 1-Jul-97 114.20% 122.40% 119.20% 118.90% 2-Jul-97 115.70% 121.60% 120.40% 120.50% 3-Jul-97 116.80% 119.40% 121.10% 122.20% 4-Jul-97 116.80% 119.40% 121.10% 122.20% 7-Jul-97 118.80% 120.90% 121.00% 121.70% 8-Jul-97 118.80% 123.90% 120.30% 122.70% 9-Jul-97 119.30% 124.30% 120.10% 121.30% 10-Jul-97 119.00% 125.00% 121.30% 122.10% 11-Jul-97 119.30% 123.50% 122.90% 122.50% 14-Jul-97 119.50% 123.90% 123.90% 122.90% 15-Jul-97 119.50% 124.60% 124.00% 124.10% 16-Jul-97 120.10% 124.30% 125.40% 125.50% 17-Jul-97 120.10% 122.40% 125.20% 124.90% 18-Jul-97 120.10% 122.80% 122.80% 122.70% 21-Jul-97 119.00% 123.10% 121.70% 122.30% 22-Jul-97 119.00% 123.90% 123.90% 125.20% 23-Jul-97 119.00% 125.00% 124.70% 125.50% 24-Jul-97 118.80% 125.40% 125.90% 125.80% 25-Jul-97 118.50% 125.70% 123.50% 125.60% 28-Jul-97 119.00% 126.90% 125.90% 125.20% 29-Jul-97 118.00% 127.20% 128.70% 125.70% 30-Jul-97 118.80% 128.40% 131.50% 126.80% 31-Jul-97 118.50% 127.60% 129.10% 126.90% 1-Aug-97 119.30% 123.90% 128.30% 126.20% 4-Aug-97 119.30% 123.90% 129.70% 126.80% 5-Aug-97 119.50% 123.90% 129.30% 127.30% 6-Aug-97 118.50% 125.70% 131.80% 128.30% 7-Aug-97 118.80% 126.50% 131.60% 127.30% 8-Aug-97 116.20% 126.10% 129.20% 125.00% 11-Aug-97 116.20% 126.50% 129.30% 125.20% 12-Aug-97 116.80% 125.00% 128.40% 123.80% 13-Aug-97 115.70% 124.60% 128.20% 123.10% 14-Aug-97 115.20% 124.60% 128.40% 123.40% 15-Aug-97 110.70% 124.30% 126.90% 120.10% 18-Aug-97 113.70% 125.00% 127.20% 121.70% 19-Aug-97 113.20% 124.60% 127.30% 123.60% 20-Aug-97 114.50% 125.70% 129.80% 125.40% 21-Aug-97 114.70% 123.90% 126.80% 123.50% 22-Aug-97 114.00% 125.00% 127.90% 123.30% 25-Aug-97 114.20% 125.40% 127.20% 122.90% 26-Aug-97 117.00% 124.60% 126.20% 121.80% 27-Aug-97 116.50% 124.60% 125.30% 122.00% 28-Aug-97 115.50% 125.70% 125.10% 120.60% 29-Aug-97 116.20% 125.00% 125.50% 120.00% 1-Sep-97 116.20% 125.00% 125.50% 120.00% 2-Sep-97 115.20% 125.70% 125.70% 123.80% 3-Sep-97 114.50% 125.40% 125.80% 123.70% 4-Sep-97 114.50% 125.00% 125.20% 124.10% 5-Sep-97 114.20% 126.10% 125.50% 123.90% 8-Sep-97 114.50% 125.40% 125.80% 123.80% 9-Sep-97 115.70% 128.00% 124.60% 124.20% 10-Sep-97 114.50% 128.00% 122.80% 122.20% 11-Sep-97 115.70% 126.50% 122.70% 121.50% 12-Sep-97 123.40% 125.40% 124.60% 122.90% 15-Sep-97 123.10% 125.40% 124.50% 122.20% 16-Sep-97 123.40% 123.50% 127.30% 125.50% 17-Sep-97 122.80% 123.10% 126.80% 125.00% 18-Sep-97 123.40% 121.30% 127.70% 125.60% 19-Sep-97 122.60% 121.30% 128.10% 126.10% 22-Sep-97 123.40% 122.00% 127.80% 126.80% 23-Sep-97 123.40% 122.00% 128.00% 126.40% 24-Sep-97 124.10% 120.50% 129.20% 125.30% 25-Sep-97 124.10% 123.50% 128.40% 124.50% 26-Sep-97 124.90% 125.70% 128.20% 125.40% 29-Sep-97 125.10% 120.90% 128.70% 126.60% 30-Sep-97 123.90% 122.40% 129.20% 125.70% 1-Oct-97 125.90% 126.50% 130.40% 126.80% 2-Oct-97 125.60% 125.40% 130.80% 127.40% 3-Oct-97 125.90% 125.70% 130.30% 127.80% 6-Oct-97 125.60% 124.30% 131.10% 128.70% 7-Oct-97 123.40% 124.60% 132.10% 130.10% 8-Oct-97 122.30% 122.80% 131.70% 129.00% 9-Oct-97 121.80% 122.40% 132.10% 128.60% 10-Oct-97 122.10% 123.50% 131.70% 128.30% 13-Oct-97 121.80% 122.40% 131.80% 128.30% 14-Oct-97 121.30% 121.60% 132.30% 128.40% 15-Oct-97 121.80% 121.60% 132.30% 127.90% 16-Oct-97 123.60% 122.00% 131.00% 126.30% 17-Oct-97 122.10% 119.40% 130.30% 124.80% 20-Oct-97 121.80% 121.30% 132.60% 126.40% 21-Oct-97 122.30% 119.40% 133.90% 128.50% 22-Oct-97 122.10% 114.90% 133.60% 128.00% 23-Oct-97 121.80% 115.70% 131.30% 125.60% 24-Oct-97 121.80% 114.90% 130.40% 124.30% 27-Oct-97 119.80% 108.20% 123.40% 115.60% 28-Oct-97 117.00% 110.40% 126.10% 121.90% 29-Oct-97 116.80% 114.20% 126.50% 121.20% 30-Oct-97 117.00% 108.20% 125.00% 119.40% 31-Oct-97 118.80% 113.40% 126.70% 120.90% 3-Nov-97 118.30% 117.20% 127.70% 124.20% 4-Nov-97 119.30% 117.90% 128.60% 124.40% 5-Nov-97 120.10% 117.50% 129.00% 124.60% 6-Nov-97 122.30% 117.50% 128.70% 123.90% 7-Nov-97 118.80% 111.60% 127.10% 122.60% 10-Nov-97 119.50% 106.30% 127.40% 121.80% 11-Nov-97 119.00% 106.70% 126.40% 122.40% 12-Nov-97 120.80% 101.90% 124.50% 120.00% 13-Nov-97 117.80% 102.20% 124.50% 121.60% 14-Nov-97 120.10% 98.50% 125.40% 123.30% 17-Nov-97 121.80% 100.70% 125.10% 125.50% 18-Nov-97 122.30% 104.90% 125.30% 124.40% 19-Nov-97 122.30% 101.10% 124.70% 125.10% 20-Nov-97 122.30% 103.70% 125.80% 126.90% 21-Nov-97 121.80% 102.60% 125.50% 127.50% 24-Nov-97 120.30% 101.50% 124.20% 125.30% 25-Nov-97 122.60% 101.50% 124.40% 125.90% 26-Nov-97 124.60% 101.50% 125.20% 125.90% 27-Nov-97 124.60% 101.50% 125.20% 125.90% 28-Nov-97 125.90% 103.40% 125.60% 126.00% 1-Dec-97 127.90% 103.70% 125.90% 128.50% 2-Dec-97 128.20% 105.60% 125.50% 127.90% 3-Dec-97 128.40% 106.00% 124.80% 128.60% 4-Dec-97 127.40% 106.70% 124.60% 127.80% 5-Dec-97 126.40% 106.30% 125.40% 129.30% 8-Dec-97 125.90% 106.70% 125.00% 129.10% [Graphic Omitted The data below were used in constructing the graph titled Schooner Traded Volume Summary] Closing Trading Date Price Volume - ------------ --------- ---------- 29-Jan-97 $22.00 25,000 27-Jan-97 22.25 11,200 28-Jan-97 22.25 43,900 30-Jan-97 22.25 25,700 31-Jan-97 22.25 23,500 24-Jan-97 22.50 22,200 3-Feb-97 22.50 26,000 23-Dec-96 22.63 9,200 15-Jan-97 22.63 21,700 4-Feb-97 22.63 56,200 18-Dec-96 22.75 10,200 24-Dec-96 22.75 9,700 25-Dec-96 22.75 NA 23-Jan-97 22.75 2,800 26-Dec-96 22.88 27,700 16-Jan-97 22.88 4,000 20-Jan-97 22.88 7,200 22-Jan-97 22.88 7,000 5-Feb-97 22.88 16,100 349,300 Total 3.7% % of Total 19-Dec-96 23.00 25,000 17-Jan-97 23.00 130,800 14-Apr-97 23.00 31,700 15-Apr-97 23.00 158,700 16-Dec-96 23.13 9,900 13-Jan-97 23.13 26,100 21-Jan-97 23.13 138,700 16-Apr-97 23.13 49,100 17-Apr-97 23.13 41,800 18-Apr-97 23.13 9,200 23-Apr-97 23.13 24,200 17-Dec-96 23.25 11,100 9-Jan-97 23.25 89,800 14-Jan-97 23.25 19,800 21-Apr-97 23.25 9,000 10-Jan-97 23.38 31,800 7-Feb-97 23.38 6,400 20-Mar-97 23.38 113,600 25-Mar-97 23.38 146,000 10-Apr-97 23.38 69,100 11-Apr-97 23.38 4,700 25-Apr-97 23.38 3,500 20-Dec-96 23.50 9,600 27-Dec-96 23.50 76,200 30-Dec-96 23.50 8,100 6-Feb-97 23.50 46,800 10-Feb-97 23.50 