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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14D-9
Solicitation/Recommendation Statement
Pursuant to Section 14(d)(4) of the
Securities Exchange Act of 1934
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Thermo BioAnalysis Corporation
(Name of Subject Company)
Thermo BioAnalysis Corporation
(Name of Person(s) Filing Statement)
Common Stock, Par Value $.01 Per Share
(Title of Class of Securities)
88355H 10 8
(CUSIP Number of Class of Securities)
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Arnold N. Weinberg
Member of the Special Committee
of the Board of Directors
c/o Richard A. Soden, Esq.
James A. Matarese, Esq.
Goodwin, Procter & Hoar llp
Exchange Place
Boston, Massachusetts 02109-2881
(617) 570-1000
(Name and Address and Telephone Number of Person Authorized to Receive Notice
and Communications on Behalf of the Person(s) Filing Statement)
With copies to:
Richard A. Soden, Esq.
James A. Matarese, Esq.
Goodwin, Procter & Hoar llp
Exchange Place
Boston, Massachusetts 02109-2881
(617) 570-1000
Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
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Item 1. Subject Company Information.
The name of the subject company is Thermo BioAnalysis Corporation, a
Delaware corporation (the "Company"), and the address of the principal
executive offices of the Company is 504 Airport Road, Santa Fe, New Mexico
87504-2108 and its phone number is (781) 622-1000.
The title of the class of equity securities to which this Schedule 14D-9
Solicitation/Recommendation Statement (this "Schedule 14D-9") relates is the
common stock, par value $.01 per share, of the Company (the "Shares" or the
"Common Stock"). As of January 28, 2000 there were 20,665,391 Shares issued
and outstanding and 1,196,048 Shares reserved for issuance pursuant to options
outstanding on such date under the Company's option plans.
Item 2. Identity and Background of Filing Person.
This Schedule 14D-9 is being filed by the subject company, Thermo
BioAnalysis Corporation. The contact information for the Company is listed in
Item 1 above.
This Schedule 14D-9 relates to the tender offer by BioAnalysis Acquisition
Inc. (the "Purchaser"), a wholly-owned subsidiary of Thermo Instrument Systems
Inc. ("Thermo Instrument"), to purchase all of the outstanding Shares which
are not currently owned by Thermo Electron Corporation ("Thermo Electron") or
its direct and indirect subsidiaries, including its majority-owned subsidiary,
Thermo Instrument (the "Publicly Held Shares"), at a purchase price of $28.00
per Share (the "Offer Price"), net to the seller in cash, without interest
thereon, less applicable withholding taxes, if any, and upon the terms and
subject to the conditions set forth in the Purchaser's Offer to Purchase,
dated March 17, 2000 (the "Offer to Purchase"), and in the related Letter of
Transmittal (which, together with the Offer to Purchase, constitutes the
"Offer"). The Purchaser filed a Schedule TO Tender Offer Statement (the
"Schedule TO") with the Securities and Exchange Commission (the "Commission")
on March 17, 2000, which includes the Offer to Purchase as an exhibit.
The Schedule TO states that if the tender offer is completed, Thermo
Electron and its subsidiaries will own at least 90% of the Company's
outstanding Shares and will, promptly following the closing of the Offer,
contribute such Shares to the Purchaser. Thermo Electron and Thermo Instrument
would then cause the Purchaser to merge with and into the Company (the
"Merger") making the Company jointly owned by Thermo Electron and Thermo
Instrument.
The Purchaser's principal executive offices, as set forth on its Schedule
TO, are located at 81 Wyman Street, P.O. Box 9046, Waltham, MA 02454-9046 and
its business phone is (781) 622-1000.
All information contained in this Schedule 14D-9 or incorporated herein by
reference concerning the Purchaser, Thermo Instrument, Thermo Electron or
their affiliates, or actions or events with respect to any of them, was
provided for inclusion herein by the Purchaser, Thermo Instrument, or Thermo
Electron or obtained from reports or statements filed by the Purchaser with
the Commission, including, without limitation, the Schedule TO, and the
Company takes no responsibility for such information.
Item 3. Past Contacts, Transactions, Negotiations and Agreements.
History of the Company. The Company was incorporated as a Delaware
corporation in February 1995 as a wholly-owned subsidiary of Thermo
Instrument. In September and October of 1996 the Company conducted an initial
public offering of its common stock, and in June 1998 the Company sold
additional shares of its Common Stock in a public offering. Following these
offerings, Thermo Electron, through its ownership of Common Stock and the
ownership of Common Stock by Thermo Instrument, maintained a controlling stake
in the Company. According to the Offer to Purchase, Thermo Instrument and
Thermo Electron are global leaders in the development, manufacture and sale of
measurement and detection instruments used to monitor, collect and analyze
data that provides knowledge for the user. The instruments are used in a range
of industries, including industrial processing, food and beverage production,
life sciences research and medical diagnostics. Thermo Instrument is a
majority-owned subsidiary of Thermo Electron.
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As described below under "Item 4--The Solicitation or Recommendation," on
January 31, 2000, Thermo Electron announced a restructuring plan pursuant to
which it expects to spin in, spin off and sell various businesses to focus
solely on its core measurement and detection instruments business. In that
announcement, Thermo Electron stated that it planned to take private certain
of its majority-owned subsidiaries, including Thermo Instrument and the
Company. On March 17, 2000, the Purchaser filed the Schedule TO with the
Commission and formally commenced the Offer. The Offer to Purchase also has
been filed with the Commission as an exhibit to the Schedule TO and as Exhibit
6 hereto.
Based on the Schedule TO, as of January 28, 2000, Thermo Instrument and
Thermo Electron beneficially owned 13,891,582 and 4,299,104 Shares,
respectively, representing approximately 67.2% and 20.8%, respectively, of the
then issued and outstanding Shares.
Composition of the Company's Board of Directors. The Company's Board of
Directors currently consists of the following five members:
<TABLE>
<C> <S>
Elias P. Dr. Gyftopoulos has been a director of the Company since its
Gyftopoulos inception in February 1995. He is a Professor Emeritus at
the Massachusetts Institute of Technology, where he was
the Ford Professor of Mechanical Engineering and of Nuclear
Engineering for more than 20 years prior to his retirement
in 1996. Dr. Gyftopoulos is also a director of Thermo
Cardiosystems Inc., Thermo Electron, ThermoLase Corporation,
ThermoRetec Corporation, Thermo Vision Corporation and Trex
Medical Corporation.
Earl R. Lewis Mr. Lewis has been a director and chairman of the board of
the Company since April and June 1997, respectively. Mr.
Lewis has been president and chief executive officer of
Thermo Instrument since March 1997 and January 1998,
respectively, and was chief operating officer of Thermo
Instrument from January 1996 to January 1998. Prior to that
time, he was executive vice president of Thermo Instrument
from January 1996 to March 1997, senior vice president of
Thermo Instrument from January 1994 to January 1996, and
vice president of Thermo Instrument from March 1992 to
January 1994. Mr. Lewis has been chief operating officer,
measurement and detection, of Thermo Electron since
September 1998. Prior to his appointment as chief operating
officer, Mr. Lewis served as senior vice president of Thermo
Electron from June 1998 to September 1998 and vice president
from September 1996 to June 1998. Mr. Lewis served as chief
executive officer of Thermo Optek Corporation, a majority-
owned subsidiary of Thermo Instrument, from its inception in
August 1995 to January 1998, and served as president of its
predecessor, Thermo Jarrell Ash Corporation, for more than
five years prior to 1995. Mr. Lewis is also a director of
FLIR Systems Inc., Metrika Systems Corporation, ONIX Systems
Inc., SpectRx Inc., Spectra-Physics Lasers, Inc., Thermedics
Detection Inc., Thermo Instrument, Thermo Optek Corporation
and ThermoQuest Corporation.
Colin Maddix Mr. Maddix has been a director of the Company, as well as
its president and chief executive officer, since March 1998.
Since 1996, Mr. Maddix also served as a president and chief
executive officer of the Clinical Products Group of Life
Sciences International, a supplier of equipment and
consumables for histology, cytology and pathology
laboratories worldwide, which was acquired by the Company
from Thermo Instrument effective March 1997. Mr. Maddix also
managed various companies within the Clinical Products Group
since 1992, including Shandon Inc., ALKO Diagnostic
Corporation and
Whale Scientific Inc. From 1989 through 1992, he served as
vice president and general manager of the International
Division of Fisher Scientific International Inc., a
manufacturer of scientific instruments and consumables with
scientific, clinical educational, occupational health and
safety applications.
</TABLE>
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<TABLE>
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Jonathan W. Mr. Painter has been a director of the Company since its
Painter inception in February 1995. Mr. Painter has been executive
vice president, operations, of Thermo Fibertek Inc., a
supplier of paper-recycling equipment, papermaking systems
and accessories, since September 1997. Mr. Painter was
treasurer of the Company and Thermo Electron from August
1994 through June 1997. He served as director of strategic
planning of Thermo Fibertek Inc. from February 1993 through
August 1994. For more than five years prior to that time,
Mr. Painter served as associate general counsel of Thermo
Electron and its subsidiaries. Mr. Painter is also a
director of Thermo Fibergen Inc.
Arnold N. Dr. Weinberg is the sole member of the Special Committee of
Weinberg the Board of Directors of the Company, which was established
to consider the Offer (the "Special Committee") (See "Item
4--The Solicitation or Recommendation"). He has been a
director of the Company since November 1995. He has been
Professor of Medicine at the Harvard Medical School and
Medical Director of the Medical Department of the
Massachusetts Institute of Technology for more than five
years.
</TABLE>
Executive Officers of the Company. The following persons are currently
executive officers of the Company:
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Name Title
---- -----
<S> <C>
Colin Maddix........................ President and Chief Executive Officer
Theo Melas-Kyriazi.................. Chief Financial Officer
Timo H. Lasola...................... Vice President
Gordon W. Logan..................... Vice President
Paul F. Kelleher.................... Chief Accounting Officer
</TABLE>
According to the Offer to Purchase Thermo Instrument anticipates that,
following consummation of the Offer and Merger, the Board of Directors of the
Company will be comprised solely of members of the Company's and Thermo
Instrument's management.
