<PAGE> 1
SCHEDULE 13E-3
Rule 13e-3 Transaction Statement Pursuant to Section 13(e)
of the Securities Exchange Act of 1934
----------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
INTEK GLOBAL CORPORATION
(Name of the Issuer)
INTEK GLOBAL CORPORATION
SECURICOR PLC
SECURITY SYSTEMS PLC
IGC ACQUISITION CORP.
(Name of Person(s) Filing Statement)
-------------------------
Common Stock, par value $.01 per share
(Title of Class of Securities)
458134 10 3
(CUSIP Number of Class of Securities)
-----------------------
<TABLE>
<S> <C>
Robert J. Shiver Nigel Griffiths
Intek Global Corporation Securicor plc
99 Park Avenue Sutton Park House
18th Floor Sutton, Surrey SM1 4LD
New York, New York 10016 England
(212) 949-4200 011 44 181 770 7000
</TABLE>
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications on Behalf of Person(s) Filing statement)
----------------------------
copies to:
<TABLE>
<CAPTION>
<S> <C>
Nancy Wojtas David Lefkowitz
Manatt Phelps Phillips, LLP Douglas P. Warner
11355 W. Olympic Boulevard Weil, Gotshal & Manges LLP
Los Angeles, California 90064 767 Fifth Avenue
New York, New York 10153
</TABLE>
This statement is filed in connection with (check the appropriate box):
<PAGE> 2
a. [ ]The filing of solicitation materials or an information statement
subject to Regulation 14A [17 CFR 240.14a-1 to 240.14b-1], Regulation
14C [17 CFR 240.14c-1 to 240.14c-101] or Rule 13e-3(c)
[Section240.13e-3(c)] under the Securities Exchange Act of 1934.
b. [ ]The filing of a registration statement under the Securities Act of
1933.
c. [X]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
<TABLE>
<CAPTION>
<S> <C>
Transaction Valuation* Amount of Filing Fee**
$54,381,239 $10,876.25
</TABLE>
* For purposes of calculating the filing fee only. This amount
assumes the purchase of 19,774,996 shares of Common Stock, par value $.01
per share, of Intek Global Corporation at $2.75 per share, net to the
sellers in cash. The foregoing number of shares is equal to the sum of (i)
the 16,365,996 shares of Common Stock outstanding as of June 7, 1999 that
are not held by affiliates of the bidders and (ii) 3,409,000 shares of
Common Stock issuable upon exercise of stock options outstanding as of
that date that have an exercise price of less than $2.75 per share.
** The amount of filing fee calculated in accordance with Rule 0-11
under the Securities Exchange Act of 1934, as amended, equals 1/50 of one
percent of the value of 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: $10,876.25
Form or Registration No.: Schedule 14D-1
Filing Parties: Securicor plc, Security Services plc and IGC Acquisition Corp.
Date Filed: June 16, 1999
<PAGE> 3
This Rule 13e-3 Transaction Statement on Schedule 13E-3 (this "Schedule 13E-3")
is being filed by (i) Securicor plc, a public limited company organized under
the laws of England and Wales ("Securicor"), (ii) Security Services plc, a
public limited company organized under the laws of England and Wales and a
wholly-owned subsidiary of Securicor ("Parent"), (iii) IGC Acquisition Corp., a
Delaware corporation and a wholly-owned subsidiary of Parent ("Purchaser"), and
(iv) Intek Global Corporation, a Delaware corporation (the "Company"), pursuant
to Section 13(e) of the Securities Exchange Act of 1934, as amended, and Rule
13e-3 thereunder. This Schedule 13E-3 relates to the offer by Purchaser to
purchase all of the issued and outstanding shares (the "Shares") of common
stock, par value of $.01 per share (the "Common Stock"), of the Company at a
price of $2.75 per Share, net to the seller in cash, upon the terms and subject
to the conditions set forth in the Offer to Purchase dated June 16, 1999 (the
"Offer to Purchase") and in the related Letter of Transmittal (which together
with any amendments or supplements thereto, collectively constitute the
"Offer"), copies of which are attached hereto as Exhibits (d)(1) and (d)(2),
respectively.
The following Cross Reference Sheet, prepared pursuant to General Instruction F
to Schedule 13E-3, shows the location in the Tender Offer Statement on Schedule
14D-1 filed by Securicor, Parent and Purchaser (the "Schedule 14D-1") with the
Securities and Exchange Commission on the date hereof of the information
required to be included in this Schedule 13E-3. The information set forth in the
Schedule 14D-1, including all exhibits thereto, is hereby expressly incorporated
herein by reference as set forth in the Cross Reference Sheet and the responses
in this Schedule 13E-3, and such responses are qualified in their entirety by
reference to the information contained in the Offer to Purchase and the
schedules and annexes thereto.
The information contained in this Schedule 13E-3 concerning the Company,
including, without limitation, the deliberations of the Company's Board of
Directors in connection with the transaction, the opinion of the Company's
financial advisor and the Company's capital structure and historical financial
statements and projections, was supplied by the Company. Securicor, Parent and
Purchaser take no responsibility for the accuracy of such information. The
information contained in this Schedule 13E-3 concerning Securicor, Parent and
Purchaser was supplied by Securicor, Parent and Purchaser. The Company takes no
responsibility for the accuracy of such information.
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
Item and Caption of Schedule 13E-3 Location of Item(s) in Schedule 14D-1
---------------------------------- -------------------------------------
<S> <C>
Item 1. Issuer and Class of Security Subject to the
Transaction.
(a) Item 1(a)
(b) Item 1(b)
(c) Item 1(c)
(d) *
(e) *
(f) *
Item 2. Identity and Background.
(a) Item 2(a)
(b) Item 2(b)
(c) Item 2(c)
(d) Item 2(d)
(e) Item 2(e)
(f) Item 2(f)
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
(g) Item 2(g)
Item 3. Past Contacts, Transactions or Negotiations.
(a) Items 3(a) and 3(b)
(b) *
Item 4. Terms of the Transaction. *
Item 5. Plans or Proposals of the Issuer or Affiliate.
(a) Item 5(a)
(b) Item 5(b)
(c) Item 5(c)
(d) Item 5(d)
(e) Item 5(e)
(f) Item 5(g)
(g) *
Item 6. Source and Amount of Funds or Other
Consideration.
(a) Item 4(a)
(b) *
(c) Item 4(b)
(d) Item 4(c)
Item 7. Purpose(s), Alternatives, Reasons and Effects.
(a) Item 5
(b) *
(c) *
(d) *
Item 8. Fairness of the Transaction. *
Item 9. Reports, Opinions, Appraisals and Certain *
Negotiations.
Item 10. Interest in Securities of the Issuer.
(a) Item 6(a)
(b) Item 6(b)
Item 11. Contracts, Arrangements or Understandings with Item 7
respect to the Issuer's Securities.
Item 12. Present Intention and Recommendation of Certain *
Persons with regard to the Transaction.
Item 13. Other provisions of the Transaction. *
Item 14. Financial Information. *
Item 15. Persons and Assets Employed, Retained or
Utilized.
(a) *
(b) Item 8
Item 16. Additional Information. Item 10(f)
Item 17. Material to be filed as Exhibits Separately included herewith
</TABLE>
- ----------
* The Item is located in the Schedule 13E-3 only.
<PAGE> 5
Item 1. Issuer and Class of Security Subject to the Transaction
(a)-(c) The responses to Items 1(a)-(c) of the Schedule 14D-1 are incorporated
herein by reference.
(d) The information set forth under "THE TENDER OFFER -- Price Range of the
Shares; Dividends" and "THE TENDER OFFER -- Dividends and Distributions"
in the Offer to Purchase is incorporated herein by reference.
(e) Not applicable.
(f) Not applicable.
Item 2. Identity and Background
(a)-(d), (g) This Schedule 13E-3 is being filed by Securicor, Parent, Purchaser
and the Company. The responses to Items 2(a) - (d) and (g) of the Schedule 14D-1
are incorporated herein by reference. The information set forth in Schedule I of
the Offer to Purchase is incorporated herein by reference.
(e)-(f) The responses to Items 2(e) and (f) of the Schedule 14D-1 are
incorporated herein by reference. During the last five years, the Company has
not and, to the best knowledge of the Company, none of the persons listed in
Schedule I of the Offer to Purchase has, been (i) convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting activities
subject to, federal or state securities laws or findings any violation of such
laws.
Item 3. Past Contacts, Transactions or Negotiations
(a) The responses to Items 3(a) and (b) of the Schedule 14D-1 are incorporated
herein by reference.
(b) Not applicable.
