<PAGE>
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
SCHEDULE 13E-3
RULE 13E-3 TRANSACTION STATEMENT
(PURSUANT TO SECTION 13(E) OF THE SECURITIES EXCHANGE ACT OF 1934)
MAXSERV, INC.
(NAME OF THE ISSUER)
SEARS, ROEBUCK AND CO.
MAX ACQUISITION DELAWARE INC.
(NAME OF THE PERSONS FILING STATEMENT)
COMMON STOCK $.01 PAR VALUE PER SHARE
(TITLE OF CLASS OF SECURITIES)
005779171
(CUSIP NUMBER OF CLASS OF SECURITIES)
---------------
MICHAEL D. LEVIN, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
SEARS, ROEBUCK AND CO.
3333 BEVERLY ROAD
HOFFMAN ESTATES, IL 60179
(847) 286-2500
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE
NOTICES AND COMMUNICATIONS ON BEHALF OF PERSONS FILING STATEMENT)
---------------
COPY TO:
MARK D. GERSTEIN, ESQ.
LATHAM & WATKINS
SEARS TOWER, SUITE 5800
233 SOUTH WACKER DRIVE
CHICAGO, IL 60606-6401
(312) 876-7700
This statement is filed in connection with (check the appropriate box):
[_](a)The filing of solicitation materials or an information statement subject
to Regulation 14A, Regulation 14C, or Rule 13e-3(c) under the Securities
Exchange Act of 1934.
[_](b)The filing of a registration statement under the Securities Act of 1933.
[X](c)A tender offer.
[_](d)None of the above.
Check the following box if the soliciting materials or information statement
referred to in checking box (a) are preliminary copies. [_]
CALCULATION OF FILING FEE:
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<TABLE>
<CAPTION>
Transaction Valuation* Amount of Filing Fee**
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<S> <C>
$35,998,711 $7,200
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</TABLE>
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* For purposes of calculating the fee only. The amount assumes the purchase
of 5,142,673 shares of Common Stock, par value $.01 per share, of Wimbledon
at $7.00 net in cash per share, which represents all outstanding shares at
February 4, 1997 not owned by the persons filing this statement.
** The amount of the filing fee calculated in accordance with Regulation
240.0-11 of the Securities Exchange Act of 1934 equals 1/50th of 1% of the
value of the shares to be purchased.
[X]Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid:$7,200.00 Filing Parties: Sears, Roebuck and
Co. Max Acquisition
Delaware Inc.
Form or Registration No.:Schedule
14D-1 Date Filed:February 4, 1997
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<PAGE>
INTRODUCTION
This Rule 13E-3 Transaction Statement (the "Schedule 13E-3") relates to a
tender offer by Max Acquisition Delaware Inc., a Delaware corporation
("Purchaser") and a wholly owned subsidiary of Sears, Roebuck and Co., a New
York corporation ("Parent"), to purchase any and all outstanding shares of
Common Stock, par value $.01 per share (the "Shares"), of MaxServ, Inc., a
Delaware corporation (the "Company"), not currently owned by Purchaser or
Parent, for a purchase price of $7.00 per share, net to the seller in cash,
without interest thereon, upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated February 4, 1997 (the "Offer to
Purchase") and in the related Letter of Transmittal (the "Letter of
Transmittal" and, together with the Offer to Purchase, the "Offer"), copies of
which are filed as Exhibits (a)(1) and (a)(2) respectively to the Tender Offer
Statement on Schedule 14D-1 (the "Schedule 14D-1") filed by Purchaser and
Parent with the Securities and Exchange Commission on the date hereof. This
Schedule 13E-3 is being filed by Purchaser and Parent.
The following cross-reference sheet is being supplied pursuant to General
Instruction F to Schedule 13E-3 and shows the location in the Schedule 14D-1
of the information required to be included in response to the items of this
Schedule 13E-3. The information set forth in the Schedule 14D-1, including all
exhibits thereto, is hereby expressly incorporated herein by reference and the
responses to each item of this Schedule 13E-3 are qualified in their entirety
by reference to the information contained in the Schedule 14D-1 and the
exhibits thereto. All cross references in this Schedule 13E-3, other than
cross references to the Schedule 14D-1, are to the Offer to Purchase.
The information contained in this Schedule 13E-3 concerning the Company,
including, without limitation, information concerning the Company's capital
structure and historical financial statements, directors and executive
officers, was obtained from the Company's publicly available filings with the
Securities and Exchange Commission. Neither Purchaser nor Parent takes any
responsibility for the accuracy of such information.
<PAGE>
CROSS-REFERENCE SHEET TO
SCHEDULE 14D-1
<TABLE>
<CAPTION>
LOCATION OF ITEM(S)
ITEM AND CAPTION OF SCHEDULE 13E-3 IN SCHEDULE 14D-1
- ---------------------------------- -------------------
<S> <C>
1. ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION.
(a)-(c)................................................... 1(a)-(c)
(d)-(f) .................................................. *
2. IDENTITY AND BACKGROUND.
(a)-(g)................................................... 2
3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS.
(a)....................................................... 3
(b)....................................................... *
4. TERMS OF THE TRANSACTION.
(a)-(b)................................................... *
5. PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE.
(a)-(e)................................................... 5(a)-(e)
(f)....................................................... 5(g)
(g)....................................................... *
6. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)....................................................... 4(a)
(b) ...................................................... *
(c) ...................................................... 4(b)
(d) ...................................................... 4(c)
7. PURPOSE(S), ALTERNATIVES, REASONS AND EFFECTS.
(a)....................................................... 5
(b)-(d) .................................................. *
8. FAIRNESS OF THE TRANSACTION.
(a)-(f)................................................... *
9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS.
(a)-(c)................................................... *
10. INTEREST IN SECURITIES OF THE ISSUER.
(a)-(b)................................................... 6
11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO
THE ISSUER'S SECURITIES................................... 7
12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSONS
WITH REGARD TO THE TRANSACTION.
(a)-(c)................................................... *
13. OTHER PROVISIONS OF THE TRANSACTION.
(a)-(c)................................................... *
14. FINANCIAL INFORMATION.
(a)....................................................... 9
(b)....................................................... *
15. PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED.
(a)....................................................... *
(b) ...................................................... 8
16. ADDITIONAL INFORMATION.................................... 10(f)
separately included
17. MATERIAL TO BE FILED AS EXHIBITS.......................... herewith
</TABLE>
- --------
* The item is not required by Schedule 14D-1 of the Securities Exchange Act
of 1934, as amended.
<PAGE>
ITEM 1. ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION.
(a)-(c) The answers to Items 1(a)-(c) of the Schedule 14D-1 are incorporated
herein by reference. Information concerning the approximate number of holders
of record of the Shares is set forth in the section entitled "INTRODUCTION" of
the Offer to Purchase and is incorporated herein by reference.
(d) The information set forth in the sections entitled "THE TENDER OFFER--
Price Range of Shares; Dividends" and "THE TENDER OFFER--Dividends and
Distributions" of the Offer to Purchase is incorporated herein by reference.
(e) Not applicable.
(f) The information set forth in the section entitled "SPECIAL FACTORS--
Background of the Offer" of the Offer to Purchase is incorporated herein by
reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(g) The answers to Item 2 of the Schedule 14D-1 are incorporated herein
by reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS.
(a)-(b) The information set forth in the sections entitled "INTRODUCTION,"
"SPECIAL FACTORS--Background of the Offer" and "SPECIAL FACTORS--Purpose and
Structure of the Offer; Plans for the Company after the Offer" of the Offer to
Purchase is incorporated herein by reference.
ITEM 4. TERMS OF THE TRANSACTION.
(a) The information set forth in the sections entitled "INTRODUCTION," "THE
TENDER OFFER--Terms of the Offer," "THE TENDER OFFER--Acceptance for Payment
and Payment for Shares," "THE TENDER OFFER--Procedure for Tendering Shares,"
"THE TENDER OFFER--Withdrawal Rights," "THE TENDER OFFER--Certain Conditions
of the Offer" and "THE TENDER OFFER--Certain Regulatory and Legal Matters" of
the Offer to Purchase is incorporated herein by reference.
(b) Not applicable.
ITEM 5. PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE.
(a)-(g) The answers to Item 5 of the Schedule 14D-1 are incorporated herein
by reference.
ITEM 6. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The answer to Item 4(a) of the Schedule 14D-1 is incorporated herein by
reference.
(b) The information set forth in the sections entitled "THE TENDER OFFER--
Source and Amount of Funds" and "THE TENDER OFFER--Fees and Expenses" of the
Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
(d) Not applicable.
ITEM 7. PURPOSE(S), ALTERNATIVES, REASONS AND EFFECTS.
(a) The answer to Item 5 of the Schedule 14D-1 is incorporated herein by
reference.
(b)-(d) The information set forth in the sections entitled "INTRODUCTION,"
"SPECIAL FACTORS--Background of the Offer," "SPECIAL FACTORS--Purpose and
Structure of the Offer; Plans for the Company After the Offer," "SPECIAL
FACTORS--Fairness of the Offer," "SPECIAL FACTORS--Certain United States
Federal Income Tax Consequences" and "THE TENDER OFFER--Certain Effects of the
Transaction" of the Offer to Purchase is incorporated herein by reference.
<PAGE>
ITEM 8. FAIRNESS OF THE TRANSACTION.
(a)-(b) The information set forth in the sections entitled "INTRODUCTION,"
"SPECIAL FACTORS--Fairness of the Offer" and "SPECIAL FACTORS--Opinion of
Merrill Lynch as Financial Advisor to Parent" of the Offer to Purchase and in
Annex II to the Offer to Purchase is incorporated herein by reference.
