<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 7
TO
SCHEDULE 13E-3
RULE 13E-3 TRANSACTION STATEMENT
(PURSUANT TO SECTION 13(e) OF THE SECURITIES EXCHANGE ACT OF 1934)
INSTRON CORPORATION
(Name of the Issuer)
ISN ACQUISITION CORPORATION
KIRTLAND CAPITAL PARTNERS III L.P.
KIRTLAND PARTNERS LTD.
KIRTLAND CAPITAL COMPANY III LLC
<TABLE>
<S> <C>
GEORGE S. BURR JONATHAN L. BURR
HELEN L. BURR THE JONATHAN L. BURR TRUST -- 1965
THE HAROLD HINDMAN TRUST -- 1969 YAHYA GHARAGOZLOU
HAROLD HINDMAN ARTHUR D. HINDMAN
JAMES M. MCCONNELL WILLIAM J. MILLIKEN
JOSEPH E. AMARAL LINTON A. MOULDING
KENNETH L. ANDERSEN JANE ELIZABETH MOULDING
JOHN R. BARRETT NORMAN L. SMITH
</TABLE>
INSTRON CORPORATION
(Name of Person(s) Filing Statement)
COMMON STOCK, PAR VALUE $1.00 PER SHARE
(Title of Class of Securities)
0004577761
(CUSIP Number of Class of Securities)
<TABLE>
<S> <C> <C>
Kirtland Capital Partners III L.P. Instron Corporation James M. McConnell
c/o Raymond A. Lancaster c/o James M. McConnell Joseph E. Amaral
2550 SOM Center Road 100 Royall Street Kenneth L. Andersen
Suite 105 Canton, MA 02021 John R. Barrett
Willoughby Hills, OH 44904 (781) 828-2500 Jonathan L. Burr
(440) 585-9010 The Jonathan L. Burr
Trust -- 1965
Kirtland Partners Ltd. Yahya Gharagozlou
Kirtland Capital Company III LLC Arthur D. Hindman
ISN Acquisition Corporation George S. Burr William J. Milliken
c/o Kirtland Capital Partners III L.P. Helen L. Burr Linton A. Moulding
c/o Raymond A. Lancaster The Harold Hindman Jane Elizabeth Moulding
2550 SOM Center Road Trust -- 1969 Norman L. Smith
Suite 105 Harold Hindman c/o Instron Corporation
Willoughby Hills, OH 44904 c/o Instron Corporation 100 Royall Street
(440) 585-9010 100 Royall Street Canton, MA 02021
Canton, MA 02021 (781) 828-2500
(781) 828-2500
</TABLE>
WITH COPIES TO:
<TABLE>
<S> <C> <C> <C>
Stuart M. Cable, P.C. Charles W. Hardin, Jr. John R. Utzschneider Thomas J. Dougherty
Joseph L. Johnson III, P.C. Jones, Day, Reavis & Pogue Bingham Dana LLP Skadden, Arps, Slate,
James A. Matarese 901 Lakeside Avenue 150 Federal Street Meagher & Flom LLP
Goodwin, Procter & Hoar LLP Cleveland, OH 44114 Boston, MA 02110 One Beacon Street
Exchange Place (216) 586-3939 (617) 951-8000 Boston, MA 02108
Boston, MA 02109 (617) 573-4800
(617) 570-1000
</TABLE>
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of Person(s) Filing Statement)
This statement is filed in connection with (check the appropriate box):
a. [X] 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.
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: [X]
CALCULATION OF FILING FEE
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<CAPTION>
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
TRANSACTION VALUE* AMOUNT OF FILING FEE
- -----------------------------------------------------------------------------------------------
<S> <C>
$151,662,752 $30,333
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
</TABLE>
* For purposes of calculating the filing fee only. Calculated in accordance with
Rule 0-11(b)(2) under the Securities Exchange Act of 1934, as amended. Assumes
the purchase of 6,653,238 shares of Common Stock, par value $1.00 per share,
of Instron Corporation at $22.00 per share and the purchase of underlying
options to purchase Common Stock for an aggregate of $5,291,516.