Item 4. Terms of the Transaction
(a) The information set forth on the cover page of, and under "INTRODUCTION",
"SPECIAL FACTORS - Rights of Stockholders in the Offer and the Merger" and
" -- The Merger Agreement", and "THE TENDER OFFER -- Terms of the Offer;
Expiration Date", "-- Procedures for Accepting the Offer and Tendering
Shares", "-- Withdrawal Rights", " -- Acceptance for Payment and Payment",
"-- Certain Conditions of the Offer", and "-- Certain Legal Matters;
Required Regulatory Approvals" in, the Offer to Purchase is incorporated
herein by reference.
(b) Not applicable.
Item 5. Plans or Proposals of the Issuer or Affiliate
(a)-(f) The responses to Items 5(a) - (e) and (g) of the Schedule 14D-1 are
incorporated herein by reference.
(g) The information set forth under "SPECIAL FACTORS - Plans for the Company
After the Offer and the Merger; Certain Effects of the Offer and the
Merger - Exchange Act Registration" is incorporated herein by reference.
<PAGE> 6
Item 6. Source and Amount of Funds or Other Consideration
(a) The response to Item 4(a) of the Schedule 14D-1 is incorporated herein by
reference.
(b) The information set forth under "THE TENDER OFFER -- Certain Fees and
Expenses" in the Offer to Purchase is incorporated herein by reference.
(c) The response to Item 4(b) of the Schedule 14D-1 is incorporated herein by
reference.
(d) The response to Item 4(c) of the Schedule 14D-1 is incorporated herein by
reference.
Item 7. Purpose(s), Alternatives, Reasons and Effects
(a) The response to Item 5 of the Schedule 14D-1 is incorporated herein by
reference.
(b) The information set forth under "SPECIAL FACTORS -- Background of the
Offer" in the Offer to Purchase is incorporated herein by reference.
(c)-(d) The information set forth under "INTRODUCTION" and under "SPECIAL
FACTORS - Background of the Offer", " -- Purpose and Structure of the
Offer and the Merger", "-- Reasons of Parent and Purchaser for the Offer
and the Merger; Position of Parent and Purchaser Regarding Fairness of the
Offer and the Merger", and " -- Plans for the Company After the Offer and
the Merger; Certain Effects of the Offer and the Merger -- Certain Effects
of the Offer and the Merger" in the Offer to Purchase is incorporated
herein by reference.
Item 8. Fairness of the Transaction
(a)-(e) The information set forth under "INTRODUCTION" and under "SPECIAL
FACTORS - Background of the Offer", " -- Recommendation of the Independent
Committee and the Company Board; Fairness of the Offer and the Merger", "
-- Opinion of the Financial Advisor to the Independent Committee",
"--Reasons of Parent and Purchaser for the Offer and the Merger; Position
of Parent and Purchaser Regarding Fairness of the Offer and the Merger"
and "Analysis of Financial Advisor to Securicor" in the Offer to Purchase
is incorporated herein by reference.
(f) Not applicable.
Item 9. Reports, Opinions, Appraisals and Certain Negotiations
The information set forth under "SPECIAL FACTORS -- Opinion of the
Financial Advisor to the Independent Committee" and " -- Analysis of Financial
Advisor to Securicor" in the Offer to Purchase is incorporated herein by
reference.
Item 10. Interest in Securities of the Issuer
(a) The response to Item 6(a) of the Schedule 14D-1 is incorporated herein by
reference. The information set forth under "SPECIAL FACTORS -- Interests of
Certain Persons in the Offer and the Merger; Share Ownership - Security
Ownership" is incorporated herein by reference.
(b) The response to Item 6(b) of the Schedule 14D-1 is incorporated herein by
reference.
Item 11. Contracts, Arrangements or Understandings with Respect to the Issuer's
Securities
The response to Item 7 of the Schedule 14D-1 is incorporated herein by
reference.
<PAGE> 7
Item 12. Present Intention and Recommendation of Certain Persons with Regard to
the Transaction
Not applicable.
Item 13. Other Provisions of the Transaction
(a) The information set forth under "SPECIAL FACTORS - Rights of Stockholders
in the Offer and the Merger" in, and Annex B "RIGHTS OF DISSENTING
STOCKHOLDERS UNDER THE DGCL" of, the Offer to Purchase is incorporated
herein by reference.
(b) Not applicable.
(c) Not applicable.
Item 14. Financial Information
(a) The information set forth under "THE TENDER OFFER -- Certain Information
Concerning the Company" in, and Schedule III "FINANCIAL STATEMENTS OF THE
COMPANY" of, the Offer to Purchase is incorporated herein by reference.
(b) Not applicable.
Item 15. Persons and Assets Employed, Retained or Utilized
(a) The information set forth under "SPECIAL FACTORS - Opinion of Financial
Advisor to the Independent Committee" and "THE TENDER OFFER - Certain Fees
and Expenses" in the Offer to Purchase is incorporated herein by
reference.
(b) The response to Item 8 of the Schedule 14D-1 is incorporated herein by
reference.
Item 16. Additional Information
The response 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) Opinion of Financial Advisor to Independent Committee, dated June 8,
1999. See Annex A to the Offer to Purchase identified below.*
(b)(2) Analysis of Financial Advisor to Independent Committee, dated June 8,
1999.
(b)(3) Analysis of Financial Advisor to Securicor, dated February 4, 1999.
(c) Agreement and Plan of Merger dated as of June 9, 1999 among the Company,
Purchaser and Parent.*
(d)(1) Offer to Purchase, dated June 16, 1999.*
(d)(2) Letter of Transmittal.*
<PAGE> 8
(d)(3) Notice of Guaranteed Delivery.*
(d)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees.*
(d)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.*
(d)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.*
(d)(7) Press Release issued by Parent and the Company, dated June 10, 1999.*
(d)(8) Summary Advertisement, as published in The Wall Street Journal on June
16, 1999.*
(e) Description of Appraisal Rights (included in Annex B to the Offer to
Purchase).*
(f) Not applicable.
- ------------------------------
* Incorporated herein by reference to the Tender Offer Statement on Schedule
14D-1 filed by Securicor, Purchaser and Parent on June 16, 1999.
<PAGE> 9
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: June 16, 1999
INTEK GLOBAL CORPORATION
By: /s/ Robert J. Shiver
---------------------------------------------
Name: Robert J. Shiver
Title: President and Chief Executive Officer
SECURICOR PLC
By: /s/ Nigel Griffiths
---------------------------------------------
Name: Nigel Griffiths
Title: Director
SECURITY SERVICES PLC
By: /s/ Nigel Griffiths
---------------------------------------------
Name: Nigel Griffiths
Title: Director
IGC ACQUISITION CORP.
By: /s/ C. Grice McMullan, Jr.
---------------------------------------------
Name: C. Grice McMullan, Jr.
Title: Secretary
<PAGE> 10
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description of Document
- -------------- -----------------------
<S> <C>
(a) Not applicable.
(b)(1) Opinion of Financial Advisor to Independent
Committee, dated June 8, 1999. See Annex A
to the Offer to Purchase identified below.*
(b)(2) Analysis of Financial Advisor to Independent
Committee, dated June 7, 1999.
(b)(3) Analysis of Financial Advisor to Securicor,
dated February 4, 1999.
(c) Agreement and Plan of Merger dated as of
June 9, 1999 among the Company, Purchaser
and Parent.*
(d)(1) Offer to Purchase, dated June 16, 1999.*
(d)(2) Letter of Transmittal.*
(d)(3) Notice of Guaranteed Delivery.*
(d)(4) Letter to Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.*
(d)(5) Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other
Nominees.*
(d)(6) Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.*
(d)(7) Press Release issued by Parent and the Company,
dated June 10, 1999.*
(d)(8) Summary Advertisement, as published in The Wall
Street Journal on June 16, 1999.*
(e) Description of Appraisal Rights (included in
Annex B to the Offer to Purchase).*
(f) Not applicable.
</TABLE>
- ------------------------------
* Incorporated herein by reference to the Tender Offer Statement on Schedule
14D-1 filed by Securicor, Purchaser and Parent on June 16, 1999.