(c)-(e) The information set forth in the sections entitled "INTRODUCTION,"
"SPECIAL FACTORS--Background of the Offer," "SPECIAL FACTORS-- Purpose and
Structure of the Offer; Plans for the Company After the Offer," "SPECIAL
FACTORS--Fairness of the Offer," "SPECIAL FACTORS--Opinion of Merrill Lynch as
Financial Advisor to Parent" and "THE TENDER OFFER--Terms of the Offer" of the
Offer to Purchase is incorporated herein by reference.
(f) Not applicable.
ITEM 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS.
(a)-(c) The information set forth in the sections entitled "INTRODUCTION,"
"SPECIAL FACTORS--Background of the Offer," "SPECIAL FACTORS--Fairness of the
Offer," "SPECIAL FACTORS--Opinion of Merrill Lynch as Financial Advisor to
Parent" and "THE TENDER OFFER--Certain Information Concerning the Company" of
the Offer to Purchase and in Annex II to the Offer to Purchase is incorporated
herein by reference.
ITEM 10. INTEREST IN SECURITIES OF THE ISSUER.
(a)-(b) The answer to Item 6 of the Schedule 14D-1 is incorporated herein by
reference.
ITEM 11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO THE
ISSUER'S SECURITIES.
The answer to Item 7 of the Schedule 14D-1 is incorporated herein by
reference.
ITEM 12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSONS WITH REGARD
TO THE TRANSACTION.
(a)-(b) Not applicable.
ITEM 13. OTHER PROVISIONS OF THE TRANSACTION.
(a) The information set forth in "SPECIAL FACTORS--Appraisal Rights" of the
Offer to Purchase and in Annex III to the Offer to Purchase is incorporated
herein by reference.
(b)-(c) Not applicable.
ITEM 14. FINANCIAL INFORMATION.
(a) The information set forth in the section entitled "THE TENDER OFFER--
Certain Information Concerning the Company" of the Offer to Purchase
incorporated herein by reference.
(b) Not applicable.
ITEM 15. PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED.
(a) The information set forth in the sections entitled "INTRODUCTION,"
"SPECIAL FACTORS--Background of the Offer" and "SPECIAL FACTORS--Purpose and
Structure of the Offer; Plans for the Company after the Offer" of the Offer to
Purchase is incorporated herein by reference.
(b) The answer to Item 8 of the Schedule 14D-1 is incorporated herein by
reference.
<PAGE>
ITEM 16. ADDITIONAL INFORMATION.
The answer to Item 10(f) of the Schedule 14D-1 is incorporated herein by
reference.
ITEM 17. MATERIAL TO BE FILED AS EXHIBITS.
(a) Not applicable.
(b)(1) Merrill Lynch Opinion (included as Annex II to the Offer to Purchase
and incorporated herein by reference).
(b)(2) Presentation of Merrill Lynch & Co. to the Board of Directors of
Sears, Roebuck and Co., dated February 3, 1997.
(c) Not applicable
(d)(1) Offer to Purchase (previously filed as exhibit (a)(1) to the Schedule
14D-1 and incorporated herein by reference).
(d)(2) Letter of Transmittal (previously filed as exhibit (a)(2) to the
Schedule 14D-1 and incorporated herein by reference).
(d)(3) Notice of Guaranteed Delivery (previously filed as exhibit (a)(3) to
the Schedule 14D-1 and incorporated herein by reference).
(d)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees (previously filed as exhibit (a)(4) to the Schedule 14D-1 and
incorporated herein by reference).
(d)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees (previously filed as exhibit (a)(5) to the
Schedule 14D-1 and incorporated herein by reference).
(d)(6) Guidelines for Ceritification of Taxpayer Identification Number on
Substitute Form W-9 (previously filed as exhibit (a)(6) to the Schedule 14D-1
and incorporated herein by reference).
(d)(7) Text of Press Release issued by Parent, dated February 4, 1997
(previously filed as exhibit (a)(7) to the Schedule 14D-1 and incorporated
herein by reference).
(d)(8) Summary Advertisement, dated February 4, 1997 (previously filed as
exhibit (a)(8) to the Schedule 14D-1 and incorporated herein by reference).
(e) Appraisal Rights of Dissenting Stockholders Under Delaware Law (included
as Annex III to the Offer to Purchase and incorporated herein by reference).
(f) Not applicable.
<PAGE>
SIGNATURE
AFTER DUE INQUIRY AND TO THE BEST OF MY KNOWLEDGE AND BELIEF, I CERTIFY THAT
THE INFORMATION SET FORTH IN THIS STATEMENT IS TRUE, COMPLETE AND CORRECT.
Dated: February 4, 1997 Max Acquisition Delaware Inc.
/s/ John T. Pigott
By: _________________________________
Name: John T. Pigott
Title: Vice President and
Treasurer
Sears, Roebuck and Co.
/s/ Michael D. Levin
By: _________________________________
Name: Michael D. Levin
Title: Senior Vice President,
General Counsel and Secretary
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------------------
(a) Not applicable.
(b)(1) Merrill Lynch Opinion (included as Annex II to the Offer to Purchase
and incorporated herein by reference).
(b)(2) Presentation of Merrill Lynch & Co. to the Board of Directors of
Sears, Roebuck and Co., dated February 3, 1997.
(c) Not applicable
(d)(1) Offer to Purchase (previously filed as exhibit (a)(1) to the Schedule
14D-1 and incorporated herein by reference).
(d)(2) Letter of Transmittal (previously filed as exhibit (a)(2) to the
Schedule 14D-1 and incorporated herein by reference).
(d)(3) Notice of Guaranteed Delivery (previously filed as exhibit (a)(3) to
the Schedule 14D-1 and incorporated herein by reference).
(d)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees (previously filed as exhibit (a)(4) to the Schedule 14D-1 and
incorporated herein by reference).
(d)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees (previously filed as exhibit (a)(5) to the
Schedule 14D-1 and incorporated herein by reference).
(d)(6) Guidelines for Ceritification of Taxpayer Identification Number on
Substitute Form W-9 (previously filed as exhibit (a)(6) to the Schedule 14D-1
and incorporated herein by reference).
(d)(7) Text of Press Release issued by Parent, dated February 4, 1997
(previously filed as exhibit (a)(7) to the Schedule 14D-1 and incorporated
herein by reference).
(d)(8) Summary Advertisement, dated February 4, 1997 (previously filed as
exhibit (a)(8) to the Schedule 14D-1 and incorporated herein by reference).
(e)(1) Appraisal Rights of Dissenting Stockholders Under Delaware Law
(included as Annex III to the Offer to Purchase and incorporated herein by
reference).
(f) Not applicable.
<PAGE>
EXHIBIT(B)(2)
CONFIDENTIAL
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PRESENTATION TO:
THE BOARD OF DIRECTORS OF
SEARS, ROEBUCK AND CO.
February 3, 1997
<PAGE>
TABLE OF CONTENTS
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<TABLE>
<S> <C> <C>
A. Summary of Offer
B. Valuation Overview of MaxServ Inc.
Appendix
1. Public Comparable Companies Analysis
2. Discounted Cash Flow Analysis
3. WACC Analysis
4. Analysis of Selected Minority Interest Buy-Side Transactions
</TABLE>
<PAGE>
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SUMMARY OF OFFER
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<PAGE>
SUMMARY OF PROPOSED TRANSACTION TERMS
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<TABLE>
<S> <C>
CASH CONSIDERATION PER SHARE: $7.00
PREMIUM:
Current (a)............................................................. 6%
Pre-Announcement (b):
---------------------
5 Year Average........................................................ 136%
3 Year Average........................................................ 76%
1 Year Average........................................................ 85%
December 4, 1996...................................................... 44%
</TABLE>
- --------
(a) Based on MaxServ closing price of $6.625 as of January 29, 1997.
(b) Last day of trading prior to announcement was December 4, 1996.
1
<PAGE>
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VALUATION OVERVIEW OF MAXSERV, INC.
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<PAGE>
OVERVIEW OF PROPOSED TRANSACTION MULTIPLES
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(Dollars in millions)
IMPLIED VALUE OF COMPANY
<TABLE>
<S> <C>
Per Share Offer Price.............................................. $ 7.0
Fully Diluted Shares (MM) (a)...................................... 12.2
-----
Implied Market Value (b)........................................... $85.2
Plus: Total Debt (a)............................................... --
Less: Cash (a)(c).................................................. (7.0)
-----
Implied Market Capitalization...................................... $78.2
=====
</TABLE>
TRANSACTION MULTIPLES
<TABLE>
<CAPTION>
SEARS MANAGEMENT BROADVIEW ESTIMATES
STREET (E) -------------------- -------------------
YEAR NET INCOME NET INCOME REVENUES NET INCOME REVENUES
---- ---------- ---------- -------- ---------- --------
<S> <C> <C> <C> <C> <C>
LTM Nov '96 Adjusted.... 217.0x 217.0x 1.50x 217.0x 1.50x
Dec '96E Adjusted....... 27.5 175.7 1.50 55.9 1.33
Dec '97E................ 22.4 35.2 1.38 33.2 1.06
<CAPTION>
ACTUAL/PROJECTED
FINANCIAL RESULTS:
------------------
<S> <C> <C> <C> <C> <C>
LTM Nov '96
Adjusted (d)........... $ 0.4 $ 0.4 $52.0 $ 0.4 $52.0
Dec '96E Adjusted....... 3.1 0.5(d) 52.3(d) 1.5 58.7
Dec '97E................ 3.8 2.4 56.7 2.6 74.1
</TABLE>
- --------
(a) Per Form 10-Q for the fiscal period ended November 30, 1996 (the "Form 10-
Q"), including 1.196 million options and 0.050 warrants per Form 10-K for
the fiscal year ended May 31, 1996 (the "Form 10-K").
(b) Sears owns 7.0 million shares of MaxServ per the Schedule 13D filed on
January 27, 1997. The implied market value of the shares not currently
owned by Sears is approximately $36.2 million.
(c) Includes $3.5 million of option and warrant proceeds.
(d) Per the Forms 10-K and 10-Q, adjusted for $4.0 million of one-time
calendar 1996 price increases.