[X] Check box if any 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: $30,333
Form or registration no.: Preliminary Proxy Statement on Schedule 14A (filed
concurrently with this Schedule 13E-3)
Filing party: Instron Corporation
Date filed: May 26, 1999
<PAGE> 2
This Rule 13e-3 Transaction Statement (this "Statement") is being filed
with the Securities and Exchange Commission (the "Commission") in connection
with the merger (the "Merger") of ISN Acquisition Corporation ("MergerCo") with
and into Instron Corporation ("Instron"), with Instron continuing as the
surviving corporation (the "Surviving Corporation"), pursuant to an Agreement
and Plan of Merger dated as of May 6, 1999 (the "Merger Agreement") by and among
Instron, MergerCo and Kirtland Capital Partners III L.P., the parent of MergerCo
("Kirtland"), as amended by Amendment No. 1 to the Agreement and Plan of Merger
dated as of August 5, 1999 ("Amendment No. 1").
The Merger Agreement, as amended, was formally approved by the stockholders
of Instron at a special meeting of stockholders held on September 3, 1999 (the
"Special Meeting"). The purpose of this final amendment to the Statement is to
report that on September 29, 1999 the transactions contemplated by the Merger
Agreement, as amended, including the Merger, were consummated.
Pursuant to the Merger Agreement, as amended, each share of common stock,
par value $1.00 per share, of Instron ("Instron Common Stock") outstanding
immediately prior to the Merger, other than shares held by Instron, its
subsidiaries, MergerCo or dissenting Instron stockholders, was canceled and
converted automatically into the right to receive $22.00 in cash without
interest.
In addition, certain members of Instron's management and their affiliates
(the "Management Investors") and certain members of Instron's Board of Directors
and/or their affiliates (the "Other Investors") who or which were also
stockholders of Instron exchanged some of their shares of Instron Common Stock
for equity in the Surviving Corporation and had certain of their stock options
assumed by the Surviving Corporation. Accordingly, upon consummation of the
Merger, the entire equity interest in Instron as the Surviving Corporation is
owned by Kirtland and certain of its affiliates, the Management Investors and
the Other Investors. James M. McConnell, Joseph E. Amaral, Kenneth L. Andersen,
John R. Barrett, Jonathan L. Burr, The Jonathan L. Burr Trust -- 1965, Yahya
Gharagozlou, Arthur D. Hindman, William J. Milliken, Linton A. Moulding, Jane
Elizabeth Moulding and Norman L. Smith are the Management Investors. George S.
Burr, Helen L. Burr and The Harold Hindman Trust -- 1969 are the Other
Investors. Harold Hindman is filing this Statement solely in his capacity as
trustee of The Harold Hindman Trust -- 1969. He is not, in his individual
capacity, one of the Other Investors.
Immediately prior to the Merger, (i) the Other Investors exchanged an
aggregate of 160,000 shares of Instron Common Stock for an aggregate of 32,000
shares of Series B Preferred Stock, par value $1.00 per share, of Instron
("Series B Preferred Stock") and (ii) the Management Investors exchanged an
aggregate of 164,756 shares of Instron Common Stock for an aggregate of 32,951
shares of Series B Preferred Stock. In the Merger, each share of Series B
Preferred Stock was converted into one share of common stock, par value $.01 per
share, of the Surviving Corporation ("Surviving Corporation Common Stock").
ITEM 3. PAST CONTRACTS, TRANSACTIONS OR NEGOTIATIONS
(b) At the Special Meeting held on September 3, 1999, the Merger was
approved by the holders of in excess of two-thirds of the outstanding shares of
Instron Common Stock. On September 29, 1999, the Articles of Merger were filed
with the Secretary of State of The Commonwealth of Massachusetts. As a result,
the effective time of the Merger was September 29, 1999 and MergerCo was merged
with and into Instron.
ITEM 5. PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE
The Merger was consummated on September 29, 1999.
ITEM 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS
(a) Prior to consummating the Merger, the Board of Directors of Instron and
the Board of Directors of MergerCo received a solvency opinion with respect to
Instron from Houlihan, Lokey, Howard & Zukin Financial Advisors, Inc. ("Houlihan
Lokey").
(b)(1) Houlihan Lokey is an investment banking firm specializing in
business and securities valuation, middle market investment banking
and financial restructuring.
