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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 5, 2000
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Wilmar Industries, Inc.
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(Exact name of registrant specified in Charter)
New Jersey 0-27424 22-2232386
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(State or other (Commission (IRS Employee
jurisdiction of File Number) Identification No.)
incorporation)
303 Harper Drive
Moorestown, New Jersey 08057
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(Address of principal executive offices) Zip Code
Registrant's telephone, including area code: (856) 533-3104
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(Former name and former address, if changed since last report)
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Item 5. Other Events
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Following the public announcement of the merger and recapitalization of Wilmar
Industries, Inc. ("Wilmar"), a purported shareholders' class action complaint
was filed by Phronesis Partners, L.P. on December 27, 1999 against Wilmar,
Wilmar's directors and Parthenon Capital, Inc. in the Superior Court of New
Jersey, Chancery Division, Burlington County (Docket No. BUR-C-171-99). The
complaint alleged, among other things, that Wilmar's directors had breached
their fiduciary duties and that Parthenon Capital has aided and abetted those
breaches. The complaint also alleged, among other things, that the proposed
consideration for the merger and recapitalization was unfair and inadequate. The
complaint sought to enjoin the merger and recapitalization and also sought
damages.
The parties to the lawsuit reached an agreement in principle to settle the
matter on April 17, 2000. In connection with the settlement:
. the special committee of Wilmar's board of directors agreed to request its
financial advisor, William Blair, to deliver a letter to the special
committee, in a form satisfactory to William Blair and the special
committee, bringing down through April 14, 2000, the fairness opinion
delivered by William Blair to the special committee in connection with the
merger. Wilmar agreed to publicly disclose such letter by filing it with
the Securities and Exchange Commission;
. the voting and exchange agreement was amended to require William Green and
certain trusts established by him to vote their shares of Wilmar common
stock at the special meeting in favor of and against the merger proposal in
the same proportions as the votes cast by all other Wilmar shareholders in
the aggregate at the special meeting;
. Wilmar made certain additional disclosures in the proxy statement prepared
in connection with the merger and mailed to Wilmar shareholders;
. a stipulation of settlement was agreed upon which expressly provides that
the defendants deny that they committed any violations of law, and that the
defendants settled the matter to eliminate the burden, risk and expenses of
further litigation, and acknowledged that the plaintiffs' lawsuit in part
caused additional disclosures included in the final proxy statement mailed
to Wilmar shareholders; and
. the plaintiffs' counsel will apply to the applicable New Jersey state
court for an award of attorneys' fees and disbursements in an aggregate
amount not to exceed $400,000, and Wilmar and the other defendants will not
object to this application.
While the parties' agreement in principle is binding, the terms of the
settlement are nevertheless subject to court approval, approval of the plaintiff
class, execution of a final stipulation of settlement, dismissal of the
plaintiffs' action, and the closing of the merger contemplated by the merger
agreement.
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On May 5, 2000, William Blair delivered its letter to the special committee,
bringing down its fairness opinion through April 14, 2000. The letter dated May
5, 2000 is attached hereto as Exhibit 99.1 and incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
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(C) Exhibits
(99.1) William Blair & Company, L.L.C. opinion letter dated May 5, 2000.
Signature
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Wilmar Industries, Inc.
(Registrant)
By /s/ William S. Sanford
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William S. Sanford
Senior Vice President and
Chief Financial Officer
Dated: May 9, 2000
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William Blair & Company
Limited Liability Company
May 5, 2000
Special Committee of the Board of Directors
Board of Directors
Wilmar Industries, Inc.
303 Harper Drive
Moorestown, NJ 08057
Gentlemen:
We understand that Wilmar Industries, Inc. (the "Company") and W
Acquisitions, Inc. ("Merger Sub") have entered into an Agreement and Plan of
Merger, dated December 22, 1999, (the "Agreement") which provides, among other
things, for the merger (the "Merger") of Merger Sub with and into the Company.
Under the terms set forth in the Agreement, at the effective time of the Merger
(the "Effective Time"), each share of common stock, no par value, of the Company
(the "Common Stock") issued and outstanding immediately prior to the Effective
Time (other than Shares owned by Merger Sub shall by virtue of the Merger and
without any action on the part of the holder thereof, be converted into the
right to receive, without interest, an amount in cash equal to $18.25 (the
"Merger Consideration"). The terms and conditions of the Merger are set out
more fully in the Agreement.
You have asked us to provide you with an update as of April 14, 2000 of the
opinion that we previously provided to you on December 22, 1999 that, the Merger
Consideration is fair from a financial point of view to the "Holders of Common
Stock". The "Holders of Common Stock" shall be defined as all holders of Common
Stock outstanding as of the date hereof, other than Merger Sub, any affiliates
of Merger Sub, and the Chairman of the Company (the "Chairman").
