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Filed by: Circle International Group, Inc.
Pursuant to Rule 425 under the Securities Act of 1933 and
deemed filed pursuant to Rules 14a-12 of
the Securities Exchange Act of 1934
Subject Company: Circle International Group, Inc.
Commission File No.: 0-8664
Subject Company: EGL, Inc.
Commission File No.: 0-27288
PRESS RELEASE - July 3, 2000
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AT EGL, INC. AT CIRCLE INTERNATIONAL GROUP
James R. Crane Mike Slaughter Janice Kerti
Chief Executive Officer Vice President Chief Financial Officer
Investor Relations
(281) 618-3100 (281) 618-3428 (415) 978-0783
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FOR IMMEDIATE RELEASE
MONDAY, JULY 3, 2000
EGL, INC. AND CIRCLE INTERNATIONAL GROUP, INC.
ANNOUNCE COMBINATION
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CONVERTS TO CALENDAR YEAR END
HOUSTON, TX- JULY 3, 2000, -- EGL, INC. (NASDAQ:EAGL) and CIRCLE INTERNATIONAL
GROUP, INC. (NASDAQ:CRCL) today announced a strategic merger that will create a
global leader in domestic and international transportation, logistics and
customs brokerage businesses. The transaction combines the domestically strong
EGL and the internationally focused Circle, both of which are non-asset based
heavy-weight freight forwarders.
Each of Circle's approximate 17.65 million shares of common stock will be
converted into one share of EGL common stock. The transaction is expected to be
accounted for as a pooling of
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interest and to be effected on a tax-free basis to shareholders. When complete,
EGL's shareholders will own approximately 63 percent and Circle shareholders
will own approximately 37 percent of the combined company's outstanding shares.
Following the merger, Circle will be a wholly-owned subsidiary of EGL.
Based upon EGL's Friday closing stock price of $30.75, the transaction would be
valued at approximately $543 million to Circle's shareholders, and the combined
company would have a current market capitalization of approximately $1.5
billion.
Upon completion, EGL expects the merger to be immediately accretive to earnings
and cash flow exclusive of the effect of transaction and restructuring costs.
It is anticipated that the merged company, with calendar 1999 combined revenues
of more than $1.4 billion, will target annual EPS growth in the mid-20 percent
range.
Management expects to complete the transaction this fall following satisfaction
of customary conditions, including regulatory approvals and approval by EGL and
Circle shareholders. The combined entity would be positioned to broaden service
capabilities offered to its customers through a worldwide network of almost 400
facilities and over 8,300 employees.
James R. Crane will continue as EGL CEO and will continue to head the
management team of the combined company. Circle's CEO, Peter Gibert, would join
EGL's board of directors following the transaction.
In its more than 100-year history, Circle has become a leader in international
air and ocean transportation, operating over 300 logistics centers in more than
100 countries. This capability would complement the domestic market strength of
EGL, which operates 92 terminals in nine countries, 79 of which are in North
America.
"This merger would enhance EGL's already solid market position domestically and
would present tremendous opportunities for international growth," said EGL CEO
James R. Crane. "In combining the complementary skill sets of the two
companies, one of Eagle's core strategic initiatives would be met: servicing
our customers on a truly global basis.
"We have identified a number of compelling opportunities as we seek to maximize
shareholder value through this merger," added Crane. "Upon closing, we will
immediately begin leveraging the economies of scale, benefiting from both the
operating synergies and cross-selling opportunities present within our combined
base of over 10,000 customers."
Commenting on the merger, Circle's CEO, Peter Gibert added, "Our combination
with EGL would allow us to capitalize on the strength of the employees of both
organizations and would provide our customers with a depth and scope of service
that would be unmatched in the
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industry. Our customers would benefit from the innovative and cost effective
solutions we could offer to more efficiently manage the global sourcing,
transportation and distribution of goods."
The Merger Agreement includes a provision under which EGL and Circle granted
each other the right to purchase approximately 10 percent of each other's
outstanding shares under certain conditions. James R. Crane, who owns
approximately 39 percent of EGL's common stock, has agreed to vote his shares
in favor of the transaction. Circle board members Peter Gibert and Ray C.
Robinson, Jr., who together own approximately 16 percent of Circle shares, have
also agreed to vote in favor of the merger.
EGL also announced today that it will change its fiscal year-end from September
30 to December 31 in order to facilitate the reporting requirements of the
combined company and investment community comparisons with peer companies.