(e) First Call as of January 24, 1997; one broker listed.
2
<PAGE>
HISTORICAL TRADING PERFORMANCE
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December 4, 1991 to January 29, 1997
<TABLE>
<CAPTION>
OFFER
PRE-ANNOUNCEMENT (A) PRICE PREMIUMS TO:
- -------------------- ----- ------------
<S> <C> <C>
5 Year Average............................................... $2.97 136%
3 Year Average............................................... 3.97 76%
1 Year Average............................................... 3.85 85%
Pre-Announcement............................................. 4.88 44%
<CAPTION>
CURRENT
- -------
<S> <C> <C>
1/29/97...................................................... 6.63 6%
</TABLE>
[CHART SHOWING HISTORICAL TRADING PERFORMANCE WITH DESCRIPTION OF SPECIFIC
EVENTS APPEARS HERE.]
LOGO
- --------
(a) Last day of trading prior to announcement was December 4, 1996.
3
<PAGE>
AVERAGE STOCK PRICE ANALYSIS SINCE 12/5/96
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
END OF PERIOD
PRICE DATE CLOSE PRICE VOLUME
- ---------- ----------- -------------
<S> <C> <C>
12/5/96........................ $6.50 34,900
12/6/96........................ 6.50 46,600
12/9/96........................ 6.13 10,200
12/10/96........................ 6.75 5,800
12/11/96........................ 6.25 4,000
12/12/96........................ 7.13 21,800
12/13/96........................ 7.13 16,200
12/16/96........................ 6.75 3,400
12/17/96........................ 7.00 6,100
12/18/96........................ 6.75 8,200
12/19/96........................ 7.25 2,100
12/20/96........................ 6.75 1,700
12/23/96........................ 6.50 4,600
12/24/96........................ 7.13 1,900
12/26/96........................ 7.13 1,800
12/27/96........................ 7.00 11,300
12/30/96........................ 6.50 600
12/31/96........................ 6.94 8,300
1/2/97........................ 7.00 100
1/3/97........................ 6.75 1,900
1/6/97........................ 6.50 900
1/7/97........................ 6.75 7,400
1/8/97........................ 6.88 2,200
1/9/97........................ 7.00 4,300
1/10/97........................ 7.13 1,800
1/13/97........................ 6.88 21,000
1/14/97........................ 6.75 2,300
1/15/97........................ 6.69 11,600
1/16/97........................ 6.50 15,600
1/17/97........................ 6.50 8,100
1/20/97........................ 7.00 5,600
1/21/97........................ 6.75 600
1/22/97........................ 7.13 12,300
1/23/97........................ 6.75 8,700
1/24/97........................ 6.50 17,700
1/27/97........................ 6.75 7,600
1/28/97........................ 6.00 87,500
1/29/97........................ 6.63 38,200
-----
DAILY AVERAGE................... $6.76 11,708
WEIGHTED AVERAGE................ $6.57
</TABLE>
<TABLE>
<S> <C>
PRE-ANNOUNCEMENT
PRICE: (A) $4.88
OFFER PRICE: $7.00
PREMIUM: 43.6%
MEDIAN MINORITY
INTEREST PREMIUM: 19.5%
MEAN MINORITY
INTEREST PREMIUM: 29.0%
</TABLE>
- --------
(a) Closing price on December 4, 1996.
4
<PAGE>
HISTORICAL REVIEW OF P/E MULTIPLES
- --------------------------------------------------------------------------------
Fiscal Years Ending May 31
<TABLE>
<CAPTION>
STOCK PRICE DATE STOCK PRICE CFY DATE CFY EPS NFY DATE NFY EPS CFY P/E NFY P/E
- ---------------- ----------- -------- ------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
6/94................. 3.75 5/95 0.15 5/96 0.29 25.0x 12.9x
7/94................. 3.75 5/95 0.15 5/96 0.29 25.0 12.9
8/94................. 3.75 5/95 0.15 5/96 0.29 25.0 12.9
9/94................. 4.38 5/95 0.15 5/96 0.29 29.2 15.1
10/94................. 4.00 5/95 0.15 5/96 0.29 26.7 13.8
1/94................. 4.88 5/95 0.15 5/96 0.29 32.5 16.8
2/94................. 3.75 5/95 0.20 5/96 0.25 18.8 15.0
1/95................. 3.88 5/95 0.19 5/96 0.25 20.4 15.5
2/95................. 3.75 5/95 0.19 5/96 0.25 19.7 15.0
3/95................. 3.50 5/95 0.19 5/96 0.25 18.4 14.0
4/95................. 3.63 5/95 0.19 5/96 0.25 19.1 14.5
5/95................. 3.63 5/95 0.19 5/96 0.25 19.1 14.5
- ---------------------------------------------------------------------------------------
6/95................. 3.38 5/96 0.24 5/97 0.29 14.1 11.7
7/95................. 4.00 5/96 0.24 5/97 0.29 16.7 13.8
8/95................. 3.88 5/96 0.24 5/97 0.29 16.2 13.4
9/95................. 3.25 5/96 0.24 5/97 0.29 13.5 11.2
0/95................. 3.25 5/96 0.19 5/97 0.29 17.1 11.2
1/95................. 3.44 5/96 0.18 5/97 0.29 19.1 11.9
2/95................. 3.38 5/96 0.18 5/97 0.29 18.8 11.7
1/96................. 2.88 5/96 0.18 5/97 0.29 16.0 9.9
2/96................. 2.50 5/96 0.04 5/97 0.20 62.5 * 12.5
3/96................. 3.38 5/96 (0.04) 5/97 0.18 (84.5)* 18.8
4/96................. 3.13 5/96 0.04 5/97 0.23 78.3 * 13.6
5/96................. 3.25 5/96 0.04 5/97 0.23 81.3 * 14.1
- ---------------------------------------------------------------------------------------
6/96................. 4.00 5/97 0.24 5/98 0.32 16.7 12.5
7/96................. 4.25 5/97 0.24 5/98 0.32 17.7 13.3
8/96................. 4.25 5/97 0.25 5/98 0.34 17.0 12.5
9/96................. 5.00 5/97 0.25 5/98 0.34 20.0 14.7
0/96................. 5.13 5/97 0.32 5/98 0.34 16.0 15.1
1/96................. 4.75 5/97 0.25 5/98 0.34 19.0 14.0
12/4/96................. 4.88 5/97 0.25 5/98 0.34 19.5 14.3
- ---------------------------------------------------------------------------------------
Average FYE 1995...................................................... 23.2x 14.4x
Average FYE 1996...................................................... 16.4 12.8
Average YTD FYE 1997
(Pre-Announcement)................................................... 18.0 13.8
</TABLE>
- --------
*Excluded from summary calculations
Earnings estimates obtained from I/B/E/S
5
<PAGE>
ANALYSIS OF REPORTED AND EXPECTED NEAR-TERM RESULTS
- --------------------------------------------------------------------------------
(Dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED MAY 31,
----------------------------------
MAY 1997 1ST HALF (A) 2ND HALF (B) YEAR (C)
- -------- ------------ ------------ --------
<S> <C> <C> <C>
Sales....................................... $28.53 $34.55 $63.09
EBIT........................................ 2.08 0.68 2.77
Net Income.................................. 1.33 0.51 1.84
<CAPTION>
MAY 1996 (A) 1ST HALF 2ND HALF YEAR
- ------------ ------------ ------------ --------
<S> <C> <C> <C>
Sale........................................ $25.08 $27.49 $52.57
EBIT........................................ (1.00) 2.50 1.50
Net Income.................................. (0.65) 1.74 1.08
<CAPTION>
1997 VS. 1996 VARIANCE 1ST HALF 2ND HALF YEAR
- ---------------------- ------------ ------------ --------
<S> <C> <C> <C>
Sales....................................... 13.7% 25.7% 20.0%
EBIT........................................ 309.4% (72.7%) 83.9%
Net Income.................................. 303.7% (70.9%) 69.9%
<CAPTION>
1ST HALF 2ND HALF YEAR
------------ ------------ --------
<S> <C> <C> <C>
Variance--Broadview vs. Street
1997E Net Income (d)........................ -- (66.9%) (35.3%)
</TABLE>
- --------
(a) Actual unadjusted financial results per the Forms 10-K and 10-Q.
(b) Implied earnings for second half of fiscal year 1997 based on Broadview's
projections.
(c) Per Broadview's projections.
(d) Estimated earnings per share of $0.26 for the year ended May 1997, per
First Call as of January 24, 1997.
