POREX CORP, S-1, 1997-11-14

POREX CORP
S-1, 1997-11-14

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<PAGE>

As filed with the Securities and Exchange Commission on November 14, 1997

REGISTRATION NO. 333-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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POREX CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 3089 22-3548110
(State or other (Primary standard industrial (I.R.S. employer
jurisdiction of classification code number) identification number)
incorporation or
organization)
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POREX CORPORATION
500 BOHANNON ROAD
FAIRBURN, GEORGIA 30213-2828
(770) 964-2503
(Address including zip code, and telephone number, including
area code, of registrant's principal executive offices)
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CHARLES A. MELE, ESQ.
SYNETIC, INC.
VICE PRESIDENT--GENERAL COUNSEL
669 RIVER DRIVE, RIVER DRIVE CENTER 2
ELMWOOD PARK, NEW JERSEY 07407
(201) 703-3400
(Name, address, including zip code, and telephone number,
including area code, of agent for service for the registrant)
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Copies to:
CREIGHTON O'M. CONDON, ESQ. ALAN L. JAKIMO, ESQ.
DAVID J. BEVERIDGE, ESQ. BROWN & WOOD LLP
SHEARMAN & STERLING ONE WORLD TRADE CENTER
599 LEXINGTON AVENUE NEW YORK, NEW YORK 10048
NEW YORK, NEW YORK 10022 (212) 839-5300
(212) 848-4000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [_]
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
NUMBER OF PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SHARES TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE(1)(2) REGISTRATION FEE
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock $.01 per share.... 2,875,000 $16.50 $47,437,500 $14,375
</TABLE>
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- -------------------------------------------------------------------------------
(1) Includes 375,000 shares to cover over-allotments, if any, pursuant to an
over-allotment option granted to the Underwriters.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(a) under the Securities Act of 1933, as amended.
-------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>

EXPLANATORY NOTE

This Registration Statement contains two forms of prospectus: one to be used
in connection with an underwritten public offering in the United States and
Canada of 2,000,000 shares (the "U.S. Prospectus"), and one to be used in a
concurrent underwritten public offering outside the United States and Canada
of 500,000 shares (the "International Prospectus"). The two prospectuses are
identical except for the front and back cover pages and the section entitled
"Underwriting." The form of U.S. Prospectus is included herein and is followed
by the alternate pages to be used in the International Prospectus. Each of the
alternate pages for the International Prospectus included herein is labeled
"International Prospectus--Alternate Page." Final forms of each Prospectus
will be filed with the Securities and Exchange Commission under Rule 424(b)
under the Securities Act of 1933.
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED NOVEMBER 14, 1997

PROSPECTUS

2,500,000 SHARES

POREX CORPORATION

COMMON STOCK

----------

All of the 2,500,000 shares of Common Stock, par value $.01 per share (the
"Common Stock"), offered hereby are being offered by Porex Corporation ("Porex"
or the "Company"). Of the 2,500,000 shares of Common Stock offered hereby,
2,000,000 shares are being offered in the United States and Canada (the "U.S.
Offering") and 500,000 shares are being offered outside the United States and
Canada (the "International Offering" and, together with the U.S. Offering, the
"Offerings"). The public offering price per share and the underwriting discount
per share will be identical for both Offerings. See "Underwriting." It is
expected that following the completion of the Offerings, Synetic, Inc.
("Synetic"), currently the sole stockholder of the Company, will own
approximately 86% of the outstanding Common Stock. See "Risk Factors--
Substantial Control by Synetic."

Prior to the Offerings, there has been no public market for the Common Stock.
It is currently estimated that the initial public offering price will be
between $14.50 and $16.50 per share. For a discussion of the factors that will
be considered in determining the initial public offering price of the Common
Stock, see "Underwriting."

The Company intends to apply for quotation of the Common Stock on the Nasdaq
National Market under the symbol "PORX."

SEE "RISK FACTORS" BEGINNING ON PAGE 7 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.

----------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

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- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT(1) COMPANY(2)
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<S> <C> <C> <C>
Per Share.................................... $ $ $
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Total (3).................................... $ $ $
</TABLE>
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(1) The Company has agreed to indemnify the several Underwriters against
certain liabilities, including liabilities under the Securities Act of
1933, as amended. See "Underwriting."
(2) Before deducting expenses payable by the Company estimated at $ .
(3) The Company has granted to the U.S. Underwriters and the International
Managers options, exercisable within 30 days of the date hereof, to
purchase up to an additional 300,000 and 75,000 shares of Common Stock,
respectively, solely to cover over-allotments, if any. If all such
additional shares are purchased, the total Price to Public, Underwriting
Discount and Proceeds to Company will be $ , $ and $ , respectively.
See "Underwriting."
----------

The shares of Common Stock are offered by the several Underwriters, subject
to prior sale, when, as and if issued to and accepted by them, subject to
approval of certain legal matters by counsel for the Underwriters and certain
other conditions. The Underwriters reserve the right to withdraw, cancel or
modify such offer and to reject orders in whole or in part. It is expected that
delivery of the shares of Common Stock will be made in New York, New York on or
about , 1997.
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MERRILL LYNCH & CO. PRUDENTIAL SECURITIES INCORPORATED

----------

The date of this Prospectus is , 1997.
<PAGE>

[ARTWORK]

MEDPOR(R), Squeeze-Mark(R) and TLS(R) are registered trademarks of the
Company.

----------------

CERTAIN PERSONS PARTICIPATING IN THE OFFERINGS MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK.
SPECIFICALLY, THE UNDERWRITERS MAY OVERALLOT IN CONNECTION WITH THE STOCK
OFFERINGS, MAY BID FOR AND PURCHASE COMMON STOCK IN THE OPEN MARKET AND MAY
IMPOSE PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
"UNDERWRITING."

2
<PAGE>

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read in
conjunction with, the more detailed information and financial statements,
including the notes thereto, appearing elsewhere in this Prospectus. References
in this Prospectus to "Porex" or the "Company" are to Porex Corporation and,
unless the context indicates otherwise, its consolidated subsidiaries and their
respective predecessors. Unless otherwise indicated, references herein to
fiscal years and quarters are to the Company's fiscal year, which ends on June
30 of each year, and the related fiscal quarters. For example, "Fiscal 1997"
refers to the Company's fiscal year ended June 30, 1997. Unless otherwise
indicated, all information in this Prospectus assumes that the Underwriters'
over-allotment option is not exercised. For a discussion of certain factors
that should be considered by prospective investors, see "Risk Factors."

THE COMPANY

Porex is a leading developer, manufacturer and distributor of porous plastic
products and has a 35-year history of innovation and market leadership in the
field of porous plastics. The Company's porous and solid plastic components and
products are used in a wide range of healthcare, consumer and industrial
applications, primarily to filter, wick, diffuse, drain, vent or control the
flow of fluids or gases. For the healthcare industry, Porex designs and
manufactures various components that are incorporated in the products of other
healthcare manufacturers. In addition, the Company produces its own line of
pipette tips, blood serum filters, surgical implants and plastic pharmaceutical
vials. In the consumer products market, Porex designs and manufactures porous
plastic components for use by other manufacturers in a variety of home and
office products and appliances, such as writing pen tips, or "nibs", used in
marking and highlighting pens, home water filters and deodorant and fragrance
applicators. Porex also manufactures a wide range of custom porous plastic
components for industrial applications, including automobile battery vents,
wastewater treatment filters and silencers to reduce sound levels of compressed
air. The Company has a diverse customer base of over 600 customers, including
numerous Fortune 500 companies. In Fiscal 1997, net sales and net income of the
Company were $52.9 million and $8.1 million, respectively. Healthcare, consumer
and industrial applications comprised approximately 51%, 28% and 21%,
respectively, of total net sales.

Porex has established a leading reputation in the porous plastics industry
for developing innovative manufacturing technology and providing solutions to
complex customer requirements. Porex has also developed significant expertise
in combining porous plastic components with injection molded solid plastic
products, which has broadened its range of product offerings. Porex believes
its competitive strengths include technological leadership in the design and
manufacture of porous plastic products; efficient manufacturing operations
based on proprietary, technologically advanced equipment; and an ability to
collaborate with customers to solve complex design and performance
requirements. In addition, Porex has a technically skilled sales and marketing
force and experienced management.

Porex's objective is to increase sales and net income by leveraging its
competitive strengths and broadening its product offerings. To achieve this
objective, the Company intends to (i) continue internal development of new
products and technologies, (ii) acquire businesses with products and
technologies that complement the Company's current product offerings and (iii)
pursue growth opportunities in international markets. Over the last three
fiscal years, the Company's net sales and net income have grown at a compounded
annual rate of 16.9% and 56.6%, respectively.

The Company is a newly formed holding company incorporated in November 1997.
In connection with its formation, the Company issued 15,000,000 shares of
Common Stock to Synetic in exchange for all of the outstanding capital stock of
Porex Technologies Corp. ("PTC"). As a result, the Company owns all the
outstanding capital stock of PTC, through which the Company conducts its
business operations. The Company's principal offices are located at 500
Bohannon Road, Fairburn, Georgia 30213 and its telephone number is (770) 964-
2503.

3
<PAGE>

Prior to the Offerings, the Company has been a wholly owned subsidiary of
Synetic, a publicly traded corporation engaged in the healthcare communications
business. Upon completion of the Offerings, Synetic will own approximately 86%
of the outstanding Common Stock (84% assuming the Underwriters' over-allotment
options are exercised in full). For a discussion of various intercompany
arrangements and agreements with Synetic, see "Risk Factors--Substantial
Control by Synetic" and "Transactions and Relationship with Principal
Stockholder."

4
<PAGE>

THE OFFERINGS

Common Stock offered by the Company(1):
U.S. Offering.................. 2,000,000 shares

International Offering.........
500,000 shares
Total.................... 2,500,000 shares

Common Stock to be outstanding
after the Offerings............... 17,500,000 shares(2)

Use of proceeds.................... The net proceeds received by the Company
from the Offerings will be used for
general corporate purposes, which may
include acquisitions. See "Use of
Proceeds."

Nasdaq National Market symbol...... Application will be made for quotation of
the Common Stock on the Nasdaq National
Market under the symbol "PORX."

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(1) Up to an aggregate of 375,000 additional shares may be sold by the Company
pursuant to the Underwriters' over-allotment options. See "Underwriting."

(2) Does not include shares of Common Stock reserved for future issuance
under the Company's stock option plans. See "Management--Compensation
Pursuant to Plans and Arrangements of the Company--Class A Option Plan."

5
<PAGE>

SUMMARY FINANCIAL INFORMATION

The following summary consolidated financial information data should be read
in conjunction with "Management's Discussion and Analysis of Financial
Conditions and Results of Operations," the Company's Consolidated Financial
Statements and notes thereto and other financial information included elsewhere
in this Prospectus.

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED JUNE 30, SEPTEMBER 30,
--------------------------------------- ----------------------
1993 1994 1995 1996 1997(1) 1996 1997(1)
------- ------- ------- ------- ------- ------- --------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales............. $30,130 $33,093 $39,180 $45,129 $52,885 $11,185 $14,833
Operating income...... 4,321 3,040 6,241 9,309 12,153 2,297 3,328
Net income............ 2,721 1,952 3,775 6,051 8,112 1,617 2,068
Net income per
share(2)............. .18 .13 .25 .40 .54 .11 .14
<CAPTION>
YEAR ENDED JUNE 30, SEPTEMBER 30, 1997
--------------------------------------- ----------------------
1993 1994 1995 1996 1997(1) ACTUAL AS ADJUSTED(3)
------- ------- ------- ------- ------- ------- --------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital....... $10,090 $10,915 $12,595 $18,393 $11,947 $13,580
Total assets.......... 30,127 32,372 37,526 46,486 57,584 58,716
Long-term debt, less
current portion...... 558 216 -- -- -- --
Stockholder's equity.. 25,225 27,485 31,540 37,366 45,082 46,903
</TABLE>
- --------
(1) The financial information for Fiscal 1997 and the first quarter of Fiscal
1998 reflects the Company's acquisition in February 1997 of Interflo
Technologies, Inc. ("Interflo"), a privately held corporation that
manufactures porous plastic components and products used in various
applications. See "Pro Forma Financial Information" and Note 2 to the
Company's Consolidated Financial Statements.
(2) Based on 15,000,000 shares of Common Stock outstanding.
(3) Adjusted to give effect to the sale of 2,500,000 shares of Common Stock
offered hereby, after deducting underwriting discount and estimated offering
expenses payable by the Company, at an assumed initial offering price of
$ per share and the application of the net proceeds therefrom as set
forth in "Use of Proceeds."

6
<PAGE>

RISK FACTORS

In addition to the other information in this Prospectus, the following
factors should be considered carefully by prospective investors in evaluating
the Company and its business before purchasing shares of Common Stock offered
hereby. Statements contained in this Prospectus regarding the Company's
expectations with respect to its future operations and other information,
which can be identified by the use of forward-looking terminology, such as
"may," "will," "expect," "anticipate," "estimate," "seek" or "continue" or the
negative thereof or other variations thereon or comparable terminology, are
"forward-looking statements" (as such term is defined in the Private
Securities Litigation Reform Act of 1995). Because such statements include
risks and uncertainties, actual results may differ materially from those
expressed or implied by such forward-looking statements. Factors that could
cause actual results to differ materially from those expressed or implied by
such forward-looking statements include, but are not limited to, the factors
set forth in "Risk Factors," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Business."

SUBSTANTIAL CONTROL BY SYNETIC

Immediately prior to the Offerings, Synetic was the owner of all of the
equity of the Company. Upon completion of the Offerings, Synetic will own
approximately 86% of the outstanding Common Stock and will therefore retain
effective control of the Company and will be able to control the vote on
matters submitted to the Company's stockholders and will also be able to elect
the Board of Directors of the Company. In addition, certain directors or
officers of Synetic are also directors or officers of the Company and may have
conflicts of interest with respect to certain transactions that may affect the
Company, such as transactions involving business dealings between the Company
and Synetic, acquisition opportunities, the issuance of additional shares of
Common Stock and other matters involving conflicts which cannot now be
foreseen. The Company's Certificate of Incorporation provides for the
allocation of certain corporate opportunities between Synetic and the Company.
Officers and directors of Porex also beneficially own shares and have been
granted options to purchase shares of Synetic. See "Description of Capital
Stock--Certain Provisions of the Certificate of Incorporation, By-Laws and
Delaware Law" and "Security Ownership of Management."

The level of ownership of the outstanding Common Stock by Synetic may have
the effect of discouraging or making more difficult, absent the support of
Synetic, a proxy contest, a merger involving the Company, a tender offer, an
open-market purchase program or other purchases of Common Stock that could
give stockholders of the Company the opportunity to realize a premium over the
then-prevailing market price of their shares of Common Stock. See
"Transactions and Relationship with Principal Stockholder."

IMPLEMENTATION OF GROWTH STRATEGY; INTEGRATION OF ACQUISITIONS

The Company has achieved significant growth in net sales and net income
during the past several years and has implemented a strategy to continue this
growth. No assurance can be given that this growth strategy will succeed or
that the Company will be able to maintain its recent rate of growth. The
success of the Company's growth strategy will depend to a substantial degree
on its ability to internally develop new products and technologies, acquire
businesses with complementary products and technologies and pursue growth
opportunities in international markets. Due to the uncertainties inherent in
the development of new products and technologies, there can be no assurance
that the Company will be able to develop new products and technologies or that
such products and technologies will be successful. In addition, there can be
no assurance that the Company will be able to identify and consummate suitable
acquisitions, to obtain the necessary financing on suitable terms for any
future acquisitions, or to effectively and profitably integrate into the
Company any operations that are acquired. Failure to integrate newly acquired
businesses and products may have a material adverse effect on the Company's
operating results and on the market price of the Company's Common Stock. The
Company's ability to manage growth will require significant management
attention and will require it to continue to implement and improve its
operational, financial and management information systems and to motivate and
effectively manage an increasing number of employees. Failure to manage such
growth effectively could materially adversely affect the Company's business,
financial condition or results of operations. In addition, international
acquisitions may create additional risks, including those relating to
political, economic and regulatory matters. See "Business--Growth Strategy."

7
<PAGE>

POTENTIAL PRODUCT LIABILITY RISK AND ADEQUACY OF INSURANCE COVERAGE

The products sold by the Company expose it to potential risk for product
liability claims or recalls. Certain of the Company's products are designed to
be implanted in the human body for long periods of time. Design defects and
manufacturing defects with respect to such products sold by the Company could
result in product liability claims and/or a recall of one or more of the
Company's products. In addition, in recent years, there has been an increased
public interest in product liability claims for implanted medical devices. The
claims may be brought by individuals seeking relief for themselves or,
increasingly, by groups seeking to represent a class. The Company believes
that it carries adequate insurance coverage against product liability claims
and other risks. There can be no assurance, however, that claims in excess of
Porex's insurance coverage will not arise in connection with the development,
manufacture or sale of its products. In addition, Porex's insurance policies
must be renewed annually. Although Porex has in the past been able to obtain
adequate insurance coverage at an acceptable cost and believes that it is
adequately indemnified for products manufactured by others and distributed by
it, there can be no assurance that in the future it will be able to obtain
such insurance at an acceptable cost, or at all, or be adequately protected by
such indemnification. A successful claim or claims brought against the Company
in excess of available insurance coverage and not covered by adequate
indemnities could have a material adverse effect on the business, financial
condition or results of operations of the Company. Moreover, product liability
claims or product recalls in the future could, regardless of their outcome,
have a material adverse effect on the Company's reputation and on its ability
to obtain and retain customers for its products. See "--Certain Litigation"
and "Business--Potential Liability Risk and Availability of Insurance."

CERTAIN LITIGATION

From Fiscal 1988 through Fiscal 1990, Porex distributed silicone mammary
implants ("implants") in the United States pursuant to a distribution
arrangement (the "Distribution Agreement") with a Japanese manufacturer (the
"Manufacturer"). Because of costs associated with increased government
regulation and examination, Porex's supplier determined to withdraw its
implants from the United States market. On July 9, 1991, the FDA mandated a
recall of all implants manufactured by companies that elected not to comply
with certain FDA regulations regarding data collection. Accordingly, Porex
notified all of its customers not to use any implants sold by Porex and to
return such implants to Porex for a full refund. Porex believes that after
accounting for implants returned to it, the aggregate number of recipients of
implants distributed by Porex under the Distribution Agreement in the United
States totaled approximately 2,500.

Since March 1991, Porex has been named as one of many co-defendants in a
number of actions brought by recipients of implants. Certain of the actions
against Porex have been dismissed where it was determined that the implant in
question was not distributed by Porex. In addition, as of November 5, 1997, 61
claims have been settled on a favorable basis by the Manufacturer, or by the
insurance carriers of Porex, without material cost to Porex. As of November 5,
1997, 228 actions and 32 out-of-court claims were pending against Porex. One
of the pending federal actions, Donna L. Turner v. Porex Technologies
Corporation, et al., is styled as a class action. Of the 228 actions, 111
involve implants identified as distributed by Porex and 84 cases involve
implants identified as not having been distributed by Porex. In the remaining
33 actions, the distributors of such implants have not been identified. The
number of claims made by individuals during Fiscal 1997 was similar to the
number of claims made during Fiscal 1996, both of which were significantly
lower than the number of claims made during Fiscal 1995.

The typical case or claim alleges that the individual's mammary implants
caused one or more of a wide range of ailments. These implant cases and claims
generally raise difficult and complex factual and legal issues and are subject
to many uncertainties and complexities, including, but not limited to, the
facts and circumstances of each particular case or claim, the jurisdiction in
which each suit is brought, and differences in applicable law. The Company
does not have sufficient information to evaluate each case and claim.

The Company believes that it has a valid claim for indemnification under the
Distribution Agreement with respect to any liabilities that could result from
pending actions or claims by recipients of implants or any similar actions or
claims that may be commenced in the future. However, Porex's right to
indemnification is subject to a disagreement with the Manufacturer. Pending
the resolution of such disagreement, the Manufacturer has been paying a
portion of the costs of the settled claims.

8
<PAGE>

In 1994, Porex was notified that its lead primary and excess insurance
carrier would not renew its then-existing insurance coverage after December
31, 1994 with respect to actions and claims arising out of Porex's
distribution of implants. In response, Porex exercised its right under the
policies with its lead carrier to purchase extended reporting period coverage
with respect to such actions and claims. This extended reporting period
coverage provides insurance, subject to existing policy limits but for an
unlimited time period, with respect to actions and claims made after December
31, 1994 that are based on events that occurred during the policy period. In
addition, Porex has similarly purchased extended reporting period coverage
under its other excess insurance policies, all of which coverage will by its
terms expire by December 31, 1997 and Porex expects to purchase further
extended reporting period coverage from excess insurers to the extent such
coverage is reasonably available. The Company believes that its present
coverage, together with its insurance policies in effect on or before December
31, 1994, should provide adequate coverage against liabilities that could
result from actions or claims arising out of Porex's distribution of implants.
To the extent that certain of such actions and claims seek punitive and
compensatory damages arising out of alleged intentional torts, such damages,
if awarded, may or may not be covered, in whole or in part, by Porex's
insurance policies. In addition, Porex's recovery from its insurance carriers
is subject to policy limits and certain other conditions. Porex has been
expensing the retention amount under its policies as incurred.

Although no assurances can be given, the Company believes that none of the
claims relating to the above-mentioned proceedings will have a material
adverse effect on the financial condition or results of operations of the
Company. See "Business--Litigation."

REGULATORY REQUIREMENTS

Porex manufactures and distributes certain medical/surgical devices,
including plastic and reconstructive surgical implants. The development,
testing, marketing and manufacturing of such devices are regulated under the
Medical Device Amendments of 1976 to the Federal Food, Drug and Cosmetic Act
(the "1976 Amendments") and additional regulations promulgated by the Food and
Drug Administration (the "FDA"). In general, these statutes and regulations
require that manufacturers adhere to certain standards designed to ensure the
safety and effectiveness of medical devices. Compliance with such requirements
and the process of obtaining approvals can be costly, complicated and time-
consuming and there can be no assurance that such approvals will be granted on
a timely basis, or at all.

Under the 1976 Amendments, each medical device manufacturer must be
registered and must comply with intricate regulations. The FDA is authorized
to obtain and inspect devices, their labeling and advertising, and to inspect
the facilities in which they are manufactured. A device is classified as a
Class I, II or III, depending on the degree of regulation deemed appropriate
and necessary. Class I devices are subject only to general controls. Class II
devices, in addition to general controls, are subject to performance
standards. Class III devices, including most devices used or implanted in the
body, require FDA pre-market approval before they may be marketed.

Products which Porex may introduce in the future will be subject to the FDA
classification requirements. The process may involve clinical investigation,
or human study, to generate data to prove safety and effectiveness. There can
be no assurance that new products will be approved, or that they will be
classified in the manner requested by Porex. Classification can be an
expensive and time consuming process that can delay or prevent the
introduction of products.

Medical devices also are subject to postmarket reporting requirements when
the device may have caused or contributed to the death or serious injury, and
when device malfunctions would be likely to cause or contribute to a death or
serious injury. If safety or efficacy problems occur after the product reaches
the market, the FDA may take steps to prevent or limit further marketing of
the product. Additionally, the FDA actively enforces regulations prohibiting
marketing of devices for indications or uses that have not been cleared or
approved by the FDA. See "Business--Regulation."

9
<PAGE>

DEPENDENCE ON PROPRIETARY RIGHTS AND PROPRIETARY KNOW-HOW

The Company depends in part on its proprietary technology and technical
know-how. The Company relies on a combination of trade secret, patent and
other intellectual property laws and confidentiality procedures and non-
disclosure contractual provisions to protect its intellectual property.
However, any such method may not provide adequate protection, and such
information may become known to, or be independently developed by, competitors
and the Company's patent or proprietary rights in such knowledge may be
challenged. Such events could have a material adverse effect on the Company's
business, financial condition or results of operations. See "Business--
Intellectual Property."

CHANGING CUSTOMER REQUIREMENTS

The Company's products are integrated into end products used in various
industries, some of which are characterized by rapidly changing technology and
frequent new product introductions. Accordingly, the Company's success will
depend to a substantial degree on its ability to develop and introduce in a
timely manner products and applications that meet changing customer
requirements. However, there can be no assurance that the Company will be able
to do so. See "--Competition."