2
<PAGE> 3
(b)(2) Houlihan Lokey has rendered hundreds of solvency opinions in
transactions totaling in excess of $200 billion.
(b)(3) Instron selected Houlihan Lokey based on its qualification and
reputation.
(b)(4) Not applicable.
(b)(5) Not applicable.
(b)(6) Houlihan Lokey concluded that, after giving affect the Merger and
the transactions contemplated thereby, (i) the fair value and
present fair saleable value of Inston's assets would exceed Inston's
stated liabilities and identified contingent liabilities and
identified contingent liabilities, (ii) Instron should be able to
pay its debts as they become absolute and mature, and (iii) the
capital remaining in Instron after the Merger and the transactions
contemplated thereby would not be unreasonably small for the
business in which Instron is engaged, as management has indicated it
is now conducted and is proposed to be conducted following the
consummation of the Merger and the transactions contemplated
thereby. Houlihan Lokey based its opinion on such reviews, analyses
and inquiries as it deemed necessary and appropriate under the
circumstances. Pursuant to General Instruction D of Schedule 13E-3,
the full text of the opinion which set forth the assumptions made,
matters considered and limitation on the review undertaken is
attached hereto as an exhibit and incorporated herein by reference.
(c) The full text of the opinion is attached hereto as an exhibit and
incorporated herein by reference.
ITEM 17. MATERIAL TO BE FILED AS EXHIBITS.
* (a)(1) Letter dated May 3, 1999 from National City Bank to Kirtland.
* (b)(1) Opinion of The Beacon Group Capital Services, LLC dated May 6,
1999 (included as Appendix B to the Proxy Statement dated July 23, 1999).
* (b)(2) Financial Analysis Presentation materials prepared by The Beacon
Group Capital Services, LLC in connection with its presentation to the
Board of Directors of Instron and its Opinion dated as of May 4, 1999.
* (b)(3) Financial Analysis Presentation materials prepared by The Beacon
Group Capital Services, LLC in connection with its presentation to the
Board of Directors of Instron dated as of August 11, 1998.
* (b)(4) Financial Analysis Presentation materials prepared by The Beacon
Group Capital Services, LLC in connection with its presentation to the
Board of Directors of Instron dated as of March 10, 1999.
* (b)(5) Financial Analysis Presentation materials prepared by The Beacon
Group Capital Services, LLC in connection with its presentation to the
Special Committee of the Board of Directors of Instron dated as of April
7, 1999.
(b)(6) Solvency Opinion of Houlihan, Lokey, Howard and Zukin dated as of
September 29, 1999.
* (c)(1) Agreement and Plan of Merger dated as of May 6, 1999 by and among
Instron, MergerCo and Kirtland (included as Appendix A to the Proxy
Statement dated July 23, 1999 and in the Letter to Stockholders dated as
of August 6, 1999).
* (c)(2) Letter Agreement dated as of May 6, 1999 by and among Kirtland and
the Management Investors.
* (c)(3) Letter Agreement dated as of May 6, 1999 by and among Kirtland,
Instron and the Other Investors.
* (c)(4) Voting Agreement dated as of May 6, 1999 by and among Kirtland,
MergerCo, the Management Investors and certain of their affiliates, and
the Other Investors and certain of their affiliates.
* (c)(5) Form of Stockholders Agreement.
* (c)(6) Form of Amendment to Restricted Stock Award Agreement.
3
<PAGE> 4
* (c)(7) Form of Instron Corporation 1999 Stock Option Plan.
* (c)(8) Form of Incentive Stock Option Agreement.
* (c)(9) Form of Nonqualified Stock Option Agreement.
* (c)(10) Form of Amendment to Instron Corporation 1992 Stock Incentive
Plan.
* (c)(11) Form of Amendment to Nonqualified Stock Option Agreement.
* (c)(12) Form of Amendment to Incentive Stock Option Agreement.
* (c)(13) Amendment No. 1 to the Agreement and Plan of Merger dated as of
August 5, 1999 by and among Instron, MergerCo and Kirtland (included in
the Letter to Stockholders dated as of August 6, 1999).