Conflicts of Interest. Certain directors and the executive officers of the
Company have interests in connection with the Offer that present them with
actual or potential conflicts of interest, as summarized herein.
Dr. Weinberg, the sole member of the Special Committee, does not own any
Shares. Dr. Weinberg does have options to acquire 15,000 Shares at an exercise
price of $10.00 per Share that are currently exerciseable. Dr. Weinberg also
holds 1,953 Shares under the Company's Deferred Compensation Plan for
directors, which Shares will be automatically converted into the right to
receive the Offer Price for each Share, totalling $54,684.
Officers and directors of the Company who own Shares and tender such Shares
will receive the same Offer Price on the same terms as set forth in the Offer
to Purchase. As of January 28, 2000, the members of the Board of Directors and
executive officers of the Company owned, in the aggregate, 51,955 Shares
(excluding Shares accumulated under the Deferred Compensation Plan for
directors). Assuming all the members of the Board of Directors and all
executive officers actually tender their Shares as they have indicated in the
Offer to Purchase, they would receive an aggregate of $1,454,740 in exchange
for their Shares.
In addition, as of January 28, 2000, the directors, including Dr. Weinberg,
and executive officers of the Company held options to acquire an aggregate of
265,500 Shares. Such options were issued under the Company's Equity Incentive
Plan and have exercise prices ranging from $10.00 to $21.93 per Share. Upon
the
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acquisition of the Shares and the subsequent Merger, Thermo Electron will
assume the options to acquire Shares and will convert such options into
options to acquire Thermo Electron common stock on the same terms or, in the
case of the vested options, at the election of the option holder, will pay the
option holder cash for each option equal to the Offer Price less the
applicable exercise price.
Certain directors and certain executive officers of the Company are
directors or officers of Thermo Electron and/or Thermo Instrument. Certain of
such directors and executive officers of the Company hold equity interests in
Thermo Electron and Thermo Instrument. Theo Melas-Kyriazi, the chief financial
officer of the Company, is also the chief financial officer of Thermo Electron
and Thermo Instrument. Earl R. Lewis, a director of the Company, is chief
operating officer, biomedical of Thermo Electron and is president and chief
executive officer of Thermo Instrument. Paul F. Kelleher, the chief accounting
officer of the Company, is also the chief accounting officer of Thermo
Electron and Thermo Instrument. Consequently, certain of these directors and
officers receive or have received compensation not only from the Company but
also from Thermo Electron, Thermo Instrument and their affiliates.
The members of the Boards of Directors of Thermo Electron and Thermo
Instrument own common stock of, or hold options to purchase the common stock
of, Thermo Electron, Thermo Instrument and/or the Company. In addition,
certain members of the Boards of Directors of Thermo Electron and Thermo
Instrument are also officers of the Company. These positions and equity
interests present these directors with actual or potential conflicts of
interest in determining the fairness of the Offer and the Merger to the Public
Shareholders. See Schedule I to the Offer to Purchase, which is Exhibit 6
hereto and incorporated herein by reference, for a listing of the positions
that the members of the Boards of Directors of Thermo Electron and Thermo
Instrument hold with Thermo Electron, Thermo Instrument and/or the Company and
their ownership of the common stock of Thermo Electron, Thermo Instrument
and/or the Company.
Thermo Electron has entered into separate indemnification agreements with
each of the Company's executive officers and directors providing for the
indemnification and advancement of expenses to such person directly by Thermo
Electron in the event that such person, by reason of his or her status as a
director or officer of the Company (or service as a director, officer or
fiduciary of another entity at the request of Thermo Electron), is made or is
threatened to be made party to any threatened, pending or completed action,
suit or other proceeding, whether civil, criminal, administrative or
investigative, if such officer or director acted in good faith and in a manner
believed to be in or not opposed to the best interests of Thermo Electron and,
in the case of a criminal action or proceeding, had no reason to believe his
or her conduct was unlawful. Forms of such indemnification agreements are
attached hereto as Exhibit 9 and Exhibit 10.
Certain Compensation Matters; Agreements. Certain contracts, agreements,
arrangements and understandings between the Company or its affiliates and
certain of the Company's executive officers, directors or affiliates are
described at pages 12 through 13 of the Company's Proxy Statement dated April
20, 1999 relating to its 1999 Annual Meeting of Stockholders (the "Proxy
Statement") in the section entitled "Executive Retention Agreements." A copy
of such pages of the Proxy Statement is filed as Exhibit 11 hereto and those
portions of the Proxy Statement are incorporated herein by reference.
In addition to the fees he receives for serving as a director of the
Company, Dr. Weinberg received from the Company a one-time fee of $10,000 for
serving on the Special Committee. He will also receive an attendance fee of
$1,000 for each in-person Special Committee meeting, $500 for each telephonic
Special Committee meeting, and reimbursement for out-of-pocket expenses
incurred in connection with his service on the Special Committee.
Transactions Between the Company and Thermo Electron or Thermo Instrument.
Certain contracts, agreements, arrangements and understandings between the
Company or its affiliates and Thermo Instrument or Thermo Electron are
described on pages 45 and 46 of the Purchaser's Offer to Purchase, which is
Exhibit 6 hereto and incorporated herein by reference.
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Material Agreements, Arrangements or Understandings Relating to the Company
and the Offer. Certain contracts, agreements, arrangements and understandings
relating to the Company and the Offer are described at pages 22 and 23 and
page 45 of the Purchaser's Offer to Purchase, which is Exhibit 6 hereto and
incorporated herein by reference. Other than as a result of being the subject
of the Purchaser's Offer, the Company is not a party to any of such contracts,
agreements, arrangements and understandings relating to the Company and the
Offer.
Intent to Tender. To the Company's knowledge, after reasonable inquiry, all
directors and all executive officers of the Company who own Shares currently
intend to tender their Shares pursuant to the Offer.
Item 4. The Solicitation or Recommendation.
Position of the Special Committee.
The Special Committee, whose only member consists of the sole independent
director of the Company, Arnold N. Weinberg, recommends that holders of Shares
other than Thermo Electron and its affiliates, including Thermo Instrument and
the officers and directors of the Company (the "Public Shareholders"), accept
the Offer and tender their Shares pursuant to the Offer. At a meeting of the
Special Committee held on March 28, 2000, the Special Committee determined
that the $28.00 per Share price proposed by the Purchaser was a fair price to
be paid to the Public Shareholders and resolved to recommend that the Public
Shareholders accept the Offer and tender their Shares pursuant to the Offer.
As a result of the conflict of interest among the members of the Company's
Board of Directors (other than Dr. Weinberg) and Thermo Instrument and Thermo
Electron, the Board of Directors of the Company delegated to the Special
Committee the sole and exclusive authority to respond to the Offer and to
either recommend for, recommend against or remain neutral and express no
opinion with respect to whether or not Public Shareholders should accept the
Offer and tender their Shares pursuant to the Offer.
Background; Reasons for the Special Committee's Position.
On January 31, 2000, as part of its overall restructuring plan pursuant to
which it expects to spin in, spin off and sell various businesses to focus
solely on its core measurement and detection instruments business, Thermo
Electron announced that it planned to take private certain of its majority-
owned subsidiaries, including Thermo Instrument and the Company. In
particular, Thermo Electron announced that, through the Purchaser, Thermo
Instrument would make a tender offer for all of the outstanding publicly
traded shares of the Company at a price of $28.00 per Share. According to the
Offer to Purchase, the Offer is conditioned upon the Purchaser acquiring
sufficient number of Publicly Held Shares such that Thermo Electron and its
subsidiaries, including Thermo Instrument, will together own at least 90% of
the total outstanding Shares. As stated in the Offer to Purchase, structuring
the transaction as a tender offer to acquire ownership of at least 90% of the
outstanding Shares permits the Purchaser to cause a merger of the Company and
the Purchaser without any vote of the shareholders of the Company pursuant to
the "short-form" merger provisions of the Delaware General Corporation Law.
Pursuant to such a "short-form" merger, the remaining Public Shareholders also
would receive $28.00 per Share.
As the controlling stockholder of the Company, Thermo Instrument could
cause the Company to call a special meeting of shareholders for the purpose of
seeking the approval of a merger of the Company and the Purchaser, pursuant to
which the holders of Publicly Held Shares would be paid $28.00 per Share. At
such a meeting, Thermo Electron and its affiliates would have sufficient votes
by virtue of their ownership of Shares to approve such a transaction
regardless of how holders of Publicly Held Shares vote their Shares. Such a
transaction is commonly referred to as a "long-form" merger because approval
of the shareholders is required to consummate the transaction. As set forth in
the Offer to Purchase, Thermo Instrument has chosen to pursue a tender offer
followed by a "short-form" merger rather than a "long-form" merger in an
effort to acquire the Publicly Held Shares in an expeditious manner and
provide the Public Shareholders with a prompt opportunity to receive the Offer
Price. Because Thermo Instrument and Thermo Electron collectively own
approximately
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88.0% of the total outstanding Shares, the Purchaser only needs to acquire an
additional 2.0% of the total outstanding Shares, or approximately 16.7% of the
total outstanding Publicly Held Shares, in order for Thermo Electron and its
subsidiaries to own sufficient Shares to effect a "short-form" merger.
According to the Offer to Purchase, if the Offer is not successful, the
Purchaser may make open market or privately negotiated purchases of Publicly
Held Shares to the extent necessary in order for Thermo Electron and its
subsidiaries, including Thermo Instrument, collectively to own at least 90% of
the total outstanding Shares. For additional information about the terms and
conditions of the Offer and the Purchaser's reasons for making the Offer,
shareholders should read the Offer to Purchase, which has been mailed to
shareholders directly by the Purchaser and has been filed as an exhibit to the
Schedule TO.
