SCHEDULE 14A
(Rule 14a-101)
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SCHEDULE 14A INFORMATION
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Echlin Inc.
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(Name of Registrant as Specified in Its Charter)
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(4) Date Filed:
May 4, 1998
[Dana Corporation logo] [Echlin Inc. logo]
<PAGE>
[Dana Corporation logo] May 4, 1998
Certain statements contained herein constitute "forward-looking" statements
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve numerous assumptions, known and unknown
risks, uncertainties and other factors which may cause actual and future
performance or achievements of Dana or Echlin, including with respect to the
proposed merger, to be materially different from any future results, performance
or achievements expressed or implied by such forward-looking statements. Such
factors include, among other things, the following: achieving sales levels to
fulfill revenue expectations; the absence of presently unexpected costs or
charges, certain of which may be outside the control of Dana or Echlin; the
cyclical nature of the automotive industry; failure to achieve synergies or
savings anticipated in the merger; general economic and business conditions; and
competition. Additional factors are detailed in Dana's and Echlin's public
filings with the Securities and Exchange Commission. Dana and Echlin disclaim
any responsibility to update any forward-looking statement provided in this
press release.
<PAGE>
[Dana Corporation logo] [Echlin Inc. logo]
\ /
- - Largest independent automotive supplier in North America
- - Recognized leader in the global automotive aftermarket
- - Premier global Tier 1 systems supplier to OEMs
- - Pro forma combined sales of $13 billion
- - 78,000 employees in over 30 countries
<PAGE>
[Dana Corporation
logo]
TRANSACTION TERMS
Current value per Echlin share $55.00
Exchange ratio per Echlin share 0.9293
New Dana shares issued 59.1 million
Echlin equity value $3.6 billion
Net debt assumed $0.6 billion
Total value $4.2 billion
- Tax-free stock-for-stock exchange
- Pooling of interests accounting treatment
- Echlin shareholders to own 36% of combined company
- Subject to:
- Approval by both companies' shareholders
- Customary regulatory approvals
- Completion anticipated in third calendar quarter of 1998
<PAGE>
[Dana Corporation [Echlin Inc. logo]
logo]
WHY?
- - Good for both companies' shareholders
- Accretive to 1999 First Call EPS
- Expected to improve P/E
- Strengthens balance sheet
- - Excellent fit
- Dana strong in OE and international
- Echlin aftermarket expertise
- Dana strong in manufacturing and asset management
- Echlin strength in sales and marketing
- - Growth engine for Dana
- Two new core products
- Brakes $1+ billion business
- Fluid systems $1+ billion business
- Expand and enhance engine parts SBU to $3 billion
- 7th SBU - Echlin Aftermarket
<PAGE>
[Dana Corporation logo]
BEYOND 2000 GOALS
OUR COMMITMENT TO GROWTH
- - Dana will be a growth company providing shareholders with superior
investment returns
- - Dana will obtain 50% of sales from highway vehicle OEM customers and 50%
from aftermarket, off-highway and industrial markets
- - Dana will be the leading global systems and components supplier to the
customers we serve
- - Dana will obtain 50% of sales from outside the United States
- - The Dana Style will be fully implemented throughout Dana's globally
integrated organization
<PAGE>
[Dana Corporation logo]
STRATEGIC RATIONALE
- - Creates the most extensive aftermarket product line and strongest
distribution network of any independent supplier
- - Generates sales growth opportunities through global aftermarket
cross-selling
- North America
- Europe
- South America
- - Enhances Dana's position as an OE supplier of integrated systems
- Modules/Drivetrain Systems/Rolling Chassis
- Fuel and Engine Management
- Comprehensive Brake Systems
- - Significant sales and cost synergies
- - Accretive to earnings per share
<PAGE>
[Dana Corporation logo]
BALANCED MIX BETWEEN
MARKETS SERVED
[Pie charts reflecting the following information:
OE Aftermarket
Dana 72% 28%
Echlin 32% 68%
Combined 61% 39%]
<PAGE>
[Dana Corporation logo]
DIVERSIFIED CUSTOMER BASE
[Pie charts reflecting the following information:
Big 3 Other
Dana 40% 60%