COMPETITION

SHARES ELIGIBLE FOR FUTURE SALE

Upon consummation of the Offerings, the Company will have a total of
17,500,000 shares of Common Stock (17,875,000 if the Underwriters over-
allotment options are exercised in full) outstanding and approximately
shares of Common Stock subject to stock options granted under the
Company's Stock Option Plans. See "Management--Compensation Pursuant to Plans
and Arrangements of the Company." Of such shares, 2,500,000 shares of Common
Stock (2,875,000 if the Underwriters over-allotment options are exercised in
full) being sold in the Offerings (together with any shares sold upon exercise
of the Underwriters' over-allotment option) will be immediately eligible for
sale in the public market without restriction, except for shares purchased by
or issued to any "affiliate" of the Company (within the meaning of the
Securities Act of 1933, as amended (the "Securities Act")). All of the
outstanding shares of Common Stock held by Synetic will be "restricted
securities" as such term is defined under Rule 144 under the Securities Act
("Rule 144"). The Company and Synetic have agreed not to sell or otherwise
dispose of any shares of Common Stock without the consent of Merrill Lynch for
a period of 180 days after the date of this Prospectus, subject to certain
exceptions. See "Shares Eligible for Future Sale" and "Underwriting."

Subject to the restrictions described above and applicable law, Synetic will
be free to sell shares of Common Stock it owns upon completion of the
Offerings. Upon consummation of the Offerings, Synetic will own 86% (84% if
the Underwriters over-allotment options are exercised in full) of the
outstanding Common Stock. In connection with the Offerings, the Company and
Synetic have entered into an agreement which provides that Synetic will have
certain rights to have the shares of Common Stock owned by it after the
Offerings registered by the Company under the Securities Act in order to
permit the public sale of such shares. While Synetic in the future may effect
sales of Common Stock that will reduce its ownership interest in the Company,
Synetic has advised the Company that it currently has no plans to reduce its
ownership interest in the Company through sales or other dispositions
following the Offerings. However, Synetic is not subject to any contractual
obligation to retain its controlling interest, except that Synetic has agreed
not to sell or otherwise dispose of any shares of the Company for a period of
180 days after the date of the Prospectus, as noted above. No prediction can
be made

10
<PAGE>

as to the effect, if any, that future sales of Common Stock by Synetic, or the
availability of Common Stock for future sale, will have on the market price of
the Common Stock prevailing from time to time. Sales of substantial amounts of
Common Stock (including shares issuable upon the exercise of stock options),
or the perception that such sales could occur, could materially and adversely
affect prevailing market prices for the Common Stock and the ability of the
Company to raise equity capital in the future. In addition, in the event the
Company makes future acquisitions, the Company may issue equity securities as
consideration for one or more such acquisitions or may be required to raise
funds in addition to those being raised in the Offerings through borrowings or
the issuances of additional debt or equity securities. See "--Implementation
of Growth Strategy; Integration of Acquisitions," "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Capital Resources
and Liquidity," "Business--Growth Strategy," "Transactions and Relationship
with Principal Stockholder--Certain Agreements" and "Shares Eligible for
Future Sale."

ABSENCE OF PUBLIC MARKET FOR SECURITIES

Prior to these Offerings there has been no public market for any securities
of the Company. Although the Company intends to make application to quote the
Common Stock on the Nasdaq National Market, there can be no assurance that any
trading market for the shares will develop, or, if any such market develops,
that it will be sustained. Accordingly, purchasers of the Common Stock may
experience difficulty selling or otherwise disposing of such shares. The
initial public offering price of the Common Stock offered hereby has been
determined through negotiations among the Company and the Underwriters and may
not be indicative of the market price of the Common Stock after the Offerings.
Moreover, the market price of the Common Stock after the Offerings may be
volatile and will be affected by, among other things, the Company's
performance, industry related factors and general market conditions. See
"Underwriting" for information relating to the method for determining the
initial public offering price of the Common Stock.

DILUTION; ABSENCE OF DIVIDENDS

Purchasers of the Common Stock offered hereby will experience immediate and
substantial dilution. See "Dilution." The Company currently anticipates that
it will retain all available funds for use in its business and does not expect
to pay any cash dividends in the foreseeable future. See "Dividend Policy."

11
<PAGE>

USE OF PROCEEDS

The net proceeds to be received by the Company from the issuance and sale of
Common Stock offered hereby assuming an estimated initial public offering
price of $ per share are estimated to be $ ($ if the Underwriters'
over-allotment option is exercised) after deducting underwriting discounts and
commissions and estimated offering expenses payable by the Company. The
Company currently intends to use the funds for general corporate purposes,
which may include acquisitions. As part of its growth strategy, the Company
reviews acquisition opportunities on a regular basis and from time to time
enters into negotiations with respect to potential acquisitions. As of the
date of this Prospectus, the Company has no agreement or understanding with a
prospective acquisition candidate in respect of a specific transaction. There
can be no assurance that the Company will be able to consummate any
acquisitions. See "Risk Factors--Implementation of Growth Strategy;
Integration of Acquisitions" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital
Resources."

Pending use of the net proceeds of the Offerings, the Company intends to
invest such proceeds in U.S. government or investment-grade marketable
securities.

DIVIDEND POLICY

The Company currently intends to retain any earnings to finance the
development and expansion of the Company's business and does not anticipate
paying any cash dividends in the foreseeable future. The declaration and
payment of dividends by the Company are subject to the discretion of the Board
of Directors of the Company. Any future determination to pay dividends will
depend on the Company's results of operations, financial condition, capital
requirements, contractual restrictions and other factors deemed relevant at
the time by the Board of Directors. See "Risk Factors--Dilution; Absence of
Dividends."

12
<PAGE>

DILUTION

At September 30, 1997, the Company had a net tangible book value of $34.7
million or $2.31 per share of Common Stock. Net tangible book value represents
the difference between the tangible assets of the Company and the total
liabilities of the Company. Net tangible book value per share of Common Stock
represents the total net tangible book value of the Company divided by the
number of shares of Common Stock outstanding.

After giving effect to the sale by the Company of the shares to be sold in
the Offerings and the receipt of the estimated net proceeds thereof, after
deducting underwriting discount and estimated offering expenses payable by the
Company, the net tangible book value of the Company would have been $ per
share at September 30, 1997. This amount represents an immediate increase in
net tangible book value per share of $ to Synetic and an immediate dilution
in net tangible book value per share (the difference between the public
offering price of the shares and the net tangible book value after the
offering) of $ to the persons purchasing such shares at the public offering
price. The following table illustrates such per share dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share............... $
Net tangible book value per share before the Offerings...... $
Increase per share attributable to new investors............
-------
Pro forma net tangible book value per share after the Offer-
ings......................................................... ---------
Dilution per share to new investors(1)........................ $
=========
</TABLE>
- --------
(1) Dilution is determined by subtracting the pro forma net tangible book
value per share of Common Stock after the Offerings from the public
offering price per share.

13
<PAGE>

CAPITALIZATION

The following table sets forth the unaudited capitalization of the Company
at September 30, 1997 and as adjusted to give effect to the sale in the
Offerings of 2,500,000 shares of Common Stock at the assumed public offering
price of $ per share and the application of the estimated net proceeds of
such sale (after deducting underwriting discount and estimated offering
expenses payable by the Company). See "Use of Proceeds." This table should be
read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations," the Company's Consolidated Financial
Statements and notes thereto and other financial information included
elsewhere in this prospectus.

<TABLE>
<CAPTION>
SEPTEMBER 30,
1997
-----------------
AS
ACTUAL ADJUSTED
------- --------
(IN THOUSANDS)
<S> <C> <C>
Cash and cash equivalents.................................... $ 7,352 $
======= ====
Long-term debt............................................... $ -- $--
------- ----
Stockholder's equity:
Preferred stock, $.01 par value, 10,000,000 shares autho-
rized;
no shares issued and outstanding.......................... -- --
Common stock, $.01 par value, 50,000,000 shares authorized;
15,000,000 shares issued and outstanding; 17,500,000
shares as adjusted(1)(2).................................. 150
Retained earnings.......................................... 47,374
Cumulative foreign currency translation adjustment......... (621)
------- ----
Total stockholder's equity............................... 46,903
------- ----
Total capitalization................................... $46,903 $
======= ====
</TABLE>
- --------
(1) See Note 3 to the Company's Consolidated Financial Statements.
(2) Does not include shares of Common Stock reserved for future issuance
under the Company's stock option plans. See "Management--Compensation
Pursuant to Plans and Arrangements of the Company--Class A Option Plan."

14
<PAGE>

SELECTED FINANCIAL DATA

The following table sets forth selected consolidated financial data as of
and for each of the five years in the period ended June 30, 1997 and as of
September 30, 1997 and for the three-month periods ended September 30, 1996
and 1997. Data as of June 30, 1996 and 1997 and for each of the three years in
the period ended June 30, 1997 have been derived from the Consolidated
Financial Statements of the Company included elsewhere in this Prospectus
which have been audited by Arthur Andersen LLP, independent public accountants
for the Company. Such information should be read in conjunction with the
accompanying notes and the Company's Consolidated Financial Statements and the
related notes thereto included elsewhere in this Prospectus. Information as of
June 30, 1993, 1994 and 1995 and for each of the years ended June 30, 1993 and
1994 and as of and for the three-month periods ended September 30, 1996 and
1997 is unaudited but, in the opinion of management, contains all normal and
recurring adjustments necessary to present fairly the financial position and
results of operations of the Company for those periods. Results for the
interim periods are not necessarily indicative of results for any full year.

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED JUNE 30, SEPTEMBER 30,
--------------------------------------- ---------------------
1993 1994 1995 1996 1997(1) 1996 1997(1)
------- ------- ------- ------- ------- ------- -------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales............... $30,130 $33,093 $39,180 $45,129 $52,885 $11,185 $14,833
Costs and expenses:
Cost of sales......... 18,124 21,493 23,006 25,106 29,035 6,126 8,316
Selling, general and
administrative....... 7,685 8,560 9,933 10,714 11,697 2,762 3,189
------- ------- ------- ------- ------- ------- -------
Operating income........ 4,321 3,040 6,241 9,309 12,153 2,297 3,328
Other income, net ...... 155 48 244 586 904 305 103
------- ------- ------- ------- ------- ------- -------
Income before provision
for income taxes....... 4,476 3,088 6,485 9,895 13,057 2,602 3,431
Provision for income
taxes.................. 1,755 1,136 2,710 3,844 4,945 985 1,363
------- ------- ------- ------- ------- ------- -------
Net income.............. $ 2,721 $ 1,952 $ 3,775 $ 6,051 $ 8,112 $ 1,617 $ 2,068
======= ======= ======= ======= ======= ======= =======
Net income per share(2). $ .18 $ .13 $ .25 $ .40 $ .54 $ .11 $ .14
======= ======= ======= ======= ======= ======= =======
<CAPTION>
JUNE 30, SEPTEMBER 30,
--------------------------------------- -------------
1993 1994 1995 1996 1997(1) 1997(1)
------- ------- ------- ------- ------- -------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital......... $10,090 $10,915 $12,595 $18,393 $11,947 $13,580
Total assets............ 30,127 32,372 37,526 46,486 57,584 58,716
Long-term debt, less
current portion........ 558 216 -- -- -- --
Stockholder's equity.... 25,225 27,485 31,540 37,366 45,082 46,903
</TABLE>
- --------
(1) The financial information for Fiscal 1997 and the first quarter of Fiscal
1998 reflects the Company's acquisition of Interflo in February 1997. See
"Pro Forma Financial Information."
(2) Based on 15,000,000 shares of Common Stock outstanding.

15
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

RESULTS OF OPERATIONS

The following table sets forth for the periods indicated (i) the percentage
which certain items in the financial statements of the Company bear to net
sales and (ii) the percentage change in the dollar amount of such items from
period to period.

<TABLE>
<CAPTION>
PERCENTAGE INCREASE
PERCENTAGE OF NET SALES (DECREASE)
----------------------------------- --------------------------
THREE MONTHS THREE MONTHS
YEAR ENDED JUNE ENDED YEAR ENDED ENDED
30, SEPTEMBER 30, JUNE 30, SEPTEMBER 30,
------------------- -------------- ----------- -------------
1996 1997 1997
VS VS VS
1995 1996 1997 1996 1997 1995 1996 1996
----- ----- ----- ------ ------ ----- ---- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales............... 100.0% 100.0% 100.0% 100.0% 100.0% 15.2% 17.2% 32.6 %
Cost of sales........... 58.7 55.6 54.9 54.8 56.1 9.1 15.6 35.7
Selling, general and
administrative......... 25.4 23.8 22.1 24.7 21.5 7.9 9.2 15.5
----- ----- ----- ------ ------ ----- ---- -----
Total costs and
expenses............... 84.1 79.4 77.0 79.5 77.6 8.7 13.7 29.4
----- ----- ----- ------ ------ ----- ---- -----
Operating income........ 15.9 20.6 23.0 20.5 22.4 49.2 30.6 44.9
Other income, net....... 0.6 1.3 1.7 2.7 0.7 140.2 54.3 (66.2)
----- ----- ----- ------ ------ ----- ---- -----
Income before provision
for income taxes....... 16.5 21.9 24.7 23.2 23.1 52.6 32.0 31.9
Provision for income
taxes.................. 6.9 8.5 9.4 8.8 9.2 41.8 28.6 38.4
----- ----- ----- ------ ------ ----- ---- -----
Net income.............. 9.6% 13.4% 15.3% 14.4% 13.9% 60.3% 34.2% 27.9 %
===== ===== ===== ====== ====== ===== ==== =====
</TABLE>

THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1997

Net sales for the first quarter of Fiscal 1998 increased 32.6% to
$14,833,000 from $11,185,000 in the comparable prior year period. The
acquisition of Interflo in February 1997 accounted for $1,611,000 of the
increase in sales. The balance of the increase in net sales was due
principally to (a) significant increased sales of writing instrument nibs, (b)
increased sales to medical original equipment manufacturers ("OEMs") of porous
components used in diagnostic products and (c) increased sales of porous
plastic components to the industrial market, including components used in
electronic devices.

Cost of sales for the first quarter of Fiscal 1998 increased 35.7% to
$8,316,000 from $6,126,000 in the comparable prior year period. This increase
was attributable to the operations of Interflo, the increased sales volume
noted above and to a lesser extent additional depreciation for equipment
associated with process improvements. As a percent of net sales, cost of sales
for the first quarter of Fiscal 1998 increased to 56.1% from 54.8% in the
prior year period due to certain higher costs associated with the operations
of Interflo. The Company expects to improve the productivity of Interflo
through the introduction of the Company's proprietary technology and
manufacturing processes.

Selling, general and administrative expenses for the first quarter of Fiscal
1998 increased 15.5% to $3,189,000 from $2,762,000 in the comparable prior
year period. This increase was due primarily to an increase in expenses
associated with the increase in sales volume noted above and to the operations
of Interflo. As a percent of net sales, selling, general and administrative
expenses for the first quarter of Fiscal 1998 decreased to 21.5% from 24.7% in
the prior year. This improvement reflects the higher growth rate of net sales
as compared to the growth rate of selling, general and administrative
expenses, a portion of which are fixed in nature and do not increase
proportionately with net sales.

16
<PAGE>

Other income, net, which is comprised primarily of interest income, for the
first quarter of Fiscal 1998 decreased 66.2% to $103,000 from $305,000 from
the prior year period due to reduced cash available for investment following
the payment in cash of the purchase price for the acquisition of Interflo.

The effective tax rate for the first quarter of Fiscal 1998 increased to
39.7% from 37.9% in the prior year period due primarily to foreign tax
adjustments lowering the effective rate in the prior year.

FISCAL 1997 COMPARED TO FISCAL 1996

Net sales for Fiscal 1997 increased 17.2% to $52,885,000 from $45,129,000 in
the comparable prior year period. The acquisition of Interflo and other
businesses accounted for $4,102,000 of the sales increase. The balance of the
increase in net sales was due principally to (a) increased sales of writing
instrument nibs primarily as a result of the introduction of a new line of
writing instrument products, (b) increased sales of medical OEM porous
components, such as pipette tip filters, and sales of the Company's own
finished products, such as pipette tips, primarily to the research and
laboratory markets and (c) to a lesser extent, increased sales of surgical
products.

Costs of sales for Fiscal 1997 increased 15.6% to $29,035,000 from
$25,106,000 in the comparable prior year period due to the increased sales
volume noted above and to the operations of Interflo. As a percent of net
sales, cost of sales for Fiscal 1997 decreased to 54.9% from 55.6% in the
comparable prior year period principally due to increased leverage of certain
fixed costs which do not increase proportionately with sales and improvements
in material and labor usage.

Selling, general and administrative expenses for Fiscal 1997 increased 9.2%
to $11,697,000 from $10,714,000 in the comparable prior year period due
primarily to an increase in expenses associated with the increase in sales
volume noted above. As a percent of net sales, selling, general and
administrative expenses for Fiscal 1997 decreased to 22.1% from 23.8% in the
comparable prior year period. This improvement reflects the higher growth rate
of net sales as compared to the growth rate of selling, general and
administrative expenses, a portion of which are fixed in nature and do not
increase proportionately with net sales.

Other income for Fiscal 1997 increased 54.3% to $904,000 from $586,000 in
the comparable prior year period primarily as a result of the investment of
additional cash generated from operations.

The effective tax rate for Fiscal 1997 decreased to 37.9% from 38.8% in the
prior year period primarily as a result of a reduction in state income taxes
resulting from changes in certain state apportionment rules.

FISCAL 1996 COMPARED TO FISCAL 1995

Net sales for Fiscal 1996 increased 15.2% to $45,129,000 from $39,180,000 in
the comparable prior year period. The increase in net sales was due
principally to (a) increased sales of medical OEM porous components primarily
used in diagnostic applications and pipette tip filters for the research and
laboratory markets, (b) increased sales of plastic pharmaceutical vials and
(c) increased sales of writing instrument nibs.

Cost of sales for Fiscal 1996 increased 9.1% to $25,106,000 from $23,006,000
in the comparable year period due to the increased sales volume noted above
and additional depreciation related to capital equipment added to expand
production capabilities and improve efficiencies and product development
costs. As a percent of net sales, cost of sales for Fiscal 1996 decreased to
55.6% from 58.7% in the comparable prior year period principally due to
increased leverage of certain fixed costs which do not increase
proportionately with sales and improvements in material and labor usage.

Selling, general and administrative expenses for Fiscal 1996 increased 7.9%
to $10,714,000 from $9,933,000 in the comparable prior year period due
primarily to an increase in expenses associated with the increase in sales
volume noted above. As a percent of net sales, selling, general and
administrative expenses for Fiscal 1996 decreased to 23.8% from 25.4% in the
prior year. This improvement reflects the higher growth rate of net sales as
compared to the growth rate of selling, general and administrative expenses, a
portion of which are fixed in nature and do not increase proportionately with
net sales.

17
<PAGE>

Other income, which is comprised primarily of interest income for Fiscal
1996 increased 140.2% to $586,000 from $244,000 in the comparable prior year
period primarily as a result of the investment of additional cash generated
from operations.

The effective tax rate for Fiscal 1996 decreased to 38.8% from 41.8% in the
prior year period primarily due to tax credits on certain foreign investments.

CAPITAL RESOURCES AND LIQUIDITY

As of September 30, 1997, the Company had $7,352,000 of cash and cash
equivalents. Cash and cash equivalents decreased $5,576,000 in Fiscal 1997 as
a result of (a) net cash used for investing activities of $17,888,000 offset
partially by (b) net cash provided by operations of $13,324,000. Net cash
provided by operating activities in Fiscal 1997 increased 22.5% from
$10,876,000 in Fiscal 1996, principally as a result of increased net income
and increased depreciation and amortization. Net cash used for investing
activities of $17,888,000 in Fiscal 1997 consisted of $12,813,000 paid for
acquired businesses (principally, Interflo) and capital expenditures of
$5,075,000. As of September 30, 1997, the Company had no long-term
indebtedness.

Prior to the Offerings, the Company has operated as a wholly owned
subsidiary of Synetic. As a result, Synetic employees have performed certain
functions on behalf of the Company relating primarily to financial analysis
and tax and legal advice in connection with the Company's operations and other
technical services. Costs associated with these services historically have not
been material. Following the Offerings, as a result of becoming a separate
public company, the Company anticipates that overhead expenses will increase
as a result of (a) the costs associated with being a public company and (b)
costs relating to the addition of any personnel required to manage and
administer its affairs and to pursue its growth strategy. The Company at this
time cannot estimate the magnitude of the increase in overhead expenses. While
no assurance can be given, the Company believes that any such incremental
costs will not be material.

As part of its growth strategy, the Company reviews acquisition
opportunities on a regular basis and from time to time enters into
negotiations with respect to potential acquisitions. Since the Company's
working capital requirements have generally been met by cash flow from
operations and no material commitments for capital expenditures exist, the
Company intends to use the net proceeds of the Offerings for general corporate
purposes, including potential acquisitions. Financing for such acquisitions
may also come from several other sources, including, without limitation, (a)
proceeds from the incurrence of indebtedness or the issuance of common stock,
preferred stock, convertible debt or other securities and (b) borrowings from
Synetic. As consideration for any acquisitions, in addition to cash, the
Company may issue securities such as notes or common or preferred stock. There
can be no assurance that the Company's acquisition program will be successful.
See "Risk Factors--Implementation of Growth Strategy; Integration of
Acquisitions," "Use of Proceeds" and "Business--Growth Strategy."

18
<PAGE>

PRO FORMA FINANCIAL INFORMATION

The Unaudited Pro Forma Condensed Consolidated Statement of Income for
Fiscal 1997 has been prepared by the Company by combining, with the
adjustments described in the accompanying notes, the results of operations of
the Company and Interflo assuming the acquisition of Interflo had been
consummated at July 1, 1996, the beginning of the period presented. The pro
forma information is not necessarily indicative of results of operations which
would have occurred had the acquisition been consummated as of July 1, 1996,
or of the results of future operations.

The results of operations of the Company are derived from the Company's
audited Consolidated Financial Statements for Fiscal 1997. The results of
operations of Interflo are derived from the books and records of Interflo for
the period from July 1, 1996 to February 10, 1997 (date of acquisition). The
pro forma adjustments are based upon available information and certain
assumptions that the Company believes are reasonable.

The Unaudited Pro Forma Condensed Consolidated Statement of Income should be
read in conjunction with the Consolidated Financial Statements of the Company
and the related notes thereto as well as the Financial Statements of Interflo
and the related notes thereto which are included elsewhere in this Prospectus.

19
<PAGE>

POREX CORPORATION AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
INTERFLO
FOR THE
POREX PERIOD FROM
YEAR ENDED JULY 1, 1996 TO PRO FORMA
JUNE 30, 1997 FEBRUARY 10, 1997 ADJUSTMENTS PRO FORMA
------------- ----------------- ----------- ---------
<S> <C> <C> <C> <C>
Net sales............... $52,885 $3,584 $56,469
------- ------ -------
Costs and expenses:
Cost of sales......... 29,035 2,544 31,579
Selling, general and
administrative....... 11,697 945 $ 182(1) 12,824
------- ------ ----- -------
40,732 3,489 182 44,403
------- ------ ----- -------
Operating income........ 12,153 95 (182) 12,066
Other income (expense),
net.................... 904 (32) (331)(2) 541
------- ------ ----- -------
Income before provision
for income taxes....... 13,057 63 (513) 12,607
Provision for income
taxes.................. 4,945 1 (181)(3) 4,765
------- ------ ----- -------
Net income.............. $ 8,112 $ 62 $(332) $ 7,842
======= ====== ===== =======
Net income per share.... $ .54 $ .52
======= =======
Weighted average shares
outstanding............ 15,000 15,000
======= =======
</TABLE>

- --------
(1) Represents the amortization of goodwill and other intangibles determined
on a straight-line basis over periods of up to 40 years resulting from the
purchase accounting adjustments related to the transaction.

(2) Represents the elimination of the interest income earned on the funds used
to acquire Interflo.

(3) Represents (a) a provision for taxes computed on Interflo's income before
provision for income taxes, which was not included in the Financial
Statements of Interflo since Interflo was a Subchapter S Corporation, and
(b) the tax effects of the pro forma adjustments at an assumed combined
federal and state statutory rate
of 40%.

20
<PAGE>

BUSINESS

GENERAL

Porex is a leading developer, manufacturer and distributor of porous
plastics products and has a 35-year history of innovation and market
leadership in the field of porous plastics. The Company's porous and solid
plastic components and products are used in a wide range of healthcare,
consumer and industrial applications. Porex's principal products are porous
plastic components, which are incorporated by other manufacturers in a wide
array of finished products, and Porex also designs and manufactures its own
line of finished products in the healthcare area. Below is a summary of
Porex's three product areas.