As a result of the conflict of interest between the Company and Thermo
Instrument and Thermo Electron by virtue of Thermo Instrument's and Thermo
Electron's control of the Company and its Board of Directors, the Board of
Directors established the Special Committee consisting of the only member of
the Board of Directors having no affiliation with Thermo Instrument or Thermo
Electron. The Special Committee was given the sole and exclusive authority to
respond to the Offer and to either recommend for, recommend against or remain
neutral and express no opinion with respect to whether or not Public
Shareholders should accept the Offer and tender their Shares pursuant to the
Offer. Other than as described in the preceding sentence, the Special
Committee was given no other authority or responsibilities, and in particular,
was not given the authority to "shop" the Company to prospective third-party
purchasers or explore other strategic alternatives that might enhance or
maximize shareholder value for the Public Shareholders. To assist it in
performing its responsibilities, the Special Committee retained Tucker Anthony
Cleary Gull ("Tucker Anthony") as separate independent financial advisor and
Goodwin, Procter & Hoar LLP as separate independent legal counsel. The Special
Committee was familiar with both its legal counsel and financial advisor
because in 1999 they had advised the independent special committee of another
of Thermo Instrument's majority-owned subsidiaries in connection with a
similar transaction involving Thermo Instrument's acquisition of the entire
equity ownership of that subsidiary.
Pursuant to the authority granted to it by the Company's Board of
Directors, the Special Committee undertook to determine independently, with
the advice of its legal counsel and financial advisor, the adequacy of the
terms of the Offer and whether to recommend for, recommend against or remain
neutral and express no opinion with respect to the Offer based primarily on
the information furnished to the Special Committee by the Company's management
and Thermo Electron. The Special Committee also reviewed the information
concerning the Offer set forth in the Offer to Purchase and was given access
to representatives of Thermo Electron's and Thermo Instrument's financial
advisors, J.P. Morgan Securities Inc. ("J.P. Morgan") and The Beacon Group
Capital Services, LLC ("The Beacon Group"). After receiving advice from its
legal counsel and financial advisor concerning the adequacy of the Offer, the
Special Committee inquired as to whether Thermo Instrument would consider
increasing the Offer Price, but was informed that Thermo Electron and Thermo
Instrument believed that the terms of the Offer were fair to the Public
Shareholders from a financial point of view and would not engage in any
negotiations concerning the Offer Price. The Special Committee also discussed
with representatives of Thermo Electron the anticipated timing of the Offer
and other administrative matters relating to the Offer. Except as described
above, the Special Committee did not participate in any communications or
negotiations concerning the terms and conditions of the Offer, including the
Offer Price, with the Purchaser, Thermo Instrument or Thermo Electron.
The Special Committee, prior to expressing its position with respect to the
Offer, received advice, opinions, views or presentations from, and discussed
the Offer with the Company's management and Tucker Anthony. As noted above,
the Special Committee also was given access to representatives of J.P. Morgan
and The Beacon Group, with whom Tucker Anthony, after completing its
independent analysis of the fairness from a financial point of view of the
Offer Price, discussed certain matters relating to such analysis. In
expressing its position with respect to the Offer, the Special Committee
considered a number of factors, including, but not limited to, the following:
(i) Business and Prospects. The Special Committee received advice from
Tucker Anthony concerning the Company's historical and current
financial condition and operating results, as well as the future
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prospects of the Company, based on discussions with senior management of
the Company. In particular, the Special Committee considered the
following:
. Continued Investment in Research and Development. The Special
Committee recognized the fact that the Company must continue to
invest in its research and development efforts in order to remain
competitive. The Special Committee noted that due to the highly
competitive, rapidly evolving nature of the healthcare,
biochemistry, and technology industries, the Company will not only
have to increase the absolute amount of resources devoted to
research and development, but it also will have to invest a greater
amount of such resources as a percentage of overall revenues than it
has done historically if the Company is to increase internal revenue
growth, improve margins, and continue to offer a competitive product
line.
. Acquisition-Related Integration Issues. The Special Committee
considered the fact that the Company has completed the acquisition of
a number of domestic and international companies during the past five
fiscal years. The Special Committee believes that integrating these
companies with the Company's existing businesses has required
substantial management time and resources. The completion of such
integration should permit management to focus its attention on
increasing internal revenue growth and margin improvement. In
addition, the Special Committee noted the probable need for future
acquisitions to broaden the Company's product offerings and to
improve its strength in the distribution channels.
. Shift in Revenue Mix to Higher Margin Business Segments. The Special
Committee considered the fact the Company has three distinct business
segments and noted that the Clinical Consumables and Laboratory
Information Management Systems segments carry higher margins than the
Biomolecular Instruments segment. The Special Committee noted that
given the industry growth rates and the Company's heightened
strategic focus on the Clinical Consumables and Laboratory
Information Management Systems segments, the Company's senior
management expects that these higher margin business segments will
constitute a higher percentage of the Company's overall revenue going
forward.
(ii) Market Information Regarding Publicly Held Shares. The Special
Committee considered historical market prices and trading information
with respect to the Publicly Held Shares and a comparison of these
market prices and trading information with those of selected publicly
held companies operating in industries similar to that of the Company
and the sales, earnings and price to earnings multiples at which the
Publicly Held Shares and the securities of these other companies
trade. See "Opinion of Financial Advisor" below.
(iii) Financial Analysis of Offer Price. The Special Committee considered a
financial analysis of the Offer Price performed by Tucker Anthony
using various methodologies, including a selected comparable public
companies analysis, a selected comparable transactions analysis and a
discounted cash flow analysis. A summary of Tucker Anthony's analysis
appears on pages 9 through 15 of this Schedule 14D-9 under the
section entitled "Opinion of Financial Advisor."
(iv) Market Price Considerations. The Special Committee considered the fact
that the $28.00 per Share Offer Price represents (A) a premium of
55.5% over $18.00, the closing price of the Publicly Held Shares on
the American Stock Exchange (the "AMEX") one week prior to the public
announcement of the Offer on January 31, 2000, and (B) a premium of
53.4% over $18.25, the closing price of the Publicly Held Shares on
the AMEX four weeks prior to the public announcement of the Offer on
January 31, 2000. The Special Committee also considered the fact that
in its underwritten public offering in June 1998, the Company sold
Shares to the public at a price of $18.125 per Share. The Special
Committee noted that the Offer Price represents a premium of 54.5% to
the public offering price of $18.125 per Share.
(v) Liquidity and Trading Volume. The Special Committee considered the fact
that historically there has been relatively low trading volume of the
Publicly Held Shares and that tendering Shares in the Offer would
result in immediate liquidity for the Public Shareholders. The Special
Committee believes that
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the Common Stock is an illiquid security and that this lack of liquidity
has had an adverse effect on the trading price of the Publicly Held
Shares. In this regard, the Special Committee noted the limited trading
volume of the Publicly Held Shares on the AMEX, as evidenced by its
average monthly trading volume (approximately 257,617 Shares per month
over the twelve months prior to January 28, 2000, the last trading day
prior to the first public announcement of the Offer) and the limited
public float of such shares resulting from the majority ownership of the
Company by Thermo Electron and its subsidiaries.
(vi) Fairness Opinion. The Special Committee considered the opinion of
Tucker Anthony, delivered to the Special Committee on March 28, 2000,
that, as of such date and based upon and subject to the limitations
set forth therein, the Offer Price of $28.00 per Share to be paid by
the Purchaser to the Public Shareholders was fair, from a financial
point of view, to such holders (a copy of such opinion is attached
hereto as Schedule I to this Schedule 14D-9 and is incorporated herein
by reference).
(vii) Participation in Future Growth. The Special Committee also considered
the fact that Public Shareholders who tender their shares in the
Offer will be precluded from having the opportunity to participate in
the future growth prospects of the Company. However, the Special
Committee noted that Public Shareholders who tender their shares in
the Offer will not be exposed to the possibility of future declines
in the price at which the Publicly Held Shares trade.
(viii) Inability to Negotiate Offer Price and "Shop" the Company. The
Special Committee considered the fact that Thermo Instrument and
Thermo Electron were not willing to negotiate the Offer Price, did
not "shop" the Company to prospective purchasers and did not
authorize the Special Committee to explore other strategic
alternatives that might enhance or maximize shareholder value for
the Public Shareholders. The Special Committee noted that receiving
actual offers from unaffiliated third parties might have been
another means by which to determine the value of the Publicly Held
Shares.
(ix) Availability of Dissenters' Appraisal Rights. The Special Committee
considered the fact that Public Shareholders who do not tender their
shares in the Offer will have dissenters' appraisal rights under
Delaware law in connection with the merger of the Company with the
Purchaser. However, Public Shareholders who exercise their appraisal
rights may receive more or less for their Publicly Held Shares than
the Offer Price.
(x) Alternative Squeeze-Out Structures. The Special Committee considered
the fact that Thermo Instrument and Thermo Electron could also have
pursued, and could pursue if the Offer is not successful, a "long-form"
merger pursuant to which they could cause the Company to call a special
meeting of shareholders for the purpose of seeking the approval of a
merger of the Company and the Purchaser, at which meeting Thermo
Electron and its affiliates would have sufficient votes to obtain such
approval. If the Offer is not successful, the Purchaser also may make
open market or privately negotiated purchases of Publicly Held Shares
to the extent necessary in order for Thermo Electron and its
subsidiaries collectively to own at least 90% of the total outstanding
Shares and therefore effect a "short-form" merger.
In view of the variety of factors considered by the Special Committee, the
Special Committee did not find it practicable to, and did not assign, relative
weights to the factors set forth above. Rather, the Special Committee reached
its determination based on the totality of the circumstances and the advice
presented to it by its legal and financial advisors.
In analyzing the Offer, the Special Committee was assisted and advised by
representatives of Tucker Anthony and the Special Committee's legal counsel,
who reviewed various financial, legal and other considerations. The full text
of the written opinion of Tucker Anthony, setting forth the procedures
followed, the matters considered, the scope of the review undertaken and the
assumptions made by Tucker Anthony in arriving at its opinion, is attached as
Schedule I to this Schedule 14D-9 and is incorporated herein by reference.
Public Shareholders are urged to, and should, read such opinion carefully and
in its entirety. The opinion was provided for the information and assistance
of the Special Committee in connection with its consideration of the Offer.
8
<PAGE>
Such opinion addresses only the fairness, from a financial point of view, of
the Offer Price to the Public Shareholders and does not constitute a
recommendation to any such holder as to whether or not to tender Publicly Held
Shares in the Offer.