* (d)(1) Letter to Stockholders dated as of July 23, 1999.
* (d)(2) Notice of Special Meeting of Stockholders dated as of July 23,
1999.
* (d)(3) Proxy Statement.
* (d)(4) Form of Proxy.
* (d)(5) Press Release issued by Instron and Kirtland dated as of May 7,
1999 (incorporated by reference to the Current Report on Form 8-K filed
by Instron on May 12, 1999).
* (d)(6) Form of Voting Instruction Card.
* (d)(7) Letter to Stockholders dated as of August 6, 1999.
* (d)(8) Notice of Special Meeting of Stockholders dated as of August 6,
1999.
* (d)(9) Form of New Proxy Card.
* (d)(10) Form of New Voting Instruction Card.
*(d)(11) Press Release issued by Instron dated as of September 3, 1999.
(d)(12) Press Release issued by Instron and Kirtland dated as of
September 29, 1999.
* (e) Text of Sections 85 to 98 of Chapter 156B of the General Laws of
Massachusetts (included as Appendix C to the Proxy Statement dated July
23, 1999).
(f) Not applicable.
* Previously filed
4
<PAGE> 5
SIGNATURES
After due inquiry and to the best of our knowledge and belief, each of the
undersigned certifies that the information set forth in this Statement is true,
complete and correct.
<TABLE>
<S> <C>
INSTRON CORPORATION
Dated: September 30, 1999 By: /s/ LINTON A. MOULDING
--------------------------------------------
Name: Linton A. Moulding
Title: Chief Financial Officer
ISN ACQUISITION CORPORATION
Dated: September 30, 1999 By: /s/ THOMAS N. LITTMAN
--------------------------------------------
Name: Thomas N. Littman
Title: Treasurer
KIRTLAND CAPITAL PARTNERS III L.P.
By: Kirtland Partners Ltd., its General
Partner
Dated: September 30, 1999 By: /s/ THOMAS N. LITTMAN
--------------------------------------------
Name: Thomas N. Littman
Title: Vice President
GEORGE S. BURR
Dated: September 30, 1999 /s/ GEORGE S. BURR
--------------------------------------------
HELEN L. BURR
Dated: September 30, 1999 /s/ HELEN L. BURR
--------------------------------------------
THE HAROLD HINDMAN TRUST -- 1969
Dated: September 30, 1999 By: /s/ HAROLD HINDMAN
--------------------------------------------
Name: Harold Hindman
Title: Trustee
Dated: September 30, 1999 By: /s/ ROBERT N. SHAPIRO
--------------------------------------------
Name: Robert N. Shapiro
Title: Trustee
JAMES M. MCCONNELL
Dated: September 30, 1999 /s/ JAMES M. MCCONNELL
--------------------------------------------
JOSEPH E. AMARAL
Dated: September 30, 1999 /s/ JOSEPH E. AMARAL
--------------------------------------------
</TABLE>
5
<PAGE> 6
<TABLE>
<S> <C>
KENNETH L. ANDERSEN
Dated: September 30, 1999 /s/ KENNETH L. ANDERSEN
--------------------------------------------
JOHN R. BARRETT
Dated: September 30, 1999 /s/ JOHN R. BARRETT
--------------------------------------------
JONATHAN L. BURR
Dated: September 30, 1999 /s/ JONATHAN L. BURR
--------------------------------------------
THE JONATHAN L. BURR TRUST -- 1965
Dated: September 30, 1999 By: /s/ JONATHAN L. BURR
--------------------------------------------
Name: Jonathan L. Burr
Title: Beneficiary
YAHYA GHARAGOZLOU
Dated: September 30, 1999 /s/ YAHYA GHARAGOZLOU
--------------------------------------------
ARTHUR D. HINDMAN
Dated: September 30, 1999 /s/ ARTHUR D. HINDMAN
--------------------------------------------
WILLIAM J. MILLIKEN
Dated: September 30, 1999 /s/ WILLIAM J. MILLIKEN
--------------------------------------------
LINTON A. MOULDING
Dated: September 30, 1999 /s/ LINTON A. MOULDING
--------------------------------------------
JANE ELIZABETH MOULDING
Dated: September 30, 1999 /s/ JANE ELIZABETH MOULDING
--------------------------------------------
NORMAN L. SMITH
Dated: September 30, 1999 /s/ NORMAN L. SMITH
--------------------------------------------
</TABLE>
<TABLE>
<S> <C>
HAROLD HINDMAN
Dated: September 30, 1999 /s/ HAROLD HINDMAN
--------------------------------------------
</TABLE>
6
<PAGE> 7
<TABLE>
<S> <C>
KIRTLAND PARTNERS LTD.