Healthcare. In the healthcare industry, Porex designs and manufactures
various components that are incorporated in the products of other healthcare
manufacturers, as well as its own line of pipette tips, blood serum filters,
surgical implants and plastic pharmaceutical vials. The Company sells its
healthcare components and products directly to customers and through
independent distributors, such as Allegiance Healthcare Corporation and Fisher
Scientific. Healthcare products represented approximately $27.2 million, or
51%, of the Company's net sales for Fiscal 1997.

Consumer. Porex manufactures porous plastic components for use by other
manufacturers in a variety of home and office products and appliances, such as
writing pen tips, or "nibs", used in marking and highlighting pens, home water
filters, and deodorant and fragrance applicators. Sales to this market
represented approximately $14.7 million, or 28%, of Porex's net sales for
Fiscal 1997.

Industrial. Porex manufactures a wide range of custom porous plastic
components for industrial applications, including automobile battery vents,
wastewater treatment filters and silencers to reduce sound levels produced by
compressed air. Industrial products represented approximately $11.0 million,
or 21%, of Porex's net sales for Fiscal 1997.

The Company's porous plastic products are used to filter, wick, diffuse,
drain, vent or control the flow of fluids or gases. Porous plastic has a
permeable structure with omni-directional, interconnecting pores that allow
fluids and gases to flow in all directions. In numerous healthcare, consumer
and industrial applications, porous plastic is a cost-effective and high-
quality alternative to other non-porous plastic media. Depending on the
intended application, the Company manufactures porous plastic products with
pore sizes between approximately 5 and 500 micrometers (one micrometer is
equal to one-millionth of a meter; an object of 40 micrometers in size is
about as small as can be discerned by the naked eye). Porex manufactures
porous plastic materials at its own facilities as fabricated devices, custom-
molded shapes, sheets, tubes or rods, depending on the intended application or
customer specifications.

The table below sets forth the aggregate amount of net sales of the
Company's products for healthcare, consumer and industrial applications. See
Note 5 to the Company's Consolidated Financial Statements for Segment
Information by geographic area.

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
------------------------------------------- THREE MONTHS ENDED
1995 1996 1997 SEPTEMBER 30, 1997
------------- ------------- ------------- -------------------
AMOUNT % AMOUNT % AMOUNT % AMOUNT %
------- ----- ------- ----- ------- ----- -------------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Product Category:
Healthcare............. $19,957 50.9% $23,723 52.6% $27,216 51.5% $ 7,275 49.0%
Consumer............... 9,854 25.2 11,231 24.9 14,709 27.8 4,748 32.0
Industrial............. 9,369 23.9 10,175 22.5 10,960 20.7 2,810 19.0
------- ----- ------- ----- ------- ----- ---------- --------
Total Net Sales....... $39,180 100.0% $45,129 100.0% $52,885 100.0% $ 14,833 100.0%
======= ===== ======= ===== ======= ===== ========== ========
</TABLE>

21
<PAGE>

COMPETITIVE STRENGTHS

Porex's leading reputation for developing innovative manufacturing
technology and providing solutions to complex customer requirements results
from its competitive strengths described below.

Technological Leadership. The Company is a technological leader in the
design and manufacture of porous plastic products. Through 35 years of
experience, the Company has developed extensive proprietary technologies that
the Company believes provide it with significant competitive advantages. One
such advantage is the proprietary design of its molding machines and molds,
which provide an efficient and cost-effective method of manufacturing high-
quality products.

Advanced, Efficient Manufacturing Capabilities. The Company has
technologically advanced manufacturing capabilities, with four manufacturing
facilities located in the United States and additional facilities in the
United Kingdom and Germany. The Company has spent over $12.0 million in the
last three fiscal years on new machines and technology to improve efficiency
and manufacturing processes in order to produce higher quality products. Two
of the Company's U.S. facilities operate under Good Manufacturing Practices
("GMP") protocols and are registered with the FDA and a third U.S. facility
will seek FDA registration. Both of the Company's European facilities are
International Standards Organization ("ISO") certified. The Company believes
that its operation under GMP protocols and ISO certification and its
recognition as a reliable source of supply gives it significant competitive
advantages in the United States and Europe.

Active Collaboration with Customers. Since its inception, Porex has
dedicated itself to identifying and implementing solutions to complex customer
design and performance requirements. The Company's customer-focused teams
consult with customers and take a proactive role in developing new
applications of its proprietary technology. The Company has a diverse customer
base of over 600 customers, including numerous Fortune 500 companies.

Technically Skilled Sales Force. The Company's marketing activities are
conducted by a sales and marketing force of 19 professionals with in-depth
knowledge of plastics technologies and product applications. This knowledge
enables them to identify and develop products that provide solutions to both
industry-wide and customer-specific problems. The Company believes that the
technical skills of its sales force have created close working relationships
with many of its customers, allowing the Company to respond promptly to
customer demands.

Experienced Management. The Company's senior managers responsible for
manufacturing, research and development, and sales and marketing have played
an integral role in the development of the porous plastics industry. Several
of these managers have more than 20 years of industry experience and have been
important to the Company's identification of emerging customer needs, the
development of new applications for its core technologies and the
establishment of its proprietary manufacturing facilities and processes.

GROWTH STRATEGY

The Company's objective is to increase sales and net income by leveraging
the Company's competitive strengths and broadening its product offerings. To
achieve this objective, the Company intends to internally develop and acquire
new products and technologies that complement the Company's current product
offerings. In addition, the Company intends to pursue growth opportunities in
international markets.

Internal Development and Acquisition of Complementary Products and
Technologies. The Company believes there are significant opportunities for new
applications of porous plastic products and components. In addition, the
Company intends to expand its product offerings to include non-plastic porous
products. The Company anticipates pursuing these opportunities by internally
developing and acquiring (i) non-plastic porous

22
<PAGE>

media products and technologies, (ii) new products and technologies in the
life sciences and clinical products areas to take advantage of its established
distribution network and (iii) new products in the surgical products area.

. New Porous Media Products and Technologies. Historically, substantially
all of the Company's porous plastic components and products have been
manufactured from thermoplastic polymers. The Company believes, however,
that certain non-plastic porous media, such as fiber, felts and
membranes, are preferred by certain customers over porous plastics for
certain applications. The Company is seeking to increase sales to
existing customers and gain new customers by expanding its product lines
to include non-plastic porous media through internal development and
acquisitions. The Company believes that there are many attractive
acquisition candidates with different porous media technology that are
privately held companies with fewer resources and customer relationships
than Porex. By acquiring one or more of these companies, the Company
believes that it can penetrate the market for non-plastic porous media
products through leveraging its own size, manufacturing experience and
reputation for providing innovative customer-driven solutions in the
porous plastics area.

. Life Sciences and Clinical Products. Porex believes that it can achieve
sales growth in the life sciences and clinical products areas by
acquiring businesses with new products and technologies and through
internal development of new products. By broadening its mix of life
sciences and clinical products, Porex believes that it can increase sales
to medical and laboratory product distributors by taking advantage of the
industry trend to consolidate the sources of supply. Porex currently
distributes its life sciences and clinical products through distributors
such as Allegiance Healthcare Corporation and Fisher Scientific. Porex is
a "Best Value" supplier partner of Allegiance Healthcare Corporation and
a key "Outstanding Quality" supplier of Fisher Scientific.

. Surgical Products. Porex has developed strong relationships with plastic
and reconstructive surgeons through the development and commercialization
of its MEDPOR surgical implant product line. Through its established
distribution network, Porex also sells surgical drains and markers. Porex
intends to expand its product offerings in the surgical products area by
leveraging its existing relationships with surgeons and its distribution
network, as well as by acquiring businesses with complementary surgical
products.

Expansion in International Markets. The Company believes that markets
outside of the United States offer significant growth opportunities for
numerous porous plastic applications that have been proven effective in the
United States. The Company's strategy is to introduce in these markets porous
plastic alternatives to higher-cost or lower-performing products made from
other media. During Fiscal 1997, the Company acquired two U.K. entities,
Sintair and Warwicker, to complement its existing European manufacturing base
and accelerate its growth in Europe. The Company believes its presence in
Europe enables it to work more closely with its customers and gives its
customers assurance of a reliable regional supplier of porous plastic
components. In addition, the Company has a regional office based in Malaysia
to service Pacific Rim customers. This office coordinates marketing of the
Company's porous plastic components through independent sales representatives
in several Asian countries. The Company intends to aggressively seek further
opportunities to increase its sales to foreign customers and its presence in
foreign markets, including expanding its foreign manufacturing capabilities.

There can be no assurance that the Company can successfully implement its
growth strategy and achieve its objectives. See "Risk Factors--Implementation
of Growth Strategy; Integration of Acquisitions."

HEALTHCARE PRODUCTS

Porex manufactures porous plastic components for incorporation into
healthcare products made by OEMs. The Company's proprietary products for life
sciences and clinical applications include blood serum filters, pipette tips
and blood tube closure devices. The Company also manufactures and assembles a
line of medical/surgical products designed primarily for use in plastic and
reconstructive surgery, oculoplastic surgery and oral maxillofacial surgery.

23
<PAGE>

OEM Medical Product Components. Porex manufactures various porous plastic
components that it sells to OEMs for incorporation into their finished
products. These porous plastic products are used to filter, wick, diffuse,
drain, vent or control the flow of fluid or gases and are also used as
membrane supports in certain products. The components include (i) self-sealing
valves in surgical vacuum canisters to minimize exposure to blood or other
body fluids and to protect downstream vacuum sources, (ii) a venting system
for catheters which allows air to vent from a catheter as it is inserted into
a vein, while at the same time preventing blood spillage and possible
contamination of hospital personnel, (iii) vents for blood storage containers
used in clinical research, and (iv) an array of porous plastic strips and
similar components used for wicking body fluids in diagnostic testing and
monitoring kits for professional and home use.

Life Sciences and Clinical Products. The Company's life science products
include a full line of pipette tips used by research laboratories worldwide.
The Company produces certain pipette tips that contain patented porous plastic
filters that prevent contamination of pipetters and test samples. In the
clinical area, Porex's blood serum filters are used to separate microscopic
particles and fibrous matter (fibrin) from centrifuged blood serum to prevent
clogging of automated laboratory chemical analysis equipment. Porex also
manufactures a line of closure devices that are used with blood serum filters
and tubes. Porex believes that the demand for its current blood serum filters
has been decreasing in the past few years due to the use of automated blood
testing equipment which does not require filtered blood serum for analysis.

The Company has identified disposable plastic products for the life sciences
and clinical market as a niche market with significant growth opportunity. In
this area, the Company has recently introduced two new products: (i) an
enhanced pipette tip product line for hand and automatic pipetters and (ii) a
line of plastic test tubes. A pipetter is a device for transferring a precise
amount of fluid.

Surgical Products. Porex's surgical products are marketed primarily to
surgeons who specialize in plastic and reconstructive surgery, oculoplastic
surgery and oral maxillofacial surgery. The product line includes MEDPOR
Surgical Implant polymeric biomaterial, used for craniofacial reconstruction
and augmentation, and TLS Surgical Drainage Systems for small surgical
incisions. Porex also markets Squeeze-Mark and TLS Surgical Marker pens to
mark the areas of proposed surgical incision. Porex manufactures MEDPOR
Surgical Implant material and distributes, and in some cases assembles, the
other items in its surgical product line.

Vials and Solid Plastic Components. Porex manufactures and sells a full line
of plastic pharmaceutical vials. Porex also produces close-tolerance solid
plastic components, which use most thermoplastic resins, but primarily
polystyrene, polypropylene and thermoplastic rubber for medical and industrial
applications. Some of these products are custom designed and produced to
satisfy individual customer specifications.

CONSUMER PRODUCTS

Porex manufactures a line of porous plastic components used in a variety of
home and office products and appliances.

Writing Instrument Nibs. Porex's consumer products include a variety of
writing pen tips, or "nibs", which Porex supplies to manufacturers of marking
and highlighting pens. The porous nib conducts the ink stored in the pen
barrel to the writing surface by capillary action. Recently, Porex introduced
a line of stamper nibs for incorporation into a new line of childrens'
markers.

Filters. Porex produces a variety of porous plastic filters used in home
water filters and conditioners which remove particles and sediment. The
Company also manufactures filters incorporating activated carbon used to
reduce chlorine levels in drinking water thereby improving its taste and odor.

Health and Beauty Products. Porex also sells its porous plastic components
for use in health and beauty aid products such as deodorant and fragrance
applicators.

24
<PAGE>

INDUSTRIAL PRODUCTS

Porex manufactures a variety of custom porous plastic components for a broad
range of industrial applications. These components are produced as molded
shapes, and in sheets, tubes and rods, and are individually designed to
customer specifications as to size, rigidity, porosity and other needs. In
this market, the Company believes that it is currently the largest producer of
porous plastic vents used in domestic automobile batteries. The Company also
manufactures a porous plastic material used for large filter support media for
wastewater treatment facilities, which permits recycling and reuse of
wastewater. Recently, the Company has developed a new product for one of its
customers that is used in a system to remove odor and color from wastewater.
Porex also produces other industrial components, including (i) filters to
remove particulate matter, oil and water residues from compressed air lines,
(ii) silencers to reduce sound levels produced by compressed air, (iii)
miscellaneous water filters for industrial use, including use in vending
machines, and (iv) products for facilitating the movement of powdered
materials.

MARKETING AND DISTRIBUTION

The Company has a diverse customer base of over 600 customers, including
numerous Fortune 500 companies. Porex distributes its life sciences and
clinical products through Allegiance Healthcare Corporation and Fisher
Scientific and other independent distributors. Porex's surgical products are
sold by its sales personnel, as well as through independent dealers and
agents. In the United States, sales of OEM health care products, industrial
products and consumer products are made directly by Porex's marketing staff.
Internationally, these products are sold by Porex's marketing staff and
through independent distributors and agents, who work with Porex's marketing
staff. Export sales, which are made principally to Europe and Asia, consist
primarily of Porex's OEM medical product, industrial product and consumer
product lines. In Fiscal 1995, Porex's foreign and export product sales were
approximately $10,402,000, or 27% of net sales, as compared to approximately
$12,270,000, or 27% of net sales, in Fiscal 1996 and approximately
$14,730,000, or 28% of net sales, in Fiscal 1997. No customer accounted for
more than 10% of Porex's net sales in Fiscal 1996 or Fiscal 1997. See Note 5
to the Company's Consolidated Financial Statements.

RESEARCH AND DEVELOPMENT

Porex maintains a continuing development program devoted primarily to porous
materials and their applications and proprietary products for the life
sciences and clinical laboratories. Development activities include designing
new and improved products, either proprietary or for customers' specific
requirements, and new manufacturing processes. See "Risk Factors--
Implementation of Growth Strategy; Integration of Acquisitions." Porex's
development expenditures were approximately $1,490,000, $2,014,000 and
$1,791,000 for Fiscal 1995, Fiscal 1996 and Fiscal 1997, respectively.

RAW MATERIALS

The principal raw materials used by Porex in its plastic products business
are a variety of plastic resins which are generally available from a number of
suppliers in adequate quantities to meet Porex's needs. Porex has been able to
obtain adequate supplies of raw materials and believes that sufficient
supplies will be available in the foreseeable future. Porex has no long-term
supply contracts for the purchase of raw materials. Because the primary
resource used in plastic resins is petroleum, the cost and availability of
plastic resins for use in Porex's products varies to a great extent with the
price of petroleum. Porex's inability to acquire sufficient plastic resins at
a reasonable price would affect its ability to maintain its margins in the
short term.

Porex requires high-grade plastic resins with specific properties as raw
materials for certain of its porous plastic products. Accordingly, shipments
of raw materials from suppliers are closely monitored for compliance with
Porex's standards. Although there are various suppliers of high-grade plastic
resins with specific properties and Porex has not experienced any material
difficulty in obtaining adequate supplies of high-grade materials, the

25
<PAGE>

inability to obtain such high-grade plastic resins, or any raw materials,
could have a material adverse effect on Porex. To ensure the availability of
high-grade plastic resins with specific properties, Porex occasionally
purchases larger quantities of such products than it would otherwise currently
require.

For its solid plastic products, Porex utilizes commercial grade
thermoplastic resins, including polyethylene, polypropylene and polystyrene,
that are readily available from a large number of sources. Porex is not
dependent on any single source of supply and, because of the ready
availability of such materials, does not maintain a significant inventory of
such raw materials.

INTELLECTUAL PROPERTY

Porex uses proprietary technology for manufacturing its porous plastic
materials and injection molding technology for manufacturing its solid plastic
products. Porex believes that its non-patented proprietary manufacturing
processes are protected under trade secret, contractual and other intellectual
property rights which do not afford the statutory exclusivity possible for
patented processes. To protect its proprietary technology and maintain high
manufacturing quality and efficiency, the Company designs and manufactures its
porous molding equipment and most of its molds in-house. In certain instances,
however, Porex has sought and intends to continue to seek patents for specific
products and manufacturing processes.

Porex owns a number of patents and trademarks in the United States and other
countries which it deems to be important to its business. The majority of
Porex's patents and patent applications relate to porous plastics and medical
devices. Porex is the exclusive licensee of a patented valve device used in
one model of its blood serum filters, and of a patent on a surgical drain
device. Porex does not consider either license to be material to its business
operations.

REGULATION

The developing, testing, marketing and manufacturing of medical devices such
as plastic and reconstructive surgical implants are regulated under the 1976
Amendments and additional regulations promulgated by the FDA. In general,
these statutes and regulations require that manufacturers adhere to certain
standards designed to ensure the safety and effectiveness of medical devices.
Compliance with such requirements and the process of obtaining approvals can
be costly, complicated and time-consuming and there can be no assurance that
such approvals will be granted on a timely basis.

Under the 1976 Amendments, each medical device manufacturer must be a
registered device manufacturer and must comply with regulations applicable
generally to manufacturing practices and clinical investigations involving
humans. The FDA is authorized to obtain and inspect devices, their labeling
and advertising, and to inspect the facilities in which they are manufactured
in order to ensure that a device is not improperly manufactured or labeled.
Porex is registered with the FDA.

In addition, the sale and marketing of specific medical devices are
regulated by the FDA under the 1976 Amendments, which classify medical devices
based upon the degree of regulation deemed appropriate and necessary. A device
is classified as a Class I, II or III device based on recommendations of
advisory panels appointed by the FDA. Class I devices are subject only to
general controls. Class II devices, in addition to general controls, are
subject to performance standards. Class III devices, including most devices
used or implanted in the body, require FDA pre-market approval before they may
be distributed other than in clinical trials.

Porex's MEDPOR Surgical Implants are regulated as Class II medical devices.
Products which Porex may introduce in the future, if any, may also be
classified as Class I, Class II or Class III medical devices. The procedure
for obtaining classification of a new device as a Class I or Class II device
involves the submission of a petition to the FDA. If the FDA determines that
the device is substantially equivalent to a pre-enactment device or a device
subsequently classified in Class I or Class II, then within the applicable
waiting period it will grant

26
<PAGE>

approval to market the device commercially. If the FDA determines the device
is not substantially equivalent to a pre-enactment device or a device
subsequently classified in Class I or Class II, it is automatically placed
into Class III and will either require reclassification or the submission of
valid scientific evidence to prove the device is safe and effective for human
use. Devices to be implanted will be categorized as Class III unless such
classification is not necessary to ensure their safety and effectiveness. For
new Class III devices, Porex may submit to the FDA an application for an
Investigational Device Exemption ("IDE"). An approved IDE exempts Porex from
certain otherwise applicable FDA regulations and grants approval for a
clinical investigation, or human study, to generate data to prove safety and
effectiveness. In addition, the possibility exists that certain pre-enactment,
or substantially equivalent, devices may be placed into Class III by the FDA.

When a manufacturer believes that sufficient clinical data have been
generated to prove the safety and effectiveness of the device, it may submit a
pre-market approval application ("PMA") to the FDA. The FDA reviews the PMA
and determines whether it is in submittable form and all key elements have
been included. Following acceptance of the PMA, the FDA continues its review
process which includes submission of the PMA to a panel of experts appointed
by the FDA to review the PMA and to recommend appropriate action. The panel
then recommends that the PMA be approved, not approved or approved subject to
conditions. The FDA may act according to the panel's recommendations, or it
may overrule the panel. In approving a PMA, the FDA may require some form of
post-market surveillance or other restrictions.

Vials that are used to contain and transport pharmaceuticals are not
directly regulated by the FDA. The U.S. Pharmacopeia specifies tests and
properties that are necessary to maintain the potency and pharmacological
properties of the medicine the vial is to be used for. The U.S. Consumer
Product Safety Commission specifies the tests that a vial must pass to be
considered child resistant and senior adult user-friendly. Porex's vials have
been designed to meet such standards.

Certain environmental regulations also apply to Porex's business, and the
Company believes that Porex is in substantial compliance with all of such
regulations. However, Porex is subject to random and scheduled checks by
environmental authorities. The Company does not anticipate that any material
capital expenditures will be required to comply with environmental
regulations. See "Risk Factors--Regulatory Requirements."

COMPETITION

The Company competes with other producers of porous plastic materials, as
well as producers of non-plastic porous materials used instead of porous
plastic in certain applications. The Company's ongoing success requires the
continued development of new products and applications of its existing
products. The Company's competitors may succeed in developing porous plastic
and other products that are more effective than the Company's products. In the
porous plastic business, Porex has three competitors in the United States and
two competitors in Europe. The Company's finished products, including surgical
drains and markers, compete with products of a variety of other manufacturers.

The Company attempts to compete principally through product performance,
quality and service, rather than price. The Company believes Porex's principal
competitive strengths are its technological leadership, modern and efficient
manufacturing capabilities, customer relationships and focus, technically
skilled sales force and experienced management. See "--Competitive Strengths."

27
<PAGE>

EMPLOYEES

As of September 30, 1997, the Company had approximately 600 employees.
Approximately 100 production employees at the New York facility of the Company
are covered by a collective bargaining agreement. There are no other
collective bargaining agreements in effect at the Company. The Company
considers its relations with its employees to be good.

FACILITIES

The Company has technologically advanced manufacturing capabilities which it
believes are one of its competitive strengths. See "--Competitive Strengths."
The Company's facilities enable it to produce a broad range of high quality
products. The following table sets forth the Company's facilities.

<TABLE>
<CAPTION>
NUMBER OF TOTAL SQUARE
LOCATION BUILDINGS OWNERSHIP FOOTAGE
----------------------- --------- ------------------------ ------------
<S> <C> <C> <C>
Fairburn, Georgia Two Owned 176,000
Newnan, Georgia One Owned 53,000
College Park, Georgia One Owned 13,000
College Point, New York One Leased, expiring 2011(1) 55,000
Bautzen, Germany Four Owned 55,000
Kings Lynn, England One Leased, expiring 1999 5,000
</TABLE>
- --------
(1) Does not include two additional five-year periods, at the Company's
option.

All of the Company's facilities are used for manufacturing, office space and
warehouse purposes. The Company believes its facilities and equipment are well
maintained, in good operating condition and, in general, suitable for the
Company's purposes and adequate for its present operation.

POTENTIAL LIABILITY RISK AND AVAILABILITY OF INSURANCE

The products sold by Porex expose it to potential risk of product liability
claims, particularly with respect to Porex's life sciences, clinical and
surgical products. The Company believes that it carries adequate insurance
coverage against product liability claims and other risks. There can be no
assurance, however, that claims in excess of Porex's insurance coverage will
not arise. In addition, Porex's insurance policies must be renewed annually.
Although Porex has been able to obtain adequate insurance coverages at an
acceptable cost in the past and seeks indemnification for products
manufactured by others that it distributes, there can be no assurance that in
the future it will be able to obtain such insurance at an acceptable cost, or
at all, or that it will be adequately protected by such indemnification. See
"--Health Care Products," "Risk Factors--Potential Product Liability Risk and
Adequacy of Insurance Coverage" and "Risk Factors--Certain Litigation."

LITIGATION

From Fiscal 1988 through Fiscal 1990, Porex distributed implants in the
United States pursuant to the Distribution Agreement with the Manufacturer.
Because of costs associated with increased government regulation and
examination, Porex's supplier determined to withdraw its implants from the
United States market. On July 9, 1991, the FDA mandated a recall of all
implants manufactured by companies that elected not to comply with certain FDA
regulations regarding data collection. Accordingly, Porex notified all of its
customers not to use any implants sold by Porex and to return such implants to
Porex for a full refund. Porex believes that after accounting for implants
returned to it, the aggregate number of recipients of implants distributed by
Porex under the Distribution Agreement in the United States totaled
approximately 2,500.