6
<PAGE>
HISTORICAL FINANCIALS
- -------------------------------------------------------------------------------
(Dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED MAY 31, ADJUSTED (A)
----------------------------------------- ----------------
LTM FYE MAY LTM
1991 1992 1993 1994 1995 1996 NOV- 96 1996 NOV- 96
----- ----- ----- ----- ----- ----- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Sears Revenue........... $ 2.2 $ 3.5 $ 7.2 $14.4 $29.3 $48.9 $52.1 $46.2 $48.1
Other Revenue........... 0.3 0.3 0.2 1.3 2.5 3.7 3.9 3.7 3.9
----- ----- ----- ----- ----- ----- ----- ----- -----
Total Revenue........ 2.5 3.8 7.4 15.7 31.8 52.6 56.0 49.9 $52.0
Gross Profit............ 1.0 0.9 1.5 3.5 5.5 4.9 8.4 2.2 4.4
S,G&A Expense........... (0.5) (0.8) (1.0) (2.2) (3.2) (3.4) (3.8) (3.4) (3.8)
----- ----- ----- ----- ----- ----- ----- ----- -----
EBIT.................... 0.5 0.1 0.5 1.3 2.3 1.5 4.6 (1.2) 0.6
Growth................. -- (77%) 352% 149% 79% (36%) 205%
Net Income.............. $ 0.2 $ 0.1 $ 0.3 $ 0.7 $ 1.6 $ 1.1 $ 3.1 $(0.7) $ 0.4
Growth................. (47%) 182% 162% 132% (33%) 181%
Year End Market Value of
Equity................. $ 3.1 $ 2.2 $16.0 $37.4 $34.0 $44.3 $50.5 $44.3 $50.5
Year End Shares
Outstanding............ 3.5 3.5 6.4 7.5 10.9 10.9 10.9 10.9 10.9
End of Year Stock Price. $0.88 $0.63 $2.50 $5.00 $3.13 $4.06 $4.63 $4.06 $4.63
Sears % of Total
Revenues............... 88.0% 92.0% 97.0% 92.0% 92.0% 93.0% 93.0% 92.6% 92.5%
Gross Margin............ 40.0% 24.5% 20.2% 22.5% 17.3% 9.4% 15.0% 4.5% 8.5%
S,G&A as a % of Sales... 19.2% 21.4% 13.1% 14.1% 10.0% 6.6% 6.8% 6.9% 7.4%
EBIT Margin............. 20.9% 3.1% 7.1% 8.4% 7.4% 2.9% 8.2% (2.4%) 1.1%
Capital Expenditures.... $ 0.1 $ 0.3 $ 0.8 $ 1.7 $ 8.4 $ 3.8 $ 4.1 $ 3.8 $ 4.1
</TABLE>
- --------
(a) Per review of the Forms 10-K and 10-Q, adjusted for $2.7 and $4.0 million
of one-time calendar 1996 price increases from FYE May '96 and LTM Nov.
'96, respectively.
7
<PAGE>
PROJECTED FINANCIALS
- --------------------------------------------------------------------------------
(Dollars in millions)
<TABLE>
<CAPTION>
PROJECTED CALENDAR YEARS ENDING DECEMBER 31, (A)
-------------------------------------------------------- '96-'01
ADJUSTED 5 YEAR
1996 1996 (B) 1997 1998 1999 2000 2001 CAGR
------ ---------------- ------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sears Revenue........... $ 51.5 $ 47.5 $ 51.2 $ 52.4 $ 55.1 $ 57.9 $ 60.8 5.1%
Other Revenue........... 4.8 4.8 5.5 6.6 7.9 9.4 11.3 19.0%
------ ------ ------ ------ ------ ------ ------ ----
Total Revenue........ 56.3 52.3 56.7 59.0 63.0 67.3 72.2 6.7%
Sears Gross Profit...... 7.8 3.8 6.8 6.8 7.1 7.5 7.8 15.8%
Other Gross Profit...... 1.0 1.0 1.1 1.3 1.6 1.9 2.3 19.0%
------ ------ ------ ------ ------ ------ ------ ----
Total Gross Profit... 8.7 4.7 7.9 8.1 8.7 9.4 10.1 16.4%
S,G&A Expense........... (3.9) (3.9) (4.0) (4.1) (4.3) (4.6) (4.9) 4.6%
------ ------ ------ ------ ------ ------ ------ ----
EBIT.................... 4.8 0.8 3.9 4.0 4.4 4.8 5.2 46.0%
Net Income (c).......... $ 3.0 $ 0.5 $ 2.4 $ 2.5 $ 2.7 $ 3.0 $ 3.2 46.0%
Sears Revenue Growth.... -- -- 7.7% 2.4% 5.1% 5.1% 5.1%
Other Revenue Growth.... -- -- 15.0% 20.0% 20.0% 20.0% 20.0%
------ ------ ------ ------ ------ ------ ------
Total Revenue Growth. -- -- 8.4% 4.1% 6.7% 6.9% 7.2%
Sears % of Total
Revenues............... 91.6% 90.9% 90.4% 88.9% 87.5% 86.0% 84.3%
Sears Gross Margin...... 15.1% 7.9% 13.2% 13.0% 12.9% 12.9% 12.9%
Other Gross Margin...... 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0%
------ ------ ------ ------ ------ ------ ------
Total Gross Margin... 15.5% 9.0% 13.9% 13.8% 13.8% 13.9% 14.0%
S,G&A as a % of Sales... 7.0% 7.5% 7.0% 7.0% 6.8% 6.8% 6.8%
EBIT Margin............. 8.5% 1.5% 6.9% 6.8% 7.0% 7.1% 7.2%
</TABLE>
- --------
(a) 1996-1999 based on projections by members of Sears management who monitor
the operations of MaxServ. Projections for 2000-2001 extrapolated
therefrom.
(b) Per review of the Form 10-K, adjusted for $4.0 million of one-time calendar
1996 price increases.
(c) Assumes a tax rate of 38%.
8
<PAGE>
SUMMARY OF PROJECTIONS
- --------------------------------------------------------------------------------
(Dollars in millions)
<TABLE>
<CAPTION>
CALENDAR YEAR ENDING DECEMBER 31,
---------------------------------------------
BROADVIEW CALENDARIZED
PROJECTIONS (A) 1996 1997
- ---------------------- -------------------------------- ----------------
<S> <C> <C> <C> <C>
Sales...................... $58.7 $ 74.1
EBIT....................... 2.2 4.0
Net Income................. 1.5 2.6
<CAPTION>
SEARS PROJECTIONS (B) UNADJUSTED ADJUSTED (C)
- --------------------- ------------- ---------------
<S> <C> <C> <C> <C>
Sales...................... $ 56.3 $ 52.3 $ 56.7
EBIT....................... 4.8 0.8 3.9
Net Income................. 3.0 0.5 2.4
<CAPTION>
VARIANCE
- --------
<S> <C> <C> <C> <C>
Sales...................... 4.3% 12.3% 30.8%
EBIT....................... (53.2%) 186.5% 1.9%
Net Income................. (48.6%) 214.1% 6.0%
</TABLE>
- --------
(a) Based on Broadview projections, calendarized to a December 31 year-end.
(b) Based on projections by members of Sears management who monitor the
operations of MaxServ.
(c) Per review of the Form 10-K, adjusted for $4.0 million of one-time calendar
1996 price increases.
9
<PAGE>
VALUATION SUMMARY OF IMPLIED EQUITY VALUES PER SHARE (A)
- --------------------------------------------------------------------------------
[CHART SHOWING IMPLIED EQUITY VALUES PER SHARE APPEARS HERE.]
- --------
(a) Based on 12.172 million fully diluted shares.
(b) Direct response companies with market capitalizations less than $250
million.
10
<PAGE>
PUBLIC COMPARABLE IMPLIED VALUATION
- -------------------------------------------------------------------------------
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
CALENDAR YEAR
-------------------------------------------------------------
1996 1997
------------------------------------- -----------------------
SEARS (A) SEARS (A)
BROADVIEW (B) UNADJUSTED ADJUSTED (C) BROADVIEW (B) SEARS (A)
------------- ---------- ------------ ------------- ---------
<S> <C> <C> <C> <C> <C>
Net Income.............. $1,523 $2,965 $ 485 $2,567 $2,421
Annual Growth........... -- 123% (63%) 69% 399%
Companies with Market
Value Less Than $250
Million (d)............ 29.3x 29.3x 29.3x 21.2x 21.2x
Implied Share Price (e). $3.67 $7.14 $1.17 $4.47 $4.22
</TABLE>
- --------
(a) Net Income estimates based on projections by members of Sears management
who monitor the operations of MaxServ.
(b) Net Income estimates based on Broadview projections, calendarized to a
December 31 year-end.
(c) Per review of the Form 10-K, adjusted for $4.0 million of one-time
calendar 1996 price increases.
(d) Median multiples.
(e) Based on 12.172 million fully diluted shares per the Form 10-Q including
1.196 million options and 0.050 warrants per the Form 10-K, and net debt
of ($3.5) million.
11
<PAGE>
DISCOUNTED CASH FLOW ANALYSIS (A)
- -------------------------------------------------------------------------------
Net Income Multiple Method
SEARS MANAGEMENT PROJECTIONS (B)
<TABLE>
<CAPTION>
EQUITY VALUE BASED ON
DISCOUNT MULTIPLE OF 2001 AFTER- EQUITY VALUE
RATE TAX EBIT(D) PER SHARE(E)
- -------- ----------------------- -----------------
15.0X 20.0X 25.0X 15.0X 20.0X 25.0X
------- ------- ------- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
14%................................... $ 42.4 $ 50.7 $ 59.1 $3.48 $4.17 $4.85
16%................................... 39.8 47.5 55.1 3.27 3.90 4.53
18%................................... 37.5 44.5 51.5 3.08 3.66 4.23
SENSITIVITY CASE (C)
<CAPTION>
EQUITY VALUE BASED ON
DISCOUNT MULTIPLE OF 2001 AFTER- EQUITY VALUE
RATE TAX EBIT(D) PER SHARE(E)
- -------- ----------------------- -----------------
15.0X 20.0X 25.0X 15.0X 20.0X 25.0X
------- ------- ------- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
14%................................... $ 62.1 $ 76.1 $ 90.1 $5.11 $6.25 $7.40
16%................................... 58.0 70.8 83.6 4.76 5.82 6.87
18%................................... 54.2 66.0 77.8 4.45 5.42 6.39
</TABLE>
- --------
(a) Cash Flows and Terminal Values are discounted to January 1, 1997.
(b) 1996-1999 based on projections by members of Sears management who monitor
the operations of MaxServ. Projections for 2000-2001 extrapolated
therefrom.
(c) See Sensitivity Case included in the appendix.
(d) Adjusted for ($3.5) million net debt per the Form 10-Q and option and
warrant proceeds of $3.5 million.
(e) Based on 12.172 million fully diluted shares per the Form 10-Q, including
1.196 million options and 0.050 million warrants per the Form 10-K.
