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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
(Amendment No. 9)
PACIFIC SCIENTIFIC COMPANY
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(Name of Subject Company)
KOLLMORGEN CORPORATION
TORQUE CORPORATION
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(Bidders)
Common Stock, $1.00 par value per share
(Including the Associated Preferred Stock Purchase Rights)
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(Title of Class of Securities)
694806 (Common Stock)
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(CUSIP Number of Class of Securities)
James A. Eder, Esq.
KOLLMORGEN CORPORATION
1601 Trapelo Road
Waltham, Massachusetts 02154
(781) 890-5655
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(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications on Behalf of Bidders)
Copy to:
Creighton O'M. Condon, Esq.
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Telephone: (212) 848-4000
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This Amendment No. 9 to the Tender Offer Statement on Schedule 14D-1, as
previously amended (the "Schedule 14D-1") relates to the offer by Torque
Corporation, a Delaware corporation ("Purchaser") and a wholly owned subsidiary
of Kollmorgen Corporation, a New York corporation ("Parent"), to purchase
6,347,241 shares of common stock, par value $1.00 per share (the "Common
Stock"), of Pacific Scientific Company, a California corporation (the
"Company"), including the associated preferred stock purchase rights (the
"Rights" and, together with the Common Stock, the "Shares") or such greater or
lesser number of Shares that, together with the Shares owned by Parent and
Purchaser, would constitute a majority of the outstanding Shares on a fully
diluted basis (such number of Shares being the "Minimum Number"), at a price of
$20.50 per Share, net to the seller in cash (the "Offer Price"), upon the terms
and subject to the conditions set forth in Purchaser's Offer to Purchase dated
December 15, 1997 (the "Offer to Purchase") and in the related Letter of
Transmittal (which, as amended from time to time, together constitute the
"Offer"), copies of which were attached to the Schedule 14D-1 as Exhibits (a)(1)
and (a)(2), respectively. The Schedule 14D-1 was initially filed on December 15,
1997.
Capitalized terms used but not otherwise defined herein have the respective
meanings assigned to such terms in the Offer to Purchase.
ITEM 10. ADDITIONAL INFORMATION
(f) On January 26, 1998, Parent reported operating results for 1997 and
reaffirmed its intention to acquire the Company.
A press release issued by Parent with respect to the foregoing is filed as
Exhibit (a)(20) to the Schedule 14D-1 and is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
Item 11 is hereby amended and supplemented by adding the following Exhibit:
(a)(20) Press Release issued by Parent on January 26, 1998.
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
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<S> <C>
*(a)(1) Form of Offer to Purchase dated December 15, 1997.
*(a)(2) Form of Letter of Transmittal.
*(a)(3) Form of Notice of Guaranteed Delivery.
*(a)(4) Form of Letter from Salomon Smith Barney to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
*(a)(5) Form of Letter from Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees to
Clients.
*(a)(6) Form of Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.
*(a)(7) Summary Advertisement as published in The Wall Street Journal on December 15, 1997.
*(a)(8) Press Release issued by Parent on December 15, 1997.
*(a)(9) Definitive Consent Solicitation Statement/Prospectus filed with the Commission on December 15,
1997.
*(a)(10) Form of Consent.
*(a)(11) Parent Letter to Company Shareholders dated December 15, 1997.
*(a)(12) Form of Press Release dated December 15, 1997, relating to the record date for action by consent of
Pacific Scientific Shareholders.
*(a)(13) Press Release issued by Parent on December 22, 1997.
*(a)(14) Press Release issued by Parent on December 29, 1997.
*(a)(15) Press Release issued by Parent on December 31, 1997.
*(a)(16) Press Release issued by Parent on January 8, 1998.
*(a)(17) Press Release issued by Parent on January 15, 1998.
*(a)(18) Press Release issued by Parent on January 22, 1998.
*(a)(19) Letter to Lester Hill, Chairman, President and Chief Executive Officer of the Company, from Morgan
& Finnegan, L.L.P., patent counsel for Parent, dated January 21, 1998.
(a)(20) Press Release issued by Parent on January 26, 1998.
*(b)(1) Commitment Letter among Salomon Brothers Inc, Salomon Brothers Holding Company Inc and Parent,
dated December 9, 1997.
*(c) Not applicable.
*(d) Not applicable.
*(e) Not applicable.
*(f) None.
*(g)(1) Complaint seeking Declaratory and Injunctive Relief filed in the United States District Court for
the Central District of California on December 15, 1997.
</TABLE>
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* Previously filed.
3
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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: January 27, 1998
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<S> <C> <C>
TORQUE CORPORATION
BY: /S/ JAMES A. EDER
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Name: James A. Eder
Title: Vice President
</TABLE>
4
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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: January 27, 1998 KOLLMORGEN CORPORATION
By: /s/ JAMES A. EDER
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Name: James A. Eder
Title: Vice President
5
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PRESS RELEASE
KOLLMORGEN REPORTS STRONG FINANCIAL RESULTS FOR 1997; FOURTH QUARTER AND FULL
YEAR SHOW OPERATING GAINS
Kollmorgen Again Urges Pacific Scientific Chairman/CEO Lester Hill to Enter
into 'Serious Merger Discussions'
WALTHAM, Mass., January 26--Kollmorgen Corporation (NYSE:KOL)
today reported strong operating results for 1997 and reaffirmed its intention
to acquire Pacific Scientific Company (NYSE:PSX).