Opinion of Financial Advisor
The Special Committee retained Tucker Anthony to act as its financial
advisor and to render an opinion to the Special Committee as to the fairness,
from a financial point of view, of the Offer Price to be received by the
Public Shareholders who tender their Shares pursuant to the Offer.
The Special Committee selected Tucker Anthony for a number of reasons,
including its knowledge of the instruments, consumables, diagnostics and
information management systems segments of the healthcare and biochemistry
industries and its experience and reputation in the area of valuation and
financial advisory work generally, and in relation to transactions of the size
and nature of the proposed transaction specifically. Tucker Anthony is a
nationally recognized investment banking firm and is regularly engaged in the
valuation of businesses and their securities in connection with mergers and
acquisitions, leveraged buyouts, negotiated underwritings, private placements
and valuations for corporate and other purposes. From time to time, Tucker
Anthony and its affiliates may hold long or short positions in the Common
Stock, the common stock of Thermo Electron or the common stock of Thermo
Instrument.
Tucker Anthony rendered its written opinion to the Special Committee on
March 28, 2000, to the effect that, as of that date, the Offer Price to be
received by the Public Shareholders pursuant to the Offer was fair, from a
financial point of view, to the Public Shareholders. Tucker Anthony has not
been requested to, and will not, update its opinion unless the Special
Committee requests such an update. The Special Committee has advised Tucker
Anthony that it will not seek an update to the fairness opinion unless:
. there is a material modification to the terms of the proposed
consideration or other material amendment to the Offer that the Special
Committee determines would be reasonably likely to impact the overall
fairness of the Offer to the Public Shareholders; or
. a material event occurs that the Special Committee determines would be
reasonably likely to affect Tucker Anthony's opinion if the opinion was
reissued taking into account such event.
The Special Committee has informed Tucker Anthony that, as of the date of
this 14D-9, there has been no change in the terms of the proposed
consideration and there has been no material event that the Special Committee
believes could affect Tucker Anthony's opinion since Tucker Anthony rendered
such opinion.
The full text of the written opinion of Tucker Anthony dated March 28,
2000, which sets forth the assumptions made, general procedures followed,
matters considered and limitations on the scope of review undertaken by Tucker
Anthony in rendering its opinion, is attached as Schedule I to this Schedule
14D-9 and is incorporated herein by reference. The Tucker Anthony opinion is
directed to the Special Committee and relates only to the fairness, from a
financial point of view, of the Offer Price to be received by the Public
Shareholders pursuant to the Offer, and does not constitute a recommendation
to any of the Public Shareholders as to whether or not they should accept the
Offer and tender their shares. The summary of Tucker Anthony's opinion set
forth below is qualified in its entirety by reference to the full text of the
written opinion attached hereto as Schedule I. Public Shareholders are urged
to read the entire opinion carefully.
9
<PAGE>
In conducting its investigation and analysis and in arriving at its
opinion, Tucker Anthony reviewed the information and took into account such
financial and economic factors as it deemed relevant and material under the
circumstances. The material actions Tucker Anthony undertook in its analysis
were as follows:
. reviewed internal financial information (including certain financial
projections, as described below) concerning the business and operations
of the Company that was furnished to Tucker Anthony by the Company's
management for purposes of its analysis, as well as publicly available
information, including but not limited to the Company's recent filings
with the Commission;
. reviewed the Offer to Purchase;
. compared the historical market prices and trading activity of the Common
Stock with those of other publicly traded companies that Tucker Anthony
deemed relevant;
. compared the financial position and operating results of the Company
with those of other publicly traded companies that Tucker Anthony deemed
relevant;
. compared the proposed financial terms of the Offer with the financial
terms of acquisitions of remaining minority interest, purchases of
minority interest and other merger and acquisition transactions that
Tucker Anthony deemed relevant; and
. held discussions with members of the Company's senior management
concerning the Company's historical and current financial condition and
operating results, as well as the future prospects of the Company.
Tucker Anthony also reviewed relevant industry market research studies,
company research reports and key economic and market indicators, including
interest rates, inflation rates, consumer spending levels, manufacturing
productivity levels, unemployment rates and general stock market performance.
Other than as set forth above, Tucker Anthony did not review any additional
information in preparing its opinion that, independently, was material to its
analysis. As a part of its engagement, Tucker Anthony was not requested to,
and did not, solicit third party indications of interest in acquiring the
Company. The Special Committee did not place any limitation upon Tucker
Anthony with respect to the procedures followed or factors considered by
Tucker Anthony in rendering its opinion.
In arriving at its opinion, Tucker Anthony assumed and relied upon the
accuracy and completeness of all of the financial and other information that
was publicly available or provided to Tucker Anthony by, or on behalf of, the
Company, and did not independently verify that information. Tucker Anthony
assumed, with the Special Committee's consent, that:
. all material assets and liabilities (contingent or otherwise, known or
unknown) of the Company are as set forth in its financial statements;
. obtaining all regulatory and other approvals and third party consents
required for consummation of the proposed Offer to Purchase would not
have a material effect on the anticipated benefits of the transaction;
and
. the Offer to Purchase would be consummated in accordance with the terms
set forth in the Offer to Purchase without any amendment thereto and
without waiver by the Company or Thermo Instrument of any of the
conditions to their respective obligations thereunder.
In performing its analysis, Tucker Anthony was given access to and relied
upon financial projections for fiscal 2000, 2001, 2002, 2003 and 2004, as well
as unaudited historical information for fiscal 1999 (the "Projections").
Tucker Anthony assumed that the Projections were reasonably prepared based
upon the best available estimates and good faith judgments of the Company's
senior management as to the future performance of the Company. For information
concerning the Projections, see "Financial Projections" below on pages 15
through 17.
10
<PAGE>
In conducting its review, Tucker Anthony did not obtain an independent
evaluation or appraisal of any of the assets or liabilities (contingent or
otherwise) of the Company. Tucker Anthony's opinion did not predict or take
into account any possible economic, monetary or other changes that may occur,
or information that may become available, after the date of its written
opinion.
Summary of Analyses. The following is a summary of the material financial
analyses performed by Tucker Anthony in connection with rendering its
opinion.
Analysis of Historical Trading Prices. Tucker Anthony reviewed the
Company's historical trading prices for the three months, six months and
twelve months preceding the announcement of the Offer on January 31, 2000, as
follows:
<TABLE>
<CAPTION>
Stock Price during Period
Trading ------------------------------
Volume Weighted Average Low High
---------------- ---------------- ------ ------
<S> <C> <C> <C> <C>
Three Months 302,300 shares $17.63 $16.50 $18.75
Six Months 850,000 shares $17.80 $16.13 $19.50
Twelve Months 3,091,400 shares $17.89 $16.00 $21.00
</TABLE>
Tucker Anthony compared these historical stock prices to the Offer Price of
$28.00. Tucker Anthony noted that for all periods the high price of $21.00 was
reached on April 14, 1999.
Analysis of the Company's Valuation Premium. Tucker Anthony compared the
premium to be received by the Public Shareholders as represented by the Offer
Price of $28.00 per share in cash to the closing price of the Common Stock
four weeks prior to the January 31, 2000 date of the announcement of the
Offer.
. Tucker Anthony calculated that the Offer Price of $28.00 per share
represented a premium of 53.4% over the closing price of $18.25 for the
Common Stock on January 3, 2000, four weeks prior to the date of the
announcement of the Offer.
Tucker Anthony reviewed comparable transactions in the following
categories: (i) 16 acquisitions between January 1, 1994 and March 24, 2000 of
a remaining minority interest (ranging from 8.0% to 35.1%) in a public company
that went private as a result of the transaction; and (ii) 31 acquisitions
between January 1, 1994 and March 24, 2000 of a minority interest (ranging
from 10.0% to 29.5%) in a public company that remained a public company
following the transaction. Tucker Anthony noted that the transaction
contemplated by the Offer represents an 11.8% remaining minority interest
transaction. Tucker Anthony further noted that an acquisition of a minority
interest or a remaining minority interest differs from an acquisition of a
100% interest. In a 100% acquisition, the acquiring company purchases control
of the subject company and, therefore, the financial terms of the transaction
reflect a control premium. The acquisition of a minority interest in, or the
remaining minority interest of, a public company does not generally involve a
control premium. However, unlike a transaction involving the acquisition of a
minority interest, in a transaction involving the acquisition of a remaining
minority interest, shareholders do not have the alternative to retain their
publicly traded stock in the subject company. Accordingly, premiums paid in
remaining interest transactions generally are greater than premiums paid in
minority interest transactions. Tucker Anthony's analysis produced the
following adjusted mean premiums (the adjusted mean excludes the high and low
values in calculating the average) over the four-weeks-prior stock price in
the comparable transactions as compared to the 53.4% premium in the
transaction contemplated by the Offer:
. the adjusted mean premium over the stock price four weeks prior to the
announcement of the 16 remaining minority interest transactions was
19.9%, with a range of 1.1% to 61.0%. Tucker Anthony again noted that
these transactions are most comparable to the transaction contemplated
by the Offer; and
. the adjusted mean premium over the stock price four weeks prior to the
announcement of the 31 acquisitions of a minority interest in a public
company was 12.8%, with a range of 1.6% to 30.1%.
11
<PAGE>
Analysis of Selected Publicly Traded Companies Comparable to the
Company. Tucker Anthony noted that the profile of the Company's business in
aggregate is unique. As a result, Tucker Anthony reviewed publicly available
financial information as of the most recently reported period and stock market
information as of March 24, 2000 for publicly traded companies that Tucker
Anthony deemed relevant to each of the Company's three business segments: (i)
Biomolecular Instruments segment; (ii) Clinical Consumables segment; and (iii)
Laboratory Information Management Systems segment. For the Company's
Biomolecular Instruments and Clinical Consumables segments, Tucker Anthony
calculated multiples of enterprise value to the latest twelve months ("LTM")
revenues, LTM earnings before interest, taxes, depreciation and amortization
("EBITDA"), and LTM earnings before interest and taxes ("EBIT"). For the
Company's Laboratory Information Management Systems segment, Tucker Anthony
calculated multiples of enterprise value to LTM revenues, LTM EBITDA, and
projected price to earnings multiples for the year 2000. Tucker Anthony then
calculated the implied enterprise values for each business segment based on
the adjusted mean and median of these comparable group multiples and the
corresponding business segment multiple for the LTM ending December 31, 1999.
