<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION,
WASHINGTON, D.C. 20549
-----------------
SCHEDULE TO
(RULE 14d-100)
TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
ENGINEERING ANIMATION, INC.
(Name of Subject Company (Issuer))
UGS ACQUISITION CORPORATION,
a wholly owned subsidiary of
UNIGRAPHICS SOLUTIONS INC.
(Names of Filing Persons (Offeror))
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of Class of Securities)
29287210-8
(CUSIP Number of Class of Securities)
J. Randall Walti, Esq.
General Counsel
UNIGRAPHICS SOLUTIONS INC.
13736 Riverport Drive
Maryland Heights, Missouri 63043
TELEPHONE: 314-344-5900
FACSIMILE: 314-344-2677
(Name, Address and Telephone Numbers of Person
Authorized to Receive Notices and Communications on Behalf of Filing Persons)
Copies to:
William F. Bavinger III, Esq.
Bryan Cave LLP
700 Thirteenth Street, N.W.
Washington, DC 20005
Telephone: 202-508-6082
Facsimile: 202-508-6200
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CALCULATION OF FILING FEE
=============================================================================
Transaction Valuation Amount of Filing Fee
Not Applicable Not Applicable
=============================================================================
[ ] Check the 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.
<TABLE>
<S> <C> <C> <C>
Amount Previously Paid: Not Applicable Filing Party: Not Applicable
Form or Registration No.: Not Applicable Date Filed: Not Applicable
</TABLE>
[X] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which
the statement relates:
[X] third-party tender offer subject to Rule 14d-1.
[ ] issuer tender offer subject to Rule 13e-4.
[ ] going-private transaction subject to Rule 13e-3.
[ ] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the
results of the tender offer: [ ]
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[UNIGRAPHICS SOLUTIONS LOGO]
PRESS RELEASE
Editorial Contacts:
Jim Phelan Jamie Wade
Unigraphics Solutions Engineering Animation, Inc.
314-344-5290 515-296-6942
email: [email protected] email: [email protected]
Investor Relations Contacts:
Doug Barnett Jamie Wade
Unigraphics Solutions Engineering Animation, Inc.
314-344-8448 515-296-6942
[email protected] email: [email protected]
UNIGRAPHICS SOLUTIONS TO ACQUIRE ENGINEERING ANIMATION, INC.
NEW COMPANY POSITIONED TO BECOME INDUSTRY LEADER IN INTERNET-ENABLED
COLLABORATIVE PRODUCT COMMERCE SOLUTIONS FOR MANUFACTURERS
ST. LOUIS, MO and AMES, IA (September 5, 2000) -- Unigraphics Solutions Inc.
(NYSE: UGS), a leading provider of collaborative product development software
and services, and Engineering Animation, Inc. (Nasdaq: EAII), a developer of
world-class visualization, collaboration and analysis tools, today announced
that they have reached a definitive agreement allowing UGS to acquire EAI in a
cash tender offer. The total purchase price, which also includes other
acquisition-related costs, is expected to be about $205 million. The agreement
calls for shareholders of EAI to receive $13.75 cash for each share of EAI
common stock owned. The agreement has been approved by both companies' boards of
directors.
OVERVIEW
Bringing together the complementary solutions and market strategies of these two
world-class organizations represents a major strategic event for both companies.
This business combination provides significantly expanded market opportunities
and positions UGS to become a leader in Internet-enabled product development
collaboration solutions.
UGS will maintain the independent nature of the EAI product set, ensuring that
all current and future EAI customers -- including UGS competitors -- will
continue to experience a high degree of interoperability with EAI technology. In
doing so, UGS expects to establish the de facto standard for visual
collaboration and interoperability solutions, becoming the manufacturing
industry's leading supplier of these products.
This event represents the next logical step for two organizations that have been
working closely together since
<PAGE> 4
1998 and is expected to yield immediate benefits for several of UGS' existing
marketing activities, while providing increased distribution opportunities for
EAI software products.
"The Internet's impact on time, geography and `idea collaboration' in product
life cycle development is significantly changing the way manufacturers compete,"
said Tony Affuso, president and CEO of Unigraphics Solutions. "Accelerated
competitive demands require collaborative solutions with a significantly higher
level of interoperability and ease of deployment. The combined resources of UGS
and EAI will provide customers with the most comprehensive and effective
solutions in the market and position UGS as the industry leader in Collaborative
Product Commerce (CPC)."