24,400 19-Mar-97 23.50 59,200 21-Mar-97 23.50 184,900 24-Mar-97 23.50 115,300 26-Mar-97 23.50 43,900 31-Mar-97 23.50 49,200 22-Apr-97 23.50 14,100 24-Apr-97 23.50 12,100 27-Mar-97 23.63 70,100 28-Mar-97 23.63 NA 13-Dec-96 23.75 2,000 18-Mar-97 23.75 45,500 2-Apr-97 23.75 52,000 3-Apr-97 23.75 144,800 7-Apr-97 23.75 40,800 12-Dec-96 23.88 3,000 31-Dec-96 23.88 8,100 1-Jan-97 23.88 NA 2-Jan-97 23.88 189,200 8-Jan-97 23.88 91,700 11-Feb-97 23.88 751,500 12-Feb-97 23.88 32,500 13-Feb-97 23.88 121,500 17-Mar-97 23.88 32,000 4-Apr-97 23.88 42,000 8-Apr-97 23.88 10,100 9-Apr-97 23.88 75,100 2,569,300 Total 27.4% % of Total 14-Feb-97 24.00 113,000 17-Feb-97 24.00 NA 13-Mar-97 24.00 23,600 28-Apr-97 24.00 23,500 6-Jan-97 24.13 5,600 7-Jan-97 24.13 56,300 14-Mar-97 24.13 70,700 1-Apr-97 24.13 33,600 11-Dec-96 24.25 14,500 3-Jan-97 24.25 148,500 21-Feb-97 24.25 93,900 24-Feb-97 24.25 8,900 10-Dec-96 24.38 33,300 27-Feb-97 24.38 11,100 28-Feb-97 24.38 12,200 7-Mar-97 24.38 117,700 12-Mar-97 24.38 37,500 25-Feb-97 24.50 56,600 26-Feb-97 24.50 23,000 5-Mar-97 24.50 120,200 6-Mar-97 24.50 108,200 11-Mar-97 24.50 45,300 29-Apr-97 24.50 15,900 9-Dec-96 24.63 800 19-Feb-97 24.63 81,200 20-Feb-97 24.63 76,700 30-Apr-97 24.63 28,300 1-May-97 24.63 31,300 18-Feb-97 24.75 210,800 3-Mar-97 24.75 97,200 4-Mar-97 24.75 29,000 10-Mar-97 24.75 77,100 1,805,500 Total 19.2% % of Total 2-May-97 25.00 11,300 8-May-97 25.50 39,500 7-May-97 25.75 21,500 9-May-97 25.75 41,800 15-May-97 25.88 7,900 122,000 Total 1.3% % of Total 5-May-97 26.00 29,800 13-May-97 26.13 13,200 16-May-97 26.25 54,300 6-May-97 26.38 49,200 12-May-97 26.50 31,200 14-May-97 26.50 17,100 19-May-97 26.50 11,900 20-May-97 26.75 13,800 21-May-97 26.88 11,500 232,000 Total 2.2% % of Total 15-Aug-97 27.25 28,400 22-May-97 27.63 3,800 19-Aug-97 27.88 34,100 66,300 Total 0.7% % of Total 29-May-97 28.00 6,100 18-Aug-97 28.00 48,500 22-Aug-97 28.06 35,200 23-May-97 28.13 35,600 26-May-97 28.13 NA 28-May-97 28.13 14,400 30-Jun-97 28.13 66,900 1-Jul-97 28.13 23,000 25-Aug-97 28.13 6,900 5-Sep-97 28.13 59,000 27-Jun-97 28.19 58,700 20-Aug-97 28.19 14,000 3-Sep-97 28.19 15,900 4-Sep-97 28.19 21,400 8-Sep-97 28.19 8,100 10-Sep-97 28.19 6,700 21-Aug-97 28.25 11,600 26-Jun-97 28.31 34,800 27-May-97 28.38 109,000 30-May-97 28.38 32,800 2-Jun-97 28.38 6,300 14-Aug-97 28.38 12,500 2-Sep-97 28.38 39,600 28-Aug-97 28.44 29,400 2-Jul-97 28.50 67,600 13-Aug-97 28.50 17,900 9-Sep-97 28.50 94,800 11-Sep-97 28.50 111,700 8-Aug-97 28.63 21,200 11-Aug-97 28.63 16,200 29-Aug-97 28.63 40,000 1-Sep-97 28.63 NA 27-Aug-97 28.69 28,500 4-Jun-97 28.75 25,200 3-Jul-97 28.75 55,400 4-Jul-97 28.75 NA 12-Aug-97 28.75 44,100 29-Oct-97 28.75 4,200 26-Aug-97 28.81 18,800 28-Oct-97 28.81 30,800 30-Oct-97 28.81 9,800 1,282,600 Total 13.7% % of Total 3-Jun-97 29.00 58,600 5-Jun-97 29.00 38,800 13-Nov-97 29.00 29,400 29-Jul-97 29.06 2,900 6-Jun-97 29.13 47,400 25-Jun-97 29.13 46,500 3-Nov-97 29.13 15,500 25-Jul-97 29.19 3,400 31-Jul-97 29.19 20,200 6-Aug-97 29.19 4,600 7-Jul-97 29.25 35,800 8-Jul-97 29.25 49,600 24-Jul-97 29.25 16,200 30-Jul-97 29.25 23,500 7-Aug-97 29.25 18,000 31-Oct-97 29.25 19,200 7-Nov-97 29.25 71,500 10-Jul-97 29.31 37,600 21-Jul-97 29.31 7,900 22-Jul-97 29.31 7,800 23-Jul-97 29.31 17,000 28-Jul-97 29.31 29,400 11-Nov-97 29.31 1,900 9-Jun-97 29.38 54,800 11-Jun-97 29.38 5,300 12-Jun-97 29.38 38,100 9-Jul-97 29.38 32,100 11-Jul-97 29.38 15,800 1-Aug-97 29.38 67,600 4-Aug-97 29.38 37,600 4-Nov-97 29.38 9,300 14-Jul-97 29.44 25,200 15-Jul-97 29.44 63,900 5-Aug-97 29.44 43,500 10-Nov-97 29.44 24,100 10-Jun-97 29.50 73,600 13-Jun-97 29.50 32,000 27-Oct-97 29.50 35,400 16-Jul-97 29.56 34,200 17-Jul-97 29.56 22,600 18-Jul-97 29.56 36,900 5-Nov-97 29.56 7,600 14-Nov-97 29.56 3,900 24-Jun-97 29.63 11,900 24-Nov-97 29.63 9,800 12-Nov-97 29.75 53,800 20-Jun-97 29.88 45,200 14-Oct-97 29.88 37,700 1,424,600 Total 15.2% % of Total 16-Jun-97 30.00 42,100 23-Jun-97 30.00 15,000 9-Oct-97 30.00 15,200 13-Oct-97 30.00 4,500 15-Oct-97 30.00 25,500 20-Oct-97 30.00 30,500 23-Oct-97 30.00 18,900 24-Oct-97 30.00 20,100 17-Nov-97 30.00 12,000 21-Nov-97 30.00 110,900 10-Oct-97 30.06 45,800 17-Oct-97 30.06 47,300 22-Oct-97 30.06 14,600 8-Oct-97 30.13 58,500 21-Oct-97 30.13 42,700 6-Nov-97 30.13 26,100 18-Nov-97 30.13 8,900 19-Nov-97 30.13 1,300 20-Nov-97 30.13 42,900 19-Sep-97 30.19 10,500 25-Nov-97 30.19 9,100 17-Sep-97 30.25 38,800 15-Sep-97 30.31 62,300 17-Jun-97 30.38 64,900 12-Sep-97 30.38 33,100 16-Sep-97 30.38 17,700 18-Sep-97 30.38 2,500 22-Sep-97 30.38 18,400 23-Sep-97 30.38 15,900 7-Oct-97 30.38 22,000 16-Oct-97 30.44 27,200 18-Jun-97 30.50 37,500 30-Sep-97 30.50 13,600 24-Sep-97 30.56 18,400 25-Sep-97 30.56 40,400 26-Nov-97 30.69 53,200 27-Nov-97 30.69 NA 26-Sep-97 30.75 12,400 29-Sep-97 30.81 3,800 2-Oct-97 30.94 24,300 6-Oct-97 30.94 12,600 1,121,400 Total 11.9% % of Total 19-Jun-97 31.00 62,200 1-Oct-97 31.00 24,300 3-Oct-97 31.00 29,300 28-Nov-97 31.00 35,900 8-Dec-97 31.00 106,200 5-Dec-97 31.13 48,300 4-Dec-97 31.38 1,200 1-Dec-97 31.50 59,600 2-Dec-97 31.56 2,300 3-Dec-97 31.63 45,600 414,900 Total 4.2% % of Total Total 9.3 million Confidential Project Yacht - ------------------------------------------------------------------------------- Summary of Significant Holdings - Schooner and Sloop