Tucker Anthony compared the financial characteristics of the Company's
Biomolecular Instruments segment to the following:
1) Beckman Coulter, Inc. 6) Millipore Corporation
2) Bio-Rad Laboratories Inc. 7) Molecular Devices Corp.
3) CEM Corporation 8) PE Corp.-PE Biosystems
4) Dionex Corp. 9) PerkinElmer, Inc.
5) Life Technologies, Inc. 10) Sybron International Corp
The following table sets forth the calculation of the implied enterprise
value for the Company's Biomolecular Instruments segment based upon the
adjusted mean multiples of the comparable group:
<TABLE>
<CAPTION>
Company Comparable Implied
Financial Data Group Multiples Enterprise Value
-------------- --------------- ----------------
(In thousands) (In thousands)
<S> <C> <C> <C>
LTM EBIT $ 13,233 16.8x $222,288
LTM EBITDA $ 19,421 12.4x $240,392
LTM Revenues $121,111 2.4x $293,764
</TABLE>
Tucker Anthony compared the financial characteristics of the Company's
Clinical Consumables segment to the following:
1) Beckman Coulter, Inc. 5) Meridian Diagnostics Inc.
2) Becton, Dickinson and Co. 6) Neogen Corporation
3) CYTYC Corporation 7) Quidel Corporation
4) Diagnostic Products 8) Ventana Medical Systems
The following table sets forth the calculation of the implied enterprise
value for the Company's Clinical Consumables segment based upon the adjusted
mean multiples of the comparable group:
<TABLE>
<CAPTION>
Company Comparable Implied
Financial Data Group Multiples Enterprise Value
-------------- --------------- ----------------
(In thousands) (In thousands)
<S> <C> <C> <C>
LTM EBIT $ 10,990 14.1x $154,880
LTM EBITDA $ 17,351 9.0x $156,229
LTM Revenues $129,539 2.0x $264,273
</TABLE>
Tucker Anthony compared the financial characteristics of the Company's
Laboratory Information Management Systems segment to the following:
1) Beckman Coulter, Inc. 4) PerkinElmer, Inc.
2) PAREXEL International 5) Waters Corporation
3) PE Corp.-PE Biosystems
12
<PAGE>
The following table sets forth the calculation of the implied enterprise
value for the Company's Laboratory Information Management Systems segment
based upon the adjusted mean multiples of the comparable group:
<TABLE>
<CAPTION>
Company Comparable Implied
Financial Data Group Multiples Enterprise Value
-------------- --------------- ----------------
(In thousands) (In thousands)
<S> <C> <C> <C>
2000 P/E $ 5,949 24.5x $139,110
LTM EBITDA $ 9,845 15.5x $152,210
LTM Revenues $ 39,606 3.1x $121,771
</TABLE>
From these implied enterprise values for each business segment, Tucker
Anthony estimated a range of enterprise values for each of the three segments
and aggregated these ranges to arrive at a range of aggregated enterprise
value for the Company of $495,000,000 to $620,000,000. From this range, Tucker
Anthony subtracted the Net Debt of the Company ($17,539,000) as of December
31, 1999. Net Debt was calculated by adding Current Maturities of Long-term
Obligations ($21,127,000), Notes Payable ($31,101,000), Long Term Obligations
($18,452,000) and by subtracting Cash and Equivalents ($54,141,000) as of
December 31, 1999 to arrive at a range of aggregated implied equity value of
$477,461,000 to $602,461,000. The range of implied equity values were then
divided by the number of outstanding shares of Common Stock, estimated to be
21,747,064, as of December 31, 1999. The number of outstanding shares included
547,424 net options, assuming that the cash proceeds from exercised options
were used to repurchase shares at the proposed consideration of $28.00 per
share. These calculations produced per share equity values ranging from $21.96
to $27.70. Tucker Anthony compared these amounts to the Company's four-weeks-
prior stock price of $18.25 and the proposed consideration of $28.00 per
share.
Analysis of Selected Comparable 100% Acquisition Transactions. Tucker
Anthony reviewed 44 transactions that Tucker Anthony deemed relevant. The
transactions were 100% acquisitions and were chosen based on a review of
acquired companies that possessed general business, operating and financial
characteristics representative of companies in the industries in which the
Company operates. Tucker Anthony noted that none of the selected transactions
reviewed were identical to the proposed transaction and that, accordingly, the
analysis of comparable transactions necessarily involves complex consideration
and judgments concerning differences in financial and operating
characteristics of the Company and other factors that would affect the
acquisition value of comparable transactions including, among others, the
general market conditions prevailing in the equity capital markets at the time
of such transactions.
For the Biomolecular Instruments and Clinical Consumables segments, Tucker
Anthony calculated multiples of enterprise value to LTM Revenues, LTM EBITDA,
and LTM EBIT. For the Laboratory Information Management Systems Division,
Tucker Anthony calculated multiples of enterprise value to LTM Revenues, LTM
EBITDA, and projected price to earnings multiples for the year 2000. Tucker
Anthony then calculated the implied enterprise value for each business segment
based on the adjusted mean and median of these comparable group multiples and
the corresponding business segment multiple for the LTM ending December 31,
1999. From these implied enterprise values for each business segment, Tucker
Anthony derived a range of enterprise values for each of the three segments
and aggregated these ranges to estimate a range of enterprise value for the
Company of $515,000,000 to $615,000,000.
Tucker Anthony then estimated the range of implied equity value per share
of the Company based on the above range of aggregate enterprise values for the
Company. From this range, Tucker Anthony subtracted the Net Debt of the
Company as of December 31, 1999 ($17,539,000) to arrive at a range of
aggregated implied equity values. The range of aggregated implied equity
values were then divided by the number of outstanding shares of Common Stock
as of December 31, 1999 and shares added as the result of the anticipated
exercise of options. These calculations produced per share values ranging from
$22.87 to $27.47. While Tucker Anthony noted that values associated with 100%
acquisitions differed from those in a remaining minority interest acquisition
such as the proposed transaction, Tucker Anthony compared these per share
values to the proposed consideration of $28.00.
13
<PAGE>
Discounted Cash Flow Analysis. Tucker Anthony performed a discounted cash
flow ("DCF") analysis of the Company using the Projections which cover fiscal
years 2000 through 2004 (see "Financial Projections" below for information
concerning the Projections), without taking into account any potential cost
savings and efficiencies that may be realized following the consummation of
the transaction contemplated by the Offer. In such analysis, Tucker Anthony
assumed terminal value multiples of 14.0x to 16.0x EBIT in the year 2004 and
discount rates of 14.2% to 16.2%. Selection of an appropriate discount rate is
an inherently subjective process and is affected by numerous factors. The
discount rates used by Tucker Anthony were selected based upon its calculation
of the weighted average cost of capital ("WACC"). To arrive at the aggregated
WACC, Tucker Anthony calculated the WACC for each of the Company's business
segments and applied a weighted average based upon each segments' contribution
to 1999 EBITDA. This analysis produced present values of the Common Stock
ranging from $23.52 to $28.71 per share. In addition, Tucker Anthony adjusted
gross margins in the management projections to conform with historical levels,
fixing the margin at 53.3% for projected years 2001 to 2004, compared to a
range of projected gross margins of 54.6% in 2000 to 55.9% in 2004 in the
management case. This adjusted case produced present values of the Common
Stock ranging from $19.33 to $23.61.
Tucker Anthony noted that the per share present values in its DCF analysis
represented values attributable to a 100% acquisition. As such, these values
included a control premium that was not comparable to this remaining minority
interest transaction. While Tucker Anthony compared the above present values
per share to the proposed consideration of $28.00 per share, it did so only
with reference to this context. Tucker Anthony also compared these present
values per share to the per share values of $22.87 to $27.47 derived from its
analysis of comparable merger and acquisition transactions involving 100%
acquisitions discussed above.
The foregoing summary does not purport to be a complete description of the
analyses performed by Tucker Anthony. The preparation of a fairness opinion is
a complex process and is not susceptible to partial analysis or summary
description. Tucker Anthony believes that its analyses must be considered as a
whole, and that selecting portions of such analysis without considering all
analyses and factors, would create an incomplete view of the processes
underlying its opinion. Tucker Anthony did not attempt to assign specific
weights to particular analyses. However, there were no specific factors
reviewed by Tucker Anthony that did not support its opinion. Any estimates
contained in Tucker Anthony's analyses are not necessarily indicative of
actual values, which may be significantly more or less favorable than as set
forth therein. Estimates of values of companies do not purport to be
appraisals or necessarily to reflect the prices at which companies may
actually be sold. Because such estimates are inherently subject to
uncertainty, Tucker Anthony does not assume responsibility for their accuracy.
Pursuant to the terms of Tucker Anthony's engagement letter dated February
16, 2000 with the Special Committee, the Company paid Tucker Anthony a
retainer fee of $75,000 and a fee of $120,000 for the preparation and delivery
of its written fairness opinion dated March 28, 2000 (which fee was payable
regardless of the conclusions expressed therein). In addition, the Company has
agreed to pay Tucker Anthony an additional $25,000 upon delivery of any
updated fairness opinion if required by a material change to the Offer to
Purchase. The Company has also agreed to reimburse Tucker Anthony up to
$15,000 for its out-of-pocket expenses, including the reasonable fees and
disbursements of its counsel, arising in connection with its engagement, and
to indemnify Tucker Anthony, its affiliates and their respective directors,
officers, employees and agents to the fullest extent permitted by law against
certain liabilities, including liabilities under the federal securities laws,
relating to or arising out of its engagement, except for liabilities found to
have resulted from the bad faith, gross negligence or intentional or reckless
misconduct of Tucker Anthony.