<PAGE> 1
PROJECT STAR TREK
PRESENTATION TO THE INDEPENDENT COMMITTEE OF THE
BOARD OF DIRECTORS OF INTEK GLOBAL CORPORATION
JUNE 7, 1999
<PAGE> 2
1
TABLE OF CONTENTS
SECTION
- --------------------------------------------------------------------------------
1 Introduction
2 Stock Price Performance
3 Financial Analyses
APPENDICES
A List of Target Markets for the RoameR One Roll-Out
B Comparable Company and Comparable Transaction Analyses
- --------------------------------------------------------------------------------
<PAGE> 3
1
SECTION 1
INTRODUCTION
<PAGE> 4
1 PROJECT STAR TREK
BEAR STEARNS' ENGAGEMENT
- - Bear Stearns has been engaged by the Independent Committee of the Board of
Directors of Intek Global Corporation ("Intek" or the "Company") to render
an opinion (the "Opinion") as to the fairness, from a financial point of
view to the public shareholders of Intek, of the offer by Securicor
Communications Ltd. ("Securicor") to purchase all of the outstanding common
stock of Intek it does not already own
- - The following activities have been performed by Bear Stearns to date:
- Performed business and financial due diligence through review of public
documents (including 10-Ks, 10-Qs and proxies, among others)
- Reviewed the Company's historical results of operations, including, on
a regular basis, year-to-date financial results with management
- Visited the Company's facilities and held extensive discussions with
senior management and staff regarding Intek's operations, historical
financial results and future prospects
- Assisted Intek management in refining its business plan
- Presented our preliminary analyses to the Board of Directors on
February 25, 1999
- Presented our preliminary financial review of the Company to the
Independent Committee on several occasions and reviewed informal
discussions held with Lazard Freres, Securicor's financial advisor
- Reviewed the historical prices and trading volume of the common shares
of Intek
- Performed various financial and valuation analyses based on financial
projections and operating assumptions provided by the Company's
management
- Developed detailed discounted cash flow financial analyses
incorporating management's financial projections and operating
assumptions
- Conducted other studies, analyses and inquiries as we deemed
appropriate
CONFIDENTIAL 1
<PAGE> 5
1 PROJECT STAR TREK
KEY TERMS OF THE PROPOSED TRANSACTION
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------------------------------------------------
PROPOSED TRANSACTION Purchase of all Intek common shares not already owned by Securicor
OFFER PRICE $2.75 per share of Intek common stock in cash
IMPLIED ENTERPRISE VALUE Approximately $226 million
TERMS OF AGREEMENT - Cash tender offer to commence as soon as
practicable, but in no event later than five business days
following the execution of the merger agreement
- Tender offer is subject to a minimum
condition of receiving a majority of the
shares not held by Securicor
- If the conditions of the tender offer are
satisfied, but the tender offer does not
result in Securicor owning 90% or more of
Intek's common shares, the merger will be
approved by majority written consent of
the shareholders
- If the ownership reaches the 90% level,
Securicor will execute a "certificate of
ownership and merger" to effect the
merger
TIMING The tender offer will expire 20 business days after it commences, subject to extension
STOCK PRICE PREMIUM - 113% premium to average stock price of $1.29 for the 30-day period prior to the
filing of the amendment to Securicor's Schedule 13-D on January 19, 1999
- 25.7% premium to the closing price of $2.19 on June 4, 1999
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
CONFIDENTIAL 2
<PAGE> 6
BEAR
STEARNS
SECTION 2
STOCK PRICE PERFORMANCE
<PAGE> 7
BEAR
STEARNS PROJECT STAR TREK
INTEK PRICE / VOLUME GRAPH - LATEST TWELVE MONTHS
DAILY: JUNE 5, 1998 TO JUNE 4, 1999
- --------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
Annotation Date Open Close Volume
<S> <C> <C> <C> <C>
A 07/29/98 $3.75 $3.63 15,100
B 08/14/98 3.00 2.94 4,800
C 08/24/98 2.50 2.50 21,900
D 10/23/98 1.09 1.38 138,000
E 12/24/98 1.69 1.69 25,200
F 01/19/99 1.44 1.41 121,500
G 02/03/99 1.72 1.94 416,800
H 02/12/99 2.00 2.06 47,100
I 02/16/99 2.06 2.03 4,900
J 02/22/99 2.00 2.13 21,300
K 03/11/99 2.13 2.06 22,700
L 04/20/99 1.75 1.63 25,500
M 05/17/99 2.44 2.44 10,200
</TABLE>
<TABLE>
<S> <C>
Average Closing Stock Price $2.07
Median Closing Stock Price $1.88
Average Daily Volume 43,767
</TABLE>
A 07/29/98 - FCC approves Global's Linear Modulation technology for entry
into emerging $25 billion VHF refarming market
B 08/14/98 - Intek Global releases results for the fiscal third quarter of
1998; reports revenues of $9.2 million and a net loss of ($9.3)
million
C 08/24/98 - Intek Global announces its intention to sell certain assets
of its Radiocoms subsidiary for $8 million in cash
D 10/23/98 - Intek Global is awarded 181 licenses in Phase II of the FCC's
220 MHz auction
E 12/24/98 - Intek Global releases fiscal 1998 results; reports revenues
of $35.7 million and a net loss of ($66.3) million
F 01/19/99 - Securicor files amendment to Schedule 13-D stating it is
considering various alternatives relating to its equity and
debt interests in Intek
G 02/03/99 - Independent Committee of Intek Global announces retention of
Bear Stearns as investment banker
H 02/12/99 - Intek Global releases results for the fiscal first quarter,
reports revenues of $5.9 million and a net loss of ($7.4)
million
I 02/16/99 - Intek signs a multi-year product development and
manufacturing agreement with Taiwan-based ADI Communications
J 02/22/99 - Intek Global ships initial $5 million of equipment to NRTC
K 03/11/99 - Announces agreement with Spain's Teltronic S.A. to develop a
UHF digital transmitter
L 04/20/99 - Securicor communicates an informal indication of interest to
the Independent Committee to purchase all of the outstanding
common stock of Intek it does not already own at $2.75 per
share
M 05/17/99 - Intek Global releases results for the second fiscal quarter
of 1999; reports revenues of $6.7 million and a net loss of
($8.9) million
- --------------------------------------------------------------------------------
- ---------------------
Source: FactSet Research.
CONFIDENTIAL 3
<PAGE> 8
BEAR
STEARNS PROJECT STAR TREK
INTEK TRADING VOLUME - LATEST TWELVE MONTHS
JUNE 5, 1998 TO JUNE 4, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
% of Total Intek 31.5% 33.2% 15.1% 6.6% 10.1% 3.5%
Trading Volume
Intek Stock Price $1.00-$1.50 $1.50-$2.00 $2.00-$2.50 $2.50-$3.00 $3.00-$3.50 $3.50-$4.00
Range
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
CUMULATIVE VOLUME 3,106,400 3,280,800 1,486,200 654,400 995,300 347,700
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
- ---------------------
Source: FactSet Research.
CONFIDENTIAL 4
<PAGE> 9
BEAR
STEARNS PROJECT STAR TREK
INTEK COMPARATIVE STOCK PRICE PERFORMANCE - LATEST TWELVE MONTHS
INTEK VERSUS THE RUSSELL 2000 INDEX
DAILY: JUNE 5, 1998 TO JUNE 4, 1999
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Date Intek Russell 2000
- ------------------------------------------------------------------------------
<S> <C> <C>
6/5/98 100% 100%
7/6/98 91 101
8/5/98 89 88
9/4/98 43 76
10/5/98 45 74
11/5/98 53 87
12/4/98 38 88
1/4/99 37 93
2/4/99 59 92
3/4/99 59 87
4/5/99 57 89
5/5/99 63 96
6/4/99 63 97
</TABLE>
- ----------------------
Source: FactSet Research.
CONFIDENTIAL 5
<PAGE> 10
BEAR
STEARNS
SECTION 3
FINANCIAL ANALYSES
<PAGE> 11
BEAR
STEARNS PROJECT STAR TREK
ENTERPRISE VALUE / STOCK PRICE MATRIX
THE FOLLOWING TABLE ILLUSTRATES THE EQUIVALENT PER SHARE COMMON STOCK PRICES
FOR A RANGE OF INTEK ENTERPRISE VALUES FROM $150 MILLION TO $250 MILLION.
THIS TABLE IS FOR ILLUSTRATIVE PURPOSES ONLY
<TABLE>
<CAPTION>
COMMON STOCK PRICES PER SHARE ($ IN MILLIONS, EXCEPT PER SHARE DATA)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Enterprise Value $150.0 $175.0 $200.0 $225.0 $250.0
Less: Total Debt(1) (42.9) (42.9) (42.9) (42.9) (42.9)
Less: Preferred Stock(1) (36.8) (36.8) (36.8) (36.8) (36.8)
Plus: Cash(1) 2.3 2.3 2.3 2.3 2.3
------ ------ ------ ------ ------
Equity Value 72.7 97.7 122.7 147.7 172.7
Diluted Shares Outstanding(2) 53.5 53.5 53.5 53.5 53.5
PRICE PER SHARE(2) $ 1.36 $ 1.83 $ 2.29 $ 2.76 $ 3.23
PRO FORMA PRICE PER SHARE(3) $ 1.41 $ 1.85 $ 2.30 $ 2.74 $ 3.18
(FULLY DRAWN DECEMBER 1998
CONVERTIBLE DEBT FACILITY)
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) As of March 31, 1999. Total debt excludes $17.5 million of indebtedness
convertible by Securicor into Intek common stock.
(2) Assumes conversion of $17.5 million outstanding under Securicor convertible
credit facility as follows: (i) $12.5 million at $1.50 per share, (ii) $2.5
million at $1.81 per share, and (iii) $2.5 million and accrued interest of
$0.3 at $1.90 per share. Does not include management stock options.