(shares in thousands) Schooner Sloop ------------------------------------ ---------------------------------- As a % As a % of As a % As a % of Shares Of Total Public Float Shares Of Total Public Float ------ -------- ------------ ------ -------- ------------ Cramer Rosenthal McGlynn ..... 1,128 2.7% 5.5% 3,992 8.4% 11.7% Fidelity Mgmt & Res Corp ..... 3,921 9.5% 19.0% 117 0.2% 0.3% T Rowe Price Associates ...... 3,975 9.6% 19.3% 0 0.0% 0.0% Grantham Mayo Van Otter ...... 0 0.0% 0.0% 1,518 3.2% 4.4% Barclays Bank Plc............. 356 0.9% 1.7% 899 1.9% 2.6% Babson David L C Co .......... 989 2.4% 4.8% 16 0.0% 0.0% Mellon Bank Corporation ...... 234 0.6% 1.1% 760 1.6% 2.2% Geocapital Corporation ....... 0 0.0% 0.0% 982 2.1% 2.9% Wellington Management Co ..... 0 0.0% 0.0% 923 1.9% 2.7% First Chicago Nbd Corp ....... 825 2.0% 4.0% 20 0.0% 0.1% Pimco Advisors L P ........... 0 0.0% 0.0% 702 1.5% 2.0% Numeric Investors L P ........ 0 0.0% 0.0% 618 1.3% 1.8% AIM Mgmt Group Inc. .......... 0 0.0% 0.0% 549 1.2% 1.6% Rainier Invt Mgmt Inc ........ 0 0.0% 0.0% 546 1.2% 1.6% Skyline Asset Mgmt Lp ........ 531 1.3% 2.6% 0 0.0% 0.0% Prudential Ins Co/Amer ....... 0 0.0% 0.0% 519 1.1% 1.5% Ohio State Teach Ret Sys ..... 500 1.2% 2.4% 0 0.0% 0.0% Nicholas-Applegate Cap........ 28 0.1% 0.1% 441 0.9% 1.3% Invista Capital Mgmt Inc ..... 422 1.0% 2.0% 0 0.0% 0.0% Bankers Trust N Y Corp ....... 109 0.3% 0.5% 299 0.6% 0.9% Zurich Kemper Invts Inc ...... 400 1.0% 1.9% 0 0.0% 0.0% First Pacific Advisors ....... 392 0.9% 1.9% 0 0.0% 0.0% Travelers Inc ................ 14 0.0% 0.1% 369 0.8% 1.1% ------ ----- ----- ------ ----- ----- Total ........................ 13,823 33.5% 67.2% 13,269 28.0% 38.8% Other Institutions ........... 2,669 6.5% 13.0% 4,678 9.9% 13.7% ------ ----- ----- ------ ----- ----- Total Institutions ........... 16,492 39.9% 80.1% 17,947 37.9% 52.4% Total Retail and Other ....... 4,093 9.9% 19.9% 16,292 34.4% 47.6% Insiders: Affiliated Directors ......... 1,912 4.6% 5,220 11.0% Fellini ...................... 1,584 3.8% 7,825 16.5% Other Directors and Executives 2,053 5.0% 94 0.2% Sloop ........................ 15,191 36.8% 0 0.0% ------ ----- ------ ----- Total Insiders ............... 20,740 50.2% 13,139 27.7% ------ ------ Total Shares Outstanding ..... 41,325 47,378
___________________ Notes: The top five institutional holders of Schooner's stock own 52.6% of the public float. - --------------------------------------------------------------------------- Stand Alone Financial Analysis - --------------------------------------------------------------------------- Confidential Project Yacht - -------------------------------------------------------------------------------- Summary of Financial Assumptions - Sloop(1) (Dollars in Millions, Except Per Share Data) 1997(2) 1998 1999 -------- -------- --------- Revenue ....................... $ 911.0 $ 975.0 $ 1,075.0 Revenue Growth ................ 4.7%(3) 7.0% 10.3% EBITDA ........................ 150.5 165.5 183.2 EBITDA Margin ................. 16.5% 17.0% 17.0% EBIT .......................... 106.0 119.0 135.0 EBIT Margin ................... 11.6% 12.2% 12.6% Net Income .................... 70.3 87.7 102.7 Fully-Diluted EPS ............. $ 1.47 $ 1.67 $ 1.92 ___________________ NOTES: (1) Based on Sloop management estimates; 1997 reflects recent divestitures. (2) From operations; excludes extraordinary gains and charges from the disposition of assets and the sale of investments; reflects dilution of convertible subordinated debentures. (3) Growth rate based on 1996 revenues adjusted to exclude discontinued operations. Confidential - Project Yacht - ----------------------------------------------------------------------------- Summary of Financial Assumptions - Schooner(1) (Dollars in Millions, Except Per Share Data) 1997 1998 1999 ------- ------- ------ Revenue ........................ $ 666.0 $ 717.6 $767.6 Revenue Growth ................. 10.9% 7.8% 7.0% EBITDA ......................... 141.5 157.0 171.4 EBITDA Margin .................. 21.3% 21.9% 22.3% EBIT ........................... 115.6 128.3 139.7 EBlT Margin ..................... 17.4% 17.9% 18.2% Net Income ..................... 72.5 81.7 91.5 Fully-Diluted EPS .............. $ 1.74 $ 1.96 $ 2.19 - ------------------- NOTES: (1) Based on Schooner management estimates. Confidential Project Yacht - ------------------------------------------------------------------------------ Schooner Capital Structure (Dollars in millions) Balance Sheet Data As of 9/30/97 (1) - ----------------------------------------------------------------------------- Cash $126.0 Current Liabilities $66.5 Other Current Assets 188.4 Debt 71.6 PP&E 194.7 Other Liabilities 47.6 Other Assets 218.0 Shareholders' Equity 541.4 ------ ------ Total Liabilities & Total Assets $727.1 Shareholders' Equity $727.1 Net Current Assets $247.8 Net Debt (54.4) Total Debt/Total Capitalization 11.7% Net Debt/Total Capitalization NM - ---------------- NOTES: (1) Source: 1O-Q filing for quarter ended 9/30/97. - ----------------------------------------------------------------------------- Transaction Overview - ----------------------------------------------------------------------------- Confidential Project Yacht - ------------------------------------------------------------------------------ Transaction Overview Offer Price: o $34.50 per share Form of Consideration/ o Cash tender offer Transaction Structure: Board Approval (both companies): o Recommendation of the Special Committee o Approval by Full Board of Directors No Solicitation: o Schooner has agreed not to solicit, initiate or take any action to facilitate any merger, consolidation, combination, sale or other transaction that would impede, prevent or delay the proposed transaction, provided that such action will not cause the Schooner Board to breach its fiduciary duties Break-Up Fees: o Schooner has agreed to pay Sloop a fee of $10 million if the recommendation of the Schooner Board or Special Committee is withdrawn or modified as a result of an Acquisition Proposal (as defined) and, within 12 months after termination of the proposed transaction Schooner enters into an agreement in respect of the Acquisition Proposal which is subsequently consummated Mutual Expense Reimbursement: o Expense reimbursement of up to $5 million in reasonable out-of-pocket expenses incurred in connection with the proposed transaction to the non-breaching party for material breaches of representations, warranties or covenants of the other party Minimum Condition of Tender Offer: o Majority of outstanding shares (41,325,118 outstanding as of 11/30/97) excluding shares owned by Sloop, Fellini and RAM (18,576,669 shares or 45.0%) and excluding Schooner restricted award shares (854,880 shares or 2.1 %) o Shares required excluding affiliates: Approx. 