In the past, Tucker Anthony has not performed investment banking services
for the Company or received any compensation from the Company, other than as
provided for in the engagement letter. Additionally, it has been over eight
years since Tucker Anthony has provided any investment banking services to
Thermo Electron. In May 1999, Tucker Anthony rendered an opinion (and was paid
a fee of $225,000 for such opinion) to the Special Committee of the Board of
Directors of ThermoSpectra Corporation ("ThermoSpectra") as to the fairness
from a financial point of view, of the consideration to be received by the
minority shareholders of ThermoSpectra pursuant to a proposed merger by and
between ThermoSpectra and Thermo Instrument. Tucker Anthony is also presently
engaged in providing fairness opinions to the Special Committees of both ONIX
14
<PAGE>
Systems Inc. and Metrika Systems Corporation, both affiliates of Thermo
Instrument, regarding transactions similar to the transaction contemplated by
the Offer. Tucker Anthony will receive a fee similar to that described in the
preceding paragraph for its services in both the proposed ONIX Systems Inc.
and Metrika Systems Corporation transactions.
Financial Projections.
The Company does not, as a matter of course, make public forecasts or
projections as to future sales, earnings or other income statement data, cash
flows or balance sheet and financial position information. However, the
Special Committee had access to the Projections and made the Projections
available to Tucker Anthony.
The following summary of the Projections is included in this Schedule 14D-9
because the Projections were made available to the Special Committee and
Tucker Anthony. The Projections do not reflect any of the effects of the
transaction contemplated by the Offer or other changes that may in the future
affect the Company and its assets, business, operations, properties, policies,
corporate structure, capitalization and management in light of the
circumstances then existing.
To the Special Committee's knowledge, the Projections were not prepared
with a view toward public disclosure or compliance with published guidelines
of the Commission or the American Institute of Certified Public Accountants
regarding forward-looking information or generally accepted accounting
principles. To the Special Committee's knowledge, neither the Company's
independent auditors, nor any other independent accountants, have compiled,
examined or performed any procedures with respect to the prospective financial
information contained in the Projections nor have they expressed any opinion
or given any form of assurance with respect to such information or its
achievability. Furthermore, the Projections necessarily make numerous
assumptions, many of which are beyond the control of the Company and may prove
not to have been, or may no longer be, accurate. Additionally, this
information, except as otherwise indicated, does not reflect revised prospects
for the Company's businesses, changes in general business and economic
conditions, or any other transaction or event that has occurred or that may
occur and that was not anticipated at the time such information was prepared.
Accordingly, such information is not necessarily indicative of current values
or future performance, which may be significantly more favorable or less
favorable than as set forth below, and should not be regarded as a
representation that they will be achieved.
THE PROJECTIONS ARE NOT GUARANTEES OF PERFORMANCE. THEY INVOLVE RISKS,
UNCERTAINTIES AND ASSUMPTIONS. THE FUTURE FINANCIAL RESULTS AND SHAREHOLDER
VALUE OF THE COMPANY MAY MATERIALLY DIFFER FROM THOSE EXPRESSED IN THE
PROJECTIONS. MANY OF THE FACTORS THAT WILL DETERMINE THESE RESULTS AND VALUES
ARE BEYOND THE COMPANY'S ABILITY TO CONTROL OR PREDICT. SHAREHOLDERS ARE
CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THE PROJECTIONS. THERE CAN BE NO
ASSURANCE THAT THE PROJECTIONS WILL BE REALIZED OR THAT THE COMPANY'S FUTURE
FINANCIAL RESULTS WILL NOT MATERIALLY VARY FROM THE PROJECTIONS. THE COMPANY
DOES NOT INTEND TO UPDATE OR REVISE THE PROJECTIONS.
The Projections also include, for comparison purposes, certain selected
historical consolidated financial information with respect to the Company and
its subsidiaries excerpted or derived from the audited historical consolidated
financial statements contained in the Company's Annual Report on Form 10-K for
its fiscal year ended January 2, 1999. The selected historical consolidated
financial information with respect to the fiscal year ended January 1, 2000
(fiscal 1999) was furnished to the Special Committee by the Company's
management and is unaudited; however, such information does not differ
materially from that contained in the Company's Annual Report on Form 10-K for
the fiscal year ended January 1, 2000, which has been filed with the
Commission. More comprehensive historical financial information is included
for fiscal periods ending on or prior to January 1, 2000 in the Company's
Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q (the "Company
15
<PAGE>
Reports") and in other documents filed by the Company with the Commission, and
the following historical financial information for such periods is qualified
in its entirety by reference to the Company Reports and other documents and
all of the financial information (including any related notes) contained
therein or incorporated therein by reference.
Thermo BioAnalysis Corporation
Selected Consolidated Historical and Projected Financial Information
(In thousands)
<TABLE>
<CAPTION>
Historical Projected
---------------------------------------------- ------------------------------------------------
Income Statement Data 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
- --------------------- ------- ------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues................ $22,534 $71,649 $201,998 $227,082 $290,582 $319,999 $347,000 $377,000 $410,000 $448,500
% Increase in Revenues.. N/A 218.0% 181.9% 12.4% 28.0% 10.1% 8.4% 8.6% 8.8% 9.4%
Cost of Revenues........ 13,036 37,807 102,826 109,905 135,787 145,165 157,097 168,967 181,118 197,968
------- ------- -------- -------- -------- -------- -------- -------- -------- --------
Gross Profit............ $ 9,498 $33,842 $ 99,172 $117,177 $154,795 $174,834 $189,903 $208,033 $228,882 $250,532
Gross Profit %.......... 42.1% 47.2% 49.1% 51.6% 53.3% 54.6% 54.7% 55.2% 55.8% 55.9%
Costs & Operating
Expenses:
SG&A/Other (excl. Corp.
G&A and restructuring
expenses).............. 4,534 20,271 59,926 74,316 97,491 104,623 111,905 119,535 129,802 141,516
Research & Development
Expenses............... 1,325 7,298 14,057 15,559 24,241 29,442 31,943 35,672 39,100 43,043
------- ------- -------- -------- -------- -------- -------- -------- -------- --------
Total Operating
Expenses.............. $ 5,859 $27,569 $ 73,983 $ 89,875 $121,732 $134,065 $143,848 $155,207 $168,902 $184,559
------- ------- -------- -------- -------- -------- -------- -------- -------- --------
Division Income $ 3,639 $ 6,273 $ 25,189 $ 27,302 $ 33,063 $ 40,769 $ 46,055 $ 52,826 $ 59,980 $ 65,973
Equity in Earnings of
J.V. -- -- -- $ 1,241 $ 2,640 $ 3,290 $ 3,472 $ 3,649 $ 3,835 $ 4,030
Corporate G&A Expenses 270 716 2,020 1,817 2,325 2,560 2,800 3,040 3,296 3,600
EBIT(/1/) $ 3,369 $ 5,557 $ 23,169 $ 26,726 $ 33,378 $ 41,499 $ 46,727 $ 53,435 $ 60,519 $ 66,403
EBIT Margin............. 14.9% 7.8% 11.5% 11.8% 11.5% 13.0% 13.5% 14.2% 14.8% 14.8%
Interest Income......... 819 1,280 2,431 4,254 2,405 1,726 3,085 3,987 5,384 6,996
Interest (Expense)...... -- (1,873) (7,725) (7,903) (5,443) (3,204) (2,511) (1,681) (1,367) (1,183)
Translation and Other
Expense................ -- -- -- 1,150 114 -- -- -- -- --
Write-off of acxquired
technology............. -- (3,500) -- -- -- -- -- -- -- --
Restructuring Costs..... -- -- -- (4,072) -- -- -- -- -- --
------- ------- -------- -------- -------- -------- -------- -------- -------- --------
Total Other Income
(Expense)............. 819 (4,093) (5,294) (6,571) (2,924) (1,478) 574 2,306 4,017 5,813
------- ------- -------- -------- -------- -------- -------- -------- -------- --------
Income Before Taxes &
Minority Interest...... 4,188 1,464 17,875 20,155 30,454 40,021 47,301 55,741 64,536 72,216
Provisions (Credit) for
Income Taxes........... 1,674 1,900 6,535 8,155 11,237 15,392 18,211 21,464 24,849 29,722
Minority Interest
Income................. -- -- -- 9 (5) (44) -- -- -- --
------- ------- -------- -------- -------- -------- -------- -------- -------- --------
Net Income.............. $ 2,514 $ (436) $ 11,340 $ 12,009 $ 19,212 $ 24,585 $ 29,090 $ 34,277 $ 39,687 $ 42,495
======= ======= ======== ======== ======== ======== ======== ======== ======== ========
Earnings Per Share...... $ 0.33 $ (0.05) $ 0.86 $ 0.74 $ 1.06 $ 1.13 $ 1.34 $ 1.58 $ 1.82 $ 1.95
Shares Outstanding after
option exercise........ 7,694 8,542 13,232 16,124 18,166 21,747 21,747 21,747 21,747 21,747
Depreciation and
Amortization........... 346 3,002 9,452 11,366 13,352 14,472 14,763 15,113 15,127 14,797
------- ------- -------- -------- -------- -------- -------- -------- -------- --------
EBITDA(/2/)............. $ 3,715 $ 8,559 $ 32,621 $ 38,092 $ 46,730 $ 55,971 $ 61,490 $ 68,548 $ 75,646 $ 81,200
======= ======= ======== ======== ======== ======== ======== ======== ======== ========
EBITDA Margin........... 16.5% 11.9% 16.1% 16.8% 16.1% 17.5% 17.7% 18.2% 18.5% 18.1%
</TABLE>
- -------
(/1/EBIT)represents earnings before interest and taxes and is derived from the
statements of income.
(/2/EBITDA)represents earnings before interest, taxes, depreciation and
amortization. EBITDA is presented because it is frequently used by
securities analysts, investors and other interested parties in the
evaluation of companies. Other companies may calculate EBITDA differently
than the Company. EBITDA is not a measurement of financial performance
under generally accepted accounting principles and should not be
considered as an alternative to cash flow from operating activities or as
a measure of liquidity or as an alternative to net income as indicators of
the Company's operating performance or any other measure of performance
derived in accordance with generally accepted accounting principles.