(3) Pro forma for the impact of $7.5 million of additional borrowings under the
Securicor credit facility (fully drawn) and assuming the proceeds are held
in cash and the debt is convertible at $2.36 per share, the average closing
price over the last 20 trading days ending June 4, 1999.
CONFIDENTIAL 6
<PAGE> 12
BEAR
STEARNS PROJECT STAR TREK
INTEK HISTORICAL AND PROJECTED FINANCIAL RESULTS
THE SUMMARY CONSOLIDATED FINANCIAL PROJECTIONS BELOW WERE PREPARED BY INTEK'S
MANAGEMENT
<TABLE>
<CAPTION>
SELECTED INCOME STATEMENT DATA ($ IN MILLIONS)
- ---------------------------------------------------------------
FISCAL YEAR ENDING SEPTEMBER 30,
-----------------------------------
ACTUAL
-----------------------------------
1996 1997 1998
----- ----- -----
<S> <C> <C> <C>
Revenues
Product Sales $23.0 $38.6 $28.5
Service Income 0.9 3.7 7.1
----- ----- -----
TOTAL REVENUES 23.9 42.3 35.7
Growth Rate NA 76.9% (15.6%)
Gross Profit
Product Sales $3.1 $0.8 $8.4
Service Income 0.7 1.9 (0.2)
----- ----- -----
TOTAL GROSS PROFIT 3.8 2.7 8.2
Margin 16.0% 6.4% 23.0%
EBITDA ($8.9) ($21.5) ($18.8) (1)
Margin (37.3%) (50.7%) (52.7%)
OPERATING INCOME ($10.4) ($25.9) ($25.5) (1)
Margin (43.6%) (61.3%) (71.4%)
NET INCOME TO COMMON ($9.1) ($28.0) ($30.4) (1)
Margin (38.0%) (66.2%) (85.2%)
- -------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SELECTED INCOME STATEMENT DATA ($ IN MILLIONS)
- ----------------------------------------------------------------------------------------------------------
FISCAL YEAR ENDING SEPTEMBER 30,
-------------------------------------------------------------------------------------
PROJECTED
-------------------------------------------------------------------------------------
1999 2000 2001 2002 2003 2004
----- ----- ----- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Revenues
Product Sales $39.0 $51.5 $69.3 $88.7 $100.1 $105.5
Service Income 5.5 18.0 35.7 64.6 100.9 134.8
----- ----- ----- ----- ------ ------
TOTAL REVENUES 44.5 69.6 105.0 153.3 201.0 240.3
Growth Rate 25.0% 56.2% 51.0% 46.0% 31.1% 19.6%
Gross Profit
Product Sales $9.8 $8.5 $5.6 $4.5 $5.6 $10.5
Service Income 1.3 7.3 20.8 44.4 74.7 103.7
----- ----- ----- ----- ------ ------
TOTAL GROSS PROFIT 11.1 15.8 26.4 48.9 80.3 114.2
Margin 25.0% 22.7% 25.1% 31.9% 40.0% 47.5%
EBITDA ($12.7) ($8.8) ($9.2) $2.9 $29.5 $63.8
Margin (28.5%) (12.7%) (8.8%) 1.9% 14.7% 26.5%
OPERATING INCOME ($18.8) ($15.8) ($18.0) ($9.6) $12.7 $45.0
Margin (42.3%) (22.7%) (17.2%) (6.2%) 6.3% 18.7%
NET INCOME TO COMMON ($28.8) ($25.2) ($29.6) ($24.3) ($3.9) $32.8
Margin (64.6%) (36.2%) (28.2%) (15.8%) (2.0%) 13.6%
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------
(1) Excludes a restructuring charge of $1.6 million and an impairment of
long-lived assets charge of $34.4 million in fiscal 1998.
CONFIDENTIAL 7
<PAGE> 13
BEAR
STEARNS PROJECT STAR TREK
INTEK HISTORICAL AND PROJECTED FINANCIAL RESULTS
THE SUMMARY CONSOLIDATED FINANCIAL PROJECTIONS BELOW WERE PREPARED BY INTEK'S
MANAGEMENT
<TABLE>
<CAPTION>
SELECTED BALANCE SHEET AND CASH FLOW DATA ($ IN MILLIONS)
- ------------------------------------------------------------------------------------------
FISCAL YEAR ENDING SEPTEMBER 30,
-----------------------------------
ACTUAL
-----------------------------------
1996 1997 1998
----- ---- ----
<S> <C> <C> <C>
SELECTED BALANCE SHEET DATA
Cash & Equivalents $0.4 $10.1 $5.7
Total Current Assets 33.4 34.4 31.2
Property, Plant & Equipment, net 6.6 21.6 23.6
Total Assets 50.3 112.6 80.1
Total Current Liabilities $38.7 $13.1 $20.3
Total Debt (including current maturities) 66.2 26.7 38.6
Preferred Stock 0.0 21.0 35.5
Stockholders' Equity (Deficit) (21.3) 53.8 (8.5)
SELECTED CASH FLOW DATA
Capital Expenditures ($1.7) ($9.2) ($7.1)
License Acquisition Costs 0.0 (2.0) (8.3)
Sales of Sites and Licenses 0.0 0.0 0.0
- -----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SELECTED BALANCE SHEET AND CASH FLOW DATA ($ IN MILLIONS)
- ---------------------------------------------------------------------------------------------------------------------------
FISCAL YEAR ENDING SEPTEMBER 30,
---------------------------------------------------------------------
PROJECTED
---------------------------------------------------------------------
1999 2000 2001 2002 2003 2004
----- ----- ----- ------ ------ -----
<S> <C> <C> <C> <C> <C> <C>
SELECTED BALANCE SHEET DATA
Cash & Equivalents $0.5 $0.5 $0.5 $0.5 $0.5 $0.5
Total Current Assets 25.4 13.7 15.7 18.7 20.5 22.4
Property, Plant & Equipment, net 22.3 21.7 29.8 42.2 51.2 52.9
Total Assets 75.0 58.2 64.9 78.7 87.9 89.8
Total Current Liabilities $32.5 $32.0 $51.8 $70.1 $64.0 $77.8
Total Debt (including current maturities) 54.2 64.8 92.4 120.3 124.1 85.3
Preferred Stock 38.3 41.4 44.8 48.5 52.6 57.0
Stockholders' Equity (Deficit) (32.1) (57.6) (87.3) (111.5) (115.5) (82.7)
SELECTED CASH FLOW DATA
Capital Expenditures ($7.5) ($7.0) ($15.2) ($23.2) ($24.1) ($18.8)
License Acquisition Costs (7.5) 0.0 0.0 0.0 0.0 0.0
Sales of Sites and Licenses 5.0 5.0 0.0 0.0 0.0 0.0
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
CONFIDENTIAL 8
<PAGE> 14
BEAR
STEARNS PROJECT STAR TREK
MANAGEMENT'S FINANCIAL PROJECTIONS - ROAMER ONE
<TABLE>
<CAPTION>
SELECTED FINANCIAL DATA ($ IN MILLIONS)
- --------------------------------------------------------------------------------------------------------------------------------
FISCAL YEAR ENDING SEPTEMBER 30,
-------------------------------------------------------------------------------------------------
PROJECTED
ACTUAL ---------------------------------------------------------------------------------
1998 1999 2000 2001 2002 2003 2004
------ ------ ------ ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Number of Markets NA 6 22 38 54 60 60
Year-End Subscribers 10,500 22,486 58,245 124,572 221,767 325,743 410,346
REVENUES $1.2 $8.1 $24.6 $55.7 $96.6 $135.7 $161.8
Growth NA 570.0% 213.2% 126.0% 73.6% 40.4% 19.3%
GROSS PROFIT ($3.8) ($1.9) $2.0 $11.2 $31.1 $59.7 $89.3
Margin NM (23.7%) 8.1% 20.1% 32.2% 44.0% 55.2%
EBITDA ($10.4) ($5.2) ($8.8) ($9.9) $0.6 $25.9 $58.2
Margin NM (64.5%) (35.6%) (17.8%) 0.7% 19.1% 36.0%
OPERATING INCOME ($11.5) ($9.2) ($14.6) ($17.9) ($10.9) $10.0 $40.2
Margin NM (113.6%) (59.4%) (32.2%) (11.3%) 7.4% 24.8%
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
CONFIDENTIAL 9
<PAGE> 15
BEAR
STEARNS PROJECT STAR TREK
MANAGEMENT'S FINANCIAL PROJECTIONS - MIDLAND
<TABLE>
<CAPTION>
SELECTED FINANCIAL DATA ($ IN MILLIONS)
- ----------------------------------------------------------------------------------------------------------------------------
FISCAL YEAR ENDING SEPTEMBER 30,
-------------------------------------------------------------------------------------------------
PROJECTED
ACTUAL ----------------------------------------------------------------------------------
1998 1999 2000 2001 2002 2003 2004
----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUES $15.4 $29.4 $40.6 $44.5 $51.5 $58.5 $69.2
Growth NA 91.3% 38.2% 9.6% 15.6% 13.5% 18.4%
GROSS PROFIT $5.4 $7.2 $12.5 $13.8 $16.5 $18.8 $22.2
Margin 35.2% 24.5% 30.9% 31.1% 32.1% 32.2% 32.1%
EBITDA ($1.2) ($2.3) $2.5 $2.9 $4.2 $5.1 $6.4
Margin (7.7%) (5.5%) 6.2% 6.5% 8.2% 8.7% 9.3%
OPERATING INCOME ($1.4) ($2.6) $1.5 $1.8 $3.1 $3.9 $5.4
Margin (8.9%) (8.8%) 3.6% 3.9% 6.0% 6.7% 7.9%
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
CONFIDENTIAL 10
<PAGE> 16
BEAR
STEARNS PROJECT STAR TREK
MANAGEMENT'S FINANCIAL PROJECTIONS - LM TECHNOLOGY
<TABLE>
<CAPTION>
SELECTED FINANCIAL DATA ($ IN MILLIONS)
- ------------------------------------------------------------------------------------------------------------------------