28
<PAGE>

implant in question was not distributed by Porex. In addition, as of September
10, 1997, 61 claims have been settled on a favorable basis by the
Manufacturer, or by the insurance carriers of Porex, without material cost to
Porex. As of September 10, 1997, 225 actions and 31 out-of-court claims were
pending against Porex. One of the pending federal actions, Donna L. Turner v.
Porex Technologies Corporation, et al., is styled as a class action. Of the
225 actions, 108 involve implants identified as distributed by Porex and 84
cases involve implants identified as not having been distributed by Porex. In
the remaining 33 actions, the implants have not been identified. The number of
claims made by individuals during Fiscal 1997 was similar to the number of
claims made during Fiscal 1996, both of which were significantly lower than
the number of claims made during Fiscal 1995.

In 1994, Porex was notified that its lead primary and excess insurance
carrier would not renew its then-existing insurance coverage after December
31, 1994 with respect to actions and claims arising out of Porex's
distribution of implants. In response, Porex exercised its right under the
policies with its lead carrier to purchase extended reporting period coverage
with respect to such actions and claims. Such coverage provides insurance,
subject to existing policy limits but for an unlimited time period, with
respect to actions and claims made after December 31, 1994 that are based on
events that occurred during the policy period. In addition, Porex has other
excess insurance where it has similarly purchased extended reporting period
coverage under its other excess insurance policies, all of which coverage will
by its terms expire by December 31, 1997 and Porex expects to purchase further
extended reporting period coverage from excess insurers to the extent such
coverage is reasonably available. The Company believes that its present
coverage, together with its insurance policies in effect on or before December
31, 1994, should provide adequate coverage against liabilities that could
result from actions or claims arising out of Porex's distribution of implants.
To the extent that certain of such actions and claims seek punitive and
compensatory damages arising out of alleged intentional torts, such damages,
if awarded, may or may not be covered, in whole or in part, by Porex's
insurance policies. In addition, Porex's recovery from its insurance carriers
is subject to policy limits and certain other conditions. Porex has been
expensing the retention amount under its policies as incurred.

The Company is subject to various claims and proceedings in the ordinary
course of business. Based on information currently available, the Company
believes that none of such current claims or proceedings, individually or in
the aggregate, will have a material adverse effect on the Company's financial
condition or results of operations.

29
<PAGE>

MANAGEMENT

DIRECTORS AND OFFICERS OF THE COMPANY

The directors and executive officers of the Company are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
---- --- -------------------------
<S> <C> <C>
Martin J. Wygod................ 57 Chairman of the Board
Ray E. Hannah.................. 61 President, Chief Executive Officer and Director
Michael W. Smith............... 44 Senior Vice President--President, Porex Technologies Americas
Joachim Wernersbach............ 42 Senior Vice President--President, Porex Technologies Europe
James P. Wingo................. 51 Senior Vice President--Corporate Marketing and Development
Donald K. Jackson.............. 39 Senior Vice President--Chief Financial Officer
Ronald G. Kalish(1)(2)......... 57 Director
James V. Manning............... 51 Director
James Marden(1)................ 44 Director
Leo M. Walsh, Jr.(1)(2)........ 65 Director
- --------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.

Certain other officers of the Company are:

<CAPTION>
NAME AGE POSITION WITH THE COMPANY
---- --- -------------------------
<S> <C> <C>
L. Franklin Bost............... 52 Vice President--President, Porex Surgical
Ioakim Haldopoules............. 61 Vice President--Technology
Philip C. White................ 51 Vice President--Human Resources
</TABLE>

Martin J. Wygod has been Chairman of the Board of the Company since its
inception in November 1997. Since July 1983, he has been Chairman of the Board
of PTC and since May 1989, he has been Chairman of the Board of Synetic. From
May 1989 to February 1993, Mr. Wygod also served as Synetic's President and
Chief Executive Officer and until May 1994 was an executive officer of
Synetic. Until May 1994, Mr. Wygod was Chairman of the Board of Medco
Containment Services, Inc. ("Medco"), the former parent of Synetic, for more
than five years, and until January 1993 he also served as Chief Executive
Officer of Medco. Mr. Wygod is also engaged in the business of racing,
boarding and breeding thoroughbred horses and is President of River Edge Farm,
Inc., which is engaged in the business of breeding and boarding thoroughbred
horses.

Ray E. Hannah has been President and Chief Executive Officer of the Company
since its inception in November 1997. He has been President of PTC since
September 1987 and its Chief Executive Officer since November 1992. Prior to
becoming Chief Executive Officer of PTC, he was Chief Operating Officer of PTC
from November 1984 to November 1992. He has been a director of Synetic since
May 1989 and a director of PTC since November 1984. Mr. Hannah has served as
an officer or otherwise been employed by PTC for approximately 29 years.

Michael W. Smith has been Senior Vice President--President, Porex
Technologies Americas of the Company since its inception in November 1997. He
has been Vice President--General Manager of PTC for more than five years.

Joachim Wernersbach has been Senior Vice President--President, Porex
Technologies Europe of the Company since its inception in November 1997. He
has been Managing Director of Porex Technologies GmbH, an indirect wholly-
owned subsidiary of the Company, for more than five years.

James P. Wingo has been Senior Vice President--Corporate Marketing and
Development of the Company since its inception in November 1997. Since
November 1993, he has been Vice President--Marketing of PTC and from September
1992 to November 1993, he was its Vice President--Corporate Product
Development.

30
<PAGE>

Donald K. Jackson has been Senior Vice President--Chief Financial Officer of
the Company since its inception in November 1997. Since April 1993, he has
been Vice President--Finance of PTC. Prior to such time, he was Director of
Finance for Westburne Supply Inc. and a Manager for Arthur Andersen & Co.

Ronald G. Kalish has been a director of the Company since its inception in
November 1997. From April 1991 to April 1995, he was President and Chief
Executive Officer of UCB Services, Inc., a provider of mortgage credit
reports. From November 1995 to present, he served as Senior Advisor and then
as General Partner of White Pines Limited Partnership, a provider of capital
and management assistance to small- and medium-sized companies.

James V. Manning has been a director of the Company since its inception in
November 1997. Mr. Manning is the President and Chief Executive Officer of
Synetic and has been an executive officer of Synetic for more than six years
and was, until December 1994, an executive officer of Medco for more than five
years. He is also a director of Synetic and Chairman of the Board of Comnet
Corporation, a computer software company.

James Marden has been a director of the Company since its inception in
November 1997. From 1995 until 1997, he served as President of The
Entertainment Connection, Inc. From July 1991 to December 1994, he was Vice
President--Acquisitions of Medco and Synetic. He is also a director of Comnet
Corporation.

Leo M. Walsh, Jr. has been a director of the Company since its inception in
November 1997. From 1989 to present, he has been a director and/or trustee of
several investment companies advised by Hyperion Capital Management, Inc. or
its affiliates. He has also been the Director of Equitable Real Estate
Hyperion Mortgage Opportunity Fund, Inc. and Equitable Real Estate Hyperion
High Yield Commercial Mortgage Fund, Inc. From 1989 to 1994, he was a
financial consultant to Synetic.

L. Franklin Bost has been Vice President--President, Porex Surgical of the
Company since its inception in November 1997 and has been President of Porex
Surgical Inc., an indirect wholly-owned subsidiary of the Company, since
October 1997. Prior to such time, he was Vice President and General Manager of
Porex Surgical Inc. for more than five years.

Ioakim Haldopoules has been Vice President--Technology of the Company since
its inception in November 1997. From April 1995 to November 1997, he was Vice
President--Corporate Research & Development of PTC and prior to such time, he
was Vice President and General Manager of Porex Scientific Inc., an indirect
wholly-owned subsidiary of the Company, for more than five years.

Philip C. White has been Vice President--Human Resources for the Company
since its inception in November 1997. He has been Vice President--Human
Resources for PTC for more than five years.

COMMITTEES OF THE BOARD

The Company's Board has established an Audit Committee and a Compensation
Committee.

Audit Committee. The Audit Committee's primary responsibilities are to meet
with and consider suggestions from members of management and the Company's
independent accountants concerning the financial operations of the Company.
The Audit Committee also reviews audited financial statements of the Company
and considers and recommends the employment of, and approves the fee
arrangement with, independent accountants for audit functions and advisory and
other consulting services. Messrs. Kalish, Marden and Walsh are the members of
the Audit Committee.

Compensation Committee. The Compensation Committee's responsibilities are to
make determinations with respect to salaries and bonuses payable to the
Company's executive officers and to administer the Company's stock option
plans (other than the Director Plan (as defined below)). Messrs. Kalish and
Walsh are the members of the Compensation Committee.

31
<PAGE>

COMPENSATION OF DIRECTORS

Directors of the Company who are employees of the Company or Synetic will
not receive additional compensation for serving as directors of the Company.
Directors who are not employees of the Company or
Synetic will participate in the Porex Corporation Non-Employee Director Stock
Option Plan (the "Director Plan"), but will not receive cash compensation. The
Director Plan provides that on the first business day of each fiscal year of
the Company, each eligible director then in office will automatically be
granted an option to purchase shares of Common Stock at an exercise price
equal to the fair market value of the Common Stock on the date of grant,
subject to vesting requirements. In addition, each such director will
automatically receive an option to purchase shares of Common Stock,
subject to vesting requirements, at the time he is first elected to the Board.
The initial grants under the Director Plan will occur on the date of the
consummation of the Offerings (the "Effective Date") at an exercise price
equal to the initial public offering price. All directors of the Company
(other than the members of the Compensation Committee) are also eligible to
participate in the Class A Option Plan (as defined below). See "Management--
Compensation Pursuant to Plans and Arrangements of the Company--Class A Option
Plan."

EXECUTIVE COMPENSATION

The following table presents information concerning compensation paid for
services to the Company during Fiscal 1997 to Mr. Hannah, Mr. Smith, Mr.
Wernersbach, Mr. Wingo and Mr. Jackson (the "Named Executive Officers"):

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------- -------------------
SECURITIES
NAME AND PRINCIPAL SALARY BONUS OTHER ANNUAL UNDERLYING ALL OTHER
POSITION YEAR ($) ($) COMPENSATION ($) OPTIONS/SARS (#)(1) COMPENSATION ($)
- ------------------ ---- ------- ------- ---------------- ------------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Ray E. Hannah........... 1997 163,461 100,000 4,505 40,000 5,901(2)
President and Chief
Executive Officer
Michael W. Smith........ 1997 108,629 48,556 1,216,875(3) 18,750 2,210(4)
Senior Vice President--
President, Porex
Technologies Americas
Joachim Wernersbach(5).. 1997 119,581 24,074 341,057(6) 12,500 2,642(7)
Senior Vice President--
President, Porex
Technologies Europe
James P. Wingo.......... 1997 91,954 37,389 -- 12,500 2,865(8)
Senior Vice President--
Corporate Marketing and
Development
Donald K. Jackson....... 1997 88,457 38,263 -- 12,500 1,769(9)
Senior Vice President--
Chief Financial Officer
</TABLE>
- --------
(1) Represents options to purchase shares of common stock, $.01 par value, of
Synetic ("Synetic Common Stock") granted to each of the Named Executive
Officers for services rendered to the Company and its subsidiaries under
Synetic's 1989 Class A Stock Option Plan (the "Synetic Class A Plan"), in
the case of Mr. Hannah, and Synetic's 1991 Special Nonqualified Stock
Option Plan (the "Synetic Non-Officer Plan"), in the case of Messrs.
Smith, Wernersbach, Wingo and Jackson.
(2) Includes Company matching contributions to the Porex Technologies Corp.
401(k) Savings Plan (the "Porex 401(k) Plan") and life insurance premiums
paid on behalf of Mr. Hannah of $3,795 and $2,106, respectively.
(3) Represents income realized on the exercise of options to purchase Synetic
Common Stock.
(4) Includes Company matching contributions to the Porex 401(k) Plan and life
insurance premiums paid on behalf of Mr. Smith of $1,931 and $279,
respectively.

32
<PAGE>

(5) German Deutsche Mark amounts have been translated into U.S. dollars at the
rate of DM 1.59=$1.00, the monthly average of the noon buying rate in New
York City for cable transfers in Deutsche Marks during Fiscal 1997 as
certified for customs purposes by the Federal Reserve Bank of New York
(the "Deutsche Mark Conversion Rate").
(6) Represents income realized on the exercise of options to purchase Synetic
Common Stock of $338,400 and an automobile allowance.
(7) Comprised of Company matching contributions to the Porex 401(k) Plan.
(8) Includes Company matching contributions to the Porex 401(k) Plan and life
insurance premiums paid on behalf of Mr. Wingo of $1,483 and $1,382,
respectively.
(9) Includes Company matching contributions to the Porex 401(k) Plan and life
insurance premiums paid on behalf of Mr. Jackson of $1,629 and $140,
respectively.

The following table presents information concerning the options to purchase
Synetic Common Stock granted during the last fiscal year to the Named
Executive Officers for services rendered to the Company. The Company has
adopted stock option plans which contain substantially similar terms and
conditions to the Synetic Class A Plan and Synetic Non-Officer Plan. For a
description of such plans, see "Management--Compensation Pursuant to Plans and
Arrangements of the Company--Class A Option Plan".

OPTION/SAR GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE
OPTIONS/ EMPLOYEES OR BASE GRANT DATE
SARS IN FISCAL PRICE EXPIRATION PRESENT VALUE
GRANTED (#)(1) YEAR(2) ($/SH) DATE ($)(3)
-------------- ------------ -------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Ray E. Hannah........... 40,000 1.1% 35.50 04/16/07 459,998
Michael W. Smith........ 18,750 * 32.25 10/02/11 187,424
Joachim Wernersbach..... 12,500 * 32.25 10/02/11 124,949
James P. Wingo.......... 12,500 * 32.25 10/02/11 124,949
Donald K. Jackson....... 12,500 * 32.25 10/02/11 124,949
</TABLE>
- --------
* Less than 1%.
(1) These options vest and become exercisable at the rate of 20% per year,
commencing on the first anniversary of the date of grant and were granted
on the following dates: Mr. Hannah, on April 16, 1997; Messrs. Smith,
Wernersbach, Wingo and Jackson on October 2, 1996. The options to purchase
Synetic Common Stock will continue to vest and remain exercisable subject
to such Named Executive Officers continued employment with the Company and
the terms and conditions of the Synetic Class A Plan and Synetic Non-
Officer Plan, as applicable.
(2) Based upon the total number of stock options granted to employees of
Synetic.
(3) The estimated grant date present value reflected in the above table is
determined using the Black-Scholes model. The material assumptions and
adjustments incorporated in the Black-Scholes model in estimating the
value of the options reflected in the above table include the following:
(i) the respective option exercise price, specified above, equal to the
fair market value of the underlying stock on the date of grant; (ii) the
exercise of options within one year of the date that they become
exercisable; (iii) a risk-free interest rate of 6.5% per annum; and (iv)
volatility of 0.2722 calculated using daily prices of Synetic Common Stock
during the period from December 14, 1994 to June 30, 1997. The ultimate
values of the options will depend on the future market price of Synetic
Common Stock, which cannot be forecast with reasonable accuracy. The
actual value, if any, an optionee will realize upon exercise of an option
will depend on the excess of the market value of Synetic Common Stock over
the exercise price on the date the option is exercised. There is no
assurance that the value realized by an optionee will be at or near the
value estimated by the Black-Scholes model or any other model applied to
value the options.

33
<PAGE>

The following table presents information concerning the value realized upon
the exercise of options to purchase Synetic Common Stock and the fiscal year-
end value of options to purchase Synetic Common Stock held by the Named
Executive Officers.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS/SARS AT IN-THE-MONEY OPTIONS/
ACQUIRED VALUE FY-END (#) SARS AT FY-END ($)(1)
ON EXERCISE REALIZED ------------------------- -------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ray E. Hannah........... -- -- 64,000 40,000 1,754,500 60,000
Michael W. Smith........ 30,000 1,216,875 0 18,750 0 89,063
Joachim Wernersbach..... 16,000 338,400 0 12,500 0 59,375
James P. Wingo.......... -- -- 8,000 12,500 254,000 59,375
Donald K. Jackson....... -- -- 7,200 17,300 198,000 191,375
</TABLE>

<TABLE>
<S> <C>
</TABLE>
- --------
(1) Based upon the Fiscal 1997 closing price of Synetic Common Stock of
$37.00.

COMPENSATION PURSUANT TO PLANS AND ARRANGEMENTS OF THE COMPANY

Set forth below is information with respect to certain benefit plans and
employment arrangements of the Company pursuant to which cash and non-cash
compensation was paid or distributed for Fiscal 1997, or is proposed to be
paid or distributed in the future, to the directors and executive officers of
the Company. The executive officers of the Company who are also directors or
executive officers of Synetic may continue to be included in Synetic's benefit
plans and employment arrangements. The executive officers of the Company who
are not executive officers of Synetic are not expected to be included in
Synetic's benefit plans. The Company has not borne, and is not expected to
bear in the future, any cost or expense of Synetic's benefit plans or
employment arrangements.

CLASS A OPTION PLAN

The Company has adopted (and Synetic, as the sole shareholder of the
Company, has approved) the Porex Corporation Class A Stock Option Plan (the
"Class A Plan"). The maximum number of shares of Common Stock that will be
subject to options under the Class A Plan is , subject to adjustment in
accordance with the terms of the Class A Plan. The Class A Plan limits the
number of options that may be granted thereunder to an eligible employee in
any one-year period to no more than (subject to adjustment in accordance
with the terms of the Class A Plan). It is presently anticipated that, in
order to comply with the requirements of Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"), the Class A Plan will be
submitted to the stockholders of the Company for their approval no later than
the first annual meeting of stockholders to be held more than twelve months
after the Effective Date.

The Class A Plan will be administered by the Compensation Committee, all of
the members of which are nonemployee directors and "outside directors" within
the meaning of Rule 16b-3 under the Exchange Act and Section 162(m) of the
Code, respectively. The Compensation Committee will have the authority, within
limitations as set forth in the Class A Plan, to determine the persons to whom
options may be granted, the number of shares of Common Stock to be covered by
each option, the time or times at which the options may be granted or
exercised and the terms and provisions of the options to be granted.

Eligibility for the grant of options under the Class A Plan is limited to
employees, officers and directors (excluding directors who serve on the
Compensation Committee) of the Company and its subsidiaries and certain
consultants, agents and key contractors of the Company and its subsidiaries.
It is anticipated that grants under

34
<PAGE>

the Class A Plan will not be made to directors who are not employees of the
Company. Options granted under the Class A Plan may be either incentive stock
options within the meaning of Section 422 of the Code, or non-qualified stock
options, as determined by the Compensation Committee.

Under the Class A Plan, the exercise price for an incentive stock option may
not be less than 100% (or 110% if the optionee owns or is deemed to own more
than 10% of the total combined voting power of all classes of stock of the
Company or a subsidiary) of the fair market value of the Common Stock on the
date of grant, as determined by the Board of Directors or the Compensation
Committee, and non-qualified stock options must have an exercise price of at
least 85% (100% in the case of designated eligible employees whose
compensation may be subject to the limitation on tax deductible compensation
imposed by Section 162(m) of the Code) of the fair market value of the Common
Stock on the date of grant (as determined by the Board of Directors or the
Compensation Committee).

Under the Class A Plan, if there is a Change in Control (as defined below),
the Board of Directors may provide that options granted under the Class A Plan
will become exercisable in whole or in part, whether or not the options are
otherwise exercisable. A Change in Control is generally defined as the
occurrence of (i) any person (excluding Synetic and its subsidiaries, the
Company and its subsidiaries and certain affiliates of the Company, and the
Company's employee benefit plans) becoming the beneficial owner of 50% or more
of the voting power of Synetic's or the Company's securities, (ii) during a
24-month period the individuals who, at the beginning of such period,
constituted the Company's or Synetic's Board of Directors (the "Incumbent
Directors") ceasing to be a majority of the Board of Directors unless such new
directors were elected or recommended by the Incumbent Directors, (iii) the
approval by the stockholders of Synetic or the Company of a merger or
consolidation of Synetic or the Company, as the case may be, without the
consent of a majority of the Incumbent Directors, (iv) stockholder approval of
a sale of all or substantially all of the assets of the Company or Synetic, as
the case may be, or (v) adoption by the Company or Synetic of a plan of
liquidation. For purposes of the Class A Plan, a Change in Control of Synetic
will not result in any options becoming exercisable unless, immediately
preceding such Change in Control, Synetic was in control of the Company within
the meaning of the Exchange Act. In addition, the Compensation Committee may
determine that an option shall become exercisable in full or in part upon the
occurrence of such circumstances or events as the Compensation Committee
determines merit special consideration.

The Class A Plan may be terminated and may be modified or amended by the
Board at any time; provided, however, that (i) no modification or amendment
will be effective without stockholder approval if such approval is required by
law or under the rules of Nasdaq National Market or any stock exchange on
which the Common Stock is listed and (ii) no such termination, modification or
amendment of the Class A Plan may adversely alter or affect the terms of any
then outstanding options previously granted without the consent of the
affected optionee.

PENSION PLAN

Employees of the Company and certain of its subsidiaries who satisfy certain
age and service requirements are eligible to participate in the Pension Plan
for Employees of Porex Technologies Corp. (the "Pension Plan"), a defined
benefit plan. The Company bears the entire cost of the Pension Plan. The
Company's contributions to the Pension Plan are computed on an actuarial basis
in order to fund the defined retirement benefits.

Normal retirement benefits are payable monthly for life to a participant
upon retirement at his or her retirement date (i.e., age 65), and are equal to
1/12 of the sum of (a) 0.6% of the participant's average annual compensation
for the five consecutive calendar years that the participant's compensation
was the highest during the ten consecutive years of service immediately
preceding retirement ("Final Average Compensation"), multiplied by the
participant's credited years of service up to a maximum of 35 years, and (b)
0.6% of the participant's Final Average Compensation in excess of the average
annual Social Security taxable wage base for the 35-year period ending with
the year the participant would reach normal retirement age, multiplied by the
participant's credited years of service up to a maximum of 35 years. A
participant becomes 100% vested in his

35
<PAGE>

or her accrued retirement benefit after completion of five years of service or
upon attainment of normal retirement at age 65. Retirement benefits are not
subject to any deduction for Social Security or other offset amounts.

Under a defined benefit plan such as the Pension Plan, contributions
allocable to individual participants cannot be readily and accurately
calculated. The table below shows estimated annual retirement benefits for
executives at specified levels of remuneration and years of service. The
estimates assume that benefits commence at age 65 under a straight life
annuity form. The table discloses the benefits that an individual would
receive at age 65 if he participated in the Pension Plan for 15, 20, 25, 30
and 35 years.

PENSION PLAN TABLE

<TABLE>
<CAPTION>
YEARS OF SERVICE
----------------------------------
REMUNERATION 15 20 25 30 35
- ------------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
100,000...................................... 15,363 20,484 25,604 30,725 35,864
115,000...................................... 18,063 24,084 30,104 36,125 42,146
125,000...................................... 19,863 26,484 33,104 39,725 46,346
150,000...................................... 24,363 32,484 40,604 48,725 56,846
152,000 or more.............................. 24,723 32,964 41,204 49,445 57,686
</TABLE>

Messrs. Hannah, Smith, Wingo and Jackson have accrued 29, 25, 24 and 4
credited years of service under the Pension Plan, respectively. Sections
401(a)(17) and 415 of the Code limit the amount of compensation that may be
considered in computing benefits under a qualified retirement plan. For 1997,
the maximum amount of compensation allowed for use in calculating an
individual's pension benefits under the Pension Plan was $160,000. Messrs.
Hannah, Smith, Wingo and Jackson had annual remuneration covered by the
Pension Plan of $160,000, $152,647, $128,619 and $124,618, respectively, as of
January 1, 1997.

Mr. Wernersbach does not participate in the Pension Plan. Porex Technologies
GmbH contributes DM 350 per month to a pension fund administered by a German
governmental agency for the benefit of Mr. Wernersbach. Pursuant to such
arrangement, Mr. Wernersbach is entitled to receive upon his retirement from
the Company after attaining age 65 and completing 10 years of service a lump
sum payment equal to the greater of (i) DM 70,000 (approximately $44,025 using
the Deutsche Mark Conversion Rate) and (ii) his then current account balance
(including earnings on the contributions).