For the year ended December 31, 1997, which was highlighted by a number of
important financial events and special items, Kollmorgen reported that net
income rose by 122% to $19.7 million, or $1.90 a share (diluted), on sales of
$222.2 million. These results compare to net income of $8.9 million, or
$0.86 a share (diluted), on sales of $230.4 million in 1996. Excluding
special items, net income for 1997 rose by 18% to $10.5 million, or $1.02 per
share (diluted).
For the fourth quarter, excluding special items, net income rose 17% to
$3.8 million, or $0.38 per share (diluted), on sales of $59.2 million, versus
net income of $3.2 million, or $0.32 per share (diluted), on sales of $60.8
million in comparable 1996 period. Excluding revenues from Macbeth, which
became part of a joint venture at the end of 1996, the Company's sales from
ongoing businesses increased by 15% for the fourth quarter and 13% for the
year.
After accounting for a change of $4.2 million for costs associated with
the tender offer for Pacific Scientific, earnings in the fourth quarter were
$200,000, or $0.02 per share (diluted).
These comparative results were affected by several special items.
- -- Results for 1997 include a gain after fees of $24.4 million from the sale
of the Company's share in its GretagMacbeth joint venture. GretagMacbeth was
brought public on the Swiss Stock Exchange in June.
- -- Results for 1997 reflect approximately $4.2 million in costs associated
with the Company's offer to purchase shares of Pacific Scientific, announced
in December. These costs are included as expenses in the fourth quarter.
- -- Results for 1997 include a charge of $11.4 million for acquired research
and development, principally associated with the Company's acquisitions of
Servotronix and Seidel in the second quarter.
- -- Results for 1997 reflect the effect of income taxes, whereas 1996 results
reflect a zero tax rate due to tax loss carry-forwards from earlier years.
Kollmorgen's Offer for Pacific Scientific
Kollmorgen said that it is determined to proceed with its $20.50 per share
offer to acquire Pacific Scientific Company despite the unwillingness of
Pacific Scientific to allow Kollmorgen to participate in the sale process it
has publicly stated it is pursuing.
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Gideon Argov, Chairman, President and Chief Executive Officer of
Kollmorgen Corporation, said: "While apparently granting other parties the
right to do so, Pacific Scientific has refused to permit Kollmorgen to
conduct any due diligence unless Kollmorgen first agrees to abandon its offer
and cancel the special meeting of Pacific Scientific shareholders. We do not
believe this is in the best interest of the shareholders of either company.
"Despite Mr. Hill's statements as reported in the press that he is willing
to meet with Kollmorgen, and despite our repeated calls upon him to do so,
Pacific Scientific up to now has failed to contact us either to negotiate a
transaction or to more fully inform itself about our proposal.
"We continue to be willing to enter into serious discussions with Pacific
Scientific," Argov said, "with no preconditions whatsoever. While we have
made what we believe is a full and fair offer for Pacific Scientific, we are
prepared to consider increasing that offer if Pacific Scientific can
demonstrate greater value in the company than we have been able to identify
from public information. And, in that vein, in order to provide both of our
companies with the maximum amount of flexibility to negotiate a friendly
transaction in advance of the Pacific Scientific special meeting of
shareholders on February 13, 1998, we have decided to postpone the
Kollmorgen shareholders meeting until early February. We urge Pacific
Scientific to sit down with Kollmorgen, the only party with a firm offer on
the table, to negotiate a mutually advantageous transaction."
Kollmorgen said that the special meeting of Kollmorgen shareholders will
now take place on February 10, 1998, at 10 a.m. at BankBoston, 100 Federal
Street in Boston.
On January 22, Kollmorgen announced that it will receive a $27.2 million
settlement from a third party with respect to Kollmorgen's electronic motion
control patents. As it is doing with other companies in the industry,
Kollmorgen has formally notified Pacific Scientific that certain of Pacific
Scientific's motion-control products, representing a substantial percentage
of Pacific Scientific's motion-control revenues, infringe Kollmorgen patents.
Kollmorgen said that it has offered to Pacific Scientific the opportunity to
enter into licensing arrangements in regard to these patents.
1997 Full-Year and Fourth-Quarter Highlights
Commenting on the Company's performance during the year, Argov called 1997
"an outstanding and strategically important year for Kollmorgen. The Company
remained on target financially," he said, "with bookings growing steadily
right through the fourth quarter in both the Industrial and Commercial and
the Aerospace and Defense groups, Bookings for the year were up 27% over 1998.
"Early in the year, we divested ourselves of a non-core Kollmorgen
business, Macbeth, through a merger and public offering in Switzerland. This
helped us to improve our balance sheet and greatly reduce our outstanding
debt. In addition, it allowed us to better concentrate on our core business
of high-performance motion control.