Echlin 16% 84%
Combined 33% 67%]
<PAGE>
[Dana Corporation logo]
SALES BY PRODUCT LINE
[Pie charts reflecting the following information:
Brake Engine Drivechain/
Systems Systems Chassis Systems Other
Dana 15% 51% 34%
Echlin 38% 33% 17% 12%
Combined Company 11% 20% 41% 28%]
<PAGE>
[Dana Corporation logo]
MOST INTEGRATED CHASSIS
SYSTEMS SUPPLIER IN THE INDUSTRY
DRIVETRAIN SYSTEMS STEERING SYSTEMS SUSPENSION SYSTEMS
- - Axles - Hydraulic power - Shock absorbers
steering components
- - Driveshafts - Electro-hydraulic - Tie rods/ball joints
power steering systems
- - Halfshafts
- - CV and universal joints BRAKE SYSTEMS AND
COMPONENTS
- - Wheel ends [Photograph of drive - Hydraulic brake
chain] components
- - Transfer cases - Electric brake controls
- - Corner and driving axle - ABS components
modules
POWER TRANSMISSION STRUCTURAL COMPONENTS
COMPONENTS
- - Clutch release bearings - Frames
- - Bell housings - Front and rear cradles
- - Shifters and linkages - Front and rear modules
- - Engine mounts
- - Transmission and oil
coolers
<PAGE>
[Dana Corporation logo]
COMPLETE ENGINE SYSTEMS CAPABILITY
[Photograph of engine]
COMPLETE SEALING SYSTEMS
ENGINE HARD PARTS
- - Gaskets - Piston rings
- - Oil seals - Cylinder lines
- - O-rings - Camshafts
- - Cam and engine covers - Timing components
AIR AND FLUID FUEL AND ENGINE
MANAGEMENT COMPONENTS MANAGEMENT SYSTEMS
- - Filters - Sensors, actuators and electronics
- - Hose assemblies - Ignition components
- - Water pumps - Electronic fuel injectors
- - Oil pumps, pans and coolers - Fuel pumps, lines and rails
- - Evaporators - Emission control components
<PAGE>
[Dana Corporation
logo]
UNPARALLELED STABLE OF BRANDS
PERFECT CIRCLE(registered) [American
Electronic
[Components, [PTG logo]
Inc. logo]
WEATHERHEAD(registered) [Raybestos [Echlin
logo] Automotive
logo]
VICTOR REINZ(registered) [ARBA logo] [Borg Warner logo]
SPICER(registered) [NAPA logo] [ECHLIN logo] [SPRAGUE [LONG logo]
logo]
WIX(registered) [QH logo] [BECK/ARNLEY [BROSOL logo]
WORLDPARTS logo]
[FTE [ACCEL logo] [NAPA logo] [United
Automotive Brake Parts
logo] logo]
<PAGE>
[Dana Corporation logo]
GLOBAL FACILITIES AND DISTRIBUTION
Dana Echlin Pro Forma
North America 181 138 319
Europe 67 37 104
South America 37 10 47
Asia/Pacific/South Africa 44 12 56
-- -- --
Total 329 197 526
<PAGE>
[Dana Corporation logo]
SYNERGIES
- - Significant new revenue opportunities for each company as well as cost
savings
- - Run-rate synergies of approximately $200 million pre-tax
- Incremental to Echlin's previously announced Phase I and Phase II
savings
- - Cost savings will be realized in the following areas:
- Manufacturing and distribution rationalization
- Global sourcing
- Sales and marketing
- Research and development
<PAGE>
[Dana Corporation logo]
COMBINED FINANCIAL RESULTS
1997 CALENDARIZED DATA
INCOME STATEMENT DANA ECHLIN COMBINED
Sales $8,291 $3,549 $11,840
EBIT $577 $237 $814
Net Income $369 $130 $499
EBITDA $841 $350 $1,191
DANA ECHLIN*
BALANCE SHEET (3/31/98) (2/28/98) COMBINED
Total Assets $6,297 $2,200 $8,497
Total Debt $1,543 $632 $2,175
Total Shareholders Equity $1,774 $970 $2,744
Total Debt/Capital 46.5% 39.5% 44.2%
Debt Rating (S&P/Moody's) A-/Baa1
*Pro forma for the divestiture of Midland-Grau
<PAGE>
[Dana Corporation logo]
A GLOBAL LEADER
IN AUTOMOTIVE COMPONENTS
- - Largest independent automotive supplier in North America
- - Aftermarket leadership - #1 independent supplier in the world
- - Sales growth through leveraging of resources and capabilities
- - Enhanced position as a leading OE supplier of integrated systems
- Modules/Drivetrain Systems /Rolling Chassis
- Fuel and Engine Management
- Light Vehicle Brakes
- - Significant cost synergies
- - Accretive to earnings per share
- - Platform for enhanced growth in shareholder value
<PAGE>
[Dana Corporation [Echlin Inc. logo]
logo]
WHY?
- - Good for both companies' shareholders
- Accretive to 1999 First Call EPS
- Expected to improve P/E
- Strengthens balance sheet
- - Excellent fit
- Dana strong in OE and international
- Echlin aftermarket expertise
- Dana strong in manufacturing and asset management
- Echlin strength in sales and marketing
- - Growth engine for Dana
- Two new core products
- Brakes $1+ billion business
- Fluid systems $1+ billion business
- Expand and enhance engine parts SBU to $3 billion
- 7th SBU - Echlin Aftermarket