DE FACTO STANDARDS FOR INTERNET-BASED CPC
EAI has gained widespread acceptance in the manufacturing industry by creating
solutions that inter-operate with CAD/CAM and product data management (PDM)
applications from all of the leading vendors. By maintaining this
"vendor-neutral" policy, EAI -- with its popular suite of visualization
solutions -- has created the most widely used format for sharing geometry over
the Internet. Similarly, Parasolid, UGS' industry-leading geometry modeling
software engine, has established itself as an industry standard for precise
geometric models. By continuing to strengthen this vendor-neutral environment,
and combining these powerful technologies with EAI's e-Vis(TM) solution for
collaborative commerce, UGS expects to establish the de facto standard building
blocks for visual CPC over the Internet.
EXPANDED DISTRIBUTION AND ENHANCED MARKET OPPORTUNITIES
"Joining forces with UGS will translate into an expanded market opportunity for
EAI and our products," said Robert Nierman, president and COO of EAI. "The
neutral business model defined for UGS' Parasolid modeling software is well
structured for EAI's visualization and collaboration product suites. The
complementary nature of our respective offerings and the resultant expanded
distribution and support capabilities make this event a winner for our customers
and employees."
The Parasolid community presents a significantly expanded distribution
opportunity for EAI solutions, due to its large and rapidly growing install
base. Currently, over 200 organizations license Parasolid, representing more
than 600,000 end-users.
In addition, the acquisition should have a beneficial impact on UGS' existing
market activity. The company is currently working with a premier list of leading
manufacturing organizations to deliver integrated solutions for product
development. The combination with EAI can be expected to further improve the
value of UGS software offerings and accelerate delivery of these technologies.
STRONG ONGOING PARTNERSHIP
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"EAI and UGS have been strategic partners since 1998," said Matt Rizai, CEO of
Engineering Animation. "This acquisition agreement reflects the strength and
quality of that relationship and an understanding of the potential our combined
companies can realize in the market. It will give further momentum to our
collaborative commerce initiative and our collective abilities to support
collaborative commerce offerings."
The development teams from EAI and UGS have worked closely together since their
strategic partnership began, sharing technology and development practices. EAI's
visualization and digital mock-up tools already form the underlying
infrastructure of UGS' ProductVision suite and provide the imbedded
visualization functionality in iMAN, UGS' product content management
application. These EAI tools are also tightly integrated with Unigraphics and
Solid Edge, UGS' high-end and mid-range MCAD software solutions, providing
direct access to product definition data in both applications.
FINANCIAL DETAILS AND TRANSACTION SUMMARY
UGS expects the transaction to be accretive to UGS' fiscal year 2001 earnings,
excluding acquisition related amortization costs. In connection with this
acquisition, UGS expects to record a one-time, non-cash charge for in-process
research and development in the quarter ending December 31, 2000 in an amount
yet to be determined. UGS has retained an independent appraisal firm to provide
advice in connection with such determination. Excluding the charge for
in-process research and development, UGS expects the acquisition to be $0.10 to
$0.12 dilutive, excluding amortization costs, to fourth quarter 2000 earnings
per share.
With approximately 12,058,850 EAI shares outstanding, the transaction has an
equity valuation, excluding the impact of outstanding stock options, of $165.8
million. The transaction is structured as a $13.75 per share cash tender offer
by a newly formed UGS subsidiary for at least a majority of the outstanding EAI
shares on a fully diluted basis, followed by a merger at the same price per
share. The consummation of the tender offer is subject to customary conditions,
including expiration of applicable waiting periods under the antitrust/merger
control laws of the United States and other countries. UGS expects to commence
the tender offer in approximately one week, and under Securities and Exchange
Commission (SEC) rules, the offer must be held open for a minimum of twenty
business days.
The final merger would require the approval of EAI's shareholders at a special
meeting called for such purpose (which would be assured if UGS acquires at least
51 percent of the outstanding shares in the tender offer) unless UGS acquires at
least 90 percent of the outstanding shares in the tender offer, in which case
the merger can be effected promptly after the consummation of the tender offer
without a special meeting of shareholders. Matthew M. Rizai, EAI's Chairman and
Chief Executive Officer, Martin J. Vanderploeg, EAI's Executive Vice President,
and Jeffrey D. Trom, EAI's Vice President and Chief Technology Officer, have
agreed to tender their shares in the cash tender offer and to vote their shares
in favor of the merger.
