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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: January 2, 2000
(Date of earliest event reported)
EDO Corporation
(Exact name of registrant as specified in its charter)
New York 1-3985 11-0707740
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
60 East 42nd Street, Suite 5010, New York, New York 10165
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(212) 716-2000
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Item 5. Other Events.
On January 3, 2000, EDO Corporation, a New York corporation,
EDO Acquisition III Corporation, a Delaware corporation and a wholly-owned
subsidiary of EDO Corporation, and AIL Technologies Inc., a Delaware
corporation, announced that they had entered into an Agreement and Plan of
Merger (the "Merger Agreement"). The press release relating to the Merger
Agreement is attached as Exhibit 99.1 hereto.
Item 7. Exhibits.
99.1 Press Release, dated January 3, 2000.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
EDO CORPORATION
(Registrant)
By: /s/ Frank A. Fariello
Name: Frank A. Fariello
Title: Chief Executive Officer
Date: January 3, 2000
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EXHIBIT INDEX
Exhibit
Number Exhibit
99.1 Press Release, dated January 3, 2000.
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EXHIBIT 99.1
[EDO CORPORATION LOGO]
FOR IMMEDIATE RELEASE 60 East 42nd Street,
Suite 5010
New York, NY 10165
212-716-2000
AGENCY CONTACT: AIL COMPANY CONTACT: EDO COMPANY CONTACT:
Neil G. Berkman Associates James M. Smith Frank A. Fariello
1900 Avenue of the Stars President & CEO Chairman & CEO
Los Angeles, CA 90067 (516) 595-5083 (212) 716-2000
(310) 277-5162 www.ail.com www.edocorp.com
[email protected]
EDO CORPORATION AND AIL TECHNOLOGIES INC.
AGREE TO MERGE
$87 Million Transaction Creates Integrated
Defense and Aerospace Technology Company
With Current Annualized Revenue of Approximately $240 Million
NEW YORK, NEW YORK, January 3, 2000 . . . EDO CORPORATION (NYSE:EDO)
and privately-held AIL TECHNOLOGIES INC., Deer Park, New York, announced today
that they have signed a definitive merger agreement which will create an
integrated defense and aerospace technology company with current annualized
revenue of approximately $240.0 million.
AIL has an installed base of electronic systems products of
approximately $5.0 billion, including the defensive avionics on the B-1B bomber
and the stand-off jamming systems on the EA-6B. In addition, AIL manufactures a
broad array of aircraft, marine and satellite antennas including antennas for
Boeing's entire line of commercial aircraft.
AIL had revenue of $111.3 million, EBITDA of $11.1 million, and net
income of $1.9 million for the first nine months of 1999. EDO reported revenue
of $70.5 million, EBITDA of $9.2 million, and net earnings from continuing
operations of $4.2 million for the first nine months of 1999.
Under the agreement and share purchase agreements with certain AIL
shareholders, all of the outstanding common and preferred shares of AIL will be
exchanged or purchased for approximately 6.6 million newly-issued shares of
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EDO common stock and a cash payment of approximately $13.1 million. The merged
company will also assume approximately $35.2 million of AIL debt. Approximately
5.3 million of the newly-issued shares will be held in trust by AIL's ESOP, of
which approximately 2.8 million will not be included in EDO's fully diluted
shares for financial reporting purposes; therefore, on a pro forma basis, EDO's
fully diluted shares outstanding will approximate 12.0 million shares. The
transaction, with a total value of approximately $86.8 million based on EDO's
closing price on December 31, 1999, is expected to be tax-free to AIL
shareholders and to close in the first half of 2000.
(more)
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EDO CORPORATION AND AIL TECHNOLOGIES INC. AGREE TO MERGE
January 3, 2000
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The transaction is subject to approval by both companies' shareholders,
including the trustee of the AIL ESOP, and regulatory authorities. The trustee
has agreed that, assuming that circumstances at the date of the merger
agreement, including the trustee's valuation of AIL and the price of EDO stock,
prevail at the time of the shareholder vote, it will vote the AIL ESOP shares in
accordance with the vote of the AIL ESOP participants. EDO and AIL soon will
announce dates for meetings of shareholders to consider the proposed
transaction.