12
<PAGE>
DISCOUNTED CASH FLOW ANALYSIS (A)
- -------------------------------------------------------------------------------
Perpetuity Growth Method
SEARS MANAGEMENT PROJECTIONS (B)
<TABLE>
<CAPTION>
DISCOUNT EQUITY VALUE BASED ON EQUITY VALUE
RATE CASH FLOW PERPETUITY GROWTH (D) PER SHARE (E)
- -------- -------------------------------- -----------------
6.0% 7.0% 8.0% 6.0% 7.0% 8.0%
---------- ---------- ---------- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
14%.......................... $ 39.4 $ 42.8 $ 47.4 $3.24 $3.52 $3.89
16%.......................... 33.1 35.0 37.5 2.72 2.88 3.08
18%.......................... 28.8 30.1 31.6 2.37 2.47 2.59
SENSITIVITY CASE (C)
<CAPTION>
DISCOUNT EQUITY VALUE BASED ON EQUITY VALUE
RATE CASH FLOW PERPETUITY GROWTH (D) PER SHARE (E)
- -------- -------------------------------- -----------------
6.0% 7.0% 8.0% 6.0% 7.0% 8.0%
---------- ---------- ---------- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
14%.......................... $ 57.2 $ 62.9 $ 70.5 $4.70 $5.17 $5.80
16%.......................... 46.7 50.0 54.1 3.84 4.11 4.45
18%.......................... 39.7 41.8 44.3 3.26 3.43 3.64
</TABLE>
- --------
(a) Cash Flows and Terminal Values are discounted to January 1, 1997.
(b) 1996-1999 based on projections by members of Sears management who monitor
the operations of MaxServe. Projections for 2000-2001 extrapolated
therefrom.
(c) See Sensitivity Case included in the appendix.
(d) Adjusted for ($3.5) million net debt per the Form 10-Q and option and
warrant proceeds of $3.5 million.
(e) Based on 12.172 million fully diluted shares per the Form 10-Q, including
1.196 million options and 0.050 million warrants per the Form 10-K.
13
<PAGE>
- --------------------------------------------------------------------------------
APPENDIX
- --------------------------------------------------------------------------------
<PAGE>
ANALYSIS OF PUBLICLY TRADED COMPANIES
- -------------------------------------------------------------------------------
(Dollars in millions, except per share data)
<TABLE>
<CAPTION>
MARKET VALUE AS A MULT. OF 97 P/E LTM
--------------------------- ------- -------------
EST. EST. 5
CALENDAR CALENDAR CALENDAR 5 YEAR YEAR
PRICE MARKET 1996 EPS 1997 EPS 1998 EPS GROWTH GROWTH EBITDA EBIT MARKET
COMPANIES 29-JAN-97 SHARES VALUE EST. (A) EST. (A) EST. (A) RATE(A) RATE(A) MARGIN MARGIN CAP.
- --------- --------- ------ ------- -------- -------- -------- ------- ------- ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Market Value<
$250
ATC Comm........ $11.3 16.1 $ 182.0 31.4x 22.2x 15.3x(d) 50% 0.44x 14% 11% $ 183.4
Boston Comm.
Group.......... 6.0 12.7 76.3 200.0* 37.5 26.8(d) 40% 0.94 7% 4% 72.6
ICT Group....... 4.9 11.5 56.2 27.1 15.2(c) 10.5(d) 45% 0.34 8% 4% 39.9
Metro One....... 9.1 10.7 97.5 70.2 21.2 12.9 NA NA 15% 8% 83.7
RMI
Teleservices... 7.9 8.1 63.9 24.6 17.7 12.6(d) 40% 0.44 11% 8% 56.0
MEAN 38.3X 22.8X 15.6X 44% 0.54X 11% 7%
MEDIAN 29.3 21.2 12.9 43% 0.44 11% 8%
Market Value>
$250
Access Health... $28.6 17.6 $ 503.0 42.7x 24.7x 17.8x(d) 38% 0.65x 25% 19% $ 477.4
APAC
Teleservices,
Inc............ 35.0 46.4 1,624.7 56.5 37.6 27.1 45% 0.84 21% 17% 1,626.1
Caribiner Intl.. 46.5 9.6 447.0 41.5 30.6 23.6(d) 30% 1.02 12% 10% 496.8
Ha Lo
Industries..... 26.0 16.4 426.8 44.8 28.0 22.8 30% 0.93 5% 4% 429.9
National
TechTeam....... 25.3 14.8 372.7 68.2 46.8 32.8 35% 1.34 14% 10% 379.4
Precision
Response....... 36.0 20.0 720.0 97.3 43.4 30.0 58% 0.75 13% 10% 716.4
Sitel Corp...... 19.6 58.7 1,152.0 63.3 42.5 33.6 38% 1.12 13% 10% 1,159.6
Snyder
Communications. 27.9 33.5 933.7 164.0* 69.7 45.7 50% 1.39 15% 14% 879.3
Sykes
Enterprises.... 40.1 21.8 874.7 85.2 53.4(c) 36.4(d) 40% 1.34 12% 10% 872.9
Telespectrum
Worldwide...... 16.8 25.1 419.7 54.0 27.0 19.7 40% 0.68 12% 7% 366.0
Teletech
Holdings....... 28.0 55.1 1,542.9 127.3* 63.6 45.5(d) 40% 1.59 16% 12% 1,551.3
West
Teleservices... 23.4 62.5 1,460.4 47.7 41.0 35.3(d) NA NA 18% 14% 1,472.4
MEAN 60.1X 42.4X 30.8X 40% 1.05X 15% 11%
MEDIAN 55.2 41.8 31.4 40% 1.04 14% 10%
OVERALL MEAN 55.6X 36.6X 26.4X 41% 0.89X 14% 10%
OVERALL MEDIAN 54.0 37.5 26.8 40% 0.94 13% 10%
MaxServ (May
FYE)........... $ 6.6 10.9 $ 72.4 66.3x 25.5x 20.7x(d) NA NA 17% 8% $ 68.9
MaxServ (Dec
CYE)........... 6.6 10.9 72.4 23.4 20.0 16.2(d) NA NA 17% 8% 68.9
<CAPTION>
MARKET CAP. AS A
MULTIPLE OF LTM
--------------------
COMPANIES SALES EBIT EBITDA
- --------- ------ ------ ------
<S> <C> <C> <C>
Market Value<
$250
ATC Comm........ 1.78x 15.8x 12.5x
Boston Comm.
Group.......... 1.46 39.7 19.8
ICT Group....... 0.59 13.5 7.4
Metro One....... 4.90 59.1 32.5
RMI
Teleservices... 1.73 22.8 15.8
MEAN 2.09X 30.2X 17.6X
MEDIAN 1.73 12.8 15.8
Market Value>
$250
Access Health... 7.69x 39.5x 30.4x
APAC
Teleservices,
Inc............ 7.21 42.8 34.7
Caribiner Intl.. 3.35 33.2 27.4
Ha Lo
Industries..... 2.08 55.6 40.9
National
TechTeam....... 6.14 60.8 43.2
Precision
Response....... 9.77 95.8* 74.5*
Sitel Corp...... 6.97 71.8 53.2
Snyder
Communications. 12.00 88.2* 81.3*
Sykes
Enterprises.... 9.41 90.0* 75.6*
Telespectrum
Worldwide...... 3.19 45.9 27.1
Teletech
Holdings....... 12.70 105.3* 78.6*
West
Teleservices... 4.83 33.5 26.3
MEAN 7.11X 47.9X 35.4X
MEDIAN 7.09 44.3 32.5
OVERALL MEAN 5.63X 41.1X 28.6X
OVERALL MEDIAN 4.90 39.7 27.4
MaxServ (May
FYE)........... 1.23x 15.0x 7.4x
MaxServ (Dec
CYE)........... 1.23 15.0 7.4
</TABLE>
- -------
(a) Earnings estimates were obtained from First Call as of 1/24/97 and
calendarized when necessary. 5 Year Est. Growth Rates are taken from
I/B/E/S as of January 16, 1996.
(b) Summary multiples exclude numbers that are negative, not available, not
meaningful, and (*) figures.
(c) Earnings estimates obtained from Nelson's (1/24/96).
(d) Earnings per share are projected using the 5 Year Est. Growth Rate, where
available. When the 5 year Est. Growth Rate is not available, the earnings
per share growth rate over current and next years is used (West
Teleservices and MaxServ).