Dated: September 30, 1999 By: /s/ THOMAS N. LITTMAN
--------------------------------------------
Name: Thomas N. Littman
Title: Vice President
KIRTLAND CAPITAL COMPANY III LLC
Dated: September 30, 1999 By: Kirtland Partners Ltd., its managing
member
By: /s/ THOMAS N. LITTMAN
--------------------------------------------
Name: Thomas N. Littman
Title: Vice President
</TABLE>
7
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<S> <C>
*(a)(1) Letter dated May 3, 1999 from National City Bank to Kirtland
Capital Partners III L.P.
*(b)(1) Opinion of The Beacon Group Capital Services, LLC dated May
6, 1999 (included as Appendix B to the Proxy Statement dated
July 23, 1999).
*(b)(2) Financial Analysis Presentation materials prepared by The
Beacon Group Capital Services, LLC in connection with its
presentation to the Board of Directors of Instron and its
Opinion dated as of May 4, 1999.
*(b)(3) Financial Analysis Presentation materials prepared by The
Beacon Group Capital Services, LLC in connection with its
presentation to the Board of Directors of Instron dated as
of August 11, 1998.
*(b)(4) Financial Analysis Presentation materials prepared by The
Beacon Group Capital Services, LLC in connection with its
presentation to the Board of Directors of Instron dated as
of March 10, 1999.
*(b)(5) Financial Analysis Presentation materials prepared by The
Beacon Group Capital Services, LLC in connection with its
presentation to the Special Committee of the Board of
Directors of Instron dated as of April 7, 1999.
(b)(6) Solvency Opinion of Houlihan, Lokey, Howard and Zukin dated
as of September 29, 1999.
*(c)(1) Agreement and Plan of Merger dated as of May 6, 1999 by and
among Instron, MergerCo and Kirtland (included as Appendix A
to the Proxy Statement dated July 23, 1999 and in the Letter
to Stockholders dated as of August 6, 1999).
*(c)(2) Letter Agreement dated as of May 6, 1999 by and among
Kirtland and the Management Investors.
*(c)(3) Letter Agreement dated as of May 6, 1999 by and among
Kirtland, Instron and the Other Investors.
*(c)(4) Voting Agreement dated as of May 6, 1999 by and among
Kirtland, MergerCo, the Management Investors and certain of
their affiliates, and the Other Investors and certain of
their affiliates.
*(c)(5) Form of Stockholders Agreement.
*(c)(6) Form of Amendment to Restricted Stock Award Agreement.
*(c)(7) Form of Instron Corporation 1999 Stock Option Plan.
*(c)(8) Form of Incentive Stock Option Agreement.
*(c)(9) Form of Nonqualified Stock Option Agreement.
*(c)(10) Form of Amendment to Instron Corporation 1992 Stock
Incentive Plan.
*(c)(11) Form of Amendment to Nonqualified Stock Option Agreement.
*(c)(12) Form of Amendment to Incentive Stock Option Agreement.
*(c)(13) Amendment No. 1 to the Agreement and Plan of Merger dated as
of August 5, 1999 by and among Instron, MergerCo and
Kirtland (included in the Letter to Stockholders dated as of
August 6, 1999).
*(d)(1) Letter to Stockholders dated as of July 23, 1999.
*(d)(2) Notice of Special Meeting of Stockholders dated as of July
23, 1999.
*(d)(3) Proxy Statement.
*(d)(4) Form of Proxy.
*(d)(5) Press Release issued by Instron and Kirtland, dated as of
May 7, 1999 (incorporated by reference to the Current Report
on Form 8-K filed by Instron on May 12, 1999).
*(d)(6) Form of Voting Instruction Card.