Frank A. Fariello, Chairman and Chief Executive Officer of EDO
Corporation, said, "This transaction will take advantage of each company's
leadership in mission-critical defense and aerospace technologies. It will more
than double EDO's revenue. The funded backlog of both companies combined was
$230.0 million at September 30, 1999, forming a very firm foundation for the
merged company. I believe that this merger is a major step toward achieving the
size necessary to compete effectively in today's business environment. We expect
the merger with AIL Technologies to be accretive to earnings in 2000 before
taking merger-related and integration costs into account."
Fariello will continue as Chairman during the initial period of
integration of the two companies. James M. Smith, President and Chief Executive
Officer of AIL and a Director of EDO since early 1999, will be the merged
company's President and Chief Executive Officer. Ira Kaplan will retain his
current position as Chief Operating Officer. Darrell Reed, Chief Financial
Officer of AIL, will be appointed Chief Financial Officer of the merged company.
Neil Armstrong, AIL's Chairman, and AIL Director Ron Leach will join EDO's
existing board members on the merged company's Board of Directors.
"James Smith is a well known, respected executive in the defense and
aerospace community. He has a proven track record in building AIL to its
position of industry leadership. His background and knowledge of both EDO and
AIL will allow him to hit the ground running as CEO of the merged company,"
Fariello said.
James Smith added, "We believe that this merger creates a company that
is far more than the sum of its parts. Both of our companies supply high
technology mission critical products to strong niche markets and common, loyal
customers. This creates excellent opportunities for cross marketing and should
improve the productivity of our combined sales force. Moreover, the merged
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company will offer a broader range of products than either did separately. Our
manufacturing technologies also are similar, which should provide opportunities
for synergistic savings in manufacturing, quality control and administrative
functions.
(more)
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EDO CORPORATION AND AIL TECHNOLOGIES INC. AGREE TO MERGE
January 3, 2000
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"In addition, with our larger size, we expect our opportunities to
participate in customers' larger programs also to increase. Combining EDO's
strengths in marine command and control and undersea sonar systems, airborne
mine countermeasures, aircraft stores suspension and release equipment and
related technologies with AIL's strengths in the design and manufacture of RF
sensors and systems for defense and aerospace applications will position the
merged company to address a broader range of markets and customers than ever
before. Both companies are dedicated to the aggressive pursuit of customer
satisfaction. With its many years of combined experience, the new management
team is geared to take full advantage of the exciting growth opportunities
available to us in the aerospace and defense industries."
ABOUT AIL TECHNOLOGIES
AIL Technologies (www.ail.com) was founded in 1945 by a group of
scientists and engineers that collaborated on scientific war efforts during
World War II. In subsequent years, AIL became part of the Eaton Corporation,
Cleveland, Ohio. In 1997 a management-led ESOP purchased the Company from Eaton,
which retained a minority interest. Eaton's minority interest in AIL will end
upon completion of the merger with EDO. AIL Technologies has approximately 1,100
employees and operates manufacturing facilities in Deer Park, New York and
Westlake and Lancaster, California.
ABOUT EDO CORPORATION
Headquartered in New York City, EDO Corporation (www.edocorp.com)
designs and manufactures advanced electronic, mechanical and electro-optical
systems and engineered materials for domestic and international defense and
industrial markets. EDO employs approximately 750 people at facilities in North
Amityville, New York, Shelton, Connecticut, Chesapeake and Falls Church,
Virginia, Horsham, Pennsylvania, Salt Lake City, Utah and Baton Rouge,
Louisiana.
The statements contained in this release which are not historical facts may be
deemed to contain forward-looking statements with respect to events, the
occurrence of which involve risks and uncertainties,
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including, without limitation, demand and competition for the Company's
products, and other risks or uncertainties detailed in the Company's Securities
and Exchange Commission filings.
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