<PAGE> 6
The merger agreement includes customary non-solicitation, termination fee and
expense reimbursement provisions. In addition, EAI has granted UGS an option to
purchase approximately 2.4 million shares of EAI outstanding common stock at a
price of $13.75 per share, exercisable under certain circumstances.
It is expected that EAI shareholders who do not tender their shares in the
tender offer will receive $13.75 for each of their shares of common stock in the
merger. Holders of outstanding vested EAI options will also receive $13.75 for
each share of common stock underlying such options less the applicable option
exercise price.
The tender offer described in this release has not yet commenced, and this
release is neither an offer to purchase nor a solicitation of an offer to sell
securities. The tender offer will be made only through the Offer to Purchase and
the related Letter of Transmittal. Investors and security holders are urged to
read the following documents containing important information regarding the
tender offer and merger, when they become available:
- UGS' tender offer statement on Schedule TO, including the Offer to
Purchase, Letter of Transmittal and Notice of Guaranteed Delivery; and
- EAI's Solicitation/Recommendation Statement on Schedule 14D-9.
These documents and any amendments to these documents will be filed with the
United States Securities and Exchange Commission when the tender offer
commences. When these and other documents are filed with the SEC, they may be
obtained free of charge at the SEC's web site (www.sec.gov). You may also obtain
these documents, when available, free of charge from the Information Agent for
the tender offer (to be announced).
Morgan Stanley Dean Witter & Co. has advised UGS on the transaction, and
Goldman, Sachs & Co. and Colonnade Advisors LLC have advised EAI.
The purchase price will be funded through borrowings by UGS under its
inter-company credit facility with Electronic Data Systems Corporation (NYSE:
EDS), UGS' majority shareholder. Excluding a one-time charge for in-process
research and development referred to above, EDS expects the acquisition to be
one to two cents dilutive to fourth quarter 2000 earnings per share.
FORWARD LOOKING STATEMENTS
All statements in this press release that do not directly and exclusively relate
to historical facts constitute "forward-looking statements." These statements
represent the intentions, plans, expectations and beliefs of UGS and EAI, and
are subject to risks, uncertainties and other factors, many of which are outside
their control. These factors could cause actual results to differ materially
from such forward-looking statements.
<PAGE> 7
For a description of these factors, see the "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in UGS' Quarterly
Report on Form 10-Q for the quarter ended June 30, 2000, and in the same section
of EAI's Quarterly Report on Form 10-Q for the quarter ended June 30, 2000.
ABOUT EAI
Engineering Animation, Inc. is the leader in Internet-enabled visual process
management, collaboration, analysis and communication solutions for extended
manufacturing enterprises. EAI's solutions, which include e-Vis(TM)
(www.e-vis.com), Open Enterprise Visualization(TM) and Virtual Factory(TM), help
manufacturing companies drive down costs while improving business practices,
efficiency, quality and time-to-market. The Company maintains its corporate
headquarters and technology center in Ames, Iowa, and has offices worldwide. For
more information, visit EAI at www.eai.com or call (515) 296-9908.
ABOUT UNIGRAPHICS SOLUTIONS
Unigraphics Solutions Inc. (NYSE: UGS) is focused on improving the entire
product life cycle for design and manufacturing companies through the delivery
of software and consulting service solutions that address process and
productivity enhancements. Its CAD/CAM/CAE, product content management and
e-Business solutions are designed to promote collaborative product commerce
(CPC) through incorporation of today's most advanced technology and intelligent
use of the Internet. Headquartered in St. Louis, Missouri, UGS has been
providing software solutions to engineering and manufacturing companies for over
25 years and is the first company in its industry to earn the ISO 9001/TickIT
certification. Please contact UGS at (800) 498-5351 or via the World Wide Web at
http://www.ugsolutions.com.
###
Unigraphics Solutions, Parasolid, Solid Edge, Unigraphics, ProductVision, iMAN,
GRIP, managedServices, LightningStart and RAPIDiMAN are trademarks, registered
trademarks or service marks of Unigraphics Solutions Inc. EAI, e-VIS, Open
Enterprise Visualization, and Virtual Factory are trademarks or registered
trademarks of Engineering Animation, Inc. All other trademarks, registered
trademarks or service marks belong to their respective holders. The information
within is subject to change without notice and does not represent a commitment
on the part of Unigraphics Solutions.