*(d)(7) Letter to Stockholders dated as of August 6, 1999.
*(d)(8) Notice of Special Meeting of Stockholders dated as of August
6, 1999.
*(d)(9) Form of New Proxy Card.
*(d)(10) Form of New Voting Instruction Card.
(d)(11) Press Release issued by Instron dated as of September 3,
1999.
(d)(12) Press Release issued by Instron Kirtland dated as of
September 29, 1999.
*(e) Text of Sections 85 to 98 of Chapter 156B of the General
Laws of Massachusetts (included as Appendix C to the Proxy
Statement dated July 23, 1999).
</TABLE>
* Previously filed
<PAGE> 1
Exhibit (b)(6)
[Company Logo]
HOULIHAN LOKEY HOWARD & ZUKIN
_____________________________
FINANCIAL ADVISORS
September 29, 1999
ISN Acquisition Corporation and the Board of Directors of
ISN Acquisition Corporation
Kirtland Partners Ltd.
Kirtland Capital Partners III L.P.
2550 SOM Center Road
Suite 105
Willoughby Hills, OH 44094
Instron Corporation and the
Board of Directors of
Instron Corporation
100 Royal Street
Canton, MA 02021
Dear Gentlemen:
We understand that Kirtland Capital Partners III L.P. ("KCP III"), of which
Kirtland is the general partner, has entered into a merger agreement with
Instron Corporation (the "Company"). In connection with the merger, KCP III has
formed a new entity, ISN Acquisition Corporation ("MergerCo"), to acquire the
Company which will be capitalized with an approximately $50 million equity
investment by KCP III and certain of its affiliates, the issuance and sale of
60,000 units, each consisting of $1,000 principal amount of 13 1/4 percent
senior subordinated notes due 2009 and one warrant to purchase 0.05109 shares
of our common stock to Donaldson, Lufkin & Jenrette Securities Corporation (the
"Initial Purchaser"), and a $80 million senior bank facility. The senior bank
facility is composed of revolving credit facility of $50 million and a term
loan of $30 million maturing in five and one half years. Borrowings under the
senior bank facility bear interest, at the option of the borrower, at a rate
equal to LIBOR plus a margin that decreases (based on a funded debt to EBITDA
ratio) from 300 basis points to 250 basis points, or a base rate plus a margin
that decreases from 150 basis points to 100 basis points. The merger and other
related transactions disclosed to Houlihan Lokey are referred to collectively
herein as the "Transaction." It is our understanding that a significant part of
the financing for the Transaction will be obtained by the Company from the
Initial Purchaser and one or more institutional lenders (the "Lenders").
[Houlihan Lokey & Zukin Letterhead]
<PAGE> 2
September 29, 1999 -2-
You have requested our written opinion (the "Opinion") as to the matters set
forth below. This Opinion values the Company as a going-concern (including
goodwill), on a pro forma basis, immediately after and giving effect to the
Transaction and the associated indebtedness. For purposes of this Opinion, "fair
value" shall be defined as the amount at which the Company would change hands
between a willing buyer and a willing seller, each having reasonable knowledge
of the relevant facts, neither being under any compulsion to act, with equity to
both; and "present fair saleable value" shall be defined as the amount that may
be realized if the Company's aggregate assets (including goodwill) are sold as
an entirety with reasonable promptness in an arm's length transaction under
present conditions for the sale of comparable business enterprises, as such
conditions can be reasonably evaluated by Houlihan Lokey Howard & Zukin
Financial Advisors, Inc. ("Houlihan Lokey"). We have used the same valuation
methodologies in determining fair value and present fair saleable value for
purposes of rendering this Opinion. The term "identified contingent liabilities"
shall mean the stated amount of contingent liabilities identified to us and
valued by responsible officers of the Company, upon whom we have relied upon
without independent verification; no other contingent liabilities will be
considered. Being "able to pay its debts as they become absolute and mature"
shall mean that, assuming the Transaction has been consummated as proposed, the
Company's financial forecasts for the period 1999 to 2003 indicate positive cash
flow for such period, including (and after giving effect to) the payment of
installments due under loans made pursuant to the indebtedness incurred in the
Transaction, as such installments are scheduled at the close of the Transaction.
