FILED BY HEI, INC. PURSUANT TO
RULE 425 UNDER THE SECURITIES ACT
OF 1933 AND DEEMED FILED PURSUANT
TO RULES 14A-12 AND 14D-2 OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NO.: 000-12471
SUBJECT COMPANY: COLORADO MEDTECH, INC.
FOR IMMEDIATE RELEASE
---------------------
HEI, INC. ANNOUNCES INTENTION TO COMMENCE EXCHANGE OFFER
--------------------------------------------------------
TO ACQUIRE COLORADO MEDTECH, INC.
---------------------------------
MINNEAPOLIS - September 11, 2000 - HEI, Inc. (Nasdaq: HEII) said today
that it has made a proposal to Colorado MEDtech, Inc. (Nasdaq: CMED) of Boulder,
Colorado that HEI acquire Colorado MEDtech in an exchange offer and subsequent
merger. Pursuant to the proposal, Colorado MEDtech shareholders would tender
each of their shares for a number of shares of HEI common stock having a value
of $12.00, up to a maximum of an aggregate of 8.5 million HEI shares to be
issued in the exchange offer and merger. Based on the stock price of Colorado
MEDtech at the time of this announcement, this would represent a 41% premium
over Colorado MEDtech's current stock price.
In a letter to Colorado MEDtech, Anthony J. Fant, Chairman and CEO of HEI, said
that HEI desired to acquire Colorado MEDtech in a negotiated transaction but
would still proceed with an exchange offer even in the absence of a negotiated
agreement. A copy of the letter from Mr. Fant to Colorado MEDtech is attached to
this press release.
The exchange offer will be subject to certain conditions, including those
specified in Mr. Fant's letter to Colorado MEDtech. The complete details of
HEI's exchange offer will be set forth in a filing to be made with the
Securities and Exchange Commission.
In a press release earlier today, HEI announced that it had acquired
approximately 9.9% of the common stock of Colorado MEDtech from Mr. Fant.
HEI specializes in the custom design and manufacture of high performance,
ultraminiature microelectronic devices and high-technology products
incorporating those devices. HEI contributes to its customers' competitiveness
in the hearing, medical, communications, wireless smart cards, other RF
applications, and industrial markets through innovative design solutions and by
the application of state-of-the-art materials, processes and manufacturing
capabilities.
Colorado MEDtech is a leading full-service provider of advanced medical products
and comprehensive outsourcing services.
<PAGE>
THIS NEWS RELEASE IS FOR INFORMATIONAL PURPOSES ONLY. IT IS NOT AN OFFER TO BUY
OR A SOLICITATION OF AN OFFER TO SELL ANY SHARES OF COLORADO MEDTECH COMMON
STOCK. THE SOLICITATION OF OFFERS TO BUY COLORADO MEDTECH COMMON STOCK WILL ONLY
BE MADE PURSUANT TO A PROSPECTUS AND RELATED MATERIALS THAT HEI EXPECTS TO SEND
TO COLORADO MEDTECH SHAREHOLDERS. A REGISTRATION STATEMENT RELATING TO THESE
SECURITIES WILL BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AS SOON AS
PRACTICABLE. THESE SECURITIES MAY NOT BE SOLD, NOR MAY OFFERS TO BUY BE EFFECTED
PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS
COMMUNICATION SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY, NOT 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.
THIS MATERIAL ALSO WILL BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AS
PART OF A TENDER OFFER STATEMENT. COLORADO MEDTECH SHAREHOLDERS ARE URGED TO
CAREFULLY READ THE COMPLETE TERMS AND CONDITIONS OF THOSE MATERIALS, WHICH WILL
CONTAIN IMPORTANT INFORMATION REGARDING THE EXCHANGE OFFER, PRIOR TO MAKING ANY
DECISIONS WITH RESPECT TO SUCH EXCHANGE OFFER.