A1
<PAGE>
OVERVIEW OF PUBLIC COMPARABLES--SIGNIFICANT CONCENTRATION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMPARABLE COMPANY SIGNIFICANT CUSTOMERS--PERCENTAGE OF LFY REVENUE
- ------------------ ------------------------------------------------
<S> <C>
ACCESS HEALTH........... Top 5 customers--approximately 50% of 1996 revenues
Blue Cross of Western Pennsylvania--16.8%
Empire Blue Cross--12.0%
Foundation Health Federal Services--11.6%
APAC TELESERVICES....... Top 2 customers--approximately 27% of revenues
ATC COMM. GROUP......... AT&T > 10%
American Express > 10%
Pacific Bell > 10%
US West > 10%
BOSTON COMM. GROUP...... Top 10 largest customers--approximately 85% of revenues
Bell Atlantic--15.0%
NYNEX Mobile--13.9%
SNET Mobility--11.9%
CARABINER INTERNATIONAL. Ford Motor Company--15%
IBM--13%
State Farm Group--11%
HA LO INDUSTRIES........ Montgomery Ward--17%
ICT GROUP............... Mass Marketing Insurance Group (JC Penny)--43%
METRO ONE............... Top 3 customers--approximately 72% of 1995 revenues
US West New Vector
Ameritech Cellular
Bell Atlantic NYNEX Mobile
NATIONAL TECHTEAM....... Top 5 customers--approximately 73% of 1995 revenues
Ford Motor Company--37.3%
Chrysler Corporation--10.0%
Hewlett-Packard Corporation--17.4%
PRECISION RESPONSE...... Top 5 customers--approximately 77% of 1995 revenues
AT&T--42.1%
RMH TELESERVICES........ Top 3 customers--approximately 75% of revenues
SITEL CORPORATION....... Top 10 customers--approximately 64% of 1996 revenues
JC Penney Life Insurance Company--11.6%
Allstate Insurance Company--11.0%
SNYDER COMMUNICATIONS... Top customer--59%
SYKES ENTERPRISES....... Top 10 customers--approximately 70% of 1995 revenues
IBM--16%
Apple--17%
TELESPECTRUM WORLDWIDE.. Top 10 customers--approximately 56% of 1995 revenues
Mass Marketing Insurance Group--11.9%
TELETECH HOLDINGS....... Top 10 customers--approximately 82% of 1995 revenues
AT&T--31%
Continental Airlines--18%
Apple Computer--9%
</TABLE>
A2
<PAGE>
OVERVIEW OF PUBLIC COMPARABLES--SIGNIFICANT CONCENTRATION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMPARABLE COMPANY SIGNIFICANT CUSTOMERS--PERCENTAGE OF LFY REVENUE
- ------------------ ------------------------------------------------
<S> <C>
WEST TELESERVICES......... Top 10 customers--approximately 50% of 1995 revenues
AT&T--17%
MAXSERV................... Sears--90%
</TABLE>
A3
<PAGE>
PROJECT WIMBLEDON SEARS MANAGEMENT CASE
Discounted Cash Flow Valuation (a) (b)
- -------------------------------------------------------------------------------
(Dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
HISTORICAL FISCAL YEAR LTM
ENDED MAY 31, NOV. 30 PROJECTED TWELVE MONTHS ENDING DECEMBER 31, 96-
---------------------- ------- ---------------------------------------------------- '01
1995 1996 1996 1996E 1997 1998 1999 2000 2001 CAGR
----------- ----------- ------- -------- ------- ------- ------- ------- ------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Sears Revenue........... $ 29.3 $ 46.2 $48.1 $ 47.5 $ 51.2 $ 52.4 $ 55.1 $ 57.9 $ 60.8 5.1%
Other Business Revenue.. 2.5 3.7 3.9 4.8 5.5 6.6 7.9 9.4 11.3 19.0%
----------- ----------- ----- ------- ------- ------- ------- ------- ------- ----
Net Sales............... 31.8 49.9 52.0 52.3 56.7 59.0 63.0 67.3 72.2 6.7%
Sales Growth........... 102.8% 56.6% 4.3% 0.5% 13.6% 4.1% 6.7% 6.9% 7.2% --
Sears Gross Profit...... NA NA NA 3.8 6.8 6.8 7.1 7.5 7.8 15.8%
Other Gross Profit...... NA NA NA 1.0 1.1 1.3 1.6 1.9 2.3 19.0%
----------- ----------- ----- ------- ------- ------- ------- ------- ------- ----
Total Gross Profit...... 5.5 2.2 4.4 4.7 7.9 8.1 8.7 9.4 10.1 16.4%
S,G&A Expense........... (3.2) (3.4) (3.8) (3.9) (4.0) (4.1) (4.3) (4.6) (4.9) --
----------- ----------- ----- ------- ------- ------- ------- ------- ------- ----
EBIT.................... 2.3 (1.2) 0.6 0.8 3.9 4.0 4.4 4.8 5.2 46.0%
Less Taxes @ 38.0%...... (0.9) 0.5 (0.2) (0.3) (1.5) (1.5) (1.7) (1.8) (2.0) --
----------- ----------- ----- ------- ------- ------- ------- ------- ------- ----
After-Tax EBIT.......... 1.4 (0.7) 0.4 0.5 2.4 2.5 2.7 3.0 3.2 46.0%
CapEx less Depreciation. 0.3 1.0 0.0 0.0 0.0 --
Changes in Net Working
Capital................ 0.0 0.0 0.0 0.0 0.0 --
------- ------- ------- ------- ------- ----
UNLEVERED FREE CASH
FLOW................... $ 2.7 $ 3.5 $ 2.7 $ 3.0 $ 3.2 --
======= ======= ======= ======= ======= ====
</TABLE>
DISCOUNTED CASH FLOW ANALYSIS
<TABLE>
<CAPTION>
EQUITY VALUE PER
A B C SHARE (D)
------------- + ----------------- = ----------------- -----------------
TERMINAL VALUE AS EQUITY VALUE VALUE PER SHARE
A MULTIPLE OF BASED ON BASED ON AFTER-
2001 AFTER-TAX AFTER-TAX EBIT TAX
PRESENT VALUE EBIT MULTIPLE (C) EBIT MULTIPLE
ISCOUNTD 1997-2001 ----------------- ----------------- -----------------
RATE CASH FLOWS 15.0X 20.0X 25.0X 15.0X 20.0X 25.0X 15.0X 20.0X 25.0X
- -------- ------------- ----- ----- ----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
14.0%................... 10.3 $25.1 $33.4 $41.8 $42.4 $50.7 $59.1 $3.48 $4.17 $4.85
16.0%................... 9.8 23.0 30.6 38.3 39.8 47.5 55.1 3.27 3.90 4.53
18.0%................... 9.4 21.1 28.1 35.2 37.5 44.5 51.5 3.08 3.66 4.23
</TABLE>
- ------------------------------------------------------------------ -----------
<TABLE>
<CAPTION>
TERMINAL FREE EQUITY VALUE
CASH FLOW IN BASED ON VALUE PER SHARE
PERPETUITY PERPETUITY BASED ON
PRESENT VALUE GROWING AT GROWTH (C) PERPETUITY GROWTH
ISCOUNTD 1997-2001 ----------------- ----------------- -----------------
RATE CASH FLOWS 6.0% 7.0% 8.0% 6.0% 7.0% 8.0% 6.0% 7.0% 8.0%
- -------- ------------- ----- ----- ----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
14.0%................... 10.3 $22.1 $25.5 $30.1 $39.4 $42.8 $47.4 $3.24 $3.52 $3.89
16.0%................... 9.8 16.2 18.2 20.7 33.1 35.0 37.5 2.72 2.88 3.08
18.0%................... 9.4 12.4 13.7 15.2 28.8 30.1 31.6 2.37 2.47 2.59
</TABLE>
- -------
(a) Cash Flows and Terminal Values are discounted to January 1, 1997.
(b) 1996-1999 based on projections by members of Sears management who monitor
the operations of MaxServ. Projections for 2000-2001 extrapolated
therefrom.
(c) Adjusted for ($3.5) million net debt per the Form 10-Q and option and
warrant proceeds of $3.5 million.
(d) Based on 12.172 million fully diluted shares per the Form 10-Q, including
1.196 million options and 0.050 warrants per the Form 10-K.
A4
<PAGE>
PROJECT WIMBLEDON SENSITIVITY CASE
Discounted Cash Flow Valuation (a) (b)
- --------------------------------------------------------------------------------
(Dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
HISTORICAL FISCAL YEAR LTM
ENDED MAY 31, NOV. 30 PROJECTED TWELVE MONTHS ENDING DECEMBER 31, 96-
---------------------- ------- ---------------------------------------------------- '01
1995 1996 1996 1996E 1997 1998 1999 2000 2001 CAGR
----------- ----------- ------- -------- ------- ------- ------- ------- ------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Sears Revenue........... $ 29.3 $ 46.2 $48.1 $ 47.5 $ 51.2 $ 54.8 $ 58.6 $ 62.7 $ 67.1 7.1%
Other Business Revenue.. 2.5 3.7 3.9 4.8 7.1 10.6 15.7 23.5 35.0 49.1%
----------- ----------- ----- ------- ------- ------- ------- ------- ------- ----
Net Sales............... 31.8 49.9 52.0 52.3 58.3 65.3 74.4 86.2 102.1 14.3%
Sales Growth........... 102.8% 56.6% 4.3% 0.5% 16.9% 12.1% 13.8% 15.9% 18.5% --
Sears Gross Profit...... NA NA NA 3.8 6.8 7.1 7.6 8.1 8.7 18.1%
Other Gross Profit...... NA NA NA 1.0 1.4 2.1 3.1 4.7 7.0 49.1%
----------- ----------- ----- ------- ------- ------- ------- ------- ------- ----
Total Gross Profit...... 5.5 2.2 4.4 4.7 8.2 9.2 10.7 12.8 15.7 27.1%
S,G&A Expense........... (3.2) (3.4) (3.8) (3.9) (4.1) (4.6) (5.1) (5.9) (7.0) --
----------- ----------- ----- ------- ------- ------- ------- ------- ------- ----
EBIT.................... 2.3 (1.2) 0.6 0.8 4.1 4.6 5.6 6.9 8.7 61.9%
Less Taxes @ 38.0%...... (0.9) 0.5 (0.0) (0.3) (1.6) (1.8) (2.1) (2.6) (3.3) --
----------- ----------- ----- ------- ------- ------- ------- ------- ------- ----
After-Tax EBIT.......... 1.4 (0.7) 0.5 0.5 2.6 2.9 3.5 4.3 5.4 61.9%
CapEx less Depreciation. 0.3 1.0 0.0 0.0 0.0 --
Changes in Net Working
Capital................ 0.0 0.0 0.0 0.0 0.0 --
------- ------- ------- ------- ------- ----
Unlevered Free Cash
Flow................... $ 2.9 $ 3.9 $ 3.5 $ 4.3 $ 5.4 --
======= ======= ======= ======= ======= ====
</TABLE>
DISCOUNTED CASH FLOW ANALYSIS
<TABLE>
<CAPTION>
EQUITY VALUE PER
A B C SHARE (D)
------------- + ----------------- = ----------------- -----------------
TERMINAL VALUE AS EQUITY VALUE
A MULTIPLE OF BASED ON VALUE PER SHARE
2001 AFTER-TAX AFTER-TAX EBIT BASED ON AFTER-
PRESENT VALUE EBIT MULTIPLE (C) TAX EBIT MULTIPLE
ISCOUNTD 1997-2001 ----------------- ----------------- -----------------
RATE CASH FLOWS 15.0X 20.0X 25.0X 15.0X 20.0X 25.0X 15.0X 20.0X 25.0X
- -------- ------------- ----- ----- ----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
14.0%................... 13.2 $42.0 $56.0 $70.0 $62.1 $76.1 $90.1 $5.11 $6.25 $7.40
16.0%................... 12.5 38.5 51.3 64.1 58.0 70.8 83.6 4.76 5.82 6.87
18.0%................... 11.9 35.3 47.1 58.9 54.2 66.0 77.8 4.45 5.42 6.39
</TABLE>
- ------------------------------------------------------------------ -----------
<TABLE>
<CAPTION>
TERMINAL FREE EQUITY VALUE
CASH FLOW IN BASED ON VALUE PER SHARE
PERPETUITY PERPETUITY GROWTH BASED ON
PRESENT VALUE GROWING AT (C) PERPETUITY GROWTH
ISCOUNTD 1997-2001 ----------------- ----------------- -----------------
RATE CASH FLOWS 6.0% 7.0% 8.0% 6.0% 7.0% 8.0% 6.0% 7.0% 8.0%
- -------- ------------- ----- ----- ----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
14.0%................... 13.2 $37.1 $42.8 $50.4 $57.2 $62.9 $70.5 $4.70 $5.17 $5.80
16.0%................... 12.5 27.2 30.5 34.6 46.7 50.0 54.1 3.84 4.11 4.45
18.0%................... 11.9 20.8 22.9 25.4 39.7 41.8 44.3 3.26 3.43 3.64
</TABLE>
- -------
(a) Cash Flows and Terminal Values are discounted to January 1, 1997.