10.95 million (26.5% of the total shares) o Shares required including affiliates: Approx. 29.52 million (71.4% of the total shares) Confidential Project Yacht - ------------------------------------------------------------------------------ Transaction Overview Term of Offer: o No obligation to extend beyond 60 days after commencement o If all conditions to the offer have been satisfied, and if the shares tendered (including all affiliates shares) do not exceed 90% of the total shares, Sloop may extend for up to 10 business days to solicit additional shares Shares Eligible for Tender: o All shares owned by Sloop are canceled o All shares in Schooner treasury stock are canceled o All Schooner restricted shares are rolled into Sloop restricted shares o Fellini and RAM intend to tender all shares o Sloop agrees to vote all shares in favor of a transaction Financing: o Sloop has a written financing commitment o At the time of acceptance for payment, Sloop will have the funds necessary to consummate the offer Closing: o As soon as practicable after all conditions have been met - --------------------------------------------------------------------------- Valuation Analysis - --------------------------------------------------------------------------- [Graphic Omitted Data extracted from the following page "Mean" values were used in constructing the graph titled Valuation Summary Schooner] Confidential Project Yacht - -------------------------------------------------------------------------------- Valuation Summary - Schooner (Dollars in Millions, Except Per Share Data) Comparable Companies - --------------------------------------------------------------------------------
Multiple Range Enterprise Value (1) Equity Value Per Share(l) Financial --------------- -------------------- ------------------------- Statistics Low High Low High Low High ---------- ----- ---- --------- --------- ---------- --------- LTM EBITDA ... $ 138.4 7.2x 10.5x $ 991.2 $ 1,453.5 $ 25.44 $ 36.52 LTM EBIT ..... 113.3 9.4 14.7 1,062.5 1,663.9 27.15 41.57 1997 EPS ..... $ 1.74 13.2x 21.5x $ 889.6 $ 1,485.2 $ 23.00 $ 37.28 1998 EBITDA .. $ 157.0 6.6x 9.3x $ 1,034.9 $ 1,460.5 $ 26.49 $ 36.69 1998 EBIT .... 128.3 8.5 12.4 1,083.8 1,591.7 27.66 39.84 1998 EPS ..... $ 1.96 11.6 18.3 879.1 1,425.4 22.75 35.85 Mean: .................... $25.41 $37.96
Precedent Transactions - ------------------------------------------------------------------------------------------------------ Multiple Range Enterprise Value (1) Equity Value Per Share(l) Financial --------------- -------------------- ------------------------- Statistics Low High Low High Low High ---------- ----- ---- --------- --------- ---------- --------- LTM EBITDA ... $ 138.4 7.1x 15.4x $ 988.4 $ 2,136.0 $ 25.37 $ 52.89 LTM EBIT ..... 113.3 9.1 16.3 1,031.9 1,841.8 26.41 45.83 LTM EPS ...... $ 1.68 12.2x 24.8x $ 783.6 $ 1,669.2 $ 20.46 $ 41.69 Forward EBITDA $ 157.0(2) 6.3x 13.8x $ 983.1 $ 2,171.9 $ 25.24 $ 53.75 Forward EBIT . 128.3(2) 8.0 14.5 1,028.6 1,858.5 26.34 46.23 Mean: .................... $24.76 $48.08
- ----------------- NOTES: LTM data as of 9/30/97 (1) Based upon estimated December 31, 1997 net debt of -$69.8 million (2) Forward multiples applied to 1998 financial statistics Confidential Project Yacht - ------------------------------------------------------------------------------ Valuation Summary - Schooner (Dollars in Millions, Except Per Share Data) Discounted Cash Flow - ----------------------------------------------------------------------------- Based on an EBITDA terminal multiple range Equity Value Per Share(l) of 8.0x to 10.0x and a discount rate of ------------------------- 11.0% to 13.0% Low High ------ ------ Mean: $33.64 $42.97 Premiums Paid in Affiliated Party Transactions - ------------------------------------------------------------------------------ Equity Value Per Share Closing ------------------ Prices (2) Premium(3) Low High ---------- ---------------- --------- -------- Low High ----- ------ 1 Day Prior to Announcement $30.88 27.4% 30.5% $39.33 $40.29 4 Weeks Prior to Announcement 29.31 33.6% 34.8% 39.17 39.51 Mean: $39.25 $39.90 Current Trading Statistics - ------------------------------------------------------------------------------- Equity Value Per Share ---------------------- Low High ------------ --------- 52-Week Range (12/09/97) $22.00 $31.63 Current Share Price (12/O9/97) $30.88 4 Week Average Price (12/09/97) $30.44 Six-Month Average Price (l2/09/97) $29.52 - ----------------- NOTES: LTM data as of 9/30/97 (1) Based upon estimated December 31, 1997 net debt of -$69.8 million (2) As of December 9, 1997 and November 11, 1997, respectively (3) Premiums paid range based on the mean and median Confidential Project Yacht - ------------------------------------------------------------------------------ Valuation Matrix (Dollars in Millions, Except Per Share Data)
Enterprise Value/ -------------------------------------------------- Equity Value LTM 1997E 1998E Net Income Price Equity Enterprise ---------------- -------------- -------------- -------------- Per Share Value Value (1) EBITDA EBIT EBITDA EBIT EBITDA EBIT 1997E 1998E - ---------- ------ ----------- ------- ------- ------ ------ ------ ------ ----- ----- Schooner Result - Aggregate $138.4 $113.3 $141.5 $115.6 $157.0 $128.3 $72.5 $81.7 - Per Share $1.74 $1.96 $ 30.50 $ 1,272.6 $ 1,202.8 8.7x 10.6x 8.5x 10.4x 7.7x 9.4x 17.6x 15.6x 31.50 1,314.3 1,244.6 9.0 11.0 8.8 10.8 7.9 9.7 18.1 16.1 32.50 1,356.1 1,286.3 9.3 11.4 9.1 11.1 8.2 10.0 18.7 16.6 33.50 1,397.8 1,328.0 9.6 11.7 9.4 11.5 8.5 10.4 19.3 17.1 34.50 1,439.5 1,369.7 9.9 12.1 9.7 11.9 8.7 10.7 19.9 17.6