"We also made two important acquisitions during 1997," Argov said. "We
completed the acquisition of Servotronix to add an industry-leading software
and
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controls capability, and we acquired Seldel, a leading provider of digital
servo drives, to accelerate our expansion into the European market for
integrated motion control equipment."
"Following the divestiture of Macbeth and the acquisitions, the Company
also realigned its worldwide businesses into two operating groups: the
Industrial and Commercial Group and the Aerospace and Defense Group.
"Kollmorgen also introduced several key products in 1997," Argov said,
"products that have already had a impact on the marketplace. Most notable is
the new Platinum (TM) DDL direct-drive linear motors and drives, which give
customers unparalleled speed and precision by eliminating the traditional
gearing and ballscrew mechanisms. The reception from customers has been
outstanding, and Kollmorgen linear systems are already being fitted into
coordinate measurement machines, x-y tables, and other precision assembly
equipment for the production of semiconductors and electronic components.
"In the Aerospace and Defense business, the Company has advanced the state
of technology with a first-of-its-kind aircraft power management system. The
system, which enables aircraft designers to reduce weight and lower production
costs, was developed for the tiltrotor V-22 Osprey, now being built by Bell
Boeing. We also continued development of an innovative Photonics mast for
the U.S. Navy's newest generation of submarines. The new system will use
advanced imaging and eletronics to replace the familiar through-the-hull
periscope design of traditional submarines.
"In Asia, we successfully established a low-cost manufacturing center in
Vietnam," Argov said. "And, we further improved manufacturing operations at
our high-volume production center in India.
"In our Engineering Services business, Kollmorgen Proto-Power turned in
another standout year. The business continued to grow in the areas of
service and software with several major customers added to the division's
client list. The division also moved into new and larger facilities during
the year to accommodate the steady growth of the business.
"As we begin the new year," Argov said, "we are preparing several exciting
new products for introduction, including our first general purpose multi-axis
controllers, a new cost-effective line of servo motors, the CLAWS(TM) weapons
control system for the military marketplace, and a new Kollmorgen SERVOSTAR
(TM) product line specially designed for the needs of our European customers."
Kollmorgen's primary business is high-performance electronic motion
control. Additional information can be found on the World Wide Web at
http://www.kollmorgen.com.
Cautionary Statement
With respect to statements about future company performance that may be
deemed to be forward-looking statements under the federal securities laws,
the Company cautions investors and others that numerous factors could cause
actual results to differ materially. Please refer to the "Forward-Looking
Statements" and "Risk Factors" included in the Registration Statement on Form
S-4, dated January 15, 1998.
Contacts:
Robert Cobuzzi Roy Winnick-Mark Semer
Kollmorgen Corporation or Kekst and Company
781-890-5655 212-521-4842 or 4802
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-Tables Follow-
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KOLLMORGEN CORPORATION and SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except per share amounts)
For the Three Months For the Twelve Months
ended December 31, ended December 31,
1997 1996 1997 1996
Net sales (1) $59,192 $60,766 $222,246 $230,424
Cost of sales 39,616 40,179 153,206 152,928
Gross profit 19,576 20,587 69,040 77,496
Selling, general and
administrative expense 12,041 13,061 44,456 51,918
Research and development
expense 2,413 3,119 9,662 12,143
Acquired research and
development (2) - - 11,391 -
Merger costs (2) 4,176 - 4,176 -
Income (loss) before interest,
minority interest,
and taxes 946 4,407 (645) 13,435
Interest and other
income (expenses) 96 (1,280) (2,772) (5,045)
Tax provision (860) - (2,838) -
Equity in earnings of
joint venture and
minority interest,
net of income taxes 2 96 1,654 514
Gain on sale of investment
in joint venture, net of
income taxes (2) - - 24,321 -
Net income $ 184 $ 3,223 $ 19,720 $ 8,904
Earnings per share:
Basic $0.02 $0.33 $2.00 $0.89
Diluted $0.02 $0.32 $1.90 $0.86
(1)-Excluding businesses previously sold, revenues were $51,442 and $197,389
for the three and 12 months ended December 31, 1996, respectively.
(2)-Excluding these special items, net income was $3,760, or $0.36 per share
(diluted), and $10,522 or $1.02 per share (diluted) for the three and 12
months ended December 31, 1997, respectively.
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KOLLMORGEN CORPORATION and SUBSIDIARIES
Condensed Balance Sheets
(In thousands)
December 31, December 31,
1997 1996
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Assets
Cash and cash equivalents $ 14,854 $ 13,445
Accounts receivable, net 39,528 43,189
Recoverable amounts on
long-term contracts 5,762 4,973
Inventories 25,162 22,450
Prepaid expenses 2,041 1,645
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Total current assets 87,347 85,702
Property, plant &
equipment, net 26,673 25,147
Other assets 31,424 30,481
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$145,444 $141,330
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Liabilities and Shareholders' Equity
Notes payable and current
portion of long-term debt $ 12,098 $ 12,487
Accounts payable and
accrued liabilities 54,219 48,521
Total current liabilities 66,317 61,008
Long-term debt 31,525 53,054
Other liabilities 5,874 5,202
Minority interest 136 287
Shareholders' equity 41,592 21,779
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$145,444 $141,330
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