(b) See Sensitivity Case on the following page.
(c) Adjusted for ($3.5) million net debt per the Form 10-Q and option and
warrant proceeds of $3.5 million.
(d) Based on 12.172 million fully diluted shares per the Form 10-Q, including
1.196 million options and 0.050 warrants per the Form 10-K.
A5
<PAGE>
PROJECTED FINANCIALS (SENSITIVITY CASE)
- -------------------------------------------------------------------------------
(Dollars in millions)
<TABLE>
<CAPTION>
PROJECTED CALENDAR YEARS ENDING DECEMBER 31, (A)
-------------------------------------------------------- '96-'01
ADJUSTED 5 YEAR
1996 1996 (B) 1997 1998 1999 2000 2001 CAGR
------ ---------------- ------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sears Revenue........... $ 51.5 $ 47.5 $ 51.2 $ 54.8 $ 58.6 $ 62.7 $ 67.1 7.1%
Other Revenue........... 4.8 4.8 7.1 10.6 15.7 23.5 35.0 49.1%
------ ------ ------ ------ ------ ------ ------ ----
Total Revenue....... 56.3 52.3 58.3 65.3 74.4 86.2 102.1 14.3%
Sears Gross Profit...... 7.8 3.8 6.8 7.1 7.6 8.1 8.7 18.1%
Other Gross Profit...... 1.0 1.0 1.4 2.1 3.1 4.7 7.0 49.1%
------ ------ ------ ------ ------ ------ ------ ----
Total Gross Profit.. 8.7 4.7 8.2 9.2 10.7 12.8 15.7 27.1%
S,G&A Expense........... (3.9) (3.9) (4.1) (4.6) (5.1) (5.9) (7.0) 12.1%
------ ------ ------ ------ ------ ------ ------ ----
EBIT.................... 4.8 0.8 4.1 4.6 5.6 6.9 8.7 61.9%
Net Income (c).......... $ 3.0 $ 0.5 $ 2.6 $ 2.9 $ 3.5 $ 4.3 $ 5.4 61.9%
Sears Revenue Growth.... -- -- 7.7% 7.0% 7.0% 7.0% 7.0%
Other Revenue Growth.... -- -- 49.1% 49.1% 49.1% 49.1% 49.1%
------ ------ ------ ------ ------ ------ ------
Total Revenue
Growth............. -- -- 11.5% 12.1% 13.8% 15.9% 18.5%
Sears % of Total
Revenues............... 91.6% 90.9% 87.8% 83.8% 78.8% 72.8% 65.7%
Sears Gross Margin...... 15.1% 7.9% 13.2% 13.0% 12.9% 12.9% 12.9%
Other Gross Margin...... 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0%
------ ------ ------ ------ ------ ------ ------
Total Gross Margin.. 15.5% 9.0% 14.1% 14.1% 14.4% 14.8% 15.3%
S,G&A as a % of Sales... 7.0% 7.5% 7.0% 7.0% 6.8% 6.8% 6.8%
EBIT Margin............. 8.5% 1.5% 7.1% 7.1% 7.6% 8.0% 8.5%
</TABLE>
- --------
(a) 1997-2001 Sensitivity Case grows Sears Revenue at 7.0% and grows Other
Revenue to $35.0 million on a straight-line basis. Margins and expense
ratios are held constant.
(b) Per the Form 10-K, adjusted for $4.0 million of one-time calendar 1996
price increases.
(c) Assumes a tax rate of 38%.
A6
<PAGE>
ANALYSIS OF WEIGHTED AVERAGE COST OF CAPITAL
- --------------------------------------------------------------------------------
ASSUMPTIONS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Three Month Treasury Bill (at
1/24/97)........................ 5.15%
Thirty Year Government Bond (at
1/24/97)........................ 6.89%
Historical Spread Between Long
Bond & S&P 500 (a).............. 7.40%
</TABLE>
<TABLE>
<S> <C>
Estimated Future Risk Premium..... 7.40%
Plus: Estimated Future Risk Free
Rate............................. 6.89%
------
Estimated Future Market Return
(b).............................. 14.29%
- -----------------------------------------
</TABLE>
<TABLE>
<CAPTION>
LEVERED TAX NET DEBT TO UNLEVERED LEVERED UNLEVERED
COMPARABLE COMPANIES BETA(C) RATE EQUITY(D) BETA(E) RETURN RETURN
- -------------------- ------- ----- ----------- --------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Access Health............. 1.55 37.0% 0.0% 1.55 18.4% 18.4%
APAC Teleservices......... 0.96 35.0% 0.1% 0.96 14.0% 14.0%
- --------------------------------------------------------------------------------
ATC Communications (f).... 1.20 34.4% 0.7% 1.19 15.8% 15.7%
- --------------------------------------------------------------------------------
Ha Lo Industries.......... 1.37 40.0% 0.8% 1.36 17.0% 17.0%
National TechTeam......... 0.66 34.6% 2.0% 0.65 11.8% 11.7%
Sitel Corp................ 1.20 34.0% 0.7% 1.19 15.8% 15.7%
---- ----- ---- ---- ----- -----
AVERAGE................. 1.16 35.8% 0.7% 1.15 15.4% 15.4%
MaxServ................... 0.53 30.0% 0.0% 0.53 10.8% 10.8%
</TABLE>
<TABLE>
<CAPTION>
COST OF EQUITY AT VARIOUS
UNLEVERED BETA AND CAPITAL
RATES
DEBT/EQUITY -----------------------------
CAPITAL STRUCTURES 0.53 0.84 1.15 1.35 1.55
- ------------------ ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
5.0%.................10.9%.13.3%.15.7%.17.2%.18.7%..
10.0%.................11.1%.13.5%.16.0%.17.5%.19.1%..
15.0%.................11.2%.13.7%.16.2%.17.8%.19.5%..
20.0%.................11.3%.13.9%.16.5%.18.2%.19.8%..
25.0%.................11.4%.14.1%.16.8%.18.5%.20.2%..
30.0%.................11.6%.14.3%.17.1%.18.8%.20.6%..
35.0%.................11.7%.14.5%.17.3%.19.1%.20.9%..
</TABLE>
<TABLE>
<CAPTION>
WEIGHTED AVERAGE COST OF
CAPITAL AT VARIOUS UNLEVERED
BETA AND CAPITAL RATES
DEBT/EQUITY EST. COST -----------------------------
CAPITAL STRUCTURES OF DEBT 0.53 0.84 1.15 1.35 1.55
- ------------------ --------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
5.0%................................. 6.8% 10.6% 12.9% 15.1% 16.6% 18.0%
10.0%................................. 7.0% 10.5% 12.7% 14.9% 16.3% 17.8%
15.0%................................. 7.3% 10.3% 12.5% 14.7% 16.1% 17.5%
20.0%................................. 7.5% 10.2% 12.4% 14.6% 15.9% 17.3%
25.0%................................. 7.8% 10.1% 12.3% 14.4% 15.8% 17.2%
30.0%................................. 8.0% 10.1% 12.2% 14.3% 15.7% 17.0%
35.0%................................. 8.3% 10.0% 12.1% 14.2% 15.5% 16.9%
</TABLE>
- --------
(a) Source: Ibbotson Associates 1996 Yearbook.
(b) Estimated market risk premium plus estimated future risk free rate.
(c) Source: Merrill Lynch Beta Book as of December 1996 except where noted.
(d) Book Value of Net Debt to Market Value of Equity.
(e) Unlevered beta equals (Levered Beta)/(1 + ((1 - Tax Rate) * Debt/Equity)).
(f) ATC Communications has a current market value of < $250 million.