- ----------------- NOTES: (1) Based upon estimated December 31, 1997 net debt of -$69.8 million. - ---------------------------------------------------------------------------- Pro Forma Effect of the Transaction - ---------------------------------------------------------------------------- Confidential Project Yacht - ------------------------------------------------------------------------------ Financial Overview Transaction Assumptions: o Purchase accounting is applied o Goodwill adjustments - No restatement for SAB #51 gain made based on review of Sloop's accounting advisors - Reduce goodwill by $39 million as a result of the combination - Removal of a deferred tax liability previously recognized from non-cash income from Schooner o Schooner shares owned by Sloop are retired - Lower goodwill relative to a third party transaction - No tax related to the retirement o Annual pre-tax synergies/cost savings of $4 million - Lower corporate overhead/public company costs - Less than 2% of combined S,G&A o Sloop's 4 1/2% Convertible Subordinated Debentures remain outstanding o Inter-company sales of products and services and other transactions are not eliminated due to immateriality - $4 million booked by Sloop and $0.4 million booked by Schooner in 1996 o Holders of Schooner options will receive the difference between the the offer price and strike price for each option - Schooner restricted award shares will be replaced with Sloop restricted shares Confidential Project Yacht - ------------------------------------------------------------------------------ Financing Plan Prior to announcement, Sloop expects to have a commitment from First Chicago/NBD, Bank of America and Nationsbank for a $1.3 billion credit facility, $1.1 billion to be funded at the consummation of the transaction to fund the acquisition and refinance existing bank indebtedness. The terms of the commitment are summarized as follows: Total Facility: o $1.3 billion total facility o $800 million revolving credit (approximately $600 million to be drawn at closing after giving effect to excess cash on the balance sheet) o $500 million term loan due in year 2003 Pricing: o Initial: LIBOR+ 1.125% Thereafter, spread to vary based upon matrix of leverage ratios General Covenants: o Limitation on liens - Liens and encumbrances may not exceed 10% of current assets and 5% of net worth o Limitation on sale of assets - Sale of assets may not exceed 10% of total assets per year o Limitation on subsidiary indebtedness - Subsidiary indebtedness (outside of facility) may not exceed $100 million o Limitation on restricted payments (dividends, stock repurchases and subordinated debt repurchases) - Limitation basket based on a formula of net income, principal payments and additions to capital stock and subordinated debt (starting at $40 million) Confidential Project Yacht - ------------------------------------------------------------------------------ Financing Plan Financial o Fixed charge coverage ratio: Covenants: - Defined as the ratio of EBITDA minus capital expenditures to the sum of interest expense, scheduled debt payments and cash taxes - Projected coverage approximates 1.4x at 12/31/98 versus required minimum of l.lx o Total debt to EBITDA ratio: - Defined as ratio of total debt to pre-tax earnings, excluding certain nonoperating gains and losses, plus interest expense, depreciation and amortization minus earnings from equity investments in excess of $30 million - Projected leverage of 3.7x at 12/31/98 versus a re- quired maximum of 4.5x o Capitalization test: - The sum of consolidated net worth, subordinated debt, and the amount of the subordinated debt borrowed or borrowable from Fellini under the Amended and Restated Securities Purchase Agreement dated 11/23/93 must exceed the sum of $650 million and 60% of the cumulative positive net income subsequent to the close of the facility - At 12/31/98, the Company's "Capitalization" as defined above is projected to be $831 million, which is in compliance with the test Confidential Project Yacht - -------------------------------------------------------------------------------- Transaction Summary (Dollars in Millions, Except Per Share Data) Overview: - All cash purchase @ $34.50 per Schooner share - 100% of Schooner price paid in cash - Transaction Date: Pro forma analysis as of December 31, 1997 (actual closing expected in mid-January 1998) Trading Information: Schooner Enterprise Value Sloop Schooner @ $34.50 - ---------------- -------- -------- --------- Share Price ................. 12/09/97 $ 17.44 $ 30.88 $ 34.50 Premium ..................... -- -- 11.7% Fully Diluted Shares ........ 58.4 41.7 41.7 Equity Market Value ......... $1,019.0 $1,287.7 $1,439.5 Plus: Debt .................. 191.9 73.3 73.3 Less:Cash ................... (25.0) (143.1) (143.1) -------- -------- -------- Enterprise Value ............ $1,185.9 $1,218.0 $1,369.7 Multiple Analysis - ----------------- 1997 E P/E Ratio ............ FYE 12/31 11.8x 17.8x 19.9x 1998 E P/E Ratio ............ 10.5x 15.8x 17.6x 1997 E EBITDA ............... 5.3x 8.6x 9.7x 1998 E EBITDA ............... 4.9x 7.8x 8.7x Net Debt/EBITDA ............. 3.2x N/A -- EBITDA/Net Interest Expense . 4.3x N/A -- Net Debt/Total Capitalization 66% N/A -- Confidential Project Yacht - -------------------------------------------------------------------------------- Transaction Summary (Dollars in Millions, Except Per Share Data) Sources and Uses of Funds: Sources of Funds Amount Rate Percent ---------------- -------- ------ ------- Balance Sheet Cash ................. $ 118.1 5.00% 10.0% Acquisition Debt-Revolver .......... 571.2 7.00% 48.0% Acquisition Senior Debt 1 - Term Loan ........................ 500.0 7.00% 42.0% -------- ------- Total Uses of Funds ................ $1,197.7 100.0% Uses of Funds ------------- Schooner Common Equity ............. $ 915.4 76.2% Existing Senior Debt Schooner ...... 73.3 6.1% Existing Senior Debt Sloop ......... 191.9 16.0% Transaction Costs .................. 9.0 0.8% Financing Fees ..................... 8.0 0.7% -------- ------- Total Uses of Funds ................ $1,197.7 100.0% Goodwill Calculation: Purchase Price of Schooner Equity .. $915.4 Plus: Other Transaction Costs ...... 9.0 Less: Deferred Tax Elimination ..... 