SYNETIC PLANS

The Named Executive Officers have been granted options ("Synetic Options")
to purchase shares of Synetic Common Stock pursuant to Synetic's stock option
plans. See "Management--Executive Compensation." The Synetic option plans are
administered by a stock option committee of Synetic and contain terms and
conditions which are substantially similar to the terms of the Class A Plan.
Subject to the terms and conditions of Synetic's stock option plans, the
Synetic Options will continue to vest and remain outstanding so long as the
respective Named Executive Officer remains in the employ of the Company.

36
<PAGE>

SECURITY OWNERSHIP OF MANAGEMENT

The Company is currently a wholly-owned subsidiary of Synetic, and
therefore, none of the directors or executive officers of the Company
beneficially own any of the Common Stock of the Company. The following table,
however, sets forth information with respect to the beneficial ownership of
Synetic Common Stock as of October 1, 1997 by (i) directors of the Company;
(ii) each of the Named Executive Officers; and (iii) all of the Company's
directors and executive officers as a group.

<TABLE>
<CAPTION>
SHARES OF SYNETIC COMMON STOCK
NAME AND ADDRESS BENEFICIALLY OWNED (1)(2)
---------------- ------------------------------
<S> <C>
Martin J. Wygod ............................... 5,396,959 (30.1%)
Chairman of the Board
Ray E. Hannah.................................. 137,628*
President, Chief Executive Officer and Director
Michael Smith.................................. 19,279*
Senior Vice President--President, Porex
Technologies Americas
Joachim Wernersbach............................ 2,816*
Senior Vice President--President, Porex
Technologies Europe
James P. Wingo................................. 17,031*
Senior Vice President--Corporate Marketing and
Development
Donald K. Jackson.............................. 9,926*
Senior Vice President--Chief Financial Officer
Ronald G. Kalish............................... 14,833*
Director
James V. Manning............................... 269,740 (1.5%)
Director
James Marden................................... 90,883*
Director
Leo M. Walsh, Jr. ............................. --
Director
Directors and executive officers as a group (10 5,959,095 (32.6%)
persons)......................................
</TABLE>
- --------
* Less than 1% of the shares outstanding of the class
(1) Includes shares of Common Stock that the following persons have the right
to acquire on or within 60 days of October 1, 1997 upon exercise of stock
options and upon conversion of Convertible Debentures.
(2) The number of shares of Synetic Common Stock deemed outstanding includes:
(i) 17,650,965 shares of Common Stock outstanding as of October 1, 1997,
(ii) the number of shares of Synetic Common Stock that the respective
persons named in the above table have the right to acquire presently or
within 60 days of October 1, 1997 upon exercise of stock options and
(iii) the number of shares of Common Stock that the respective persons
named in the above table have the right to acquire upon conversion of
Convertible Debentures.

For a description of certain transactions and arrangements between the
Company and Synetic, see "Risk Factors--Substantial Control by Synetic" and
"Transactions and Relationships with Principal Stockholder."

37
<PAGE>

TRANSACTIONS AND RELATIONSHIP WITH PRINCIPAL STOCKHOLDER

BACKGROUND

Porex is a recently formed holding company, which owns all the outstanding
capital stock of PTC, through which Porex conducts its business operations.
Until the consummation of the Offerings, Porex has been a wholly-owned
subsidiary of Synetic. The Company does not depend on Synetic for any of its
revenues.

Porex has been advised by Synetic's management that it believes that the
offering of a minority interest in Porex will enhance the value of Porex for
Synetic's stockholders. Synetic has directed its efforts in a new area of
business relating to the use of Internet-based technology to expand channels
of communication in the healthcare industry, which is intended to benefit
providers, payors and consumers of healthcare services by lowering healthcare
costs and improving patient outcomes. The Offerings create a separate public
entity focused entirely on the business of porous plastics and other porous
media with additional resources to pursue acquisitions and take other steps to
implement Porex's growth strategy. The Offerings also provide an opportunity
for Porex's management and employees to have a direct equity participation in
the Company.

SECURITY OWNERSHIP

Prior to the Offerings, all of the Company's capital stock was owned by
Synetic. Upon completion of the Offerings, Synetic will own 15,000,000 shares,
or approximately 86% of the outstanding shares of the Company's Common Stock
(approximately 84% if the Underwriters' over-allotment options are exercised
in full). Synetic will have the ability to control the vote on matters
submitted to a vote of the Company's stockholders and will also be able to
elect the Board of Directors of the Company. Certain directors and executive
officers of the Company own shares of Synetic Common Stock. See "Risk
Factors--Substantial Control by Synetic" and "Security Ownership of
Management." The address of Synetic is River Drive Center 2, 669 River Drive,
Elmwood Park, New Jersey 07407.

CONFLICTS OF INTEREST

Upon completion of the Offerings, Synetic will retain effective control of
the Company and may be in a position to cause the Company to merge,
consolidate, liquidate or sell all or a substantial portion of its assets on
terms determined by Synetic. Certain of Synetic's executive officers and
directors are officers of or directors of the Company. Such directors and
officers of the Company who are also directors or officers of Synetic are in
positions involving possible conflicts of interest with respect to certain
transactions that may occur and that could affect the Company, such as
transactions involving business dealings between the Company and Synetic, the
disposition of acquisition opportunities, the issuance of additional Common
Stock or other securities of the Company and other matters involving conflicts
that cannot now be foreseen.

It is contemplated that after the Offerings, officers of the Company who are
also executive officers of Synetic will continue to spend a substantial amount
of their business time as directors or officers of Synetic and its other
subsidiaries and may be engaged in other business activities, consistent with
their other employment agreements, if any. See "Risk Factors--Substantial
Control by Synetic" and "Management."

CERTAIN AGREEMENTS

The Company and Synetic will enter into a number of agreements for the
purpose of defining the ongoing relationship between the two companies.
Additional or modified agreements, arrangements and transactions may be
entered into by the Company and Synetic after the completion of the Offerings.
Any such future agreements, arrangements and transactions will be determined
through negotiations between the Company and Synetic, as the case may be.
Following the Offerings, the Company will continue to be controlled by Synetic
and consequently such negotiations will not be arm's-length.

38
<PAGE>

The following is a summary of certain proposed agreements between the
Company and Synetic.

Tax Sharing Agreement. The Company and Synetic will enter into a Tax Sharing
Agreement providing for (i) payment of federal income taxes for periods during
which the Company and Synetic are included in the same consolidated group for
federal income tax purposes, (ii) allocation of responsibility for the filing
of such tax returns, (iii) conduct of tax audits and the handling of tax
controversies and (iv) various related matters. For periods during which the
Company and its subsidiaries are included in Synetic's consolidated federal
income tax returns, the Company and each of its subsidiaries will be required
to pay to Synetic an amount equal to their federal income tax liability,
determined as if the Company and each of its subsidiaries had filed separate
federal income tax returns.

Services Agreement. The Company and Synetic will enter into a Services
Agreement, pursuant to which Synetic will provide the Company with services
relating primarily to financial, tax and legal advice in connection with the
Company's acquisition program and other technical services as required. The
Company will pay the actual costs of providing these services. Such costs will
include an allocable portion of the base compensation and other related
expenses (other than Synetic's benefit plans and employment agreements and
arrangements) of the officers of Synetic who serve as officers of the Company.
This agreement will be terminable by either party upon 90 days' prior written
notice, at the end of any quarter. Allocated charges for normal, recurring
services provided by Synetic to the Company in the past have not been
material, nor are they expected to be material in the future. However, the
cost of providing services in connection with the Company's acquisition
program or of extraordinary services, may be significant in the future,
although no estimate of such costs is presently possible. See Note 7 of the
Notes to Consolidated Financial Statements.

Indemnification Agreement. The Company and Synetic will enter into an
Indemnification Agreement, under the terms of which the Company will indemnify
and hold harmless Synetic with respect to any and all claims, losses, damages,
liabilities, costs and expenses that arise from or are based on the operations
of the business of the Company before or after the date of the consummation of
the Offerings. Similarly, Synetic will indemnify and hold harmless the Company
with respect to any and all claims, losses, damages, liabilities, costs and
expenses that arise from or are based on the operations of Synetic other than
the business of the Company before or after the date of the consummation of
the Offerings.

Registration Rights Agreement. The Company and Synetic will enter into a
Registration Rights Agreement. Under the terms of such agreement, Synetic will
have the right, subject to certain terms and conditions, to require the
Company, at the expense of Synetic, to file up to three registration
statements, if requested by Synetic, for the public offering of any equity
securities of the Company then held by Synetic. Such right may be exercised
after 180 days following the date of this Prospectus; provided, however, that
the Company will not be required to have more than one registration statement
declared effective in each year. Synetic has informed the Company that it has
no present intention of exercising such registration rights or otherwise
selling any shares of the Company's Common Stock which it owns.

Credit Agreement. Synetic intends to make available to the Company a
revolving line of credit to be used by the Company for the purpose of making
acquisitions. Terms of such line of credit, including the amount, interest
rate and security, if any, have not been determined, and if such terms are not
agreed upon by Synetic and the Company, such line of credit may not be made
available.

39
<PAGE>

DESCRIPTION OF CAPITAL STOCK

The Company's authorized capital consists of 50,000,000 shares of Common
Stock, par value $.01 per share, and 10,000,000 shares of Preferred Stock,
$.01 par value per share. No shares of Preferred Stock are outstanding as of
the date of this Prospectus. Immediately prior to the Offerings, 15,000,000
shares of Common Stock were issued and outstanding. Immediately following the
Offerings, 17,500,000 shares of Common Stock will be issued and outstanding.

PREFERRED STOCK

The Preferred Stock may be issued from time to time in one or more series,
without stockholder approval. The Board of Directors is authorized to
determine (subject to limitations prescribed by law) the rights including
voting rights, if any, preferences, terms and limitations to be granted to and
imposed upon any wholly unissued series of Preferred Stock and to fix the
number of shares of any series of Preferred Stock and the designation of any
such series. The Company has no present plans to issue any shares of Preferred
Stock. Because of its broad discretion with respect to the creation and
issuance of any series of Preferred Stock without stockholder approval, the
Board of Directors could adversely affect the voting power of Common Stock.
The issuance of Preferred Stock may have the effect of delaying, deferring or
preventing a change in control of the Company.

COMMON STOCK

Holders of record of Common Stock are entitled to one vote per share on all
matters upon which shareholders have the right to vote. There are no
cumulative voting rights. All issued and outstanding shares of Common Stock
are, and the Common Stock to be sold in the Offerings, when issued and paid
for, will be, validly issued, fully paid and non-assessable. Holders of Common
Stock are entitled to such dividends as may be declared from time to time by
the Board of Directors out of funds legally available for that purpose. The
Company does not anticipate paying any cash dividends in the foreseeable
future. See "Dividend Policy." Upon dissolution, holders of Common Stock are
entitled to share pro rata in the assets of the Company remaining after
payment in full of all of its liabilities and obligations, including payment
of the liquidation preference, if any, of any Preferred Stock then
outstanding.

CERTAIN PROVISIONS OF THE CERTIFICATE OF INCORPORATION, BY-LAWS AND DELAWARE
LAW

The Company's Certificate of Incorporation and By-laws do not provide for a
staggered Board of Directors. The Certificate of Incorporation and By-laws
provide that special meetings of the Company may be called only by a majority
of the entire Board of Directors. In addition, the By-laws establish an
advance notice procedure for stockholder proposals to be considered at annual
meetings of stockholders. Notice must be received by the Company not less than
60 days nor more than 90 days prior to the anniversary date of the immediately
preceding annual meeting of stockholders and must contain certain specified
information concerning the matters to be brought before the meeting and
concerning the stockholders submitting the proposal. Such provisions of the
Company's Certificate of Incorporation and By-laws could be deemed to have an
anti-takeover effect.

The Company's Certificate of Incorporation provides that so long as the
Company is controlled by, or under common control with, Synetic (i) directors
or officers of the Company who are also directors or officers of Synetic are
obligated to present a potential acquisition of a business engaged in the
design, manufacture or distribution of porous materials (a "Porous Materials
Business") to the Company and may present such acquisition to Synetic only
upon rejection of such acquisition by the Board of Directors of the Company,
(ii) directors or officers of the Company who are also directors or officers
of Synetic have no obligation to present a potential acquisition in the
healthcare communications area to the Company and may present such acquisition
to the Company only upon rejection of such acquisition by the Board of
Directors of Synetic and (iii) directors or officers of the Company who are
also directors or officers of Synetic have no obligation to present a
potential acquisition to the Company of a business that is not a Porous
Materials Business.

40
<PAGE>

The Company is subject to the provisions of Section 203 of the Delaware
General Corporation Law. In general, the statute prohibits a publicly held
Delaware corporation from engaging in a "business combination" with an
"interested stockholder" for a period of three years after the date of the
transaction in which the person became an interested stockholder, unless (i)
prior to such date, the board of directors approved either the business
combination or the transaction that resulted in the stockholder becoming an
interested stockholder, (ii) upon consummation of the transaction that
resulted in such person becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced (excluding, for purposes of
determining the number of shares outstanding, shares owned by certain
directors or certain employee stock plans), or (iii) on or after the date the
stockholder became an interested stockholder, the business combination is
approved by the board of directors and authorized by the affirmative vote (and
not by written consent) of at least two-thirds of the outstanding voting stock
excluding that stock owned by the interested stockholder. A "business
combination" includes a merger, asset sale or other transaction resulting in a
financial benefit to the interested stockholder. An "interested stockholder"
is a person who (other than the corporation and any direct or indirect
majority owned subsidiary of the corporation), together with affiliates and
associates, owns (or, as an affiliate or associate, within three years prior,
did own) 15% or more of the corporation's outstanding voting stock. The
application of Section 203 could have the effect of delaying or preventing a
change of control of the Company.

TRANSFER AGENT AND REGISTRAR

The Company has appointed Registrar and Transfer Company as the transfer
agent and registrar for the Common Stock.

SHARES ELIGIBLE FOR FUTURE SALE

Prior to the Offerings, there has been no public market for the Common
Stock. No information is currently available and no prediction can be made as
to the timing or amount of future sales of shares, or the effect, if any, that
market sales of shares or the availability of shares for sale will have on the
market price prevailing from time to time. Nevertheless, sales of substantial
amounts of Common Stock (including shares issuable upon exercise of stock
options) in the public market after the lapse of the restrictions described
below, or the perception that such sales may occur, could materially and
adversely affect the prevailing market prices for the Common Stock and the
ability of the Company to raise equity capital in the future. See "Risk
Factors--Shares Eligible for Future Sale."

After completion of the Offerings, the Company will have 17,500,000 shares
of Common Stock outstanding (17,875,000 shares if the Underwriters' over-
allotment options are exercised in full). All of the 2,500,000 shares of
Common Stock offered in the Offerings (2,875,000 shares if the Underwriters'
over-allotment options are exercised in full), will be freely tradeable
without restriction or further registration under the Securities Act, unless
purchased by "affiliates" of the Company, as that term is defined in Rule 144,
described below. All of the shares of Common Stock held by Synetic are
"Restricted Securities," as that term is defined in Rule 144, and may not be
sold in the absence of registration other than in accordance with Rule 144 or
another exemption from registration under the Securities Act.

In general, under Rule 144 as currently in effect, any affiliate of the
Company or any person (or persons whose shares are aggregated in accordance
with the Rule) who has beneficially owned Common Stock which is treated as
Restricted Securities for at least one year would be entitled to sell within
any three-month period a number of shares that does not exceed the greater of
1% of the outstanding shares of Common Stock (approximately 175,000 shares
based upon the number of shares outstanding after the Offerings (or 178,750
shares if the Underwriters' over-allotment options are exercised in full)) or
the reported average weekly trading volume in the Common Stock during the four
weeks preceding the date on which notice of such sale was filed under Rule
144. Sales under Rule 144 are also subject to certain manner of sale
restrictions and notice requirements and to the availability of current public
information concerning the Company. In addition, affiliates

41
<PAGE>

of the Company must comply with the restrictions and requirements of Rule 144
(other than the one-year holding period requirement) in order to sell Common
Stock that are not Restricted Securities (such as Common Stock acquired by
affiliates in market transactions). Further, if a period of at least two years
has elapsed from the date Restricted Securities were acquired from the Company
or an affiliate of the Company, a holder of such Restricted Securities who is
not an affiliate at the time of the sale and who has not been an affiliate for
at least three months prior to such sale would be entitled to sell the shares
immediately without regard to the volume, manner of sale, notice and public
information requirements of Rule 144.

Upon consummation of the Offerings, Synetic will own approximately 86% (84%
if the Underwriters' over-allotment options are exercised in full) of the
outstanding Common Stock. Synetic has advised the Company that it currently
has no plans to reduce its ownership interest following the Offerings.
However, Synetic is not subject to any contractual obligation to retain its
controlling interest, except that Synetic has agreed not to sell or otherwise
dispose of any shares of the Company for a period of 180 days after the date
of the Prospectus without the prior written consent of Merrill Lynch. In
addition, subject to certain exceptions, the Company has agreed not to sell or
otherwise dispose of any shares of Common Stock for such 180-day period
without the prior written consent of Merrill Lynch. See "Underwriting."

CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS FOR NON-U.S. HOLDERS OF
COMMON STOCK

The following is a general discussion of certain U.S. federal income and
estate tax consequences of the ownership and disposition of Common Stock by
"Non-U.S. Holders." In general, a "Non-U.S. Holder" is an individual or entity
other than: (i) a citizen or resident of the United States; (ii) a corporation
or partnership created or organized in the United States or under the laws of
the United States or of any state; (iii) an estate, the income of which is
includible in gross income for U.S. federal income tax purposes regardless of
its source; or (iv) a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more U.S. persons have the authority to control all substantial decisions of
the trust. This discussion does not address all aspects of U.S. federal income
and estate taxation and does not deal with foreign, state and local
consequences that may be relevant to Non-U.S. Holders in light of their
personal circumstances, or to certain types of Non-U.S. Holders which may be
subject to special treatment under U.S. federal income tax laws (for example,
certain U.S. expatriates, insurance companies, tax-exempt organizations,
financial institutions and broker-dealers). Furthermore, this discussion is
based on provisions of the Internal Revenue Code of 1986, amended (the "Code")
existing and proposed regulations promulgated thereunder and administrative
and judicial interpretations thereof, all as of the date hereof, and all of
which are subject to change, possibly with retroactive effect. PROSPECTIVE
INVESTORS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE U.S.
FEDERAL, STATE, LOCAL AND NON-U.S. INCOME AND OTHER TAX CONSEQUENCES OF
HOLDING AND DISPOSING OF SHARES OF COMMON STOCK.

An individual may, subject to certain exceptions, be deemed to be a resident
alien (as opposed to a nonresident alien) by virtue of being present in the
United States for at least 31 days in the calendar year and for an aggregate
of at least 183 days during a three-year period ending in the current calendar
year (counting for such purposes all of the days present in the current year,
one-third of the days present in the immediately preceding year and one-sixth
of the days present in the second preceding year). Resident aliens are subject
to U.S. federal tax as if they were U.S. citizens.

DIVIDENDS

The Company does not expect to pay any cash dividends in the foreseeable
future. See "Dividend Policy." In the event, however, that dividends are paid
on shares of Common Stock, dividends paid to a Non-U.S. Holder will generally
be subject to U.S. withholding tax at a 30% rate (or a lower rate prescribed
by an applicable tax

42
<PAGE>

treaty) unless the dividends are either (i) effectively connected with a trade
or business carried on by the Non-U.S. Holder within the United States and the
Non-U.S. Holder provides the payor with proper documentation, as discussed
below, or (ii) if certain income tax treaties apply, attributable to a
permanent establishment in the United States maintained by the Non-U.S.
Holder. Dividends effectively connected with such a U.S. trade or business or
attributable to such a U.S. permanent establishment generally will not be
subject to withholding tax (if the Non-U.S. Holder files certain forms,
including, currently, Internal Revenue Service ("IRS") Form 4224, and after
December 31, 1998, subject to certain transition rules, a Form W-8, with the
pavor of the dividend) and generally will be subject to U.S. federal income
tax on a net income basis, in the same manner as if the Non-U.S. Holder were a
resident of the United States. In the case of a Non-U.S. Holder that is a
corporation, dividend income so connected or attributable may also be subject
to the branch profits tax (which is generally imposed on a foreign corporation
on the repatriation from the United States of its effectively connected
earnings and profits subject to certain adjustments) at a 30% rate (or a lower
rate prescribed by an applicable income tax treaty). For purposes of
determining whether tax is to be withheld at a 30% rate or at a lower rate as
prescribed by an applicable tax treaty, current law permits the Company to
presume that dividends paid prior to January 1, 1999 to an address in a
foreign country are paid to a resident of such country absent knowledge that
such presumption is not warranted. However, under newly issued Treasury
regulations, in the case of dividends paid after December 31, 1998, a Non-U.S.
Holder generally will be subject to United States withholding tax at a 31%
rate under the backup withholding rules described below, rather than at a 30%
rate or a reduced rate under an income tax treaty, as described above, unless
certain Internal Revenue Service ("IRS") certification procedures (or, in the
case of payments made outside the United States with respect to an offshore
account, certain IRS documentary evidence procedures) are complied with.
Further, in order to claim the benefit of an applicable income tax treaty rate
for dividends paid after December 31, 1998, a Non-U.S. Holder must comply with
IRS certification requirements. Certain IRS certification and disclosure
requirements must be complied with in order to be exempt from withholding
under the effectively connected income exemption. The new regulations also
provide special rules for dividend payments made to foreign intermediaries,
U.S. or foreign wholly owned entities that are disregarded for U.S. federal
income tax purposes and entities that are treated as fiscally transparent in
the United States, the applicable income tax treaty jurisdiction, or both.
Prospective investors should consult with their own tax advisors concerning
the effect, if any, of the adoption of these new regulations on an investment
in the Common Stock.

A Non-U.S. Holder that is eligible for a reduced rate of U.S. withholding
tax pursuant to an income tax treaty may obtain a refund of any excess amounts
currently withheld by filing an appropriate claim for refund with the IRS.

SALE OF COMMON STOCK

In general, a Non-U.S. Holder will not be subject to U.S. federal income tax
on any gain recognized upon the disposition of Common Stock unless: (i) the
gain is effectively connected with a trade or business carried on by the Non-
U.S. Holder within the United States or, alternatively, if certain tax
treaties apply, attributable to a permanent establishment in the United States
maintained by the Non-U.S. Holder (and in either such case, the branch profits
tax may also apply if the Non-U.S. Holder is a corporation); (ii) in the case
of an individual Non-U.S. Holder who holds shares of Common Stock as capital
assets, such individual is present in the United States for 183 days or more
in the taxable year of disposition, and certain other conditions are met; or
(iii) the Company is or has been a United States real property holding
corporation (a "USRPHC") for United States federal income tax purposes at any
time within the shorter of the five-year period preceding such disposition or
such Non-U.S. Holder's holding period. A corporation is a USRPHC if the fair
market value of the U.S. real property interests held by the corporation is
50% or more of the aggregate fair market value of certain assets of the
corporation. The Company believes that it is not likely to become and is not
currently a USRPHC. If the Company were or were to become a USRPHC, gains
realized upon a disposition of Common Stock by a Non-U.S. Holder which did not
directly or indirectly own more than 5% of the Common Stock during the shorter
of the periods described

43
<PAGE>

above generally would not be subject to U.S. federal income tax so long as the
Common Stock is "regularly traded" on an established securities market.

If a Non-U.S. Holder who is an individual falls under clause (i) above, such
individual generally will be taxed on the net gain derived from a sale of
Common Stock under regular graduated U.S. federal income tax rates. If an
individual Non-U.S. Holder falls under clause (ii) above, such individual
generally will be subject to a flat 30% tax on the gain derived from a sale,
which may be offset by certain U.S. capital losses (notwithstanding the fact
that such individual is not considered a resident alien of the United States).
Thus, individual Non-U.S. Holders who have spent (or expect to spend) more
than a de minimis period of time in the United States in the taxable year in
which they contemplate a sale of Common Stock are urged to consult their tax
advisors prior to the sale as to the U.S. tax consequences of such sale.

If a Non-U.S. Holder that is a foreign corporation falls under clause (i)
above, it generally will be taxed on its net gain under regular graduated U.S.
federal income tax rates and, in addition, will be subject to the branch
profits tax equal to 30% of its "effectively connected earnings and profits,"
within the meaning of the Code for the taxable year, as adjusted for certain
items, unless it qualifies for a lower rate under an applicable tax treaty.

ESTATE TAX

Common Stock owned or treated as owned by an individual who is not a citizen
or resident (as defined for U.S. federal estate tax purposes) of the United
States at the time of death will be includible in the individual's gross
estate for U.S. federal estate tax purposes, unless an applicable estate tax
treaty provides otherwise, and therefore may be subject to U.S. federal estate
tax.