16
<PAGE>
<TABLE>
<CAPTION>
Actual Projected
--------------------------------------------- -------------------------------------------------
Balance Sheet Data 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
- ------------------ ------- -------- -------- -------- -------- -------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash and Cash
Equivalents........... $17,747 $ 45,476 $ 39,704 $ 62,957 $ 54,141 $ 60,644 $ 66,632 $ 91,821 $120 ,042 $152,301
Accounts receivable,
less allowances....... 5,482 17,265 47,210 54,718 64,606 66,552 65,620 68,007 72,401 79,361
Inventories............ 5,968 14,592 38,635 42,044 43,657 41,630 44,065 47,527 51,512 56,086
Prepaid income taxes... 672 2,319 8,484 11,459 13,880 11,788 11,788 11,788 11,788 11,788
Prepaid expenses &
other current
assets................ 768 1,583 4,221 5,253 6,846 6,834 7,951 8,571 9,379 10,487
------- -------- -------- -------- -------- -------- -------- -------- --------- --------
30,637 81,235 138,254 176,431 183,130 187,448 196,056 227,714 265,122 310,023
------- -------- -------- -------- -------- -------- -------- -------- --------- --------
Net PP&E............... 1,653 5,547 22,967 25,493 25,698 29,386 30,436 30,636 30,636 30,636
Patents and Other
Assets................ 195 3,098 2,712 24,204 24,872 25,879 27,872 30,019 32,527 35,551
Cost in Excess of Net
Assets of Acq'd
Cos................... 420 33,117 158,506 175,153 180,213 174,683 169,172 163,662 158,151 152,640
------- -------- -------- -------- -------- -------- -------- -------- --------- --------
TOTAL ASSETS......... $32,905 $122,997 $322,439 $401,281 $413,913 $417,396 $423,536 $452,031 $ 486,436 $528,850
======= ======== ======== ======== ======== ======== ======== ======== ========= ========
CURRENT LIABILITIES
Current maturities of
LT obligations........ -- -- -- 52,569 22,127 17,757 980 980 980 980
Borrowings under
overdraft (N/P)....... -- -- 2,465 11,255 31,101 28,638 22,974 17,574 12,375 12,174
Accounts payable....... 432 4,282 12,596 16,384 18,286 17,346 17,534 17,934 18,534 19,134
Accrued payroll and
employee benefits..... 691 2,616 8,482 9,543 -- -- -- -- -- --
Accrued income taxes... 1,665 2,775 6,097 11,545 -- -- -- -- -- --
Accrued acquisition
expenses.............. 61 1,857 4,604 3,605 -- -- -- -- -- --
Deferred revenue
(Rev.) & other
accrued expenses...... 683 9,955 17,663 18,700 52,463 41,915 42,204 42,404 42,704 43,204
Due to parent and
affiliated
companies............. -- -- 35,846 4,756 4,122 4,752 4,752 4,752 4,752 4,752
------- -------- -------- -------- -------- -------- -------- -------- --------- --------
3,532 21,485 87,753 128,356 128,099 110,408 88,444 83,644 79,345 80,244
Deferred Income
Taxes................. 227 196 139 1,679 (89) 1,687 1,687 1,687 1,687 1,687
Minority Interest...... -- -- -- 460 33 77 77 77 77 77
Net Long-term
obligations........... -- 50,000 100,204 60,180 18,452 12,981 11,996 11,016 10,036 9,056
------- -------- -------- -------- -------- -------- -------- -------- --------- --------
TOTAL LIABILITIES.... $3,759 $ 71,681 $188,096 $190,676 $146,495 $125,153 $102,204 $ 96,424 $ 91,145 $ 91,064
======= ======== ======== ======== ======== ======== ======== ======== ========= ========
STOCKHOLDERS' EQUITY
Common Stock........... 81 98 141 181 212 212 212 212 212 212
Capital in excess of
par................... 26,917 47,882 131,483 200,736 251,452 251,452 251,452 251,452 251,452 251,452
Retained earnings...... 2,143 1,707 9,633 20,595 39,807 63,478 92,567 126,842 166,526 209,021
Treasury stock at cost -- -- -- (10,064) (10,067) (10,067) (10,067) (10,067) (10,067) (10,067)
Trans Adj. & Accum.
other comp. items..... 5 1,629 (6,914) (843) (13,986) (12,832) (12,832) (12,832) (12,832) (12,832)
------- -------- -------- -------- -------- -------- -------- -------- --------- --------
Total Stockholders'
equity.............. 29,146 51,316 134,343 210,605 267,418 292,243 321,332 355,607 395,291 437, 786
------- -------- -------- -------- -------- -------- -------- -------- --------- --------
TOTAL LIABILITIES &
STOCKHOLDERS'
EQUITY................ $32,905 $122,997 $322,439 $401,281 $413,913 $417,396 $423,536 $452,031 $ 486,436 $528,850
======= ======== ======== ======== ======== ======== ======== ======== ========= ========
</TABLE>
17
<PAGE>
Item 5. Persons/Assets Retained, Employed, Compensated or Used.
The Special Committee entered into a letter agreement with Tucker Anthony
dated as of February 16, 2000 (the "Engagement Letter"), pursuant to which the
Special Committee engaged Tucker Anthony to act as its financial advisor in
connection with the Offer. Subject to the terms and conditions of the
Engagement Letter, Tucker Anthony agreed to act as a financial advisor to the
Special Committee and render an opinion to the Special Committee with regard
to the fairness, from a financial point of view, to the Public Shareholders of
the Offer Price. In connection with the Engagement Letter, the Company agreed
to pay Tucker Anthony an aggregate fee of $195,000, $75,000 of which was paid
upon the execution of the Engagement Letter and the balance of which was paid
upon the delivery by Tucker Anthony of the fairness opinion. In addition, the
Company has agreed to reimburse Tucker Anthony up to $15,000 for its
reasonable out-of-pocket expenses incurred in connection with its engagement
and to indemnify Tucker Anthony against certain liabilities incurred in
connection with its engagement, including liabilities under federal securities
laws.
The Special Committee also retained Goodwin, Procter & Hoar LLP to act as
the legal advisor to the Special Committee in connection with the Offer.
Except as disclosed herein, neither the Company nor any person acting on
its behalf currently intends to employ, retain or compensate any other person
to make solicitations or recommendations to holders of Shares on the Company's
behalf concerning the Offer.
Item 6. Interest in Securities of the Subject Company.
During the past 60 days no transaction in the Shares has been effected by
the Company, or to the best of the Company's knowledge, by any executive
officer, director, affiliate or subsidiary of the Company.
Item 7. Purposes of the Transaction and Plans or Proposals.
(a) Except as indicated in Items 3 and 4 above, no negotiations are being
undertaken or are underway by the Company in response to the Offer which
relate to a tender offer or other acquisition of the Company's securities by
the Company, any subsidiary of the Company or any other person.
(b) Except as set forth in Items 3 and 4 above, the Company is not engaged
in any negotiation in response to the Offer which relates to or would result
in (i) an extraordinary transaction such as a merger or reorganization
involving the Company or any subsidiary of the Company; (ii) a purchase, sale
or transfer of a material amount of assets by the Company or any subsidiary of
the Company; (iii) a tender offer for or other acquisition of securities by or
of the Company; or (iv) any material change in the present capitalization,
indebtedness or dividend rate or policy of the Company.
(c) Except as set forth in Items 3 and 4 above, there are no transactions,
board resolutions, agreements in principle or signed contracts in response to
the Offer which relate to or would result in one or more of the events
referred to in this Item 7.
Item 8. Additional Information.
The information contained in the Exhibits referred to in Item 9 below is
incorporated herein by reference.
18
<PAGE>
Item 9. Exhibits.
<TABLE>
<C> <S>
Exhibit 1 Press release issued by Thermo Instrument on January 31, 2000
(incorporated by reference to Exhibit 99 to the Current Report on
Form 8-K of Thermo Instrument filed with the Commission on February
1, 2000)
Exhibit 2 Press release issued by the Company on January 31, 2000 (previously
filed)
Exhibit 3 Press release of Thermo Electron issued on March 6, 2000
(incorporated by reference to Exhibit 12(a)(10) to the Purchaser's
Schedule TO dated March 17, 2000)
Exhibit 4 Press release of Thermo Instrument issued on March 17, 2000
(incorporated by reference to Exhibit 12(a)(11) to the Purchaser's
Schedule TO dated March 17, 2000)
Exhibit 5 Press release issued by the Company on March 30, 2000
Exhibit 6 Offer to Purchase by the Purchaser filed with the Commission on
March 17, 2000 (incorporated by reference to Exhibit 12(a)(1) to
the Purchaser's Schedule TO dated March 17, 2000)
Exhibit 7 Letter to Stockholders dated March 30, 2000*
Exhibit 8 Opinion of Tucker Anthony Cleary Gull (included as Schedule I to
this Schedule 14D-9)*
Exhibit 9 Form of Indemnification Agreement by and between the Company and
directors of the Company (incorporated by reference to Exhibit
10.10 of the Company's Registration Statement on Form S-1 (File No.
333-08697))
Exhibit 10 Form of Indemnification Agreement by and between the directors of
the Company and Thermo Electron (incorporated by reference to
Exhibit 10.1 of Thermo Electron's Registration Statement on Form S-
4 (File No. 333-90661))
Exhibit 11 Selected Sections of the Company's Proxy Statement Relating to its
1999 Annual Meeting of Stockholders
</TABLE>
- --------
* Included in materials being distributed by the Company to shareholders of the
Company.