39.0 Less: Book Value of Schooner ....... 417.2 ------- Incremental Transaction Goodwill ... $468.2 ------- Amortization Period (Years) ....... 40.0 Annual Amortization of Transaction Goodwill.......................... $ 11.7 Confidential Project Yacht - -------------------------------------------------------------------------------- Transaction Summary (Dollars in Millions, Except Per Share Data) Pro Forma Accretion/(Dilution) Summary: Pro Forma Estimated E.P.S. 1997 1998 ------ --------- --------- Sloop Stand Alone E.P.S $ 1.47 $ 1.67 Pro Forma E.P.S 1.57 1.87 Accretion/(Dilution) -------------------- Dollars $ 0.09 $0.20 Percentage 6.3% 12.2% Pro forma 1998 Accretion/(Dilution) Synergy Sensitivity ------------------------------------------------------- Purchase Annual Pre-Tax Synergies Price ------------------------------------------------------ Per share $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 --------- ----- ----- ----- ----- ----- ----- ----- $34.50 10.3% 10.9% 11.6% 12.2% 12.9% 13.5% 14.2% $0.17 $0.18 $0.19 $0.20 $0.21 $0.23 $0.24 Pro Forma Credit Statistics Summary: Pro Forma Estimated 1997 1998 FYE 12/31 --------- --------- EBITDA/Interest Expense (net) 3.0x 3.8x (EBITDA-Capex)/Interest Expense (net) 2.0 2.6 Net Debt/EBITDA 4.6 4.0 Net Debt/Total Capitalization 84.6% 79.3% Total Debt/Total Capitalization 85.0% 79.9% Confidential Project Yacht - -------------------------------------------------------------------------------- Transaction Summary (Dollars in Millions, Except Per Share Data) Pro Forma Balance Sheet Sloop Schooner Estimated Estimated Consolidated Assets 12/31/97 12/31/97 Adjustments Pro Forma - ------ ----------- --------- ------------ ---------- Cash and Equivalents ............... $ 25.0 $ 143.1 ($ 126.5) $ 41.5 Accounts Receivable ................ 126.0 84.0 0.0 210.0 Inventory .......................... 71.0 94.3 0.0 165.3 Other Current Assets ............... 40.0 4.7 0.0 44.7 --------- ------- ------- --------- Total Current Assets ............... 262.0 326.0 (126.5) 461.5 Net Property, Plant & Equipment .... 411.5 203.0 0.0 614.5 Transaction Goodwill ............... 0.0 0.0 468.2 468.2 Existing Goodwill .................. 66.6 175.9 0.0 242.5 Deferred Fees ...................... 0.0 0.0 8.0 8.0 Other Intangible Assets ............ 51.0 0.0 0.0 51.0 Investments in Affiliates .......... 284.3 0.0 (139.2) 145.1 Other Assets ....................... 11.0 39.9 0.0 50.9 --------- ------- ------- --------- Total Assets ....................... $ 1,086.3 $ 744.9 $ 210.5 $ 2,041.7 ========= ======= ======= ========= Liabilities and Shareholders' Equity Accounts Payable ................... 60.0 30.7 0.0 90.7 Other Current Liabilities .......... 98.0 36.3 0.0 134.3 --------- ------- ------- --------- Total Current Liabilities .......... 158.0 67.0 0.0 225.0 Other Liabilities .................. 0.0 4.0 0.0 4.0 Deferred Tax ....................... 183.4 44.2 (39.0) 188.5 Bank Revolver ...................... 191.9 73.3 (265.2) 0.0 Acquisition Debt - Revolver ........ 0.0 0.0 571.2 571.2 Acquisition Senior Debt 1 - Term Loan......................... 0.0 0.0 500.0 500.0 Existing Convertible Sub. Debt Sloop............................. 310.0 0.0 0.0 310.0 Total Long Term Debt ............... 501.9 73.3 805.9 1,381.2 --------- ------- ------- --------- Total Liabilities .................. 843.3 188.5 766.9 1,798.7 Common Equity ...................... 243.0 556.4 (556.4) 243.0 --------- ------- ------- --------- Total Liabilities and Equity ....... $ 1,086.3 $ 744.9 $ 210.5 $ 2,041.7 ========= ======= ======= ========= - --------------------------------------------------------------------------- Exhibits - --------------------------------------------------------------------------- - --------------------------------------------------------------------------- Comparable Companies Analysis - --------------------------------------------------------------------------- Confidential Project Yacht - -------------------------------------------------------------------------------- Comparable Companies Analysis (Dollars in millions, except per share amounts; based on data from continuing operations) Most Recent Price Market LTM Financials Ticker 12/9/97 Value Revenues ---------- ------ ------- ------- -------- Blount International, Inc.(4) 9/30/97 BLT A $26.44 $978.9 $686.7 Cooper Industries, Inc. 9/30/97 CBE 50.56 6.121.6 5,333.2 Cincinnati Milacron Inc. 9/30/97 CMZ 26.69 1,075.9 1,854.l Federal Signal Corporation(5) 9/30/97 FSS 20.69 958.1 $912.9 Kaydon Corporation(6) 9/30/97 KDN 33.69 1,146.2 315.7 Mark IV Industries, Inc 8/31/97 IV 22.63 1,449.0 2,132.0 Pentair Inc. 9/30/97 PNR 38.44 1,476.6 1,742.4 Regal-Beloit Corporation(7) 9/30/97 RBC 28.00 583.0 553.9 Teleflex Inc 9/30/97 TFX 38.63 1,438.6 1.074.6 LTM N.I. Proj. Total P/E(l) EBIT 5-Year Debt/ -------------- Margin CAGR (I) Cap.(2) 1997(E) 1998(E) ------- -------- ------- ------- ------- Blount International, Inc.(4) 13.7% 12.7% 22.2% 17.5x 14.9x Cooper Industries, Inc. 12.4% 11.2% 33.9% 16.0 14.4 Cincinnati Milacron Inc. 6.7% 11.1% 45.8% 13.4 11.8 Federal Signal Corporation(5) 11.5% 14.8% 49.1% 16.0 14.1 Kaydon Corporation(6) 28.7% 12.0% 0.0% 18.4 16.4 Mark IV Industries, Inc 10.9% 15.0% 53.0% 13.2 11.6 Pentair Inc. 9.2% 14.0% 45.4% 18.8 16.3 Regal-Beloit Corporation(7) 14.3% 32.6% 53.4% 15.5 13.1 Teleflex Inc 10.6% 15.0% 37.1% 21.5 18.3 Adjusted Market Value ------------------------------------- Adjusted LTM 1998(E) Market --------------------- -------------- Value (3) Sales EBITDA EBIT EBITDA EBIT ---------- ----- ------ ---- ------ ---- Blount International, Inc.(4) $1,029.6 1.5x 8.7x 10.9x 6.9x 8.6x Cooper Industries, Inc. 7,400.5 1.4 8.4 11.2 7.0 9.1 Cincinnati Milacron Inc. 1,434.3 0.8 8.1 11.5 6.6 9.6 Federal Signal Corporation(5) 1,222.8 1.3 9.8 11.7 9.3 10.9 Kaydon Corporation(6) 1,069.8 3.4 10.4 11.8 9.3 10.4 Mark IV Industries, Inc 2,181.3 1.0 7.2 9.4 6.6 8.6 Pentair Inc. 2,014.4 1.2 8.9 12.5 7.3 10.3 Regal-Beloit Corporation(7) 787.0 1.4 8.2 9.9 6.8 8.5 Teleflex Inc 1,671.0 1.6 10.5 14.7 8.9 12.4 LTM N.I. Proj. Total P/E(l) Market LTM EBIT 5-Year Debt/ -------------- Value Revenues Margin CAGR (I) Cap.