INFORMATION REPORTING AND BACKUP WITHHOLDING

The Company must report annually to the IRS and to each Non-U.S. Holder the
amount of dividends paid to, and the tax withheld with respect to, each Non-
U.S. Holder. These reporting requirements apply regardless of whether
withholding was not required because the dividends were effectively connected
with a U.S. trade or business of the Non-U.S. Holder or reduced or eliminated
by an applicable tax treaty. Copies of this information also may be made
available under the provisions of a specific treaty or agreement with the tax
authorities in the country in which the Non-U.S. Holder resides or is
established.

Under current rules, United States backup withholding (which generally is
imposed at the rate of 31% on certain payments to persons that fail to furnish
the information required under the U.S. information reporting requirements)
generally will not apply (i) to dividends paid on Common Stock to a Non-U.S.
Holder that is subject to withholding at the 30% rate (or that is subject to
withholding at a reduced rate under an applicable treaty) or (ii) before
January 1, 1999, to dividends paid to a Non-U.S. Holder at an address outside
the United States. However, under newly issued regulations, in the case of
dividends paid after December 31, 1998 a Non-U.S. Holder generally will be
subject to backup withholding at a 31% rate, unless certain IRS certification
procedures (or, in the case of payments made outside the United States with
respect to an offshore account, certain IRS documentary evidence procedures)
are complied with, directly or through an intermediary.

The payment of proceeds from the disposition of Common Stock to or through a
U.S. office of a broker will be subject to information reporting and backup
withholding unless either (i) the Non-U.S. Holder is a corporation or other
exempt recipient meeting certain requirements or (ii) the Non-U.S. Holder
provides a valid Form W-8. The payment of proceeds from the disposition of
Common Stock to or through a non-U.S. office of a non-U.S. broker generally
will not be subject to backup withholding and information reporting. Before
January 1, 1999, however, in the case of proceeds from the disposition of
Common Stock effected at a non-U.S. office of a broker that is: (i) a U.S.
person; (ii) a "controlled foreign corporation" for U.S. federal income tax
purposes; or (iii) a foreign person 50% or more of whose gross income from
certain periods is effectively connected with a U.S. trade or business, such
payments will not be subject to backup withholding unless such broker has
actual knowledge that the owner is not a Non-U.S. Holder but will be subject
to information reporting, unless such

44
<PAGE>

broker has documentary evidence in its files that the owner is a Non-U.S.
Holder and certain other conditions are met. Further, after December 31, 1998,
under the newly issued regulations referred to above, information reporting
and backup withholding may apply to payments of the gross proceeds from the
sale or redemption of Common Stock effected through foreign offices of brokers
having any of a broader class of connections with the United States unless
certain certification requirements are complied with. Prospective investors
should consult with their own tax advisors regarding these regulations, and in
particular with respect to whether the use of a particular broker would
subject the investor to these rules.

Backup withholding is not an additional tax. Any amounts withheld under the
backup withholding rules from a payment to a Non-U.S. Holder will be refunded
or credited against the Non-U.S. Holder's U.S. federal income tax liability,
if any, provided that the required information is furnished to the IRS.

45
<PAGE>

UNDERWRITING

Subject to the terms and conditions set forth in a U.S. purchase agreement
(the "U.S. Purchase Agreement") among the Company and each of the underwriters
named below (the "U.S. Underwriters") and concurrently with the sale of
500,000 shares of Common Stock to the International Managers (as defined
below), the Company has agreed to sell to each of the U.S. Underwriters, and
each of the U.S. Underwriters for whom Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch") and Prudential Securities Incorporated are
acting as representatives (the "U.S. Representatives"), has severally agreed
to purchase from the Company, the number of shares of Common Stock set forth
opposite its name below.

<TABLE>
<CAPTION>
NUMBER OF
U.S. UNDERWRITERS SHARES
----------------- ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated...................................................
Prudential Securities Incorporated...................................
</TABLE>

<TABLE>
<S> <C>
---------
Total........................................................... 2,000,000
=========
</TABLE>

The Company has also entered into an international purchase agreement (the
"International Purchase Agreement" and, together with the U.S. Purchase
Agreement, the "Purchase Agreements") with certain underwriters outside the
United States and Canada (the "International Managers" and, together with the
U.S. Underwriters, the "Underwriters") for whom Merrill Lynch International
and Prudential-Bache Securities (U.K.) Inc. are acting as representatives (the
"International Representatives" and, together with its U.S. Representatives,
the "Representatives"). Subject to the terms and conditions set forth in the
International Purchase Agreement, and concurrently with the sale of 2,000,000
shares of Common Stock to the U.S. Underwriters pursuant to the U.S. Purchase
Agreement, the Company has agreed to sell to the International Managers, and
the International Managers severally have agreed to purchase, an aggregate of
500,000 shares of Common Stock. The initial public offering price per share
and the underwriting discount per share of Common Stock are identical under
the U.S. Purchase Agreement and the International Purchase Agreement.

In each Purchase Agreement, the several U.S. Underwriters and the several
International Managers, respectively, have agreed, subject to the terms and
conditions set forth in such Purchase Agreement, to purchase all the shares of
Common Stock offered hereby, if any are purchased. In the event of default by
an Underwriter, each Purchase Agreement provides that, in certain
circumstances, purchase commitments of the nondefaulting Underwriters may be
increased or the Purchase Agreement may be terminated. The sale of Common
Stock to the U.S. Underwriters is conditioned upon the sale of shares of
Common Stock to the International Managers.

The U.S. Underwriters and the International Managers have entered into an
intersyndicate agreement (the "Intersyndicate Agreement") that provides for
the coordination of their activities. Pursuant to the Intersyndicate
Agreement, the U.S. Underwriters and the International Managers are permitted
to sell shares of Common Stock to each other for purposes of resale at the
initial public offering price set forth on the cover page of this Prospectus,
less an amount not greater than the selling concession. Under the terms of the
Intersyndicate Agreement, the U.S. Underwriters and any dealer to whom they
sell shares of Common Stock will not offer to sell or sell shares of Common
Stock to persons who are non-U.S. or non-Canadian persons or to persons they
believe intend to resell to persons who are non-U.S. or non-Canadian persons,
and the International Managers and any dealer to whom they sell shares of
Common Stock will not offer to sell or sell shares of Common Stock to U.S.
persons or Canadian persons or to persons they believe intend to resell to
U.S. persons or Canadian persons, except, in each case, for transactions
pursuant to the Intersyndicate Agreement.

The U.S. Representatives have advised the Company that they propose
initially to offer the shares of Common Stock to the public at the initial
public offering price set forth on the cover page of this Prospectus,

46
<PAGE>

and to certain dealers at such price less a concession not in excess of $ per
share of Common Stock. The U.S. Underwriters may allow, and such dealers may
reallow, a discount not in excess of $ per share of Common Stock to certain
other dealers. After the initial public offering, the public offering price,
concession and discount may be changed.

At the request of the Company, the U.S. Underwriters have reserved up to
250,000 shares of Common Stock for sale at the initial public offering price
to directors, employees, consultants, business associates and related persons
of the Company and Synetic. The number of shares of Common Stock available for
sale to the general public will be reduced to the extent such persons purchase
such reserved shares. Any reserved shares which are not so purchased will be
offered by the U.S. Underwriters to the general public on the same basis as
the other shares offered hereby. Employees of the Company who purchase
reserved shares will be required to agree not to sell, offer to otherwise
dispose of any such reserved shares for a period of three months after the
date of this Prospectus.

The Company and Synetic have agreed, subject to certain exceptions, not to,
directly or indirectly, (i) sell, grant any option to purchase or otherwise
transfer or dispose of any Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock or file a registration statement
under the Securities Act with respect to the foregoing or (ii) enter into any
swap or other agreement or transaction that transfers, in whole or part, the
economic consequence of ownership of the Common Stock, without the prior
written consent of Merrill Lynch, for a period of 180 days after the date of
this Prospectus. The foregoing sentence shall not apply to (a) the shares of
Common Stock to be sold hereunder, (b) any shares of Common Stock issued by
the Company upon the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof and referred to in this Prospectus,
(c) any shares of Common Stock issued or options to purchase Common Stock
granted pursuant to existing employee benefit or stock option plans of the
Company referred to in this Prospectus, (d) any shares of Common Stock issued
pursuant to any stock option plan for non-employee directors or (e) any shares
of Common Stock issued in connection with acquisitions or similar transactions
by the Company.

The Company has granted an option to the U.S. Underwriters, exercisable
within 30 days after the date of this Prospectus, to purchase up to an
aggregate of 300,000 additional shares of Common Stock at the initial public
offering price set forth on the cover page of this Prospectus, less the
underwriting discount. The U.S. Underwriters may exercise this option only to
cover over-allotments, if any, made on the sale of the Common Stock offered
hereby. To the extent that the U.S. Underwriters exercise this option, each
U.S. Underwriter will be obligated, subject to certain conditions, to purchase
a number of additional shares of Common Stock proportionate to such U.S.
Underwriter's initial amount reflected in the foregoing table. The Company has
also granted an option to the International Managers, exercisable within 30
days after the date of this Prospectus, to purchase up to an additional 75,000
shares of Common Stock to cover over-allotments, if any, on terms similar to
those granted to U.S. Underwriters.

Prior to the Offerings, there has been no public market for the Common
Stock. The initial public offering price for the Common Stock was determined
by negotiation between the Company and the Representatives. The factors
considered in determining the initial public offering price, in addition to
prevailing market conditions, are price-earnings ratios of publicly traded
companies that the Representatives believe to be comparable to the Company,
certain financial information of the Company, the history of, and the
prospects for, the Company and the industry in which it competes, and an
assessment of the Company's management, its past and present operations, the
prospects for, and timing of, future revenues of the Company, the present
state of the Company's development, and the above factors in relation to
market values and various valuation measures of other companies engaged in
activities similar to the Company. There can be no assurance that an active
trading market will develop for the Common Stock or that the Common Stock will
trade in the public market subsequent to the Offerings at or above the initial
public offering price.

The Company has agreed to indemnify the several U.S. Underwriters against
certain liabilities, including liabilities under the Securities Act of 1933,
as amended, or to contribute to payments the Underwriters may be required to
make in respect thereof.

47
<PAGE>

The U.S. Representatives have advised the Company that the Underwriters do
not intend to confirm sales of Common Stock offered hereby to any accounts
over which they exercise discretionary authority.

Until the distribution of the Common Stock is completed, rules of the
Securities and Exchange Commission may limit the ability of the Underwriters
and certain selling group members to bid for and purchase the Common Stock. As
an exception to these rules, the U.S. Representatives are permitted to engage
in certain transactions that stabilize the price of the Common Stock. Such
transactions consist of bids or purchases for the purpose of pegging, fixing
or maintaining the price of the Common Stock.

If the Underwriters create a short position in the Common Stock in
connection with the Offerings, (i.e., if they sell more shares of Common Stock
than are set forth on the cover page of this Prospectus), the U.S.
Representatives may reduce that short position by purchasing Common Stock in
the open market. The U.S. Representatives may also elect to reduce any short
position by exercising all or part of the over-allotment options described
above.

The U.S. Representatives may also impose a penalty bid on certain
Underwriters and selling group members. This means that if the U.S.
Representatives purchase shares of Common Stock in the open market to reduce
the Underwriters' short position or to stabilize the price of the Common
Stock, they may reclaim the amount of the selling concession from the
Underwriters and selling group members who sold those shares as part of the
Offerings.

In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher
than it might be in the absence of such purchases. The imposition of a penalty
bid might also have an effect on the price of a security to the extent that it
were to discourage resales of the security by purchasers in the Offerings.

Neither the Company nor any of the U.S. Underwriters makes any
representation or prediction as to the direction or magnitude of any effect
that the transactions described above may have on the price of the Common
Stock. In addition, neither the Company nor any of the Underwriters makes any
representation that the Representatives will engage in such transaction or
that such transactions, once commenced, will not be discontinued without
notice.

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Shearman & Sterling, New York, New York. Certain legal
matters will be passed upon for the Underwriters by Brown & Wood LLP, New
York, New York.

The statements of law in this Prospectus under the caption "Risk Factors--
Regulatory Requirements" and under the caption "Business--Regulation," are
based upon the opinion of Kegler, Brown, Hill & Ritter, Columbus, Ohio,
special regulatory counsel to the Company.

EXPERTS

The consolidated financial statements of the Company as of June 30, 1996 and
1997 and for each of the three years in the period ended June 30, 1997 and the
financial statements of Interflo as of December 31, 1996 and for the year then
ended, included in this Prospectus have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said Firm
as experts in giving said reports.

48
<PAGE>

AVAILABLE INFORMATION

The Company has filed with the Commission a Registration Statement on Form
S-1 under the Securities Act for the Common Stock offered hereby. This
Prospectus, filed as part of the Registration Statement, omits certain
information contained in the Registration Statement and the exhibits and
schedules thereto, to which reference is hereby made. Statements contained
herein concerning the provisions of any documents filed as exhibits to the
Registration Statement are not necessarily complete, and are qualified by
reference to the copy of such document. The Registration Statement, including
exhibits and schedules filed therewith, may be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
regional offices of the Commission located at 7 World Trade Center, 13th
Floor, New York, New York 10048 and 500 West Madison Street, Room 1400,
Chicago, Illinois 60661. Copies of such materials may be obtained at
prescribed rates from the Public Reference Section of the Commission, Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and its
public reference facilities in New York, New York and Chicago, Illinois. The
Commission also maintains a Website (http://www.sec.gov) that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission.

Upon completion of the Offerings, the Company will be subject to the
informational requirements of the Exchange Act, and in accordance therewith,
will file reports, proxy and information statements and other information with
the Commission. Such reports, proxy and information statements and other
information can be inspected and copied at the address set forth above. The
Company intends to furnish its stockholders with annual reports containing
financial statements audited by its independent accountants and quarterly
reports for the first three quarters of each fiscal year containing unaudited
summary financial information.

49
<PAGE>

POREX CORPORATION AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Public Accountants............................... F-2
Consolidated Balance Sheets as of June 30, 1996 and 1997 and September
30, 1997.............................................................. F-3
Consolidated Statements of Income for the Years Ended June 30, 1995,
1996 and 1997 and for the Three Months Ended September 30, 1996 and
1997.................................................................. F-5
Consolidated Statements of Changes in Stockholder's Equity for the
Years Ended June 30, 1995, 1996 and 1997 and for the Three Months
Ended September 30, 1996 and 1997..................................... F-6
Consolidated Statements of Cash Flows for the Years Ended June 30,
1995, 1996 and 1997 and for the Three Months Ended September 30, 1996
and 1997.............................................................. F-7
Notes to Consolidated Financial Statements............................. F-8
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

TO THE BOARD OF DIRECTORS OF POREX CORPORATION:

We have audited the accompanying consolidated balance sheets of Porex
Corporation (a Delaware corporation) and subsidiaries as of June 30, 1996 and
1997, and the related consolidated statements of income, changes in
stockholder's equity and cash flows for each of the three years in the period
ended June 30, 1997. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Porex Corporation and
subsidiaries as of June 30, 1996 and 1997, and the results of their operations
and their cash flows for each of the three years in the period ended June 30,
1997 in conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Atlanta, Georgia
November 13, 1997

F-2
<PAGE>

POREX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)

ASSETS

<TABLE>
<CAPTION>
JUNE 30,
---------------- SEPTEMBER 30,
1996 1997 1997
------- ------- -------------
(UNAUDITED)
<S> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents.................... $12,190 $ 6,614 $ 7,352
Accounts receivable, net of allowances for
doubtful accounts and sales returns of $671,
$719 and $769 at June 30, 1996 and 1997 and
September 30, 1997, respectively............ 7,299 9,094 9,215
Inventories.................................. 5,253 5,505 5,764
Other current assets......................... 1,835 2,137 1,963
------- ------- -------
Total current assets....................... 26,577 23,350 24,294
------- ------- -------
PROPERTY, PLANT AND EQUIPMENT:
Land and improvements........................ 823 1,613 1,604
Buildings and improvements................... 8,967 9,515 9,645
Machinery and equipment...................... 19,134 21,953 22,635
Furniture and fixtures....................... 2,682 2,938 2,990
Construction in progress..................... 1,307 2,167 2,233
------- ------- -------
32,913 38,186 39,107
Less: Accumulated depreciation............... (15,923) (18,331) (19,050)
------- ------- -------
Property, plant and equipment, net......... 16,990 19,855 20,057
------- ------- -------
OTHER ASSETS:
Due from Synetic............................. 1,361 1,977 2,102
Goodwill, net of accumulated amortization of
$420, $643 and $731 at June 30, 1996 and
1997 and September 30, 1997, respectively... 1,056 12,366 12,233
Other........................................ 502 36 30
------- ------- -------
Total other assets......................... 2,919 14,379 14,365
------- ------- -------
$46,486 $57,584 $58,716
======= ======= =======
</TABLE>

The accompanying notes are an integral part of these consolidated balance
sheets.

F-3
<PAGE>

POREX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)

LIABILITIES AND STOCKHOLDER'S EQUITY

<TABLE>
<CAPTION>
JUNE 30,
---------------
SEPTEMBER 30,
1996 1997 1997
------- ------- -------------
(UNAUDITED)
<S> <C> <C> <C>
CURRENT LIABILITIES:
Accounts payable.............................. $ 1,277 $ 2,061 $ 1,689
Accrued liabilities........................... 4,371 6,312 5,944
Income taxes payable.......................... 2,536 3,030 3,081
------- ------- -------
Total current liabilities................... 8,184 11,403 10,714
------- ------- -------
DEFERRED TAXES.................................. 936 1,099 1,099
------- ------- -------
COMMITMENTS AND CONTINGENCIES (NOTE 9)
STOCKHOLDER'S EQUITY:
Preferred stock, $.01 par value, 10,000,000
shares authorized; no shares issued and out-
standing..................................... -- -- --
Common stock, $.01 par value; 50,000,000
shares authorized; 15,000,000 shares issued
and outstanding at June 30, 1996 and 1997,
and September 30, 1997, respectively......... 150 150 150
Retained earnings............................. 37,194 45,306 47,374
Cumulative foreign currency translation
adjustment................................... 22 (374) (621)
------- ------- -------
Total stockholder's equity.................. 37,366 45,082 46,903
------- ------- -------
$46,486 $57,584 $58,716
======= ======= =======
</TABLE>

The accompanying notes are an integral part of these consolidated balance
sheets.

F-4
<PAGE>

POREX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED JUNE 30, SEPTEMBER 30,
----------------------- -------------------
1995 1996 1997 1996 1997
------- ------- ------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net sales...................... $39,180 $45,129 $52,885 $ 11,185 $ 14,833
------- ------- ------- --------- ---------
Costs and expenses:
Cost of sales................. 23,006 25,106 29,035 6,126 8,316
Selling, general and
administrative............... 9,933 10,714 11,697 2,762 3,189
------- ------- ------- --------- ---------
32,939 35,820 40,732 8,888 11,505
------- ------- ------- --------- ---------
Operating income............... 6,241 9,309 12,153 2,297 3,328
Other income, net............. 244 586 904 305 103
------- ------- ------- --------- ---------
Income before provision for
income taxes.................. 6,485 9,895 13,057 2,602 3,431
Provision for income taxes.... 2,710 3,844 4,945 985 1,363
------- ------- ------- --------- ---------
Net income..................... $ 3,775 $ 6,051 $ 8,112 $ 1,617 $ 2,068
======= ======= ======= ========= =========
Net income per share........... $ .25 $ .40 $ .54 $ .11 $ .14
======= ======= ======= ========= =========
Weighted average shares
outstanding................... 15,000 15,000 15,000 15,000 15,000
======= ======= ======= ========= =========
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-5
<PAGE>

POREX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
(IN THOUSANDS)

<TABLE>
<CAPTION>
COMMON STOCK
----------------
CUMULATIVE FOREIGN TOTAL
NUMBER OF RETAINED CURRENCY TRANSLATION STOCKHOLDER'S
SHARES AMOUNT EARNINGS ADJUSTMENT EQUITY
--------- ------ -------- -------------------- -------------
<S> <C> <C> <C> <C> <C>
Balance, June 30, 1994.. 15,000 $150 $27,368 $ (33) $27,485
Foreign currency
translation
adjustment............ -- -- -- 280 280
Net income............. -- -- 3,775 -- 3,775
------ ---- ------- ----- -------
Balance, June 30, 1995.. 15,000 150 31,143 247 31,540
Foreign currency
translation
adjustment............ -- -- -- (225) (225)
Net income............. -- -- 6,051 -- 6,051
------ ---- ------- ----- -------
Balance, June 30, 1996.. 15,000 150 37,194 22 37,366
Foreign currency
translation
adjustment............ -- -- -- (396) (396)
Net income............. -- -- 8,112 -- 8,112
------ ---- ------- ----- -------
Balance, June 30, 1997.. 15,000 150 45,306 (374) 45,082
Foreign currency
translation adjustment
(unaudited)........... -- -- -- (247) (247)
Net income (unaudited). -- -- 2,068 -- 2,068
------ ---- ------- ----- -------
Balance, September 30,
1997 (unaudited)....... 15,000 $150 $47,374 $(621) $46,903
====== ==== ======= ===== =======
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-6
<PAGE>

POREX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED JUNE 30, SEPTEMBER 30,
-------------------------- ------------------------
1995 1996 1997 1996 1997
------- ------- -------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Operating Activities:
Net income............. $ 3,775 $ 6,051 $ 8,112 $ 1,617 $ 2,068
Adjustments to recon-
cile net income to net
cash provided by oper-
ating activities:
Depreciation and am-
ortization.......... 2,255 3,036 3,309 805 807
Deferred income tax-
es.................. (284) (281) (139) -- --
Increase in allow-
ances for doubtful
accounts and sales
returns............. 243 36 7 29 50
Changes in operating
assets and liabili-
ties,
net of effect of ac-
quired businesses:
Accounts receivable.. (1,299) (669) (678) 449 (171)
Inventory............ 805 193 268 (535) (259)
Other assets......... (89) 117 560 453 224
Accounts payable..... (438) 644 363 (147) (371)
Accrued liabilities.. 1,344 675 1,048 (150) (370)
Income taxes payable. 805 1,074 474 (782) 51
------- ------- -------- --------- --------
Net cash provided by
operating activi-
ties............... 7,117 10,876 13,324 1,739 2,029
------- ------- -------- --------- --------
Investing activities:
Capital expenditures,
net................... (3,889) (3,192) (5,075) (1,155) (919)
Net cash paid for ac-
quired businesses..... -- -- (12,813) (861) --
------- ------- -------- --------- --------
Net cash used in in-
vesting activities.. (3,889) (3,192) (17,888) (2,016) (919)
------- ------- -------- --------- --------
Financing activities:
Changes in amounts due
from Synetic, net..... (508) (679) (616) 174 (125)
Payments on long-term
debt.................. (456) (216) -- -- --
------- ------- -------- --------- --------
Net cash provided by
(used for)
financing activities. (964) (895) (616) 174 (125)
------- ------- -------- --------- --------
Foreign currency trans-
lation adjustment..... 280 (225) (396) 62 (247)
------- ------- -------- --------- --------
Net increase (decrease)
in cash and cash
equivalents........... 2,544 6,564 (5,576) (41) 738
Cash and cash equiva-
lents at beginning of
period................ 3,082 5,626 12,190 12,190 6,614
------- ------- -------- --------- --------
Cash and cash equiva-
lents at end of peri-
od.................... $ 5,626 $12,190 $ 6,614 $ 12,149 $ 7,352
======= ======= ======== ========= ========
Cash paid during the
period for:
Interest............... $ 32 $ 6 $ -- $ -- $ --
Income taxes........... 2,063 3,307 4,562 1,773 1,251
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-7
<PAGE>

POREX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

In November 1997, Synetic, Inc. ("Synetic") formed Porex Corporation, a
Delaware corporation ("Porex"). In connection therewith Porex issued
15,000,000 shares of Common Stock, $.01 par value, to Synetic in exchange for
all of the outstanding capital stock of its wholly-owned subsidiary, Porex
Technologies Corp. ("PTC"). This reorganization has been accounted for at
historical book values in a manner similar to a pooling-of-interests. These
consolidated financial statements present the financial position and results
of operations of Porex and PTC and its subsidiaries (collectively, the
"Company"), as if this reorganization had occurred as of the first day of the
earliest period presented.

Porex designs, manufactures and distributes porous and solid plastic
components and products for use in healthcare, consumer and industrial
applications.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of
the Company, after elimination of all material intercompany accounts and
transactions.