IN CONNECTION WITH THE EXCHANGE OFFER DESCRIBED IN THIS NEWS RELEASE, HEI MAY
SOLICIT PROXIES FROM ITS SHAREHOLDERS TO APPROVE THE ISSUANCE OF STOCK IN THE
EXCHANGE OFFER AND FROM THE SHAREHOLDERS OF COLORADO MEDTECH TO CAUSE THE
ELECTION OF A NEW SLATE OF COLORADO MEDTECH DIRECTORS. THE PARTICIPANTS TO THE
SOLICITATION OF HEI SHAREHOLDERS WILL INCLUDE HEI AND EACH OF THE MEMBERS OF THE
HEI BOARD OF DIRECTORS, ANTHONY FANT, ED FINCH, MACK TRAYNOR, STEVE TONDERA AND
DAVID ORTLEIB. THE PARTICIPANTS IN THE SOLICITATION OF COLORADO MEDTECH
SHAREHOLDERS WILL INCLUDE HEI AND MR. FANT. HEI IS THE BENEFICIAL OWNER OF
APPROXIMATELY 9.9% OF THE OUTSTANDING SHARES OF COMMON STOCK OF COLORADO
MEDTECH. IN THE EVENT THAT THE EXCHANGE OFFER IS NOT SUCCESSFUL AND HEI SELLS
ITS SHARES OF COMMON STOCK OF COLORADO MEDTECH TO AN UNAFFILIATED THIRD PARTY,
ANTHONY FANT, HEI'S CHAIRMAN OF THE BOARD, WILL RECEIVE A PORTION OF THE
PROCEEDS OF SUCH SALE. HEI EXPECTS TO FILE PROXY STATEMENTS WITH THE SECURITIES
AND EXCHANGE COMMISSION REGARDING SUCH SOLICITATIONS. HEI AND COLORADO MEDTECH
SHAREHOLDERS ARE URGED TO CAREFULLY READ THE COMPLETE TERMS AND CONDITIONS OF
THE RESPECTIVE PROXY STATEMENTS, WHEN THEY ARE AVAILABLE, AS THEY WILL CONTAIN
IMPORTANT INFORMATION WITH RESPECT TO ANY SUCH SOLICITATION.
HEI AND COLORADO MEDTECH SHAREHOLDERS WILL BE ABLE TO OBTAIN THE PROSPECTUS, THE
REGISTRATION STATEMENT, THE TENDER OFFER STATEMENT AND THE PROXY STATEMENTS
REFERRED TO ABOVE, WHEN FILED BY THE COMPANY WITH THE COMMISSION, FOR FREE AT
THE COMMISSION'S WEB SITE AT WWW.SEC.GOV OR FROM THE COMPANY BY DIRECTING SUCH
REQUESTS TO BEACON HILL PARTNERS AT (212) 843-8500.
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<PAGE>
FORWARD LOOKING INFORMATION
---------------------------
Information in this news release, which is not historical, includes
forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Certain statements contained
in this press release are forward looking statements. All of such
forward-looking statements involve risks and uncertainties including, without
limitation, adverse business or market conditions, the ability of HEI to secure
and satisfy customers, the availability and cost of materials from HEI's
suppliers, adverse competitive developments, change in or cancellation of
customer requirements, and other risks detailed from time to time in HEI's SEC
filings.
CONTACT: Anthony J. Fant, CEO, (952) 443-2500 or Richard Grubaugh of Beacon Hill
Partners, (212) 843-8500.
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<PAGE>
September 11, 2000
Mr. Stephen Onody
President and CEO
Colorado MEDtech, Inc.
6175 Longbow Drive
Boulder, Colorado
Dear Mr. Onody:
Based on our review of your business and operations we
believe that combining HEI, Inc. (HEI) and Colorado MEDtech makes a tremendous
amount of sense for our respective shareholders, organizations and customers.
For this reason, I am extremely pleased, on behalf of the
HEI Board of Directors, to propose an exchange offer whereby a newly-formed
subsidiary of HEI would offer to acquire all of the outstanding capital stock of
Colorado MEDtech, and subsequently merge with Colorado MEDtech. Pursuant to the
proposal, Colorado MEDtech shareholders would tender each of their shares for a
number of shares of common stock of HEI having a value of $12.00, up to a
maximum of an aggregate of 8.5 million HEI shares to be issued in the exchange
offer and merger. Based on the stock price of Colorado MEDtech at the time of
this letter, this would represent a 41% premium over Colorado MEDtech's current
stock price.
This proposal is subject to certain conditions, including
but not limited to redemption of Colorado MEDtech's "poison pill," satisfaction
of a minimum tender condition and approval of this transaction by the Colorado
MEDtech Board of Directors. The transaction would also be subject to receipt of
the necessary approvals of HEI shareholders for the issuance of HEI shares in
the exchange offer and merger, which we anticipate would be obtained in a timely
manner. In this regard, I point out that I own or control over 30% of the HEI
voting stock. The complete details of HEI's exchange offer will be set forth in
a filing to be made with the Securities and Exchange Commission.
We anticipate offering key managers of Colorado MEDtech a
significant continuing role in the operation and ownership of Colorado MEDtech's
business and are prepared to negotiate with you regarding the same.
We believe that combining our companies represents an
extraordinary opportunity for all of our shareholders. However, because we view
the combination of our companies as important to HEI's business plans and the
best means available for Colorado MEDtech's shareholders to maximize the value
of their shares, we are committed to pursuing a transaction even in the absence
of a negotiated agreement.
<PAGE>
Your proposal to meet next Wednesday is appreciated;
however, due to the obvious importance of our proposal to our respective
companies and your shareholders, we believe an earlier meeting is more
appropriate. Our exchange offer will be commenced at the earliest practicable
date and we are prepared to meet with you anytime to pursue our discussions.
I look forward to hearing from you.
Very truly yours,
/s/ Anthony J. Fant
Anthony J. Fant
Chief Executive Officer
cc: The Board of Directors,
Colorado MEDtech, Inc.
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