FISCAL YEAR ENDING SEPTEMBER 30,
------------------------------------------------------------------------------------------------
PROJECTED
ACTUAL -------------------------------------------------------------------------------
1998 1999 2000 2001 2002 2003 2004
----- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUES $0.2 $2.5 $5.0 $5.9 $6.5 $8.4 $11.0
Growth NA NM 21.0% 16.7% 10.8% 30.0% 30.0%
GROSS PROFIT $0.1 $1.7 $2.0 $2.3 $2.6 $3.4 $4.4
Margin 47.4% 65.4% 40.0% 40.0% 40.0% 40.0% 40.0%
EBITDA ($3.9) $0.1 $0.7 $1.2 $1.5 $2.2 $2.9
Margin NM 2.6% 14.5% 21.2% 23.7% 26.6% 26.6%
OPERATING INCOME ($4.2) ($0.4) $0.2 $0.7 $1.0 $1.7 $2.3
Margin NM (17.3%) 4.2% 12.1% 15.1% 19.8% 21.2%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
CONFIDENTIAL 11
<PAGE> 17
BEAR
STEARNS PROJECT STAR TREK
INTEK VALUATION METHODOLOGY
- - In performing our analyses, we relied upon the financial projections and
operating assumptions developed by Intek management within the framework of
the Company's long-term business plan
- - Comparable company and comparable transaction multiple benchmarks are not
meaningful (see Appendix B)
- There is a lack of comparable companies given Intek's distinct mix of
business units - network operator, equipment distributor and research
and development division
- Due to the lack of near-term operating income and EBITDA, applying
comparable company and comparable transaction multiple benchmarks
results in a negative enterprise valuation
- Comparable company multiples to long-term forward EBITDA are not
reliable
- Revenue multiples can also be misleading as Intek's three business units
have different inherent gross and operating margins
- - As a result, we have used a discounted cash flow analysis, which we believe
is the appropriate analytical technique to value the Company
CONFIDENTIAL 12
<PAGE> 18
BEAR
STEARNS PROJECT STAR TREK
DISCOUNTED CASH FLOW ANALYSIS
- - We performed a discounted cash flow analysis over a time horizon through
2004
- Cash flows are discounted to March 31, 1999 to value the Company based
on the latest balance sheet information and to account for the
year-to-date results of operations
- - The year 2004 terminal multiple is based on Intek's growth prospects at that
time
- RoameR One markets will be rolled out through 2003
- We selected a range of exit EBITDA multiples (7.0x - 9.0x) which would
otherwise imply a very high 8% - 12% perpetual growth rate but would be
appropriate given the then expected near-term growth of the Company
- However, we have also taken into account the capacity constraints faced
by RoameR One in each of its markets as well as RoameR One's focus on
low-end, simplex mobile communications
- - We used a range of discount rates from 15.0% - 18.0% based on our analysis
of the weighted average cost of capital of other PCS and wireless companies
similar to Intek
- - We assumed a "normalized" tax rate of 40%, as the Company will become a full
tax payer once its net operating losses are fully utilized
- - We separately calculated the present value of the tax savings resulting from
utilization of the Company's net operating loss carryforwards
CONFIDENTIAL 13
<PAGE> 19
BEAR
STEARNS PROJECT STAR TREK
INTEK CONSOLIDATED FREE CASH FLOWS
THE FOLLOWING TABLE IS BASED UPON MANAGEMENT'S FINANCIAL PROJECTIONS
<TABLE>
<CAPTION>
PROJECTED INTEK FREE CASH FLOWS ($ IN MILLIONS)
====================================================================================================================================
PROJECTED FISCAL YEAR ENDING SEPTEMBER 30,
-----------------------------------------------------------------------
1999(1) 2000 2001 2002 2003 2004
------ ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
EBITDA $ (3.4) $ (8.8) $ (9.2) $ 2.9 $ 29.5 $ 63.8
Less: Depreciation & Amortization (4.1) (7.0) (8.8) (12.4) (16.8) (18.8)
------ ------- ------- ------- ------- -------
EBIT (7.6) (15.8) (18.1) (9.6) 12.7 45.0
Less: Income Taxes(2) 0.0 0.0 0.0 0.0 (5.1) (18.0)
------ ------- ------- ------- ------- -------
Unlevered Net Income (7.6) (15.8) (18.1) (9.6) 7.6 27.0
Plus: Depreciation & Amortization 4.1 7.0 8.8 12.4 16.8 18.8
Plus: Decrease/(Increase) in Net Working Capital 3.6 6.3 3.4 3.5 3.4 1.7
Less: Capital Expenditures(3) (0.3) (2.0) (15.2) (23.2) (24.1) (18.8)
------ ------- ------- ------- ------- -------
Unlevered Free Cash Flow (0.1) (4.6) (21.1) (16.9) 3.7 28.6
Terminal Multiple of 2004 EBITDA 8.0x 510.1
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) 1999 represents 6 months ended September 30, 1999.
(2) Assumes tax rate of 40% once the Company achieves positive income.
(3) Net of proceeds from sale of sites and licenses to NRTC, which total $5
million in both 1999 and 2000.
CONFIDENTIAL 14
<PAGE> 20
BEAR
STEARNS PROJECT STAR TREK
WEIGHTED AVERAGE COST OF CAPITAL
- - The weighted average cost of capital was calculated based on the following
PCS and wireless companies:
- Aerial Communications
- Clearnet Communications
- Nextel Communications
- Omnipoint Corp.
- Powertel Inc.
- United States Cellular Corp.
- Western Wireless Corp.
- - Key assumptions include:
- Cost of equity of 25.2% is computed based on the Capital Asset Pricing
Model using the following inputs:
- long-term risk-free rate of 5.9% (20-year Treasury Bond)(1)
- unlevered beta of 1.22 based on the average of other PCS and
wireless companies(2)
- levered beta of 1.95 based on Intek's target capital structure(2)
- equity risk premium of 8.2%(3)
- micro-capitalization equity size premium of 3.3%(3)
- After-tax cost of debt of 8.4%(4)
- Target debt / equity ratio of 100%(5)
- Normalized tax rate of 40%
- - WACC is estimated to be approximately 16.8%
- ----------
(1) Based on straight line interpolation of 10-year and 30-year Treasury bond
yields on June 4, 1999.
(2) Beta analysis is based on historical betas from Barra beta book, calculated
using 5-year monthly data.
(3) Source: Ibbotson Associates 1998.
(4) Based on current bond yields of wireless companies with public high yield
debt.
(5) Based on current capital structures and equity research reports for other
PCS and wireless companies.
CONFIDENTIAL 15
<PAGE> 21
BEAR
STEARNS PROJECT STAR TREK
DISCOUNTED CASH FLOW VALUATION (BEFORE NOL TAX BENEFIT)
<TABLE>
<CAPTION>
ENTERPRISE VALUE ($ IN MILLIONS)
================================================================================
2004 EBITDA MULTIPLE
-----------------------------------------------------
DISCOUNT RATE 7.0X 8.0X 9.0X
------------- ------ ------ ------
<S> <C> <C> <C>
15.0% $193.2 $222.7 $252.3
16.0 183.5 211.7 239.9
17.0 174.4 201.3 228.2
18.0 165.8 191.5 217.2
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
EQUITY VALUE ($ IN MILLIONS)
================================================================================
2004 EBITDA MULTIPLE
-----------------------------------------------------
DISCOUNT RATE 7.0X 8.0X 9.0X
------------- ------ ------ ------
<S> <C> <C> <C>
15.0% $115.8 $145.4 $175.0
16.0 106.2 134.4 162.6
17.0 97.1 124.0 150.9
18.0 88.5 114.2 139.8
- --------------------------------------------------------------------------------
</TABLE>
CONFIDENTIAL 16
<PAGE> 22
BEAR
STEARNS PROJECT STAR TREK
VALUATION OF NET OPERATING LOSS BENEFIT
- - The net operating loss valuation analysis calculates the present value of
the tax savings generated by the application of net operating loss
carryforwards to future income
- - We valued separately the Company's U.S. and U.K. net operating loss tax
benefits
- - Key assumptions include:
- Marginal tax rate of 40% in both the U.S. and U.K.