A7
<PAGE>
SELECTED MINORITY INTEREST BUY-SIDE TRANSACTIONS
- --------------------------------------------------------------------------------
(Dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
PRE-
DATE ACQUISITION ANNOUNCE-
- --------------- ------------------- CONSIDERATION ACQUISITION MENT ACQUISITION
ANN. EFF. TARGET ACQUIROR VALUE PERCENTAGE OFFERED PRICE PRICE PREMIUM
- ------ ------- -------------- --------------- -------- ---------- ------------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dec-96 Pending Allmerica Allmerica Fi- $ 700.8 40.5% Cash and .385 $ 28.96 $ 28.50 1.6%
Property & nancial Corp Shares
Casualty
Nov-96 Pending Central Trac- JW Childs Eq- 53.6 34.6% Cash 14.25 12.13 17.5%
tor Farm & uity Partners
Country LP
Nov-96 Pending Toy Biz Inc Andrews Group 206.0 33.0% Cash 22.50 17.38 29.5%
Inc
Oct-96 Nov-96 WCI Steel Inc Renco Group Inc 56.5 15.5% Cash 10.00 8.50 17.6%
Sep-96 Jan-97 General Phys- National Patent 26.4 48.0% .5299 Common 5.23 4.38 19.5%
ics Corp Development Shares
Aug-96 Dec-96 Bankers Life Conseco Inc 117.2 9.5% $25 in Common 25.00 21.75 14.9%
Holding Shares
Aug-96 Sep-96 Roto-Rooter Chemed Corp 88.3 41.9% Cash 41.00 36.50 12.3%
Inc
May-96 Pending SyStemix Inc Sandoz Ltd 66.4 28.4% Cash 17.00 18.63 -8.7%
(Sandoz AG)
Nov-95 Pending Immunex Corp American Home 263.0 45.8% Cash 14.5 12.0 20.8%
Products Corp
Aug-95 Jan-96 GEICO Corp Berkshire 2,347.0 49.0% Cash 70.0 55.8 25.6%
Hathaway Inc
Jul-95 Dec-95 REN Corp-USA Cobe Laborato- 177.7 47.0% Cash 20.0 14.0 42.9%
ries Inc
May-95 Dec-95 Bic Corp BIC SA 212.6 22.0% Cash 40.5 38.9 4.2%
Apr-95 Oct-95 LIN Broadcast- McCaw Cellular 3,323.4 48.0% Cash 129.5 121.5 6.6%
ing Corp
Apr-95 Aug-95 Club Med Inc Club 153.4 33.0% Cash 32.0 22.8 40.7%
Mediterranee
SA
Nov-94 Sep-95 Pacific PacifiCorp 159.0 13.0% Cash 30.0 29.5 1.7%
Telecom
Sep-94 May-95 Contel Cellu- GTE Corp 254.3 10.0% Cash 25.5 17.8 43.7%
lar
Jul-94 Nov-94 Intergroup Foundation 255.7 37.4% Common Stock 71.0 47.5 49.5%
Healthcare Health Corp
Corp
Jul-94 Jan-95 Chemical Waste WMX Technolo- 397.4 21.4% $8.85 in 8.9 7.9 12.3%
Management gies Convt. Sub.
Notes
Jun-94 Dec-94 Ogden Products Ogden Corp 110.3 15.8% 0.84 Common 18.4 17.4 5.8%
Inc Shares
Feb-94 Sep-94 Scripps Howard EW Scripps 115.9 14.0% 3.45 Class A 103.5 75.0 38.0%
Broadcasting Common
Co Shares
Jan-94 Feb-94 Holnam Inc Holderbank Fin- 51.7 5.0% Cash 7.7 6.8 13.3%
anciers
Oct-93 Apr-94 Medical Mar- Medco Contain- 122.5 45.8% Cash 27.8 33.8 -17.8%
keting Group ment Services
Inc
Sep-93 Dec-93 West Point- Valley Fashions 66.3 5.0% Cash 46.0 49.9 -7.8%
Pepperell Corp
Jul-93 Apr-94 CMS/DATA Corp Quartex Corp 26.7 35.0% 5.6 Common 7.0 1.6 330.8%
Shares
Jun-93 Nov-93 Hadson Energy Apache Corp 39.3 33.5% Cash or 0.574 15.0 15.1 -0.8%
Resources Shares
Apr-93 Apr-94 Southeastern DWG Corp 86.1 29.0% Stock 25.6 16.5 55.2%
Public Serv- (Triarc)
ice Co
Nov-92 May-93 Brand Cos Inc Rust Interna- 185.0 44.0% 1 Share or 18.8 18.9 -0.7%
tional Inc $18.75 in
Cash
Mar-92 Jul-92 Grace Energy WR Grace & Co 77.3 16.6% Cash 19.0 14.5 31.0%
Corp
Feb-92 May-92 Unocal Explo- Unocal Corp 117.5 4.0% 0.54 Common 11.7 9.9 18.3%
ration Corp Shares
Feb-92 Jul-92 Spelling En- Charter Co. 43.0 18.0% 1 Common 7.3 4.8 52.6%
tertainment (American Fi- Share
Inc nancial)
Oct-91 Jun-92 American Tele- Time Warner Inc 1,699.5 18.0% Redeemable 82.5 49.0 68.4%
vision & Reset Notes
Commun.
Sep-91 Jan-92 Arkla Explora- Arkla Inc 92.6 18.0% 0.95 Common 15.6 12.6 23.3%
tion Shares
Sep-91 Oct-91 P&C Food Mar- Penn Traffic Co 43.9 10.0% Cash and 34.0 27.9 22.0%
kets Inc 1.225 Shares
</TABLE>
A8
<PAGE>
SELECTED MINORITY INTEREST BUY-SIDE TRANSACTIONS
- --------------------------------------------------------------------------------
(Dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
PRE-
DATE ACQUISITION ANNOUNCE-
- -------------- ------------------- CONSIDERATION ACQUISITION MENT ACQUISITION
ANN. EFF. TARGET ACQUIROR VALUE PERCENTAGE OFFERED PRICE PRICE PREMIUM
- ------ ------ -------------- ---------------------- -------- ---------- ------------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Jun-91 Jul-91 Hamilton Oil Broken Hill Proprie- $ 524.3 49.9% $40 in Cash $ 40.0 $ 33.8 18.5%
Co tory Co or in ADRs
May-91 Dec-91 United Artists Tele-Communications 1,189.0 46.0% 1.02 Common 16.3 13.5 20.9%
Entertainment Shares
Mar-91 Oct-91 Metcalf & Eddy Air & Water Technology 51.0 18.0% 0.875 Common 18.9 15.8 20.1%
Shares
Jan-91 Jul-91 Ocean Drilling Murphy Oil Corp 391.8 39.0% 0.55 Common 19.4 16.5 17.5%
and Explora- Shares
tion
Nov-90 Jul-91 US West New US West Inc 437.5 19.0% 1.14 Common 44.0 30.5 44.3%
Vector Group Shares
Oct-90 Apr-91 ERC Environ- Ogden Corp 33.6 38.8% Cash 15.1 9.4 61.4%
mental
Jul-90 Nov-90 Freeport- Freeport-McMoran Inc 46.2 18.5% 0.3119461 11.0 8.0 37.5%
McMoran Oil & Shares
Gas
Jul-90 Dec-90 Ceasars New Ceasars World 48.4 13.4% Cash 22.6 16.1 40.0%
Jersey
Jul-90 Feb-91 TVX Broadcast Paramount Communica- 61.4 21.0% Cash 9.5 5.3 81.0%
Group tions
Jul-90 Oct-90 Mack Trucks Renault 103.7 40.0% Cash 6.3 5.3 19.1%
May-90 Aug-90 DST Systems Kansas City Southern 39.1 12.9% Cash 15.9 12.8 24.3%
Mar-90 Aug-90 Shearson Leh- American Express Co 360.0 39.0% 0.48 Common 12.9 10.9 18.6%
man Brothers Shares
Jan-90 Jul-90 Copperweld Imetal SA 78.0 34.8% Cash 17.0 15.8 7.8%
Corp
Dec-89 Apr-90 PCS Inc McKesson Corp 40.7 14.0% Cash 20.0 13.3 50.9%
Oct-89 Jun-90 Esselte Busi- Esselte AB 217.4 22.0% Cash 46.5 37.4 24.2%
ness Systems
Inc
Oct-89 Apr-90 Soo Line Corp Canadian Pacific 89.8 44.0% Cash 21.5 19.2 12.2%
Sep-89 Jan-90 Telerate Dow Jones 681.9 33.7% Cash 21.0 20.4 3.0%
Jul-89 Feb-90 HIMONT Montedison 639.0 19.0% Cash 51.0 44.1 15.6%
Jun-89 Aug-89 Fisher Scien- Henley Group Inc 140.0 19.0% Cash 22.3 19.3 15.6%
tific Group
Inc
Jun-89 Aug-89 Wheelabrator Wheelabrator Group 490.1 40.0% 0.845 Common 38.0 27.0 40.6%
Technologies Shares
May-89 Feb-90 TGI Friday's Carlson Hospitality 52.7 19.8% LBO 14.9 13.3 12.3%
Inc Group Inc
May-89 Jan-90 WestMarc Com- Tele-Communications 185.4 25.0% Cash; 1,000 32.3 27.0 19.4%
munications Inc Shldrs.
Inc elected
$32.25 in
Prefd.
Dec-88 Jun-89 TJX Cos Zayre Corp 414.0 NA 1.45 Shares 25.9 26.4 -1.7%
Dec-88 Mar-89 Micro D Inc Ingram Industries Inc 43.9 41.0% Cash 12.5 10.5 19.1%
Nov-88 Apr-89 Princeville Qintex Resorts BV 70.0 46.6% Cash 15.5 14.4 7.8%
Corp
Apr-88 Oct-88 TWA Carl Icahn 355.0 23.0% Cash and 41.2 27.5 49.8%
Debentures
Mar-88 Oct-88 Kearney Na- Dyson-Kissner-Moran 50.3 46.2% Cash 19.4 12.9 50.3%
tional Inc Corp
Feb-88 May-88 Certain Teed Cle de Saint-Gobain 391.3 43.0% Cash 47.5 31.6 50.2%
Corp
Feb-88 Mar-88 Genmar Indus- Minstar Inc 98.0 16.5% Cash 12.5 9.1 37.0%
tries Inc
</TABLE>
<TABLE>
<S> <C>
MAXIMUM......... 330.8%
MEAN............ 29.0%
MEDIAN.......... 19.5%
MINIMUM......... -17.8%
</TABLE>
A9