19
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: March 30, 2000
Thermo BioAnalysis Corporation
/s/ Arnold N. Weinberg
By:__________________________________
Name: Arnold N. Weinberg
Title: Sole Member of the
Special Committee of the
Board of Directors
20
<PAGE>
Schedule 1
TUCKER ANTHONY CLEARY GULL
March 28, 2000
Special Committee of the Board of Directors
Thermo BioAnalysis Corporation
504 Airport Road
Santa Fe, NM 87504-2108
Gentlemen:
We understand that BioAnalysis Acquisition Inc., a Delaware corporation and
wholly-owned subsidiary of Thermo Instrument Systems Inc., a Delaware
corporation ("Thermo Instrument"), has offered to purchase (the "Offer") all of
the outstanding shares of common stock, par value $.01 per share (the "Common
Stock"), of Thermo BioAnalysis Corporation, a Delaware corporation (the
"Company"), that Thermo Electron Corporation, a Delaware corporation ("Thermo
Electron") and the majority owner of Thermo Instrument, and its affiliates,
including Thermo Instrument, do not currently own. At the consummation of the
Offer, each share of Common Stock validly tendered, other than shares held by
dissenting shareholders, if any, will be converted into the right to receive
$28.00 per share net in cash (the "Offer Price").
You have requested our opinion (the "Opinion") as investment bankers as to
whether the Offer Price to be received by the holders of Common Stock other
than Thermo Electron and its affiliates, including Thermo Instrument and the
officers and directors of the Company (the "Public Shareholders"), is fair from
a financial point of view to the Public Shareholders.
Tucker Anthony Cleary Gull ("Tucker Anthony"), as part of its investment
banking business, is regularly engaged in the valuation of businesses and their
securities in connection with mergers and acquisitions, negotiated
underwritings, private placements and valuations for corporate and other
purposes. In the course of our ordinary business, we may trade the securities
of either Thermo Instrument or the Company for our own account or for the
accounts of our customers and, accordingly, may at any time hold a long or
short position in such securities. In connection with the procedures outlined
herein and in the preparation of this Opinion, Tucker Anthony was not
authorized by the Company to solicit, nor have we solicited, third party
indications of interest for the Company other than the Offer. Tucker Anthony
will receive fees for the rendering of this Opinion and any subsequent opinions
in connection with the Offer.
In arriving at our Opinion, we have among other things:
(i) Reviewed certain historical financial and other information concerning
the Company for the five fiscal years ended December 31, 1999;
(ii) Reviewed the Offer to Purchase by BioAnalysis Acquisition Inc., dated
March 17, 2000;
(iii) Held discussions with the senior management of the Company with
respect to the Company's past and current financial performance,
financial condition and future prospects;
(iv) Reviewed certain internal financial data and other information of the
Company, including financial projections prepared by management;
(v) Reviewed historical trading activity and ownership data of the Common
Stock and considered the prospects for dividends and price movement;
ONE BEACON STREET BOSTON MA 02108 617-725-2200 BOSTON [ ] CHICAGO [ ] DENVER [
] MILWAUKEE [ ] NEW YORK [ ] PORLAND [ ] WASHINGTON D.C.
21
<PAGE>
(vi) Analyzed certain publicly available information of other companies
that we deemed comparable or otherwise relevant to our inquiry, and
compared the Company, from a financial point of view, with certain of
these companies;
(vii) Compared the Offer Price to be received by the Public Shareholders
pursuant to the Offer with the consideration received by stockholders
in other remaining minority interest, minority interest, and other
merger and acquisition transactions of companies that we deemed
comparable or otherwise relevant to our inquiry; and
(viii) Conducted such other financial studies, analyses and investigations
and reviewed such other information as we deemed appropriate to
enable us to render our opinion.
In our review, we have also taken into account an assessment of general
economic, market and financial conditions and certain industry trends and
related matters. In arriving at the Opinion, we have assumed and relied upon
the accuracy and completeness of all the financial information publicly
available or provided to us by the Company and have not attempted to verify
any of such information. We have assumed that (i) the financial projections of
the Company provided to us have been prepared on a basis reflecting the best
currently available estimates and judgments of the Company's management as to
the future financial performance and results and (ii) that such projections
will be realized in the amounts and time periods currently estimated by
management. We did not make or obtain any independent evaluations or
appraisals of any assets or liabilities of the Company, nor did we verify any
of the Company's books or records. Our Opinion is necessarily based upon
market, economic and other conditions as they exist and can be evaluated as of
the date of this letter.
This Opinion is being furnished for the use and benefit of the Special
Committee of the Board of Directors of the Company and is not a recommendation
to the Public Shareholders. Tucker Anthony has advised the Special Committee
that it does not believe any person other than the Special Committee has the
legal right to rely on the Opinion and, absent any controlling precedent,
would resist any assertion otherwise.
Based upon and subject to the foregoing, it is our Opinion that, as of the
date hereof, the Offer Price to be received by the Public Shareholders
pursuant to the Offer is fair to the Public Shareholders from a financial
point of view.
Very truly yours,
/s/ Tucker Anthony Cleary Gull
Tucker Anthony Cleary Gull
22
<PAGE>
EXHIBIT 5
SPECIAL COMMITTEE OF THERMO BIOANALYSIS BOARD OF DIRECTORS
RECOMMENDS ACCEPTANCE OF THERMO INSTRUMENT TENDER OFFER
Thermo BioAnalysis Corporation (ASE:TBA) today announced that the Special
Committee of its Board of Directors, which consists of the sole director having
no affiliation with Thermo Instrument Systems Inc. or its parent, Thermo
Electron Corporation, is recommending that shareholders accept the $28.00 per
share cash tender offer (the "Offer") made by Thermo Instrument on March 17,
2000. The Special Committee has determined that the $28.00 per share price is a
fair price to be paid to the shareholders other than Thermo Electron and its
affiliates (including Thermo Instrument) and is recommending that shareholders
accept the Offer and tender their shares pursuant to the Offer. The Special
Committee strongly urges each shareholder to read the factors considered by the
Special Committee in the company's Schedule 14D-9, which has been filed today
with the Securities and Exchange Commission and mailed to shareholders.
<PAGE>
EXHIBIT 7
THERMO BIOANALYSIS CORPORATION
504 Airport Road
Sante Fe, New Mexico 87504-2108
March 30, 2000
Dear Shareholder:
On March 17, 2000, BioAnalysis Acquisition Inc., a wholly-owned subsidiary
of Thermo Instrument Systems Inc. ("Thermo Instrument"), commenced a tender
offer to acquire for $28.00 per share in cash all of the issued and
outstanding shares of common stock of Thermo BioAnalysis Corporation (the
"Company") not currently owned by Thermo Electron Corporation ("Thermo
Electron") and its affiliates, including Thermo Instrument (the "Offer").
Because all of the current members of the Company's Board of Directors,
except the undersigned, are affiliated with Thermo Electron and/or Thermo
Instrument, the Company's Board of Directors appointed the undersigned as a
one-member Special Committee to respond to the Offer. Based on the factors
considered by the Special Committee and set forth in the attached
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-
9"), which was filed today with the Securities and Exchange Commission, the
Special Committee is recommending that shareholders accept the Offer and
tender their shares of common stock of the Company pursuant to the Offer.
The Special Committee strongly urges you to make your decision as to
whether or not to tender your shares based on all of the information available
to you, including the factors considered by the Special Committee and
described in the Schedule 14D-9, and, to that end, strongly urges that you
read the enclosed materials carefully and in their entirety.
Very truly yours,
Arnold N. Weinberg
Sole Member of the Special Committee
of the Board
of Directors of Thermo BioAnalysis
Corporation
<PAGE>
EXHIBIT 11
SELECTED SECTIONS OF THERMO BIOANALYSIS CORPORATION'S
PROXY STATEMENT FOR ITS 1999 ANNUAL MEETING OF STOCKHOLDERS
Executive Retention Agreements
Thermo Electron has entered into agreements with certain executive officers
and key employees of Thermo Electron and its subsidiaries that provide severance
benefits if there is a change in control of Thermo Electron and their employment
is terminated by Thermo Electron "without cause" or by the individual "for good
reason," as those terms are defined therein, within 18 months thereafter. For
purposes of these agreements, a change in control exists upon (i) the
acquisition by any person of 40% or more of the outstanding common stock or
voting securities of Thermo Electron; (ii) the failure of the Thermo Electron
board of directors to include a majority of directors who are "continuing
directors", which term is defined to include directors who were members of
Thermo Electron's board on the date of the agreement or who subsequent to the
date of the agreement were nominated or elected by a majority of directors who
were "continuing directors" at the time of such nomination or election; (iii)
the consummation of a merger, consolidation, reorganization, recapitalization or
statutory share exchange involving Thermo Electron or the sale or other
disposition of all or substantially all of the assets of Thermo Electron unless
immediately after such transaction (a) all holders of Thermo Electron common
stock immediately prior to such transaction own more than 60% of the outstanding
voting securities of the resulting or acquiring corporation in substantially the
same proportions as their ownership immediately prior to such transaction and
(b) no person after the transaction owns 40% or more of the outstanding voting
securities of the resulting or acquiring corporation; or (iv) approval by
stockholders of a complete liquidation or dissolution of Thermo Electron.
In 1998, Thermo Electron authorized an executive retention agreement with
Mr. Maddix. This agreement provides that in the event Mr. Maddix's employment is
terminated under the circumstances described above, he would be entitled to a
lump sum payment equal to the sum of (a) one times his highest annual base
salary in any 12 month period during the prior five-year period, plus (b) one
times his highest annual bonus in any 12 month period during the prior five-year
period. In addition, Mr. Maddix would be provided benefits for a period of one
year after such termination substantially equivalent to the benefits package he
would have been otherwise entitled to receive if he was not terminated. Further,
all repurchase rights of Thermo Electron and its subsidiaries shall lapse in
their entirety with respect to all options that Mr. Maddix holds in Thermo
Electron and its subsidiaries, including the Corporation, as of the date of the
change in control. Finally, Mr. Maddix would be entitled to a cash payment equal
to $15,000 to be used toward outplacement services.
Assuming that the severance benefits would have been payable as of January
1, 1999, the lump sum salary and bonus payment under such agreement to Mr.
Maddix would have been approximately $260,000. In the event that payments under
these agreements are deemed to be so called "excess parachute payments" under
the applicable provisions of the Internal Revenue Code of 1986, as amended (the
"Internal Revenue Code"), Mr. Maddix would be entitled to receive a gross- up
payment equal to the amount of any excise tax payable by him with respect to
such payment plus the amount of all other additional taxes imposed on him
attributable to the receipt of such gross-up payment.