It is Houlihan Lokey's understanding, upon which it is relying, that the
Company's Board of Directors and any other recipient of the Opinion will consult
with and rely solely upon their own legal counsel with respect to said
definitions. No representation is made herein, or directly or indirectly by the
Opinion, as to any legal matter or as to the sufficiency of said definitions for
any purpose other than setting forth the scope of Houlihan Lokey's Opinion
hereunder.
Notwithstanding the use of the defined terms "fair value" and "present fair
saleable value," we have not been engaged to identify prospective purchasers or
to ascertain the actual prices at which and terms on which the Company can
currently be sold, and we know of no such efforts by others. Because the sale
of any business enterprise involves numerous assumptions and uncertainties, not
all of which can be quantified or ascertained prior to engaging in an actual
selling effort, we express no opinion as to whether the Company would actually
be sold for the amount we believe to be its fair value and present fair
saleable value.
In connection with this Opinion, we have made such reviews, analyses and
inquiries as we have deemed necessary and appropriate under the circumstances.
Among other things, we have:
1. reviewed the Company's annual reports to shareholders and on Form
10-K for the fiscal years ended 1998 and quarterly reports on Form
10-Q for the four quarters ended April 3, 1999, and Company-prepared
interim financial statements for the period ended July 3, 1999,
which the Company's management has identified as the most current
information available;
2. reviewed copies of the following documents:
DLJ's Senior Subordinated Notes due 2009 prospectus, dated August 17,
1999, Standard and Poor's credit ratings presentation prepared by
Instron management, PriceWaterhouseCoopers Acquisition Analysis dated
May 7, 1999, The Beacon Group Capital Services, LLC, Offering
Memorandum dated October 1998;
<PAGE> 3
September 29, 1999 -3-
3. reviewed the final proxy statement, dated August 6, 1999;
4. met with certain members of the senior management of the Company to
discuss the operations, financial conditions, future prospects and
projected operations and performance of the Company, and met with
representatives of the Company's counsel to discuss certain matters;
5. visited certain facilities and business offices of the Company;
6. reviewed forecasts and projections prepared by the Company's
management with respect to the Company for the years ended December
31, 1999 through 2003;
7. reviewed the historical market prices and trading volume for the
Company's publicly traded securities;
8. reviewed other publicly available financial data for the Company and
certain companies that we deem comparable to the Company;
9. reviewed drafts of certain documents to be delivered at the closing of
the Transaction, including, but not limited to, the reports of the
Company's chief financial officer and of the Company's independent
public accountants, and the National City Bank Credit and Security
agreement dated as of July 26, 1999; and
10. conducted such other studies, analyses and investigations as we have
deemed appropriate.
We have relied upon and assumed, without independent verification, that the
financial forecasts and projections provided to us have been reasonably
prepared and reflect the best currently available estimates of the future
financial results and condition of the Company, and that there has been no
material adverse change in the assets, financial condition, business or
prospects of the Company since the date of the most recent financial statements
made available to us.
We have not independently verified the accuracy and completeness of the
information supplied to us with respect to the Company and do not assume any
responsibility with respect to it. We have not made any physical inspection or
independent appraisal of any of the properties or assets of the Company. Our
opinion is necessarily based on business, economic, market and other conditions
as they exist and can be evaluated by us at the date of this letter.
Based upon the foregoing, and in reliance thereon, it is our opinion as of the
date of this letter that, assuming the Transaction had been consummated as
proposed, immediately after and giving effect to the Transaction:
(a) on a pro forma basis, the fair value and present fair saleable value
of the Company's assets would exceed the Company's stated liabilities
and identified contingent liabilities;
(b) the Company should be able to pay its debts as they become absolute
and mature; and
<PAGE> 4
September 29, 1999 -4-
(c) the capital remaining in the Company after the Transaction would not
be unreasonably small for the business in which the Company is
engaged, as management has indicated it is now conducted and is
proposed to be conducted following the consummation of the
Transaction.
