SCHEDULE 14A INFORMATION
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission only (as permitted by
rule 14a-6(e)(2))
[ ] Definitive Proxy Statement [ ] Definitive Additional Materials
[X] Soliciting Material Under Rule 14a-12
LILLY INDUSTRIES, INC.
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(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
N/A
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(NAME OF PERSON(S) FILING PROXY STATEMENT, IF
OTHER THAN THE REGISTRANT)
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[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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[THE VALSPAR CORPORATION LOGO] [LILLY INDUSTRIES, INC. LOGO]
NEWS RELEASE
FOR IMMEDIATE RELEASE
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VALSPAR TO ACQUIRE LILLY INDUSTRIES, INC.
Complementary Products Make Combination a Perfect Fit
Valspar to Assume a Leadership Position in Industrial Coatings
MINNEAPOLIS, Minnesota and INDIANAPOLIS, Indiana. June 26, 2000 - The Valspar
Corporation (NYSE: VAL) and Lilly Industries, Inc. (NYSE: LI) today announced
that their respective boards of directors have approved a definitive merger
agreement under which Valspar will acquire all outstanding shares of Lilly
Industries common stock for $31.75 per share in cash. The total value of the
transaction is approximately $975 million, including the assumption of $213
million in debt.
Valspar expects the transaction to be accretive to cash earnings the first year
and to reported earnings per share in the second year. It will use bank credit
facilities to finance the acquisition and expects to maintain an investment
grade credit rating. The cash merger transaction is subject to approval of Lilly
Industries shareholders and customary conditions including regulatory approvals.
It is expected to close by year end.
"By bringing together these two leading coatings companies, we will be able to
achieve significant synergies, provide broader product offerings to our
customers, and create greater value for our shareholders," said Richard M.
Rompala, Valspar's Chairman, President and Chief Executive Officer. "These two
companies are an extraordinarily good business fit with their complementary
technologies, and global technical, manufacturing and customer support
capabilities. Lilly has an excellent reputation for innovative technology,
quality products and outstanding customer service," said Rompala.
"This merger is a terrific result for our company, its shareholders and the
employees that make Lilly Industries great," said Douglas W. Huemme, Chairman
and Chief Executive Officer of Lilly Industries. "Both Lilly Industries and
Valspar have long and distinguished histories, and we are pleased to be able to
bring them together in this historic transaction," said Huemme.
Upon completion of the transaction, Valspar will have annual revenues of
approximately $2.25 billion with approximately 20% of its sales outside of the
U.S. "Acquisitions have been a key element of Valspar's growth strategy, with 15
acquisitions over the last five years," said Rompala. "We believe the Lilly
transaction will strengthen our low-cost position by achieving economies of
scale. Valspar has a strong track record of integrating acquisitions as
evidenced by our highly successful integration of Dexter's packaging coatings
business. Like Dexter, Lilly also brings us important new technologies, in
Lilly's case, in resins and in powder and waterborne coatings."
Salomon Smith Barney is serving as financial advisor to Valspar and Wasserstein
Perella & Co. is serving as financial advisor to Lilly Industries.
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[THE VALSPAR CORPORATION LOGO] [LILLY INDUSTRIES, INC. LOGO]
NEWS RELEASE - Page 2
Valspar, headquartered in Minneapolis, Minnesota, had 1999 sales of $1.4
billion. It is one of the ten largest coatings companies in the world with a
broad portfolio of architectural, packaging and industrial coatings and coating
intermediates. Its products include architectural, automotive refinish and
specialty coatings (34% of 1999 sales), packaging coatings, principally for food
and beverage cans (33%), industrial coatings (22%) and resins and colorants
(11%). Valspar has a global workforce of 4,600 employees and 39 manufacturing
plants worldwide.
Lilly Industries, headquartered in Indianapolis, Indiana, had 1999 sales of $656
million, with revenues outside of the U.S. accounting for 27%. It is one of the
five largest manufacturers of industrial coatings and specialty chemical
products in North America. Its products include wood coatings for furniture,
building products and kitchen cabinets (46% of 1999 sales), metal coatings for
building products, appliances and agricultural and construction equipment (43%)
and composites and glass coatings for the marine, transportation and global
mirror industries (11%). Lilly has 2,500 employees and 26 manufacturing plants
worldwide.
Contacts for
Investors: Paul C.Reyelts John C. Elbin
Sr. V.P., Finance and CFO V.P. and Chief Financial Officer
The Valspar Corporation Lilly Industries, Inc.
(612) 375-7702 (317) 814-8703
Media: Joseph McDonnell
Broadgate Consultants
(212) 232-2222
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This press release contains certain "forward-looking statements" with respect to
sales and earnings. These forward-looking statements are based upon managements'
expectations and beliefs concerning future events. Forward-looking statements
are necessarily subject to risks, uncertainties and other factors, many of which
are outside the control of the Companies, that could cause actual results to
differ materially from such statements. These uncertainties and other factors
include such things as general business conditions, strength of the economy and
growth in the coatings industry; changes in the Companies' relationships with
customers and suppliers; changes in raw material prices; regulatory
uncertainties; unusual weather conditions; and other risks and uncertainties
described from time to time in the Companies' reports filed with the Securities
and Exchange Commission.
In connection with the merger, Lilly Industries will be filing a proxy statement
with the Securities and Exchange Commission. SHAREHOLDERS OF LILLY INDUSTRIES
ARE URGED TO READ THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE BECAUSE IT
CONTAINS IMPORTANT INFORMATION REGARDING THE MERGER. Shareholders may obtain a
free copy of the proxy statement when it becomes available and other documents
filed by Lilly Industries with the Securities and Exchange Commission's website
at www.sec.gov. Security holders of Lilly Industries may also obtain for free a
copy of the proxy statement and other documents filed with the Securities and
Exchange Commission by Lilly Industries in connection with the merger by
contacting John C. Elbin, Chief Financial Officer at 317-814-8703. Lilly
Industries and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from the security holders of Lilly
Industries in favor of the merger. The directors and executive officers of Lilly
Industries include the following: James M. Cornelius, Paul K. Gaston, John D.
Peterson, Thomas E. Reilly, Jr., William C. Dorris, John C. Elbin, Douglas W.
Huemme, Harry Morrison, Ph.D., Norma J. Oman, Larry H. Dalton, Kenneth L. Mills
and Robert A. Taylor. Collectively, as of February 14, 2000, the directors and
executive officers of Lilly Industries may be deemed to beneficially own
approximately 2.7% of the outstanding shares of Lilly Industries Class A common
stock, approximately 37.0% of the outstanding shares of Lilly Industries Class B
common stock and approximately 3.5% of the total number of outstanding shares of
Lilly Industries Class A and Class B common stock taken together. Shareholders
of Lilly Industries may obtain additional information regarding the interests of
such participants by reading the proxy statement when it becomes available.