- Assumed pre-tax income growth rate beyond 2004 of 10.3%, which
represents the midpoint of the perpetual growth rate implied by the
discounted cash flow analysis (see page 22)
- Discount rate of 14%, which represents the Company's pre-tax cost of
debt
- - Aggregate present value of the U.S. and U.K. net operating loss tax savings
is estimated at approximately $26.4 million
CONFIDENTIAL 17
<PAGE> 23
BEAR
STEARNS PROJECT STAR TREK
VALUATION OF U.S. NET OPERATING LOSS BENEFIT
<TABLE>
<CAPTION>
U.S. NET OPERATING LOSS CARRYFORWARDS ($ IN MILLIONS)
=============================================================================================================================
PROJECTED FISCAL YEAR ENDING SEPTEMBER 30,
---------------------------------------------------------------------------------------------
1999(1) 2000 2001 2002 2003 2004 2005 2006 2007
------- -------- -------- -------- -------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Income (Loss) Before Taxes $ (8.2) $ (22.3) $ (26.9) $ (21.5) $ (1.6) $ 34.9 $ 38.5 $ 42.4 $ 46.8
NOL Beginning Balance(2) (3) 72.6 80.9 103.2 130.1 151.7 153.3 118.4 79.9 37.5
NOLs Added/(Utilized) 8.2 22.3 26.9 21.5 1.6 (34.9) (38.5) (42.4) (37.5)
---- ----- ----- ----- ----- ----- ----- ----- -----
NOL Ending Balance 80.9 103.2 130.1 151.7 153.3 118.4 79.9 37.5 0.0
Tax Savings (at 40%) 0.0 0.0 0.0 0.0 0.0 13.9 15.4 17.0 15.0
- ---------------------------------------
PRESENT VALUE OF TAX SAVINGS $ 24.6
- ---------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) Figures for 1999 represent 6 months ended September 30, 1999.
(2) The Company has a limitation of $0.8 million per year on net operating
losses generated prior to Securicor's acquisition of its interest in Intek
in 1996, which constituted a "change in ownership" under Section 382 of the
Internal Revenue Code.
(3) Balance as of March 31, 1999 includes (i) NOL balance at 9/30/98 of $58.6
million and (ii) year-to-date pre-tax losses, excluding portion attributable
to U.K. operations. Source: 1998 10-K and 10-Q dated 3/31/99.
CONFIDENTIAL 18
<PAGE> 24
BEAR
STEARNS PROJECT STAR TREK
VALUATION OF U.K. NET OPERATING LOSS BENEFIT
<TABLE>
<CAPTION>
U.K. NET OPERATING LOSS CARRYFORWARDS ($ IN MILLIONS)
========================================================================================================
PROJECTED FISCAL YEAR ENDING SEPTEMBER 30,
------------------------------------------------------------------------
1999(1) 2000 2001 2002 2003 2004 2005
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Income (Loss) Before Taxes $(1.0) $ 0.2 $ 0.7 $ 1.0 $ 1.7 $ 2.3 $ 2.6
NOL Beginning Balance(2) 7.4 8.4 8.2 7.5 6.5 4.8 2.5
NOLs Added/(Utilized) 1.0 (0.2) (0.7) (1.0) (1.7) (2.3) (2.5)
----- ------ ------ ------ ------ ------ ------
NOL Ending Balance 8.4 8.2 7.5 6.5 4.8 2.5 0.0
Tax Savings (at 40%) 0.0 0.1 0.3 0.4 0.7 0.9 1.0
- --------------------------------------
PRESENT VALUE OF TAX SAVINGS $ 1.8
- --------------------------------------
- --------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) Figures for 1999 represent 6 months ended September 30, 1999.
(2) Balance as of March 31, 1999 includes (i) NOL balance at 9/30/98 of $6.4
million and (ii) year-to-date pre-tax losses attributable to U.K.
operations. Source: 1998 10-K and 10-Q dated 3/31/99.
CONFIDENTIAL 19
<PAGE> 25
BEAR
STEARNS PROJECT STAR TREK
INTEK VALUATION ANALYSIS
<TABLE>
<CAPTION>
TOTAL ENTERPRISE VALUE ($ IN MILLIONS)
================================================================================
2004 EBITDA MULTIPLE
--------------------------------------------------
DISCOUNT RATE 7.0X 8.0X 9.0X
------------- ------ ------ ------
<S> <C> <C> <C>
15.0% $219.6 $249.1 $278.7
16.0 209.9 238.1 266.3
17.0 200.8 227.7 254.6
18.0 192.2 217.9 243.5
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TOTAL EQUITY VALUE ($ IN MILLIONS)
================================================================================
2004 EBITDA MULTIPLE
--------------------------------------------------
DISCOUNT RATE 7.0X 8.0X 9.0X
------------- ------ ------ ------
<S> <C> <C> <C>
15.0% $142.2 $171.8 $201.4
16.0 132.6 160.8 189.0
17.0 123.5 150.4 177.3
18.0 114.9 140.6 166.2
- --------------------------------------------------------------------------------
</TABLE>
CONFIDENTIAL 20
<PAGE> 26
BEAR
STEARNS PROJECT STAR TREK
INTEK VALUATION ANALYSIS
<TABLE>
<CAPTION>
SHARE PRICE
==========================================================================
2004 EBITDA MULTIPLE
---------------------------------------------
DISCOUNT RATE 7.0X 8.0X 9.0X
------------- ----- ----- -----
<S> <C> <C> <C>
15.0% $2.64 $3.15 $3.67
16.0 2.47 2.96 3.46
17.0 2.31 2.78 3.25
18.0 2.16 2.61 3.06
- --------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
IMPLIED PERPETUAL GROWTH RATE(1)
==========================================================================
2004 EBITDA MULTIPLE
---------------------------------------------
DISCOUNT RATE 7.0X 8.0X 9.0X
------------- ----- ----- -----
<S> <C> <C> <C>
15.0% 8.1% 8.9% 9.5%
16.0 9.0 9.8 10.5
17.0 10.0 10.8 11.4
18.0 10.9 11.7 12.4
- --------------------------------------------------------------------------
</TABLE>
- ----------
(1) Growth rate beyond 2004 implied by the discount rate and year 2004 terminal
multiple.
CONFIDENTIAL 21
<PAGE> 27
BEAR
STEARNS
APPENDICES
<PAGE> 28
BEAR
STEARNS
APPENDIX A
LIST OF TARGET MARKETS FOR THE
ROAMER ONE ROLL-OUT
<PAGE> 29
BEAR
STEARNS PROJECT STAR TREK
TARGET ROAMER ONE MARKETS
<TABLE>
<CAPTION>
1ST TIER MARKETS
===================================================================================
MSA POPS MSA POPS
- ----------------------- ---------- ------------------ ---------
<S> <C> <C> <C>
1. New York 19,938,492 25. Milwaukee 1,642,658
2. Los Angeles 15,495,155 26. Sacramento 1,632,133
3. Chicago 8,599,774 27. Norfolk 1,540,252
4. Washington-Baltimore 7,164,519 28. Indianapolis 1,492,297
5. San Francisco 6,605,428 29. SAN ANTONIO 1,490,111
6. Philadelphia 5,973,463 30. Columbus 1,447,646
7. Boston 5,563,475 31. Orlando 1,417,291
8. Detroit 5,284,171 32. CHARLOTTE 1,321,068
9. DALLAS 4,574,561 33. NEW ORLEANS 1,312,890
10. HOUSTON 4,253,428 34. Salt Lake City 1,219,842
11. Atlanta 3,541,230 35. Las Vegas 1,201,073
12. Miami 3,514,403 36. Buffalo 1,175,240
13. SEATTLE 3,320,829 37. Hartford 1,144,574
14. Cleveland 2,913,430 38. GREENSBORO 1,141,238
15. Minneapolis 2,765,116 39. Providence 1,124,044
16. PHOENIX 2,746,703 40. Nashville 1,117,178
17. San Diego 2,655,463 41. Rochester 1,088,037
18. St. Louis 2,548,238 42. Memphis 1,078,151
19. Pittsburgh 2,379,411 43. AUSTIN 1,041,330
20. Denver 2,277,401 44. OKLAHOMA CITY 1,026,657
21. Tampa Bay 2,199,231 45. RALEIGH 1,025,253
22. Portland 2,078,357 46. Grand Rapids 1,015,099
23. Cincinnati 1,920,931 47. Jacksonville 1,008,633
24. Kansas City 1,690,343
- -----------------------------------------------------------------------------------
</TABLE>
- ----------
Based on June 1996 Bureau of Census data.