Cash and Cash Equivalents

The Company considers all liquid investment instruments with an original
maturity of three months or less to be the equivalent of cash for purposes of
balance sheet presentation and for the consolidated statements of cash flows.
These short-term investments are stated at cost, which approximates market.

Inventories

Inventories are stated at the lower of first-in, first-out cost or market.
Cost includes raw materials, direct labor, and manufacturing overhead. Market
is based on current replacement cost for raw materials and supplies and on net
realizable value for work-in-process and finished goods. Inventories consisted
of the following (in thousands):

<TABLE>
<CAPTION>
JUNE 30,
------------- SEPTEMBER 30,
1996 1997 1997
------ ------ -------------
(UNAUDITED)
<S> <C> <C> <C>
Raw materials and supplies.................... $2,468 $2,672 $3,119
Work-in-process............................... 548 347 362
Finished goods................................ 2,237 2,486 2,283
------ ------ ------
$5,253 $5,505 $5,764
====== ====== ======
</TABLE>

Property, Plant and Equipment

Property, plant and equipment are stated at cost. For financial reporting
purposes, depreciation is provided principally on the straight-line method
over the estimated useful lives of the assets. Annual depreciation rates range
from 2% to 10% for buildings and improvements and from 7% to 33% for machinery
and equipment and furniture and fixtures. For income tax purposes, certain
assets are depreciated using accelerated methods. Expenditures for
maintenance, repair and renewals of minor items are charged to operations as
incurred. Major improvements are capitalized.

F-8
<PAGE>

POREX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)

Goodwill

The excess of net assets acquired over underlying book values ("goodwill")
is being amortized to expense on a straight-line basis over periods ranging
from 35 to 40 years. The Company periodically reviews the carrying values
assigned to goodwill based upon expectations of future cash flows and
operating income generated by the underlying intangible assets.

Development Costs

Development costs are expensed as incurred. Total development expenses were
$1,490,000, $2,014,000 and $1,791,000 for the years ended June 30, 1995, 1996
and 1997, respectively.

Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):

<TABLE>
<CAPTION>
JUNE 30,
-------------
1996 1997
------ ------
<S> <C> <C>
Accrued payroll and benefit costs............................ $1,841 $2,771
Accrued management incentives................................ 1,385 1,747
Accrued legal costs.......................................... 563 598
Other........................................................ 582 1,196
------ ------
Total...................................................... $4,371 $6,312
====== ======
</TABLE>

Income Taxes

The Company accounts for income taxes pursuant to Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS No. 109"),
which uses the liability method to calculate deferred income taxes. The
realization of deferred tax assets is based on historical tax positions and
expectations about future taxable income.

The Company is included in the consolidated federal income tax return of
Synetic. The accompanying financial statements reflect income taxes as if the
Company filed a separate tax return.

Foreign Currency Translation

The financial statements and transactions of the Company's foreign
manufacturing facilities are maintained in their functional currency (Deutsche
mark and Pound sterling). The translation of foreign currencies into U.S.
dollars is performed for balance sheet accounts using current exchange rates
in effect at the balance sheet date and for revenue and expense accounts using
an average exchange rate for the period. The gains or losses resulting from
translation are included in stockholder's equity.

Revenue Recognition

Revenue is recognized upon product shipment, net of sales returns and
allowances.

Net Income Per Share

Net income per share is determined by dividing net income by the weighted
average number of shares of common stock outstanding during the period.

In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS No.
128"). The new standard simplifies the computation of net income per share and
increases comparability to international standards. Under SFAS No. 128, basic
net

F-9
<PAGE>

POREX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)

income per share is computed by dividing net income by the weighted-average
number of common shares outstanding for the period. Diluted net income per
share reflects the potential dilution that could occur if securities or other
contracts to issue common stock were exercised or converted into common stock.

The Company is required to adopt the new standard during fiscal 1998,
beginning with the December 31, 1997 interim consolidated financial
statements. All prior periods presented are required to be restated at that
time. The pronouncement is not expected to have a material impact on the
Company's reported earnings per share.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Unaudited Interim Financial Information

In the opinion of management, the unaudited consolidated financial
statements as of September 30, 1997 and for the three months ended September
30, 1996 and 1997, reflect all adjustments which are of a normal recurring
nature necessary to present fairly the Company's financial position, results
of operations and cash flows. Interim results of operations are not
necessarily indicative of results to be expected for the fiscal year.

(2) ACQUISITION:

Interflo

On February 10, 1997, the Company acquired the assets and assumed certain
liabilities of Interflo Technologies Inc. ("Interflo"), a manufacturing
operation located in College Point, New York for $11,340,000 in cash. At the
closing, $2,500,000 was placed in escrow as security against representations
and warranties contained in the purchase agreement. The escrow funds will be
released over a period of approximately one year. The acquisition was
accounted for using the purchase method with the purchase price being
allocated to assets acquired and liabilities assumed based on their appraised
fair values. Interflo's results of operations have been included in the
Company's financial statements since February 10, 1997.

A summary of the purchase price is as follows (in thousands):

<TABLE>
<S> <C>
Fair value of assets acquired.................................... $ 2,175
Liabilities assumed.............................................. (1,138)
Goodwill......................................................... 10,303
-------
$11,340
=======
</TABLE>

The pro forma effects of combining the results of operations of the Company
and Interflo are not material.

F-10
<PAGE>

POREX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(3) STOCKHOLDER'S EQUITY:

As of September 30, 1997, Synetic owned 100% of the Company's outstanding
common stock. The Company is in the process of an initial public offering of
2,500,000 shares of its common stock (the "Offering").

(4) INCOME TAXES:

The income tax provisions (benefits) are summarized as follows (in
thousands):

<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
----------------------
1995 1996 1997
------ ------ ------
<S> <C> <C> <C>
Current:
Federal............................................... $2,073 $2,848 $3,655
State................................................. 281 543 366
Foreign............................................... 640 734 1,063
------ ------ ------
Total current....................................... 2,994 4,125 5,084
------ ------ ------
Deferred:
Federal............................................... (252) (233) (127)
State................................................. (32) (48) (12)
------ ------ ------
Total deferred...................................... (284) (281) (139)
------ ------ ------
Total income tax provision........................ $2,710 $3,844 $4,945
====== ====== ======
</TABLE>

Accumulated net earnings of foreign subsidiaries are intended to be
permanently reinvested in those subsidiaries. Accordingly, no federal taxes
have been provided on those earnings.

A reconciliation of the income tax provision, computed by applying the
federal statutory rate to income before taxes, and the actual provision for
income taxes is as follows:

<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
----------------------
1995 1996 1997
------ ------ ------
<S> <C> <C> <C>
Federal statutory rate........................... 35.0% 35.0% 35.0%
State tax, net of federal benefit................ 2.5 3.3 1.8
Foreign taxes rate differential.................. 4.3 1.4 1.9
Other, net....................................... -- (.9) (.8)
------ ------ ------
41.8% 38.8% 37.9%
====== ====== ======
</TABLE>

F-11
<PAGE>

POREX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(4) INCOME TAXES--(CONTINUED)

Temporary differences resulted in the following deferred tax expense
(benefit) (in thousands):

<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
----------------------
1995 1996 1997
------ ------ ------
<S> <C> <C> <C>
Sales returns and receivables allowances........ $ (14) $ (6) $ 18
Accrued expenses................................ (206) (119) (279)
Difference between tax and book depreciation
and amortization............................... 38 (117) 163
Inventory reserves.............................. (31) (29) 82
Prepaids and other.............................. (71) (10) (123)
------ ------ ------
$ (284) $ (281) $ (139)
====== ====== ======
</TABLE>

Deferred tax liabilities (assets) at June 30, 1996 and 1997, are comprised
of the following (in thousands):

<TABLE>
<CAPTION>
1996 1997
----- ------
<S> <C> <C>
Tax over book depreciation and amortization.............. $ 936 $1,099
Sales returns and receivables allowances................. (118) (100)
Accrued expenses......................................... (688) (967)
Inventory reserves....................................... (436) (354)
Prepaids and other....................................... (210) (333)
----- ------
$(516) $ (655)
===== ======
</TABLE>

In accordance with the disclosure provisions of SFAS No. 109, as of June 30,
1996 and 1997 the Company has included approximately $1,452,000 and
$1,754,000, respectively, of deferred tax assets in other current assets
representing the effects of temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the carrying
amounts for income tax purposes.

(5) MAJOR CUSTOMERS, EXPORT PRODUCT SALES AND SEGMENT INFORMATION:

For the years ended June 30, 1995, 1996 and 1997, no customer accounted for
more than 10% of the Company's net sales.

Export product sales, which are made principally to Europe and Asia, were
$5,022,000, $5,605,000 and $6,219,000 for the fiscal years ended June 30,
1995, 1996 and 1997, respectively.

F-12
<PAGE>

POREX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(5) MAJOR CUSTOMERS, EXPORT PRODUCT SALES AND SEGMENT INFORMATION--(CONTINUED)
Segment Reporting

The Company's manufacturing operations are in two principal geographic
areas, the United States and Europe. The following is a summary of financial
information by geographic area for the fiscal years ended June 30, 1995, 1996
and 1997 (in thousands):

<TABLE>
<CAPTION>
CORPORATE AND
1995 UNITED STATES EUROPE ELIMINATIONS CONSOLIDATED
- ---- ------------- ------ ------------- ------------
<S> <C> <C> <C> <C>
Net sales....................... $34,700 $5,380 $ (900) $39,180
Operating income................ 7,070 1,282 (2,111) 6,241
Identifiable assets............. 30,536 5,771 1,219 37,526
Capital expenditures, net....... 2,834 1,003 52 3,889
Depreciation and amortization... 1,673 425 157 2,255
</TABLE>

<TABLE>
<CAPTION>
CORPORATE AND
1996 UNITED STATES EUROPE ELIMINATIONS CONSOLIDATED
- ---- ------------- ------ ------------- ------------
<S> <C> <C> <C> <C>
Net sales....................... $39,055 $6,665 $ (591) $45,129
Operating income................ 10,087 1,955 (2,733) 9,309
Identifiable assets............. 38,390 7,035 1,061 46,486
Capital expenditures, net....... 1,999 1,052 141 3,192
Depreciation and amortization... 2,666 171 199 3,036
</TABLE>

<TABLE>
<CAPTION>
CORPORATE AND
1997 UNITED STATES EUROPE ELIMINATIONS CONSOLIDATED
- ---- ------------- ------ ------------- ------------
<S> <C> <C> <C> <C>
Net sales....................... $45,490 $8,511 $(1,116) $52,885
Operating income................ 12,529 2,371 (2,747) 12,153
Identifiable assets............. 48,502 8,063 1,019 57,584
Capital expenditures, net....... 3,657 504 914 5,075
Depreciation and amortization... 2,571 516 222 3,309
</TABLE>

(6) PENSION AND PROFIT SHARING PLANS:

The Company has defined benefit pension plans covering substantially all of
its employees and certain employees of Synetic. Net pension cost for the years
ended June 30, 1995, 1996 and 1997 included the following components (in
thousands):
<TABLE>
<CAPTION>
1995 1996 1997
---- ---- ------
<S> <C> <C> <C>
Service cost................................................ $240 $269 $ 277
Interest cost............................................... 273 310 338
Actual return on plan assets................................ (427) (789) (1,377)
Net amortization............................................ 127 447 923
---- ---- ------
Net pension cost.......................................... $213 $237 $ 161
==== ==== ======
</TABLE>

F-13
<PAGE>

POREX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(6) PENSION AND PROFIT SHARING PLANS--(CONTINUED)
The following table sets forth the funded status of the plans and amounts
recognized in the Company's consolidated balance sheets (in thousands):
<TABLE>
<CAPTION>
JUNE 30,
----------------
1996 1997
------- -------
<S> <C> <C>
Actuarial present value of benefit obligation:
Vested benefit obligation............................ $(2,944) $(3,311)
Nonvested benefit obligation......................... (55) (67)
------- -------
Accumulated benefit obligation....................... (2,999) (3,378)
Effect of future salary increases.................... (1,548) (1,600)
------- -------
Projected benefit obligation........................... (4,547) (4,978)
Plan assets at fair value.............................. 5,105 6,703
------- -------
Funded status.......................................... 558 1,725
Unrecognized net gain.................................. (792) (1,848)
Unrecognized net assets................................ (216) (194)
Unrecognized prior service cost........................ 61 56
------- -------
Net pension liability................................ $ (389) $ (261)
======= =======
</TABLE>

The Company funds the plans through annual contributions representing no
less than the minimum amounts required as computed by actuaries to be
consistent with the plans' objectives and government regulations. The net
pension liability is included in accrued liabilities.

Assumptions used in the accounting for the Company's defined benefit plans
as of June 30, 1996 and 1997 were:

<TABLE>
<CAPTION>
1996 1997
----- -----
<S> <C> <C>
Discount rate................................................. 7.5% 7.5%
Rate of increase in compensation levels....................... 0%-5% 0%-5%
Expected long-term rate of return on assets................... 8.0% 8.0%
</TABLE>

Plan assets consist primarily of debt and equity investments.

In addition to the defined benefit pension plans discussed above, the
Company maintains a defined contribution profit sharing plan covering
substantially all of its employees. The Company matches a portion of
participant contributions with Synetic common stock. For the year ended June
30, 1997, Synetic issued 3,341 shares of common stock to the plan. For the
years ended June 30, 1995, 1996 and 1997, Company contributions were
approximately $59,100, $81,000 and $132,500, respectively.

(7) RELATED PARTY TRANSACTIONS:

Tax sharing agreement

The Company and Synetic intend to enter into a tax sharing agreement for the
periods during which the Company is included in the consolidated federal
income tax returns of Synetic. This agreement will provide, among other
things, for the Company to pay Synetic its allocable portion of the
consolidated federal income tax liability or receive refunds determined as if
the Company had filed separate federal income tax returns. The tax sharing
agreement will terminate on the last day on which the Company is included in
Synetic's federal consolidated income tax return.

F-14
<PAGE>

POREX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(7) RELATED PARTY TRANSACTIONS--(CONTINUED)
Services agreement

The Company and Synetic intend to enter into a services agreement pursuant
to which Synetic will agree to provide the Company with services relating
primarily to financial analysis and tax and legal advice in connection with
the Company's operations and other technical services as required. The Company
will pay the actual costs of providing these services. Such costs will include
an allocable portion of the base compensation and other related expenses
(other than Synetic's benefit plans and employment agreements and
arrangements) of the officers of Synetic who serve as officers of the Company.
The service agreement will be terminable by either party upon 90 days' prior
written notice, at the end of any quarter. Allocated charges for normal,
recurring services provided by Synetic historically have not been material.

Credit agreement

Synetic intends to make available to the Company a revolving line of credit
to be used by the Company for the purpose of making acquisitions. Terms of
such line of credit, including the interest rate and security, if any, have
not been determined, and if such terms are not agreed upon by Synetic and the
Company, such line of credit may not be made available.

(8) STOCK OPTIONS:

The Company expects to adopt stock options plans covering the employees,
officers and directors of the Company and its subsidiaries and certain
consultants, agents and key contractors of the Company. The exercise price for
such options will be equal to the initial public offering price.

(9) COMMITMENTS AND CONTINGENCIES:

Leases

The Company leases office and warehouse space, equipment and automobiles
under various noncancellable operating leases. Rental expense was $154,000,
$164,000 and $329,000 for the fiscal years ended June 30, 1995,
1996 and 1997, respectively. The minimum aggregate rental commitments under
noncancellable leases, excluding renewal options, are as follows (in
thousands):

<TABLE>
<CAPTION>
YEARS ENDING JUNE 30, 1998
--------------------------
<S> <C>
1998............................................................... $ 525
1999............................................................... 505
2000............................................................... 485
2001............................................................... 431
2002............................................................... 389
Thereafter......................................................... 3,537
</TABLE>

Legal proceedings

In the normal course of business, the Company is involved in various claims
and legal proceedings. While the ultimate resolution of these matters has yet
to be determined, the Company does not believe that their outcome will have a
material adverse effect on its financial position or results of operations.

The Company has been named as one of many co-defendants in a number of
actions brought by recipients of silicone mammary implants. One of the pending
claims is styled as a purported class action. Certain of the actions against
the Company have been dismissed or settled by the manufacturer or insurance
carriers of the Company without material cost to the Company. The Company
believes its insurance coverage provides adequate coverage against liabilities
that could arise from actions or claims arising out of the Company's
distribution of implants. While the ultimate resolution of these matters has
yet to be determined, the Company does not believe that their outcome will
have a material adverse effect on its financial position or results of
operations.

F-15
<PAGE>

POREX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(10) QUARTERLY FINANCIAL DATA (UNAUDITED):

The following table summarizes the quarterly financial data for the fiscal
years ended June 30, 1996 and 1997 (in thousands, except per share data).

<TABLE>
<CAPTION>
NET OPERATING NET NET INCOME
QUARTER ENDED SALES INCOME INCOME PER SHARE
- ------------- ------- --------- ------ ----------
FISCAL 1996
<S> <C> <C> <C> <C>
September 30, 1995.......................... $11,036 $ 1,946 $1,178 $.08
December 31, 1995........................... 10,283 1,981 1,360 .09
March 31, 1996.............................. 11,311 2,273 1,523 .10
June 30, 1996............................... 12,499 3,109 1,990 .13
------- ------- ------ ----
Year ended June 30, 1996.................... $45,129 $ 9,309 $6,051 $.40
======= ======= ====== ====
<CAPTION>
FISCAL 1997
<S> <C> <C> <C> <C>
September 30, 1996.......................... $11,185 $ 2,297 $1,617 $.11
December 31, 1996........................... 11,899 2,778 1,825 .12
March 31, 1997.............................. 14,243 3,370 2,076 .14
June 30, 1997............................... 15,558 3,708 2,594 .17
------- ------- ------ ----
Year ended June 30, 1997.................... $52,885 $12,153 $8,112 $.54
======= ======= ====== ====
<CAPTION>
FISCAL 1998
<S> <C> <C> <C> <C>
September 30, 1997.......................... $14,833 $ 3,328 $2,068 $.14
======= ======= ====== ====
</TABLE>

F-16
<PAGE>

INTERFLO TECHNOLOGIES, INC.
INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Public Accountants............................... F-18
Balance Sheet as of December 31, 1996.................................. F-19
Statement of Income and Retained Earnings for the Year Ended December
31, 1996.............................................................. F-20
Statement of Cash Flows for the Year Ended December 31, 1996........... F-21
Notes to Financial Statements.......................................... F-22
</TABLE>

F-17
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

TO INTERFLO TECHNOLOGIES, INC.:

We have audited the accompanying balance sheet of Interflo Technologies,
Inc. (a New York corporation) as of December 31, 1996 and the related
statements of income and retained earnings and cash flows for the year then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Interflo Technologies,
Inc. as of December 31, 1996 and the results of its operations and its cash
flows for the year then ended in conformity with generally accepted accounting
principles.

ARTHUR ANDERSEN LLP

New York, New York
November 13, 1997

F-18
<PAGE>

INTERFLO TECHNOLOGIES, INC.
BALANCE SHEET
AS OF DECEMBER 31, 1996
(IN THOUSANDS)

ASSETS

<TABLE>
<S> <C>
CURRENT ASSETS:
Cash and cash equivalents.............................................. $ 230
Marketable securities.................................................. 140
Accounts receivable, net of allowance for doubtful accounts and sales
returns of $20......................................................... 802
Inventories............................................................ 421
Other current assets................................................... 38
------
Total current assets................................................. 1,631
------
PROPERTY AND EQUIPMENT:
Building improvements.................................................. 133
Machinery and equipment................................................ 846
Furniture and fixtures................................................. 331
------
1,310
Less: Accumulated depreciation and amortization........................ (690)
------
Property and equipment, net............................................ 620
------
OTHER ASSETS........................................................... 63
------
$2,314
======
</TABLE>

LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<S> <C>
CURRENT LIABILITIES:
Accounts payable....................................................... $ 435
Accrued liabilities.................................................... 506
Distributions payable.................................................. 144
Loan from officer...................................................... 121
Due to related party, net.............................................. 159
------
Total current liabilities............................................ 1,365
------
COMMITMENTS AND CONTINGENCIES (NOTE 5)
STOCKHOLDERS' EQUITY:
8% cumulative preferred stock, $1.00 par value; 100,000 shares
authorized; no shares issued or outstanding........................... --
Common stock, no par value; 200 shares authorized; 100 shares issued
and outstanding....................................................... --
Paid-in capital........................................................ 12
Retained earnings...................................................... 937
------
Total stockholders' equity........................................... 949
------
$2,314
======
</TABLE>

The accompanying notes are an integral part of this balance sheet.

F-19
<PAGE>

INTERFLO TECHNOLOGIES, INC.
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS)

<TABLE>
<CAPTION>
<S> <C>
Net sales............................................................... $5,657
Cost of sales.......................................................... 3,960
------
Gross profit............................................................ 1,697
Selling, general and administrative expenses........................... 1,657
------
Operating income........................................................ 40
Other expenses, net.................................................... 16
------
Income before provision for state and local income taxes................ 24
Provision for state and local income taxes.............................. 2
------
Net income.............................................................. 22
------
Retained earnings, beginning of year.................................... 1,059
Distribution of earnings................................................ (144)
------
Retained earnings, end of year.......................................... $ 937
======
</TABLE>

The accompanying notes are an integral part of this statement.

F-20
<PAGE>

INTERFLO TECHNOLOGIES, INC.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS)

<TABLE>
<S> <C>
Operating activities:
Net income............................................................. $ 22
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization........................................ 214
Increase in allowance for doubtful accounts.......................... 15
Loss on disposal of property and equipment........................... 45
Changes in operating assets and liabilities:
Accounts receivable.................................................. (150)
Inventories.......................................................... (374)
Other assets......................................................... (28)
Accounts payable..................................................... 72
Accrued liabilities.................................................. 237
----
Net cash provided by operating activities.......................... 53
----
Investing activities:
Proceeds from sale of marketable securities, net....................... 249
Capital expenditures................................................... (500)
----
Net cash used in investing activities.............................. (251)
----
Financing activities:
Advances to related party, net......................................... (57)
----
Net cash used in financing activities.............................. (57)
----
Decrease in cash and cash equivalents.................................. (255)
Cash and cash equivalents at beginning of period....................... 485
----
Cash and cash equivalents at end of period............................. $230
====
Supplemental disclosures:
Cash paid during the period for:
Interest............................................................... $ 12
Income taxes........................................................... $ 28
</TABLE>

The accompanying notes are an integral part of this statement.

F-21
<PAGE>

INTERFLO TECHNOLOGIES, INC
NOTES TO FINANCIAL STATEMENTS

(1) BACKGROUND AND SIGNIFICANT EVENTS:

Prior to December 31, 1995, Interflo Technologies, Inc. (the "Company") and
Liqui-Mark Corp. ("Liqui-Mark") operated as divisions of Redound Industries,
Inc. ("Redound"). Effective December 31, 1995, Redound spun off the net assets
of Liqui-Mark to its shareholders and renamed Redound as Interflo
Technologies, Inc. The accompanying financial statements present the
operations of the Company.

Effective February 10, 1997, substantially all of the assets and certain
liabilities of the Company were acquired by Porex Corporation, a subsidiary of
Synetic, Inc., for $11,340,000 in cash.

The Company designs and manufactures porous plastics used in healthcare,
industrial and consumer applications.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Cash and Cash Equivalents

The Company considers all liquid investment instruments with an original
maturity of three months or less to be the equivalent of cash for purposes of
balance sheet presentation and for the statement of cash flows. These short-
term investments are stated at cost, which approximates market.

Marketable Securities

Statement of Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities" addresses the accounting and
reporting for investments in equity securities that have readily determinable
fair values and for all investments in debt securities.

Marketable securities consisted primarily of equity securities as of
December 31, 1996. These investments are carried at a cost of $140,000 at
December 31, 1996, which, based on quoted prices, approximates market value.
At December 31, 1996, gross unrealized gains/losses pertaining to marketable
securities and other investments were not material. Gains and losses on the
sale of marketable securities and other investments are calculated using the
specific identification method.

Inventories

Inventories are stated at the lower of first-in, first-out cost or market.
Cost includes raw materials, direct and indirect labor and overhead. Market is
based on current replacement cost for raw materials and supplies and on net
realizable value for finished goods. Inventories consisted of the following:

<TABLE>
<S> <C>
Raw materials and supplies...................................... $295,000
Finished goods.................................................. 126,000
--------
$421,000
========
</TABLE>
Property and Equipment

Property and equipment are stated at cost. For financial reporting purposes,
depreciation is provided principally on the straight-line and double declining
balance methods over the estimated useful lives of the assets. Useful lives
range from 5 to 40 years for building improvements and from 3 to 7 years for
machinery and equipment and furniture and fixtures. For income tax purposes,
certain assets are depreciated using accelerated methods. Expenditures for
maintenance, repair and renewals of minor items are charged to operations as
incurred. Major improvements are capitalized.