For purposes of this opinion we have, among other things:
(i) reviewed certain publicly available financial statements and other
business and financial information of the Company;
(ii) reviewed certain internal financial statements and other financial and
operating data concerning the Company prepared by the Company's management;
(iii) reviewed drafts dated December 17, 1999 of certain financial forecasts
and other forward looking financial information prepared by the Company's
management which were confirmed prior to our rendering of the December 22,
1999 opinion and subsequently have been reconfirmed to us by the Company's
management and the Special Committee of the Board of Directors to be the most
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realistic case for Wilmar as an independent public company;
(iv) held discussions with the management of the Company concerning the
business, past and current operations, financial condition and future
prospects of the Company;
(v) reviewed the financial terms and conditions set forth in the
Agreement;
(vi) reviewed the stock price and trading history of Company Common Stock;
(vii) compared the financial performance of the Company and the prices and
trading activity of Company Common Stock with that of certain other publicly
traded companies comparable with the Company;
(viii) compared the financial terms of the Merger with the financial terms,
to the extent publicly available, of other transactions that we deemed
relevant;
(ix) prepared a discounted cash flow analysis of the Company;
(x) prepared a leveraged acquisition analysis of the Company;
(xi) participated in discussions among representatives of the Company and
its legal advisors; and
(xii) made such other studies and inquiries, and took into account such
other matters, as we deemed relevant, including our assessment of general
economic, market and monetary conditions as of the date hereof.
In our review and analysis, and in arriving at our opinion, we have assumed
and relied upon the accuracy and completeness of all of the financial and other
information provided to us (including information furnished to us orally or
otherwise discussed with us by the Company's management) or publicly available
and have neither attempted to verify, nor assumed responsibility for verifying,
any of such information. We have relied upon the assurances of the Company's
management that it is not aware of any facts that would make such information
inaccurate or misleading. Furthermore, we did not obtain or make, or assume any
responsibility for obtaining or making, any independent evaluation or appraisal
of the properties, assets or liabilities (contingent or otherwise) of the
Company, nor were we furnished with any such evaluation or appraisal. With
respect to the financial forecasts and projections (and the assumptions and
bases therefore) for the Company that we have reviewed, upon the advice of the
Company's management and the Special Committee of the Board of Directors, we
have assumed that such forecasts and projections have been reasonably prepared
in good faith on the basis of reasonable assumptions and reflect the best
currently available estimates and judgments of management as to the future
financial condition and performance of the Company, and we have further assumed
that such projections and forecasts will be realized in the amounts and in the
time periods currently estimated. We have assumed that the Merger will be
consummated upon the terms set forth in the Agreement without material
alteration thereof. In addition, we have assumed that the historical financial
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statements of the Company reviewed by us have been prepared and fairly presented
in accordance with U.S. generally accepted accounting principles consistently
applied. We have relied as to all legal matters relevant to rendering our
opinion on the advice of counsel.
This opinion is necessarily based upon market, economic and other conditions
as in effect on, and information made available to us as of, the date hereof.
It should be understood that subsequent developments may affect the conclusion
expressed in this opinion and that we disclaim any undertaking or obligation to
advise any person of any change in any matter affecting this opinion which may
come or be brought to our attention after the date of this opinion. Our opinion
is limited to the fairness, from a financial point of view and as to the date
hereof, of the Merger Consideration to the Holders of Common Stock. We do not
express any opinion as to (i) the value of any employee agreement or other
arrangement entered into in connection with the Merger or (ii) any tax or other
consequences that might result from the Merger. Our opinion does not address
the relative merits of the Merger and the other business strategies that the
Company's Board of Directors or the Special Committee thereof has considered or
may be considering, nor does it address the decision of the Company's Board of
Directors or the Special Committee thereof to proceed with the Merger.
In connection with the preparation of our opinion, we were requested to
approach, and held discussions with certain third parties to solicit indications
of interest in a possible business combination with the Company.
William Blair & Company is nationally recognized investment banking firm that
has been engaged in the investment banking business since 1935. We continually
undertake the valuation of investment securities in connection with public
offerings, private placements, business combinations, estate and gift tax
valuations and similar transactions. We have acted as the investment banker to
the Company in connection with the Merger and will receive a fee from the
Company for our services, a significant portion of which is contingent upon
consummation of the Merger. In addition, the Company has agreed to indemnify us
for certain liabilities that may arise out of the rendering of this opinion.
In the past, we have provided certain investment banking services to the
Company for which we have been paid fees, including acting as co-managing
underwriter for two offerings of the Company's securities and providing advice
with respect to certain acquisitions. We maintain a market in the shares of
Company Common Stock. In the ordinary course of business, we may trade in the
Company's securities for our own account and the account of our customers and,
accordingly, may at any time hold a long or short position in the Company's
securities.
Our opinion expressed herein is provided for the information of the Board of
Directors of the Company and the Special Committee thereof in connection with
its evaluation of the Merger. Our opinion is not intended to be and does not
constitute a recommendation to any stockholder of the Company as to how such
stockholder should vote, or take any other action, with respect to the Merger.
This opinion may not be summarized, described or referred to or furnished to any
party except with our express prior written consent.
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Based upon and subject to the foregoing considerations, it is our opinion
that, as of April 14, 2000, the Merger Consideration is fair to the Holders of
Common Stock, from a financial point of view.
Very truly yours,
/s/ William Blair & Company
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WILLIAM BLAIR & COMPANY, L.L.C.