Note: Bold designates MSAs located in NRTC states.
CONFIDENTIAL 22
<PAGE> 30
BEAR
STEARNS PROJECT STAR TREK
TARGET ROAMER ONE MARKETS (CONT.)
<TABLE>
<CAPTION>
2ND TIER MARKETS
=======================================================================================
MSA POPS MSA POPS
- ----------------------- ---------- ------------------ ---------
<S> <C> <C> <C>
1. West Palm Beach 992,840 28. Mobile 518,975
2. LOUISVILLE 991,765 29. Wichita 512,965
3. Dayton 950,661 30. MCALLEN 495,594
4. Richmond 935,174 31. Charleston 495,143
5. Greenville 896,679 32. Columbia 488,207
6. Birmingham 894,702 33. Fort Wayne 475,299
7. Albany 878,527 34. Colorado Springs 472,924
8. Honolulu 871,766 35. Johnson City 458,229
9. Fresno 861,753 36. Daytona Beach 456,464
10. TUCSON 767,873 37. Melbourne 453,998
11. TULSA 756,493 38. Augusta 453,612
12. Syracuse 745,691 39. Lancaster 450,834
13. EL PASO 684,446 40. Lansing 447,538
14. OMAHA 681,698 41. Chattanooga 446,096
15. ALBUQUERQUE 670,092 42. Kalamazoo 444,428
16. Knoxville 649,277 43. LEXINGTON 441,073
17. Scranton 628,073 44. Lakeland 440,954
18. Bakersfield 622,729 45. Des Moines 427,436
19. Harrisburg 614,755 46. Jacksonville 421,068
20. Allentown 614,304 47. Modesto 415,786
21. Toledo 611,417 48. SPOKANE 404,920
22. Youngstown 598,582 49. Saginaw 403,301
23. Springfield 576,561 50. Canton 402,928
24. BATON ROUGE 567,388 51. Madison 395,366
25. Little Rock-North Little Rock 548,352 52. Pensacola 385,820
26. Stockton 533,392 53. Santa Barbara 385,573
27. Sarasota 528,803
- --------------------------------------------------------------------------------------
</TABLE>
- ----------
Based on June 1996 Bureau of Census data.
Note: Bold designates MSAs located in NRTC states.
CONFIDENTIAL 23
<PAGE> 31
BEAR
STEARNS
APPENDIX B
COMPARABLE COMPANY AND
COMPARABLE TRANSACTION
ANALYSES
<PAGE> 32
BEAR
STEARNS PROJECT STAR TREK
SELECTED COMPARABLE COMPANY FORWARD MULTIPLES
<TABLE>
<CAPTION>
($ IN MILLIONS)
=====================================================================================================================
PROJECTED FISCAL YEAR
ENTERPRISE -------------------------------------------------------------
VALUE(1) 1999 2000 2001 2002 2003 2004
---------- ----- ----- ----- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
CELLULAR COMPANIES
WESTERN WIRELESS $ 3,162
EV / Revenues 4.5x 3.5x 2.9x 2.5x 2.3x 2.1x
EV / EBITDA 37.8 12.8 7.9 6.0 5.0 4.5
UNITED STATES CELLULAR $ 4,806
EV / Revenues 3.7x 3.3x 3.0x 2.8x 2.6x NM
EV / EBITDA NM NM 7.6 6.8 6.2 NM
PCS COMPANIES
AERIAL COMMUNICATIONS $ 1,537
EV / Revenues 6.7x 4.3x 3.1x 2.4x 2.0x 1.8x
EV / EBITDA NM NM 55.1 10.7 6.0 4.5
CLEARNET C$ 2,302
EV / Revenues 6.0x 4.0x 2.9x 2.3x 1.9x 1.6x
EV / EBITDA NM 767.2 15.1 7.4 4.6 3.6
NEXTEL COMMUNICATIONS $20,981
EV / Revenues 9.7x 4.9x 4.1x 3.6x 3.3x 3.2x
EV / EBITDA 36.6 18.8 12.2 9.7 8.5 7.9
OMNIPOINT CORPORATION $ 3,707
EV / Revenues 11.9x 6.8x 4.6x 3.3x 2.6x 2.1x
EV / EBITDA NM NM NM 24.0 12.7 6.8
POWERTEL $ 1,798
EV / Revenues 6.3x 4.4x 3.3x 2.7x 2.2x 1.9x
EV / EBITDA NM 48.3 18.0 10.4 7.2 5.4
- ---------------------------------------------------------------------------------------------------------------------
HARMONIC MEAN
EV / Revenues 6.1x 4.2x 3.3x 2.7x 2.4x 2.0x
EV / EBITDA 37.2 26.1 12.5 8.9 6.5 5.1
- ---------------------------------------------------------------------------------------------------------------------
ROAMER ONE / LMT OPERATING DATA
Revenues $10.6 $29.6 $61.6 $103.1 $144.1 $172.8
EBITDA (5.1) (8.1) (8.7) 2.1 28.1 61.1
INTEK ENTERPRISE VALUE(2) $ 226.1
Less Implied Midland USA Enterprise
Value (3) 10.9
-------
Implied RoameR One / LMT Enterprise $ 215.2
Value
- ---------------------------------------------------------------------------------------------------------------------
ROAMER ONE / LMT IMPLIED MULTIPLES
EV / Revenues 20.3x 7.3x 3.5x 2.1x 1.5x 1.2x
EV / EBITDA NM NM NM 102.5 7.7 3.5
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
Source: Revenues and EBITDA projections for comparable companies are taken from
selected Wall Street equity research reports.
(1) As of June 4, 1999.
(2) Intek's Enterprise Value of $226.1 million based on Securicor's offer price
of $2.75 per share.
(3) Equals Midland USA revenues multiplied by harmonic mean of revenues for
distributors and manufacturers of telecommunications equipment (0.4x in
1999, 0.3x in 2000).
CONFIDENTIAL 24
<PAGE> 33
BEAR
STEARNS PROJECT STAR TREK
SELECTED COMPARABLE COMPANY FORWARD MULTIPLES
<TABLE>
<CAPTION>
($ IN MILLIONS)
================================================================================
ENTERPRISE PROJECTED FISCAL YEAR
VALUE(1) 1999 2000
-------- ---- ----
<S> <C> <C> <C>
ANDREW CORP. $1,338
EV / Revenues 1.7x 1.5x
EV / EBITDA 9.7 7.8
ANICOM $324
EV / Revenues 0.5x NA
EV / EBITDA 7.7 NA
ANIXTER INTERNATIONAL $1,038
EV / Revenues 0.4x 0.4x
EV / EBITDA 7.8 7.3
AUDIOVOX $197
EV / Revenues 0.1x 0.1x
EV / EBITDA 3.2 2.2
GLENAYRE TECHNOLOGIES $213
EV / Revenues 0.6x 0.5x
EV / EBITDA 5.6 2.9
TESSCO TECHNOLOGIES $102
EV / Revenues 5.4x 4.5x
EV / EBITDA 86.0 63.5
- -----------------------------------------------------------------------------
HARMONIC MEAN
EV / Revenues 0.4x 0.3x
EV / EBITDA 7.0 4.6
- -----------------------------------------------------------------------------
</TABLE>
- ----------
Source: Revenues and EBITDA projections for comparable companies are taken from
Wall Street research reports.
(1) As of June 4, 1999.
(2) Enterprise Value is based on Securicor's offer price of $2.75 per share.
CONFIDENTIAL 25
<PAGE> 34
BEAR
STEARNS PROJECT STAR TREK
SELECTED COMPARABLE M&A TRANSACTIONS
<TABLE>
<CAPTION>
===================================================================================================================================
ENTERPRISE VALUE /
DATE ENTERPRISE EQUITY VALUE / -----------------------------------
ACQUIROR / TARGET ANNOUNCED VALUE BOOK VALUE LTM REVENUES LTM EBITDA LTM EBIT
----------------- --------- ---------- -------------- ------------ ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Alltel / 360 Communications Co. 3/16/98 $6,106.7 8.1x 4.7x 14.3x 24.8x
American Cellular / PriCellular 3/9/98 1,319.0 6.0 7.3 20.0 35.4
Rural Cellular / Atlantic Cellular Corporation 2/13/98 256.0 NA 6.4 12.4 NA
AirTouch Communications / US West Cellular Division 1/29/98 5,481.7 15.4 4.2 11.1 16.7
Price Communications / Palmer Wireless 5/23/97 883.3 3.0 5.6 12.6 20.4
Blackstone Group / CommNet Cellular 5/28/97 748.0 8.9 6.1 17.6 36.0
- ----------------------------------------------------------------------------------------------------------------------------------
HARMONIC MEAN 6.3x 5.5x 14.1x 24.4x
- ----------------------------------------------------------------------------------------------------------------------------------
INTEK $226.1(1) NM 7.3x NM NM
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) Enterprise Value is based on Securicor's offer price of $2.75 per share.