EGL and Circle will hold a press and industry analyst conference call
Wednesday, July 5, 2000, at 9:00 a.m. EDT/6:00 a.m. PDT. Executive
representatives from both companies will be available for comment. Individuals
can conveniently listen to the media and analyst call live via V-Call by going
to http://www.vcall.com on the Web. An archive of the briefing will be
available at the same Web address following the call.
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COMPANY PROFILES
EGL, INC. CIRCLE INTERNATIONAL GROUP
Headquarters Houston, TX San Francisco, CA
Founded 1984 1898
Chairman and CEO James R. Crane Peter Gibert
Revenues (Calendar 1999) $637.6 Million $814.1 Million
Net Income (Calendar 1999) $30.7 Million $23.2 Million
Employees 3,400 4,900
Facilities 92 300
About EGL
Houston-based EGL, Inc. operates under the name EGL Eagle Global Logistics.
Eagle's dedication to providing superior flexibility and fewer shipping
restrictions on a price competitive basis has made it a leading provider of
airfreight forwarding and other transportation and logistics services. Its
network of 92 terminals in nine countries features state-of-the-art information
systems designed to maximize cargo management efficiency and customer
satisfaction. Its fiscal 1999 revenues totaled more than $595 million. The
Company's shares are traded on the NASDAQ National Market under the symbol
"EAGL".
ABOUT CIRCLE
San Francisco-based Circle International Group, Inc. (NASDAQ: CRCL) is a global
transportation, supply chain management and information services company.
Founded in 1898, Circle has more than 4,900 employees, with more than 300
offices in 100 countries. With annual revenues exceeding $800 million, Circle's
services include air and ocean freight forwarding, customs brokerage, materials
management, warehousing, trade facilitation and procurement, and integrated
logistics and supply chain management services.
FORWARD LOOKING STATEMENT AND INVESTOR NOTICE
The statements in this press release regarding the expected date of closing of
the merger, future financial and operating results, target growth rates,
benefits of the merger, tax and accounting treatment of the merger, future
opportunities and any other effect, result or aspect of the proposed
transaction and any other statements, which are not historical facts, are
forward looking
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statements. Such statements involve risks and uncertainties, including, but not
limited to, costs and difficulties related to the integration of acquired
businesses, costs, delays, and any other difficulties related to the merger,
failure of the parties to satisfy closing conditions, risks and effects of
legal and administrative proceedings and governmental regulation, future
financial and operational results, competition, general economic conditions,
ability to manage and continue growth, risks of international operations and
other factors detailed in EGL's and Circle's Forms 10-K and other filings with
the Securities and Exchange Commission. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual outcomes may vary materially from those indicated.
EGL plans to file with the Securities and Exchange Commission ("SEC") a
registration statement on Form S-4. In the connection with the merger, EGL and
Circle expect to mail a joint proxy statement/prospectus, which will be part of
the registration statement, to shareholders of EGL and Circle containing
information about the merger. Shareholders of EGL and Circle are urged to read
the joint proxy statement/prospectus included in the registration statements
when it is filed and any other relevant documents filed with the SEC. The joint
proxy statement/prospectus will contain important information about EGL,
Circle, the merger, the persons soliciting proxies related to the merger, and
related matters that should be considered by shareholders before making any
decision regarding the merger and related transactions. Once they are filed
with the SEC, the registration statement, joint proxy statement prospectus and
other documents will be available free of charge on the SEC's web site at
http://sec.gov and from the EGL and Circle contacts listed above. In addition
to the registration statement and the joint proxy statement/prospectus, EGL and
Circle file annual, quarterly and special reports, proxy statements and other
information with the SEC that are also available free of charge at the SEC's
web site and from EGL and Circle contacts listed above.
In addition, the identity of the people who, under SEC rules, may be considered
"participants in the solicitation" of EGL shareholders and Circle shareholders
in connection with the proposed merger, and any description of their interests,
is available in an SEC filing under Schedule 14A made by both EGL and Circle on
July 3, 2000.
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FOR MORE INFORMATION ABOUT EAGLE:
CONTACT EAGLE INVESTOR RELATIONS VIA THE INTERNET AT [email protected]
OR BY TELEPHONE AT 281/618-3428, MICHAEL SLAUGHTER, VICE PRESIDENT
INVESTOR RELATIONS.
FOR MORE INFORMATION ABOUT CIRCLE INTERNATIONAL:
Contact Circle International Investor Relations via the Internet
at [email protected]
OR BY TELEPHONE AT 415/978-0783, JANICE KERTI, CHIEF FINANCIAL OFFICER.
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