<PAGE> 8
FROM: TONY AFFUSO
SENT: TUESDAY, SEPTEMBER 5, 2000 8:30 A.M.
TO: ALL UGS EMPLOYEES
SUBJECT: LETTER OF IMPORTANT ANNOUNCEMENT
Teammates,
I wanted to take a few moments to personally inform you about the exciting
news we announced this morning just before Wall Street opened. The news
is...UGS is acquiring EAI.
The acquisition of EAI represents a major strategic event for both of our
companies. Over the past year, the trend toward web-based engineering
collaboration among OEMs, partners, suppliers and customers has increased
dramatically. The Internet's impact on time, geography and "idea
collaboration" in product life cycle development is significantly changing
the way manufacturers compete. Accelerated competitive demands require
collaborative solutions with a significantly higher level of
interoperability and ease of deployment. It is based on this trend, that I
believe the merger of UGS' and EAI's people & technology will equip us to
become the new leader in the Internet-enabled Collaborative Product
Commerce (CPC) market.
I want you to know that the potential provided by this acquisition is
extensive. EAI is the leader in internet-enabled visual process management,
collaboration, analysis and communication solutions. The company not only
brings a strong set of currently available products but also a gifted team
of professionals who understand manufacturing, the power of the Internet
and potential of collaboration exchange technology. In fact, their e-Vis
product offering was the first design collaboration dot.com in the
industry, and we intend to continue full engagement in this new market.
Also, EAI provides us with the opportunity to sell well beyond our
traditional customer base. And, I can assure you that key customers are
pleased about this transaction and that the acquisition will give both
companies added strength in current sales activities.
Product Life Cycle collaboration will take on different forms, which will
include data from UG, Solid Edge, iMAN, in-KEY, ProductVision, EAI, legacy
systems and our competitors' CAD/PDM data as well. For collaboration of the
CAD model, often the Parasolid-based precise image model is required. Other
times, only an EAI lite-weight image is necessary to support Internet
collaboration across an extended enterprise. The combination of our two
companies will allow us to provide a new CAD-neutral platform that is based
on the EAI and Parasolid formats and communicated over "e-Vis powered"
Internet sites. This new CAD-neutral platform may well become the global
industry standard for collaborative commerce!
EAI is a global company with approximately 700 employees. As you can
imagine, a quick, effective integration of our companies is fundamental to
our success. I have asked Doug Barnett (UGS CFO) to lead our Transition
team and many of you will be asked to participate. We will all most
certainly be impacted, as we are asked to "step up the pace" to the speed
of our new markets. As we work on the integration of our companies the
emphasis must be on innovation, flexibility and teamwork. We are entering a
period of tremendous upside potential and, of course, downside risk. That
is the nature of the business as we continue to expand upon our MCAD base
and make a move to become the new leader in the Internet-enabled
Collaborative Product Commerce (or CPC) market. It is part of the
excitement, the exhilaration. We wouldn't want it any other way!
To keep ahead of the competition in our rapidly changing market, my direct
reports & I are in the midst of updating our Strategic Plan. We have just
completed our second intense three-day session and we will be meeting again
in mid-September. At that time members of the EAI team will become
involved, as we begin to flesh-out our strategies and define specific
long-
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<PAGE> 9
term initiatives to grow our newly merged capabilities into those of
the industry leader. We also will be establishing a framework to facilitate
our ability to anticipate market opportunities and react to competitive
initiatives. It will be from this context that I look to you to become
involved. Strategic and operational planning must permeate our company! All
of our actions must support our new company vision. Your tough day-to-day
decisions must be a part of strategy implementation. My direct reports and
I look forward to sharing the results of the Strategic Planning activities
with you within the next several weeks.
So this is a time of tremendous energy for UGS and EAI. I want you to know
that all our actions, from strategic planning through specific acquisitions
and partnerships, are focused on growth - on being the industry leader! As
I talk with many of you and see the results of your efforts, I know we
share a common perspective. Together, we will be "Number 1"! Today, I think
of when we acquired Parasolid (Shape Data), Solid Edge, Applicon and dCADE.
Those were very important milestones in our history. They changed us; they
significantly raised the market's perception of our company and provide the
resource to take on new challenges. There is no doubt the EAI acquisition
will have a similar and perhaps greater impact.
Together we will be #1,
Tony Affuso
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