The Company, like other companies and any business entities analyzed by
Houlihan Lokey or which are otherwise involved in any manner in connection with
this Opinion, could be materially affected by complications that may occur, or
may be anticipated to occur, in computer-related applications as a result of
the year change from 1999 to 2000 (the "Y2K Issue"). In accordance with
long-standing practice and procedure, Houlihan Lokey's services are not
designed to detect the likelihood and extent of the effect of the Y2K Issue,
directly or indirectly, on the financial condition and/or operations of a
business. Further, Houlihan Lokey has no responsibility with regard to the
Company's efforts to make its systems, or any other systems (including its
vendors and service providers), Year 2000 compliant on a timely basis.
Accordingly, Houlihan Lokey shall not be responsible for any effect of the Y2K
Issue on the matters set forth in this Opinion.
This Opinion is furnished solely for your benefit and may not be relied upon by
any other person without our express, prior written consent, however the
Initial Purchaser and the Lenders shall be able to rely on the Opinion in
connection with the Transaction. This Opinion is delivered to each recipient
subject to the conditions, scope of engagement, limitations and understandings
set forth in this Opinion and our engagement letter dated July 26, 1999, and
subject to the understanding that the obligations of Houlihan Lokey in the
Transaction are solely corporate obligations, and no officer, director,
employee, agent, shareholder or controlling person of Houlihan Lokey shall be
subjected to any personal liability whatsoever to any person, nor will any such
claim be asserted by or on behalf of you or your affiliates.
HOULIHAN LOKEY HOWARD & ZUKIN FINANCIAL ADVISORS, INC.
/s/ Houlihan Lokey Howard & Zukin Financial Advisors, Inc.
<PAGE> 1
Exhibit (d)(12)
WEDNESDAY SEPTEMBER 29, 4:01 PM EASTERN TIME
COMPANY PRESS RELEASE
KIRTLAND CAPITAL PARTNERS ACQUIRES INSTRON CORPORATION
CLEVELAND--(BUSINESS WIRE)--Sept. 29, 1999--Instron Corporation (ASE:ISN - news)
and Kirtland Capital Partners (KCP) today jointly announced that they have
completed the acquisition of Instron by KCP. As a result of this transaction,
shareholders of Instron's common stock will receive $22 per share in cash. The
announcement was made by James M. McConnell, President and Chief Executive
Officer of Instron, and Raymond A. Lancaster, a KCP managing partner.
"We believe that this transaction will strengthen the company's commitment to
its customers, help maintain its leading market position and allow for the
continuous development of new products," said McConnell. "Our employees are a
major contributor to Instron's success due to their intimate knowledge of our
markets and their customer orientated focus. Together with KCP, we will continue
to follow our strategic direction of growth through acquisitions."
Lancaster added, "We are pleased to have closed this transaction and look
forward to a mutually beneficial partnership. Instron is managed by a very
talented team which will work together with KCP to continue to grow the
company."
Holders of Instron's common stock, or their agents, will be receiving a letter
shortly containing instructions for surrendering their stock certificates in
order to receive the payment of $22 per share.
Instron Corporation is based in Canton, Massachusetts, with proforma revenues
in 1998 of $219 million. Instron manufactures, markets and services materials
and structural testing systems, software and accessories used to evaluate the
mechanical properties and performance of various materials, components and
structures. Instron's application technology is used by research scientists,
design engineers and quality control managers in industry, academia and
government. Due to the scope of its international operations, range of products
and recent growth through acquisitions, Instron is considered to be the world's
leading full-service materials testing company.
Based in Cleveland, Ohio, Kirtland Capital Partners is a privately funded
investment group with over $300 million in committed equity capital. KCP and its
predecessor companies have been making investments in operating companies since
1978. KCP typically invests in manufacturing, distributing and financial
services companies that are profitable and generate $25-300 million in annual
revenue. It has historically
<PAGE> 2
generated superior returns for its investors. In addition to Lancaster, the
five other KCP principal are: John F. Turben, John G. Nestor, William R.
Robertson, Michael T. DeGrandis and Thomas N. Littman.
- --------------------
Contact:
Instron Corporation
Linton A. Moulding, (781) 575-5374
[email protected]
www.instron.com
or
Robert Falls & Co. Public Relations
For Kirtland Capital Partners
Rob Falls, (216) 496-0229