F-22
<PAGE>

INTERFLO TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)

Major Customers and Export Product Sales Information

For the year ended December 31, 1996 foreign sales accounted for 12% of net
sales. Accounts receivable from foreign entities represent 16% of total
accounts receivable at December 31, 1996. Sales to two major customers
accounted for 19% and 16% of net sales in 1996.

Accrued Liabilities

Accrued liabilities consisted of the following:

<TABLE>
<S> <C>
Accrued payroll and benefit costs............................... $185,000
Accrued rent.................................................... 126,000
Accrued utilities............................................... 73,000
Other........................................................... 122,000
--------
Total......................................................... $506,000
========
</TABLE>

Income Taxes

The Company operates under Subchapter S of the Internal Revenue Code and,
consequently, is not subject to Federal and certain state income taxes. The
stockholders include their pro rata share of the Company's income in their
personal income tax returns.

Revenue Recognition

Revenue is recognized upon product shipment, net of sales returns and
allowances.

Use of Estimates

(3) RELATED PARTY TRANSACTIONS:

The Company paid monthly rent in the amount of $6,000 to its principal
stockholder and related individuals for factory, warehouse and office space.
This space was rented on a month-to-month basis, through September 30, 1996.

The Company had a loan from an officer of $100,000 at December 31, 1996
bearing interest at 9% and payable on demand. The loan and accrued interest of
$121,000 were paid in full on February 11, 1997.

The accrued distributions to shareholders at December 31, 1996 of $144,000
were paid on February 10, 1997.

The Company sells marker nibs to Liqui-Mark which manufactures writing
instruments. Sales to Liqui-Mark were approximately $140,000 in 1996. At
December 31, 1996 the Company had a trade accounts receivable due from Liqui-
Mark of $34,000 and a payable resulting primarily from the spin-off of Liqui-
Mark of $193,000, which was subsequently paid.

The Company has guaranteed a bank line-of-credit (amounting to $2,000,000)
for Liqui-Mark. As of December 31, 1996, $380,000 was outstanding under this
line-of-credit. The Company was released from this guarantee on January 29,
1997.

F-23
<PAGE>

INTERFLO TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS

(4) EMPLOYEE BENEFIT PLANS:

The Company maintains a defined contribution savings plan (the "Savings
Plan") covering substantially all of its non-union employees. Participants
must be at least 21 years of age and have completed one year of service and
may contribute up to $9,500 of their earnings annually. The Savings Plan
allows for discretionary contributions to be made by the Company. For the year
ended December 31, 1996, no such contributions were made.

The Company maintains a defined benefit pension plan (the "Pension Plan")
covering substantially all of its non-union employees. Pension Plan benefits
were frozen effective August 3, 1993 and the Company has proposed to terminate
the Pension Plan effective December 31, 1996. The Pension Plan sponsor has
applied for a favorable determination letter from the Internal Revenue Service
for the termination of the Pension Plan. The Company contribution for 1996 was
approximately $51,000.

Effective July, 1993, a shareholder of the Company who is also a key
participant of the Pension Plan, elected to waive his right to a portion of
his benefits upon Pension Plan termination such that Pension Plan assets would
be sufficient to satisfy Pension Plan liabilities. After giving effect to this
waiver, plan assets are equal to the projected benefit obligation.

In determining the projected benefit obligation, the weighted average
assumed discount rate was 6.5%.

(5) COMMITMENTS AND CONTINGENCIES

Leases

The Company leases office and warehouse space and automobiles under various
noncancellable operating leases. Rental expense was $250,000 for the year
ended December 31, 1996. The minimum aggregate rental commitments under
noncancellable leases, excluding renewal options, are as follows:

<TABLE>
<S> <C>
1997............................................................ $ 363,000
1998............................................................ 375,000
1999............................................................ 383,000
2000............................................................ 385,000
2001............................................................ 388,000
Thereafter...................................................... 4,072,000
</TABLE>

Legal proceedings

F-24
<PAGE>

POREX CORPORATION AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS SCHEDULE

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Public Accountants................................... S-1
Schedule II--Valuation and Qualifying Accounts............................. S-2
</TABLE>
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

We have audited in accordance with generally accepted auditing standards the
consolidated financial statements of Porex Corporation and subsidiaries as of
June 30, 1996 and 1997 and for each of the three years in the period ended
June 30, 1997 included in the Form S-1 and have issued our report thereon
dated November 13, 1997. Our audits were made for the purpose of forming an
opinion on the basic financial statements taken as a whole. The schedule
listed in the index to consolidated financial statements schedule is presented
for purposes of complying with the Securities and Exchange Commission's rules
and is not a required part of the basic financial statements. The schedule has
been subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, fairly states in all material
respects the financial data required to be set forth therein in relation to
the basic financial statements taken as a whole.

ARTHUR ANDERSEN LLP

Atlanta, Georgia
November 13, 1997

S-1
<PAGE>

POREX CORPORATION AND SUBSIDIARIES

SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED JUNE 30, 1995, 1996 AND 1997

<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D COL. E
------ ---------- --------------------- ------------ ----------
ADDITIONS
---------------------
BALANCE AT CHARGES TO CHARGES TO BALANCE AT
BEGINNING COST AND OTHER END OF
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS (DEDUCTIONS) PERIOD
----------- ---------- ---------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Allowances for doubtful
accounts and sales
returns
June 30, 1995........... $393,000 307,000 7,000 (71,000)(1) $636,000
June 30, 1996........... $636,000 126,000 (7,000) (84,000)(1) $671,000
June 30, 1997........... $671,000 295,000 33,000 (280,000)(1) $719,000
September, 30, 1997
(unaudited)............ $719,000 56,000 -- (6,000)(1) $769,000
</TABLE>
- --------
(1) Write-off of uncollectible accounts and other reductions, net of
recoveries.

S-2
<PAGE>

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PRO-SPECTUS IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AU-
THORIZED BY THE COMPANY OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTI-
TUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE COMMON STOCK
IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE
SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT
THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN
THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.

---------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary........................................................ 3
Risk Factors.............................................................. 7
Use of Proceeds........................................................... 12
Dividend Policy........................................................... 12
Dilution.................................................................. 13
Capitalization............................................................ 14
Selected Financial Data................................................... 15
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................... 16
Pro Forma Financial Information........................................... 19
Business.................................................................. 21
Management................................................................ 30
Security Ownership of Management.......................................... 37
Transactions and Relationship with Principal Stockholder.................. 38
Description of Capital Stock.............................................. 40
Shares Eligible for Future Sale........................................... 41
Certain United States Federal Tax Considerations for Non-U.S. Holders of
Common Stock............................................................. 42
Underwriting.............................................................. 46
Legal Matters............................................................. 48
Experts................................................................... 48
Available Information..................................................... 49
Index to Financial Statements............................................. F-1
</TABLE>

UNTIL , 199 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS EF-
FECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT PARTICIPATING IN THIS
DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS DELIVERY REQUIRE-
MENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.

2,500,000 SHARES

POREX CORPORATION

COMMON STOCK

---------------

PROSPECTUS

---------------

MERRILL LYNCH & CO.

PRUDENTIAL SECURITIES INCORPORATED

, 1997

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such State.

INTERNATIONAL PROSPECTUS--ALTERNATE PAGE
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED NOVEMBER 14, 1997

PROSPECTUS

2,500,000 SHARES

POREX CORPORATION

COMMON STOCK

----------

All of the 2,500,000 shares of Common Stock, par value $.01 per share (the
"Common Stock"), offered hereby are being offered by Porex Corp. ("Porex" or
the "Company"). Of the 2,500,000 shares of Common Stock offered hereby, 500,000
shares are being offered outside the United States and Canada (the
"International Offering") and 2,000,000 are being offered in the United States
and Canada (the "U.S. Offering" and, together with the International Offering,
the "Offerings"). The public offering price per share and the underwriting
discount per share will be identical for both Offerings. See "Underwriting." It
is expected that following the completion of the Offerings, Synetic, Inc.
("Synetic"), currently the sole stockholder of the Company, will own
approximately 86% of the outstanding Common Stock. See "Risk Factors--
Substantial Control by Synetic."

The Company intends to apply for quotation of the Common Stock on the Nasdaq
National Market under the symbol "PORX."

SEE "RISK FACTORS" BEGINNING ON PAGE 7 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.

----------

(1) The Company has agreed to indemnify the several Underwriters against
certain liabilities, including liabilities under the Securities Act of
1933, as amended. See "Underwriting."
(2) Before deducting expenses payable by the Company estimated at $ .
(3) The Company has granted to the International Underwriters and the U.S.
Underwriters options, exercisable within 30 days of the date hereof, to
purchase up to an additional 75,000 and 300,000 shares of Common Stock,
respectively, solely to cover over-allotments, if any. If all such
additional shares are purchased, the total Price to Public, Underwriting
Discount and Proceeds to Company will be $ , $ and $ , respectively.
See "Underwriting."

----------

MERRILL LYNCH INTERNATIONAL PRUDENTIAL-BACHE SECURITIES

----------

The date of this Prospectus is , 1997.

<PAGE>

INTERNATIONAL PROSPECTUS--ALTERNATE PAGE

UNDERWRITING

Subject to the terms and conditions set forth in an international purchase
agreement (the "International Purchase Agreement") among the Company and each
of the underwriters named below (the "International Managers") and
concurrently with the sale of 2,000,000 shares of Common Stock to the U.S.
Underwriters (as defined below), the Company has agreed to sell to each of the
International Managers, and each of the International Managers for whom
Merrill Lynch International ("Merrill Lynch") and Prudential-Bache Securities
(U.K.) Inc. are acting as representatives (the "International
Representatives"), has severally agreed to purchase from the Company, the
number of shares of Common Stock set forth opposite its name below.

<TABLE>
<CAPTION>
NUMBER
INTERNATIONAL MANAGERS OF SHARES
---------------------- ---------
<S> <C>
Merrill Lynch International........................................
Prudential-Bache Securities (U.K.) Inc. ...........................
</TABLE>

<TABLE>
<S> <C>
-------
Total.............................................................. 500,000
=======
</TABLE>

The Company has also entered into a U.S. purchase agreement (the "U.S.
Purchase Agreement" and, together with the International Purchase Agreement,
the "Purchase Agreements") with certain underwriters in the United States and
Canada (the "U.S. Underwriters" and, together with the International Managers,
the "Underwriters") for whom Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Prudential Securities Incorporated are acting as
representatives (the "U.S. Representatives", and, together with the
International Representatives, the "Representatives"). Subject to the terms
and conditions set forth in the U.S. Purchase Agreement, and concurrently with
the sale of 500,000 shares of Common Stock to the International Managers
pursuant to the International Purchase Agreement, the Company has agreed to
sell to the U.S. Underwriters, and the U.S. Underwriters severally have agreed
to purchase, an aggregate of 2,000,000 shares of Common Stock. The initial
public offering price per share and the underwriting discount per share of
Common Stock are identical under the International Purchase Agreement and the
U.S. Purchase Agreement.

In each Purchase Agreement, the several International Managers and the
several U.S. Underwriters, respectively have agreed, subject to the terms and
conditions set forth in such Purchase Agreement, to purchase all the shares of
Common Stock offered hereby, if any are purchased. In the event of default by
an Underwriter, each Purchase Agreement provides that, in certain
circumstances, purchase commitments of the nondefaulting Underwriters may be
increased or the Purchase Agreement may be terminated. The sale of Common
Stock to the International Managers is conditioned upon the sale of shares of
Common Stock to the U.S. Underwriters.

The International Managers and the U.S. Underwriters have entered into an
intersyndicate agreement (the "Intersyndicate Agreement") that provides for
the coordination of their activities. Pursuant to the Intersyndicate
Agreement, the International Managers and the U.S. Underwriters are permitted
to sell shares of Common Stock to each other for purposes of resale at the
initial public offering price set forth on the cover page of this Prospectus,
less an amount not greater than the selling concession. Under the terms of the
Intersyndicate Agreement, the U.S. Underwriters and any dealer to whom they
sell shares of Common Stock will not offer to sell or sell shares of Common
Stock to persons who are non-U.S. or non-Canadian persons or to persons they
believe intend to resell to persons who are non-U.S. or non-Canadian persons,
and the International Managers and any dealer to whom they sell shares of
Common Stock will not offer to sell or sell shares of Common Stock to U.S.
persons or Canadian persons or to persons they believe intend to resell to
U.S. persons or Canadian persons, except, in each case, for transactions
pursuant to the Intersyndicate Agreement.

The International Representatives have advised the Company that the
International Managers propose initially to offer the shares of Common Stock
to the public at the initial public offering price set forth on the cover page
of this Prospectus, and to certain dealers at such price less a concession not
in excess of $ per

2
<PAGE>

INTERNATIONAL PROSPECTUS--ALTERNATE PAGE
share of Common Stock. The International Managers may allow, and such dealers
may allow, a discount not in excess of $ per share of Common Stock on
sales to certain other dealers. After the initial public offering, the public
offering price, concession and discount may be changed.

The Company has granted an option to the International Managers, exercisable
for 30 days after the date of this Prospectus, to purchase up to an aggregate
of 75,000 additional shares of Common Stock at the initial public offering
price set forth on the cover page of this Prospectus, less the underwriting
discount. The International Managers may exercise this option only to cover
over-allotments, if any, made on the sale of the Common Stock offered hereby.
To the extent that the International Managers exercise this option, each
International Manager will be obligated, subject to certain conditions, to
purchase a number of additional shares of Common Stock proportionate to such
International Manager's initial amount reflected in the foregoing table. The
Company has also granted an option to the U.S. Underwriters, exercisable
within 30 days after the date of this Prospectus, to purchase up to an
additional 300,000 shares of Common Stock to cover over-allotments, if any, on
terms similar to those granted to International Managers.

The Company has agreed to indemnify the International Managers against
certain liabilities, including liabilities under the Securities Act of 1933,
as amended, or to contribute to payments the Underwriters may be required to
make in respect thereof.

The International Representatives have advised the Company that the
Underwriters do not intend to confirm sales of Common Stock offered hereby to
any accounts over which they exercise discretionary authority.

3
<PAGE>

INTERNATIONAL PROSPECTUS--ALTERNATE PAGE
If the Underwriters create a short position in the Common Stock in
connection with the Offerings (i.e., if they sell more shares of Common Stock
than are set forth on the cover page of this Prospectus), the U.S.
Representatives may reduce that short position by purchasing Common Stock in
the open market. The U.S. Representatives may also elect to reduce any short
position by exercising all or part of the over-allotment option described
above.

Neither the Company nor any of the U.S. Underwriters makes any
representation or prediction, however, as to the direction or magnitude of any
effect that the transactions described above may have on the price of the
Common Stock. In addition, neither the Company nor any of the Underwriters
makes any representation that the Representatives will engage in such
transaction or that such transactions, once commenced, will not be
discontinued without notice.

Each International Manager has agreed that (i) it has not offered or sold,
and will not offer or sell, in the United Kingdom by means of any document any
shares of Common Stock other than to persons whose ordinary activities involve
them in acquiring, holding, managing or disposing of investments (as principal
or agent) for the purposes of their businesses or otherwise in circumstances
which have not resulted and will not result in an offer to the public in the
United Kingdom within the meaning of the Public Offers of Securities
Regulations 1995 (the "Regulations"), (ii) it has complied and will comply
with all applicable provisions of the Financial Services Act of 1986 and the
Regulations with respect to anything done by it in relation to the Common
Stock in, from or otherwise involving the United Kingdom and (iii) it has only
issued or passed on and will only issue or pass on to any person in the United
Kingdom any document received by it connection with the issuance of Common
Stock it that person is of a kind described in Article 11(3) of the Financial
Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996 or is a
person to whom the document may otherwise lawfully be issued or passed on.

LEGAL MATTERS

The statements of law in this Prospectus under the Caption "Risk Factors--
Regulatory Requirements" and under the caption "Business--Regulation," are
based upon the opinion of Kegler, Brown, Hill & Ritter, Columbus, Ohio,
special regulatory counsel to the Company.

EXPERTS

4
<PAGE>

INTERNATIONAL PROSPECTUS--ALTERNATE PAGE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PRO-SPECTUS IN CON-
NECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHO-
RIZED BY THE COMPANY OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTI-TUTE
AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE COMMON STOCK IN ANY
JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS
NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS
OF THE COMPANY SINCE THE DATE HEREOF.

---------------

TABLE OF CONTENTS

2,500,000 SHARES

POREX CORPORATION

COMMON STOCK

---------------

PROSPECTUS

---------------

MERRILL LYNCH INTERNATIONAL
PRUDENTIAL-BACHE SECURITIES

, 1997

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth all expenses, other than underwriting
discount and commissions, payable by the Company in connection with the sale
of the Common Stock being registered. All the amounts shown are estimates,
except for the registration fee with the Securities and Exchange Commission
and the NASD filing fee.

<TABLE>
<S> <C>
SEC registration fee................................................ $14,375
NASD Filing Fee..................................................... $ 5,244
Printing and engraving expenses..................................... *
Legal Fees and Expenses............................................. *
Accounting Fees and Expenses........................................ *
Transfer agent and registrar fees................................... *
Miscellaneous Expenses.............................................. *
-------
TOTAL $ *
=======
</TABLE>
- --------
* To be completed by amendment.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Company's Certificate of Incorporation and Bylaws set forth the extent
to which officers or directors of the Company may be indemnified against any
liabilities which they may incur. The general effect of such provisions is
that any person made a party to an action, suit or proceeding by reason of the
fact that he is or was a director or officer of the Company, or of another
corporation or other enterprise for which he served as such at the request of
the Company, shall be indemnified by the Company against expenses (including
attorney's fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding,
to the full extent permitted under the laws of the State of Delaware. The
Company's Certificate of Incorporation and Bylaws extend such indemnification
to any employee who serves as an officer or director of any corporation at the
request of the Company. These provisions of the Company's Certificate of
Incorporation and Bylaws are not inclusive of any other indemnification rights
to which an officer or director may be entitled, whether by contract or
otherwise.

The general effect of the indemnification provisions contained in Section
145 of the Delaware General Corporation Law is as follows: A director or
officer who, by reason of such directorship or officership, is involved in any
action, suit or proceeding (other than an action by or in the right of the
corporation) may be indemnified by the corporation against expenses (including
attorney's fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding
if he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, has no reasonable cause to believe that his
conduct was unlawful. A director or officer who, by reason of such
directorship or officership, is involved in any action or suit by or in the
right of the corporation may be indemnified by the corporation against
expenses (including attorneys' fees) actually and reasonably incurred by him
in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, except that no
indemnification may be made in respect of any claim, issue or matter as to
which he shall have been adjudged to be liable to the corporation unless and
only to the extent that a court of appropriate jurisdiction shall approve such
indemnification.

The Company's Certificate of Incorporation provides that a director shall
not be personally liable to the Company or to any of its stockholders for
monetary damages for breach of fiduciary duty as a director of the

II-1
<PAGE>

Company provided, however, that such provision shall not eliminate or limit
the liability of a director: (i) for breach of the director's duty of loyalty
to the Company or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) pursuant to Section 174 of the Delaware General Corporation Law, or (iv)
for any transaction from which the director derived an improper personal
benefit.

The Company intends to purchase director's and officers' liability insurance
for its executive officers and directors, assuming that such insurance is
available on commercially reasonable terms.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

Other than the shares issued to Synetic upon the Registrant's incorporation
in exchange for Synetic's shares in PTC, no securities of the Registrant have
been issued or sold by the Registrant in the last three years.

ITEM 16. EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
*1.1 Form of Underwriting Agreement
*3.1 Certificate of Incorporation of the Company
*3.2 By-laws of the Company
*4.1 Specimen Stock Certificate of the Company
*5.1 Opinion of Shearman & Sterling
*10.1 Porex Corporation Non-Employee Director Stock Option Plan
*10.2 Porex Corporation Class A Stock Option Plan
*10.3 Form of Indemnification Agreement with Management
*10.4 Form of Services Agreement between the Company and Synetic
*10.5 Form of Tax Sharing Agreement between the Company and Synetic
*10.6 Form of Indemnification Agreement between the Company and Synetic
*10.7 Form of Registration Rights Agreement between the Company and Synetic
*10.8 Agreement and Plan of Merger between PTC and Interflo
*21.1 Subsidiaries of the Company
23.1 Consent of Arthur Andersen LLP
*23.2 Consent of Shearman & Sterling (included in Exhibit 5.1)
23.3 Consent of Kegler, Brown, Hill & Ritter
24 Powers of Attorney (included on the signature page of this Registration Statement)
*27 Financial Data Schedule (for SEC use only)
</TABLE>
- --------
* to be filed by amendment.

ITEM 17. UNDERTAKINGS.

The undersigned Registrant hereby undertakes:

(1) To provide the underwriter at the closing specified in the underwriting
agreement, certificates in such denominations and registered in such names
as required by the underwriter to permit prompt delivery to each
purchaser.

(2) For the purpose of determining any liability under the Act of 1933, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

(3) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at the
time shall be deemed to be the initial bona fide offering thereof.

II-2
<PAGE>

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as express
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.

II-3
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Fairburn, State of
Georgia, on November 14, 1997.

POREX CORPORATION

/s/ Ray E. Hannah
By: ________________________________
Ray E. Hannah
President and Chief Executive
Officer

We, the undersigned officers and directors of Porex hereby severally
constitute and appoint Ray E. Hannah, Donald K. Jackson and James V. Manning,
and each of them, with full power of substitution, our true and lawful
attorney with full power to him singly to sign for us and in our names in the
capacities indicated below the Registration Statement on Form S-1 filed
herewith and any and all pre-effective and post-effective amendments to said
Registration Statement and, in connection with any registration of additional
securities pursuant to Rule 462(b) under the Securities Act of 1933, as
amended, to sign any abbreviated registration statement and any and all
amendments thereto, and to file the same, with all exhibits thereto and other
documents in connection therewith, in each case, with the Securities and
Exchange Commission, and generally to do all such things in our names and on
our behalf in our capacities as officers and directors to enable Porex
Corporation to comply with the provisions of the Securities Act of 1933, as
amended, and all requirements of the Securities and Exchange Commission,
hereby ratifying and confirming our signatures as they may be signed by our
said attorney to said Registration Statement and any and all amendments
thereto.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.

SIGNATURE TITLE DATE

/s/ Martin J. Wygod Chairman of the Board of Directors November 14,
- ------------------------- 1997
Martin J. Wygod

/s/ Ray E. Hannah President and Chief Executive Officer; Director
(Principal Executive Officer)
November 14,
- ------------------------- 1997
Ray E. Hannah

/s/ Donald K. Jackson Senior Vice President--Chief Financial Officer
(Principal Financial and Accounting Officer)
November 14,
- ------------------------- 1997
Donald K. Jackson

/s/ Ronald G. Kalish Director November 14,
- ------------------------- 1997
Ronald G. Kalish

/s/ James V. Manning Director November 14,
- ------------------------- 1997
James V. Manning

/s/ James Marden Director November 14,
- ------------------------- 1997
James Marden

/s/ Leo M. Walsh, Jr. Director November 14,
- ------------------------- 1997
Leo M. Walsh, Jr.

II-4
<PAGE>

INDEX OF EXHIBITS

<PAGE>

EXHIBIT 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our
reports (and to all references to our Firm) included in or made a part of this
Registration Statement.

Arthur Andersen LLP

Atlanta, Georgia
November 13, 1997

<PAGE>

CONFORMED COPY
EXHIBIT 23.3

[LETTERHEAD OF KEGLER, BROWN, HILL & RITTER]

November 12, 1997

Porex Corporation
Attn: Charles A. Mele, Esq.
669 River Drive Center 2
Elmwood Park, NJ 07407-1361

Gentlemen:

We hereby consent to the reference to our firm under the heading "Legal
Matters" in the Registration Statement on Form S-1 for Porex Corporation and
to file this Consent as an Exhibit to such Registration Statement. We also
consent to all references to our firm included in such Registration Statement
VERY TRULY YOURS,

KEGLER, BROWN, HILL & RITTER CO.,
L.P.A.

By: /s/ Jack A. Bjerke
----------------------------------
Jack A. Bjerke, Vice President

JAB:wlm