(2) 1997(E) 1998(E) ------- -------- ------- -------- ------- ------- ------- Mean $1,692.0 $1,622.8 13.1% 15.4% 37.75% 16.7x 14.5x Median 1,146.2 1,074.6 11.5% 14.0% 45.45% 16.0 14.4 High 6,121.6 5,333.2 28.7% 32.6% 53.36% 21.5 18.3 Low 583.0 315.7 6.7% 11.1% 0.00% 13.2 11.6 Adjusted Market Value/ ------------------------------------- Adjusted LTM 1998(E) Market -------------------- -------------- Value (3) Sales EBITDA EBIT EBITDA EBIT ---------- ----- ------ ---- ------ ---- Mean $2,142.5 1.5x 8.9x 11.5x 7.6x 9.8x Median 1,328.6 1.4 8.7 11.5 7.0 9.6 High 7,400.5 3.4 10.5 14.7 9.3 12.4 Low 787.0 0.8 7.2 9.4 6.6 8.5 Most LTM N.I. Proj. Recent Price Market LTM EBIT 5-Year Financials Ticker 12/9/97 Value Revenues Margin CAGR (I) ---------- ------ ------- ------- -------- ------- -------- Schooner 9/30/97 $30.88 $1,282.7 $658.4 17.20% 16.0% Adjusted Market Value/ --------------------------------- Total P/E(l) Adjusted LTM 1998(E) Debt/ -------------- Market ----------------- ---------------- Cap.(2) 1997(E) 1998(E) Value (3) Sales EBITDA EBIT EBITDA EBIT ------- ------- ------- ---------- ----- ------ ---- ------ ---- Schooner 11.68% 17.5x 16.1x $1,228.4 1.9x 8.9x 10.8x 8.3x 10.2x Most LTM N.I. Proj. Recent Price Market LTM EBIT 5-Year Financials Ticker 12/9/97 Value Revenues Margin CAGR (I) ---------- ------ ------- ------- -------- ------- -------- Sloop 9/30/97 $17.44 $840.2 $960.0 10.70% 11.6% Adjusted Market Value/ --------------------------------- Total P/E(l) Adjusted LTM 1998(E) Debt/ -------------- Market ----------------- ---------------- Cap.(2) 1997(E) 1998(E) Value (3) Sales EBITDA EBIT EBITDA EBIT ------- ------- ------- ---------- ----- ------ ---- ------ ---- Sloop 72.37% 11.0x 9.1x $1,341.7 1.4x 9.1x 13.1x 7.9x 10.1x P/E(l) -------------- 1997(E) 1998(E) ------- ------- S&P 400 25.5x 23.3x - ----------------------- NOTES: (1) Source: l/B/E/S earnings report. (2) Capitalization defined as shareholders' equity plus total debt. (3) Adjusted market value is defined as market value of common equity plus net debt (total debt less cash), book value of preferred stock and minority interest. (4) Reflects 2-for-l stock split on 12/8/97. Post-split, approximately 37.4 million shares outstanding. (5) Provides leasing services which result in $172.2 million and $149.5 million in financing related assets and liabilities, respectively, representing 23.3% and 33.6% of tofal assets and liabilities, repectively. (6) D&A not available on a quarterly basis; D&A for LTM calculations assumed to be the same as for the fiscal year ended 12/31/96. Not pro forma for the recent acquisitions of several fluid power companies. (7) Pro forma for the recent acquisition of Marathon Electric derived by annualizing the 6 months ended 6/30/97 period. - -------------------------------------------------------------------------------- Precedent Transactions Analysis - -------------------------------------------------------------------------------- Confidential Project Yacht - -------------------------------------------------------------------------------- Precedent Transactions Analysis (Dollars in millions)
Multiples of ---------------------------------------------------- Transaction Value/ Equity Value/ Transaction Value/ ------------------- ------------- ------------------ Trans- LTM Tang. FTM FTM Date of Purchase action EBIT Reven- LTM LTM LTM Net Book EBIT EBITDA Target's Ann. Target Acquiror Price (a) Value(b) Margin ues EBIT EBITDA Income Value (c) (c) Business Description - -------- ----------- ---------- ---------- -------- ------ ----- ----- ------ ------- ----- ----- ----- -------------------------- 10/10/97 Greenfield Kennametal, 623.5 942.8 11.5% 1.8 15.6x 11.6x 24.5x 20.1x 12.5x 9.8x Manufactures cutting Industries Inc. tools and related products that are consumed during industrial applications. The Company also manufactures small diameter drills, routers for manufacturing circuit boards and carbide products for the petroleum industry. 08/28/97 Versa Applied 141.9 140.7 11.5% 1.5 12.8 9.5 21.2 4.0 NA NA Versa Technologies is Tech- Power, comprised of three nologies, Inc. operating segments: the Inc. custom components segment, the medical segment and the fluid power segment, the largest segment which produces hydraulic and pneumatic cylinders. 06/26/97 Imo Constell- 120.8 415.8 5.4% 0.9 16.3 9.1 NM NM 11.1 7.2 Diversified industrial Industries ation manufacture of power Inc. Capital transmission equipment, Partners pumps, fluid sensors, LLC motion control products, remote control systems and automotive components. 06/16/97 Core United 249.0 298.5 10.7% 1.2 11.5 9.3 17.4 2.3 NA NA Manufactures power Industries Dominion supplies computer Inc. Industries components, Ltd. pipeline valves, steel doors, hydraulic wagons, molded plastics and metal stampings and hinges for the electronic, fluid control, construction. farm equipment and industrial markets. 06/16/97 The Raymond BT 353.0 440.0 11.0% 1.3 12.1 10.0 22.4 2.1 10.5 8.9 A leading manufacturer Corporation Industries of electric narrow aisle AB forklifts and related material-handling systems and equipment for rise in warehouses, distribution centers and manufacturing environments. 06/12/97 Giddings Thyssen AG 675.0 705.0 7.3% 1.0 13.4 9.6 24.4 2.6 12.5 9.2 A leading global & Lewis, manufacturer of highly Inc. engineered industrial automation systems, including automated machine tools, smart manufacturing systems, flexible transfer lines, assembly automation systems, measuring systems and industrial controls. 05/06/97 BW/IPlnc. Durco 435.5 534.1 10.5% 1.1 10.5 NA 15.8 3.3 9.4 NA Worldwide supplier of International advanced technology fluid transfer and control equipment, systems and services. Its principal products are pumps, mechanical seals and valves for the petroleum, chemical and marine industries.