CONFIDENTIAL 26
<PAGE> 35
BEAR
STEARNS PROJECT STAR TREK
SELECTED COMPARABLE M&A TRANSACTIONS
<TABLE>
<CAPTION>
=================================================================================================================================
ENTERPRISE VALUE /
---------------------------
EQUITY
DATE ENTERPRISE VALUE / LTM LTM LTM
ACQUIROR / TARGET TARGET BUSINESS DESCRIPTION ANNOUNCED VALUE BOOK VALUE REVENUES EBITDA EBIT
----------------- --------------------------- --------- ----- ---------- -------- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
Arrow Electronics /
Richey Electronics Electronic components distribution 1/7/99 $176.7 2.2x 0.7x 3.4x 3.7x
Anicom Inc. /
Texcan Cable Cable and wire distribution 9/22/98 48.8 2.3x 0.4x 6.8x 7.5x
Digital Microwave /
Innova Corp. Wireless communication equipment
distribution 7/23/98 120.3 2.5x 2.5x 32.6x 83.9x
United Stationers Inc. /
Azerty Office supplies distribution 2/10/98 115.2 0.5x 0.3x 9.1x 10.0x
Unisource Worldwide /
National Sanitary Supply Industrial products distribution 8/11/97 155.9 2.0x 0.5x 10.8x 16.3x
- ---------------------------------------------------------------------------------------------------------------------------------
HARMONIC MEAN 1.3x 0.5x 7.4x 8.6x
- ---------------------------------------------------------------------------------------------------------------------------------
INTEK $226.1(1) NM 7.3x NM NM
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) Enterprise Value is based on Securicor's offer price of $2.75 per share.
CONFIDENTIAL 27
<PAGE> 1
PROJECT ZOLA Executive Summary
HISTORICAL PRICE GRAPH WITH KEY EVENTS
[GRAPHIC OMITTED]
Historical price graph of Intek with key events identified from March 1, 1996
through January 15, 1999.
THE LAZARD HOUSES Preliminary Draft - Confidential
-1-
<PAGE> 2
PROJECT ZOLA Executive Summary
INTEK ONE YEAR STOCK PRICE PERFORMANCE AND VOLUME WEIGHTED CLOSING PRICES
STOCK PRICE
[GRAPHIC OMITTED]
Historical price graph of Intek from December 15, 1997 through January 15, 1999.
VOLUME WEIGHTED CLOSING PRICES
[GRAPHIC OMITTED]
Volume weighted closing prices for Intek shares traded from December 15, 1997
through January 15, 1999.
<TABLE>
<CAPTION>
$1.00-$2.00 $2.00-$3.00 $3.00-$4.00 $4.00-$5.00
<S> <C> <C> <C> <C>
% Within
Trading Range: 39.4% 22.6% 29.5% 8.5%
Cumulative: 39.4% 62.0% 91.5% 100.0%
</TABLE>
THE LAZARD HOUSES -2- Preliminary Draft - Confidential
<PAGE> 3
PROJECT ZOLA Executive Summary
- --------------------------------------------------------------------------------
SUMMARY OVERVIEW OF INTEK'S CURRENT BUSINESS LINES
- ----------------------- ------------------------------------------------
- Exceeds FCC's future 6.25 kHz standard
COMMERCIALIZATION OF
LM TECHNOLOGY [arrow
right] - Nokia Development Contract
- Pipeline of additional development contracts
- ----------------------- ------------------------------------------------
- ----------------------- ------------------------------------------------
- Distribution of spectrum efficient products
- Exclusive provider of LM products
MIDLAND [arrow
right] - 24 hour customer service group
- Distributor of non-LM products (Hitachi)
- ----------------------- ------------------------------------------------
- ----------------------- ------------------------------------------------
- Full turnkey service offering
- National coverage capability
- Targeted markets: 220 MHz, refarming and
public safety
ROAMER [arrow
right] - 297 base station sites/300 dealers
- 100+ sites for 220 MHz licenses
- 10,500 subscribers at 9/30/98(a)
- 22,500 subscribers projected at 9/30/99(a)
- ----------------------- ------------------------------------------------
- ---------------
(a) Based on December business plans
- --------------------------------------------------------------------------------
THE LAZARD HOUSES - 3 - Preliminary Draft - Confidential
<PAGE> 4
PROJECT ZOLA Executive Summary
STRATEGIC ASSESSMENT OF INTEK GLOBAL
BUSINESS PERSPECTIVE
[up arrow] 200 MHz spectrum assets gives company an efficient outlet for its LM
Technology (capacity for 750,000 -1 million users)
[up arrow] FCC 2005 Mandate (6.25 kHz) drives refarming market opportunity
(12.1 mm UHF/VHF users)
[up arrow] Attractive development opportunities for LM Technology (Nokia)
[up arrow] EF Johnson agreement significantly lowers equipment cost and
manufacturing risk
[up arrow] Potential for Laidlaw type sales
[up arrow] $50 mm NRTC agreement; potential revenue from sale of
decommissioned base sites in B/C markets
[up arrow] Numerous ancillary uses for technology (AVL, Security)
[up arrow] Experienced management team
[down arrow] Relatively unproven business model
FINANCIAL AND MARKET PERSPECTIVE
[up arrow] 9,500 subscriber additions in 1998; 61% revenue growth
[down arrow] $15 mm operating loss projected in 1999
[down arrow] Viability of equipment rental arrangement (growth case)
[down arrow] Little or no positive stock price movement in response to recent
business developments
[down arrow] $1.00-$2.00 trading range since late summer 1998
[down arrow] Likely need for additional capital beyond recent $25 mm financing
THE LAZARD HOUSES -4- Preliminary Draft - Confidential
<PAGE> 5
PROJECT ZOLA Executive Summary
VALUATION SUMMARY BASED ON DECEMBER BUSINESS PLANS
- - OUR PRELIMINARY VALUATION WORK BASED ON THE DECEMBER BUSINESS PLANS SUGGESTS
THAT SECURICOR SHOULD BE WILLING TO PAY APPROXIMATELY $1.75 - $2.25 PER
INTEK SHARE
- Consistent with premiums paid (25% - 39%) and minority transactions (22%
- 29%)
- High end of DCF valuation
- - AS WITH FAHNESTOCK OPINION FROM THE 1996 MERGER, WE BELIEVE THAT COMPARABLE
COMPANY TRADING MULTIPLES AND COMPARABLE TRANSACTIONS ARE NOT PRIMARILY
APPLICABLE VALUATION BENCHMARKS FOR INTEK.
<TABLE>
<CAPTION>
METHODOLOGY VALUATION RANGE PREMIUM VERSUS CURRENT
----------- --------------- ----------------------
<S> <C> <C>
Current value (1/15/99)(a) $1.44 -
20-Day average $1.31 (9%)
52 week High/Low $1.03 - $4.75 (28%) - 230%
Premiums Paid $1.80 - $2.00 25% - 39%
Minority Transactions $1.75 - $1.85 22% - 29%
DCF $1.75 - $2.25 22% - 56%
</TABLE>
- ----------
(a) All references to Intek's current value reflect the closing stock price of
$1.44 on 1/15/99, the last trading day before its most recent Schedule 13D
filing.
THE LAZARD HOUSES -5- Preliminary Draft - Confidential
<PAGE> 6
PROJECT ZOLA Executive Summary
SUMMARY COMMENTARY ON "UNCONSTRAINED" INTEK BUSINESS PLAN
LAZARD MET WITH BEAR STEARNS AND INTEK CEO BOB SHIVER ON FEBRUARY 2, 1999 TO
DISCUSS Intek's "Unconstrained" business plan.
- - PLAN IS NOT YET 100% COMPLETE
- Each business line (Roamer, Midland and LMT) have separate projections
with varying degrees of detail
- Fully integrated model is not available
- - ASSUMPTIONS REFLECT UNCONSTRAINED AVAILABILITY OF ADDITIONAL CAPITAL BEYOND
RECENT $25 MM FINANCING
- - ROAMER ITSELF COULD REQUIRE UP TO $100 MM OF ADDITIONAL FUNDING THROUGH 2003
- 525,000 projected subscribers by 2008 (spectrum capacity is estimated at
750,000 - 1 mm subscribers)
- Cash flow negative through 2003; Seven-year investment pay back (2005)
- - PROJECTIONS ARE DETAILED, BUT FAIRLY SIMPLISTIC IN NATURE AND LACK NECESSARY
SENSITIVITY STUDIES
- Generic Roamer models have been created for both large and small markets
- Assumes all market roll-outs have same financial characteristics
- Service pricing, subscriber acquisition costs and G&A costs held
constant for entire 10 year period
THE LAZARD HOUSES -6- Preliminary Draft - Confidential