Confidential Project Yacht - -------------------------------------------------------------------------------- Precedent Transactions Analysis (Dollars in millions)
Multiples of ---------------------------------------------------- Transaction Value/ Equity Value/ Transaction Value/ ------------------- ------------- ------------------ Trans- LTM Tang. FTM FTM Date of Purchase action EBIT Reven- LTM LTM LTM Net Book EBIT EBITDA Target's Ann. Target Acquiror Price (a) Value(b) Margin ues EBIT EBITDA Income Value (c) (c) Business Description - -------- ----------- ---------- ---------- -------- ------ ----- ----- ------ ------- ----- ----- ----- -------------------------- 04/21/97 Goulds ITT 815.0 938.7 8.3% 1.2 14.6 10.0 23.5 4.4 13.1 9.3 Designs, manufactures, Pumps, Inc. Indust- sells and repairs tries, centrifugal pumps and Inc. accessories for a broad range of applications including: residential, chemical, commercial, pulp and paper, general industry, sewage and drainage oil refining. 04/09/97 Stant Tompkins 406.0 606.0 8.6% 0.9 10.7 7.2 19.0 11.1 9.6 6.7 Manufacturers automotive Corporation Plc windshield wiping systems and windshield wiper blades and refills; closure caps and engine thermostats; and a leading manufacturer of other automotive products including hose clamps, heaters, grease guns and auto tools. 03/20/97 Falcon Investcorp 365.0 590.0 9.4% 0.9 9.9 7.8 12.2 NM 9.6 7.7 Leading domestic Building manufacturer of products Products, for the residential and Inc. commercial construction and home-improvement markets. Products include: plumbing fixtures, air compressors, electric generators, power washers and OEM compressors. 02/26/97 Marathon Regal- 278.0 248.3 11.1% 1.0 9.1 7.2 15.6 2.4 NA NA Leading manufacturer of Electronic Beloit electric motors, Manufactur- Corpora- generators and related ing Cor- tion products for the pulp, poration paper and petrochemicals, fluid handling, fans and blowers, and the HVAC aftermarket. 07/01/96 NEWFLO Precision 176.0 300.0 14.0% 1.3 9.5 7.6 23.8 NM NA NA Manufacturer of Corp. Castparts high-quality, niche oriented industrial fluid management products, which include fluid handling industrial pumps, industrial valves and fluid measurement instruments. 06/14/96 Brenco, Varlen 169.0 165.1 12.0% 1.3 11.0 8.4 17.1 2.6 10.4 8.1 Manufactures roller Inc. Corp. bearings and component parts for major railroads, car builders and automobile manufacturers in the U.S., Canada, India and Mexico. 04/01/96 Teledyne Alle- 2,247.1 2,545.9 8.9% 1.0 10.9 8.4 17.6 5.2 9.8 7.7 Manufactures aviation and Inc. gheny electronic equipment, Ludlum specialty metals, Corp. industrial equipment and consumer expendables.
Confidential Project Yacht - -------------------------------------------------------------------------------- Precedent Transactions Analysis (Dollars in millions)
Multiples of ---------------------------------------------------- Transaction Value/ Equity Value/ Transaction Value/ ------------------- ------------- ------------------ Trans- LTM Tang. FTM FTM Date of Purchase action EBIT Reven- LTM LTM LTM Net Book EBIT EBITDA Target's Ann. Target Acquiror Price (a) Value(b) Margin ues EBIT EBITDA Income Value (c) (c) Business Description - -------- ----------- ---------- ---------- -------- ------ ----- ----- ------ ------- ----- ----- ----- -------------------------- 03/07/96 Acme- Danaher 173.0 126.9 10.4% 1.0 9.6 7.2 19.8 2.1 8.0 6.3 Manufactures products in Cleveland Corp. two business segments: Corp. telecommunications and electronic products, and precision parts. 01/22/96 Premier Farnell 2,794.9 2,792.8 20.2% 3.3 16.3 15.4 24.8 6.0 14.5 13.8 Manufactures and Industrial Electronics distributes a wide range Corp. plc of products to repair and maintain equipment, machinery, vehicles and buildings; a leading distributor of electronic components. 09/12/95 Elco Textron 179.4 216.7 7.7% 0.9 11.4 7.1 17.5 2.8 NA NA Manufacturer of specialty metal Industries Inc. fasteners and Inc. application-specific components and assemblies. 10/03/94 Purolater Mark IV 277.4 315.9 4.8% 0.7 14.2 8.8 12.7 4.0 NA NA Manufactures oil, fuel, Products Industries, and air filters, fuel Co. Inc. pumps, clutches, motor vehicle brake systems and parts.
Multiples of ---------------------------------------------------- Transaction Value/ Equity Value/ Transaction Value/ ---------------------- ------------- ------------------ LTM Tang. FTM FTM EBIT Reven- LTM LTM LTM Net Book EBIT EBITDA Margin ues EBIT EBITDA Income Value (c) (c) ------ ----- ----- ------ ------- ----- ----- ------ Mean...... 10.2% 1.2x 12.2x 9.1x 19.4x 5.0x 10.9x 8.6x Median.... 10.5% 1.1 11.5 8.8 19.0 3.3 10.5 8.1 High...... 20.2% 3.3 16.3 15.4 24.8 20.1 14.5 13.8 Low....... 4.8% 0.7 9.1 7.1 12.2 2.1 8.0 6.3 - ------------------- NOTES: (a) Purchase price equals total shares outstanding (adjusted for warrants, options and other convertible securities) multiplied by purchase price per share. (b) Transaction value equals purchase price plus total debt less cash and cash equivalents. (c) FTM (forward twelve months) financials based on analyst earnings estimates for target at the time of transaction adjusted for taxes at 38%, and interest, depreciation and amortization expenses based on LTM results. - -------------------------------------------------------------------------------- Discounted Cash Flow Analysis - -------------------------------------------------------------------------------- Confidential Project Yacht - -------------------------------------------------------------------------------- Discounted Cash Flow Analysis (Dollars in Millions, Except Per Share Data) Projected (1) ------------------------------------------------- Schooner Income Statement 1998 1999 2000 2001 2002 -------- -------- -------- -------- -------- EBITDA ................... $ 157.0 $ 171.4 $ 193.1 $ 212.8 $ 232.7 Less: Depreciation & Amortization...... 28.8 31.7 34.6 37.2 39.6 -------- -------- -------- -------- -------- EBIT ..................... $ 128.3 $ 139.7 $ 158.5 $ 175.6 $ 193.1 Free Cash Flow Calculation EBIT ..................... $ 128.3 $ 139.7 $ 158.5 $ 175.6 $ 193.1 Less: Tax @ 37.0% ...... (47.5) (51.7) (58.6) (65.0) (71.5) Plus: Depreciation & Amortization...... 28.8 31.7 34.6 37.2 39.6 Less: Capex ........... (37.2) (37.8) (35.1) (30.0) (30.1) Less: Increase in Working Capital.. (4.2) (1.9) (8.3) (6.1) (5.2) -------- -------- -------- -------- -------- Free Cash Flow ........... $ 68.1 $ 80.1 $ 91.1 $ 111.7 $ 125.9 PV of Interim Cash Flow PV of Terminal Value ---------------------------------- --------------------------------- Discount Rate PV of Cash Flow Multiple of 2002 EBITDA of: ------------- --------------- --------------------------------- 11.0% $341.3 8.0x 9.0x 10.0x 12.0% 331.9 -------- -------- -------- 13.0% 323.0 $1,104.8 $1,242.9 $1,381.0 1,056.4 1,188.4 1,320.5 1,010.5 1,136.8 1,263.1 Total Enterprise Value Equity Value Per Share --------------------------------- --------------------------------- Multiple of 2002 EBITDA of: Multiple of 2002 EBITDA of: --------------------------------- --------------------------------- 8.0x 9.0x 10.0x 8.0x 9.0x 10.0x -------- -------- --------- ------ ------ ------ $1,446.1 $1,584.2 $1,722.3 $36.34 $39.66 $42.97 1,388.3 1,520.3 1,652.4 34.96 38.12 41.29 1,333.4 1,459.7 1,586.0 33.64 36.67 39.70 (1) Source: Based on Schooner management estimates -----END PRIVACY-ENHANCED MESSAGE-----