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Filed by BioShield Technologies, Inc.
Pursuant to Rule 425 Under the Securities Act of 1933
And Deemed Filed Pursuant to Rule 14d-2 Under the
Securities Exchange Act of 1934
Subject Company: Arrow-Magnolia International, Inc.
(Commission File No. 0-24913)
FOR: BIOSHIELD TECHNOLOGIES, INC.
ARROW-MAGNOLIA INTERNATIONAL, INC.
NASDAQ: BSTI
ARWM
CONTACT: Scott Parliament
Chief Financial Officer
BioShield Technologies, Inc.
770-246-2000
Morris Shwiff Or: Larry Howell
Chairman The Howell Group
Arrow-Magnolia International, Inc. 214-368-1592
972-247-7111 Email: [email protected]
For Immediate Release
BIOSHIELD TO ACQUIRE SPECIALTY CHEMICAL MANUFACTURER
AND DISTRIBUTOR, ARROW-MAGNOLIA INTERNATIONAL
ACQUISITION TO ADD OVER $14 MILLION IN REVENUES
ATLANTA and DALLAS, July 7, 2000-BioShield Technologies, Inc. (Nasdaq:
BSTI) has entered into an agreement to acquire up to 85% of the outstanding
stock of Arrow-Magnolia International, Inc. (Nasdaq: ARWM) for cash and stock in
a transaction valued at approximately $17.2 million. Dallas-based Arrow-Magnolia
is engaged primarily in the manufacture and distribution of specialty chemical
products for use in cleaning and maintaining equipment, and generalized
maintenance and sanitation products. BioShield, based in Atlanta, has developed
surface modifying antimicrobials and biostatic products for a variety of end use
markets.
Tim Moses, Chairman, CEO and President of BioShield, commented, "We are
excited that we have entered into an agreement which will allow BioShield to
fast-track its growth and opportunities within the industrial and institutional
markets. This gives us new strengths outside of our organic growth plans.
Arrow-Magnolia has a strong history of sales growth and an established
distribution network. It provides a platform company for BioShield to expand its
sales of newly approved EPA products in the industrial and institutional
markets, while decreasing the time to market of these products and expanding
market coverage."
Morris Shwiff, Chairman of Arrow-Magnolia, said, "We are very pleased
and excited to now have the ability to compete in a marketplace not previously
available to us. The agreement with BioShield(TM) provides Arrow-Magnolia the
opportunity to be part of the latest breakthrough in EPA approved antimicrobial
technology. Arrow-Magnolia has prided itself in its sales and distribution
expertise. With this powerful combination of a strong research and development
organization, coupled with our sales and marketing capabilities, we now have the
ability to increase the sales revenues for
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both organizations."
Arrow-Magnolia has North American sales and distribution capabilities
served by a sales force of more than 100 individuals that produced over
$14,000,000 in sales and approximately $1,700,000 in EBITDA in 1999. The company
was formed in 1985 for the manufacturing, distribution and marketing of
specialty chemical products.
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BioShield/Arrow-Magnolia Page 2 of 3
July 7, 2000
TERMS OF THE AGREEMENT ARE AS FOLLOWS:
Arrow-Magnolia has outstanding, as of June 30, 2000, 3,248,566 shares of common
stock and 848,613 outstanding options and warrants.
- BioShield(TM) has agreed to purchase 85%, or 2,761,281 shares,
of Arrow-Magnolia's common stock for $5 per share in stock and
cash.
- The purchase price per share will consist of $4.41 cash; and
.05221 of a share of BioShield(TM) common stock, which
represents $0.59 in value based upon BioShield's average
closing bid price for the past five days.
- BioShield(TM) has agreed to purchase all the outstanding
options and warrants of Arrow- Magnolia for $4.75 cash, net of
strike price.
- BioShield(TM) estimates the total cost of the transaction to
be approximately $15.6 million cash and $1.6 million in stock.
BioShield(TM) anticipates that $10 million of the cash
purchase price will be provided by conventional bank
financing.
- Anticipated closing date of the transaction is September 30,
2000.
The transaction is subject to satisfaction of conditions set forth in the
agreement.
This press release contains forward-looking information regarding
Arrow-Magnolia International, Inc. and BioShield Technologies, Inc. The
forward-looking statements are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. Forward-looking
statements, including statements as to industry trends, future economic
performance, anticipated profitability, anticipated revenues and expenses,
anticipated transactions and closing dates for such transactions, planned
product development, and products or service line growth may be significantly
impacted by certain risks and uncertainties, including, but not limited to,
failure of the industry to develop at anticipated rates, failure of the
Companies' products and services and planned products and services to be timely
developed or to gain significant market acceptance, competition and other
economic factors. In addition, any statements contained in this report that are
not statements of historical fact may be deemed to be forward-looking
statements. Without limiting the generality of the foregoing, words such as
"may," "will," "expect," " believe," "anticipate," "intend," "could," "would,"
"estimate," or "continue," or the negative other variations thereof or
compatible terminology are intended to identify forward-looking statements.
These forward-looking statements speak only as of the date hereof, and the
Companies disclaim any intention of obligation to update these forward-looking
statements, all of which are difficult to predict and many of which are beyond
the control of the Companies, including areas such as: the early-stage
development of BioShield; the result of research and development efforts; future
capital needs; uncertainty of additional funding; and government regulations.
Additional risks and uncertainties are described in public filings of
Arrow-Magnolia International, Inc. and BioShield with the Securities and
Exchange Ccmmission.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
We urge investors and security holders to read the following documents,
when they become available, regarding the exchange offer (described above),
because they will contain important information:
- BioShield's preliminary prospectus, prospectus supplements,
final prospectus, and tender offer material.
- BioShield's Registration Statement on Form S-4 and Schedule TO
containing or incorporating by reference such documents and
other information.
- Arrow-Magnolia's Solicitation/Recommendation Statement on
Schedule 14D-9.
These documents and amendments to these documents will be filed with
the United States Securities and Exchange Commission.
Once they are filed with the SEC, the registration statement and other
documents will be available free of charge on the SEC website at www.sec.gov and
from the BioShield and Arrow- Magnolia contacts listed below.
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BioShield/Arrow-Magnolia Page 3 of 3
July 7, 2000
In addition to the registration statement and prospectus, BioShield and
Arrow-Magnolia file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any reports, statements or
other information filed by BioShield or Arrow-Magnolia at the SEC Public
Reference Rooms at 450 Fifth Street, N.W., Washington, D.C. 20549 or at any of
the SEC's other public reference rooms in New York and Chicago. Please call the
SEC at 1-800-SEC-0330 for further information on the public reference rooms.
BioShield's and Arrow-Magnolia's filings with the Commission are also available
free of charge to the public from commercial document-retrieval services and at
the website maintained by the SEC at http://www.sec.gov. These documents may
also be obtained from the BioShield and Arrow-Magnolia contacts listed below.
CONTACTS
BIOSHIELD(TM) TECHNOLOGIES, INC.
Scott Parliament
Chief Financial Officer, BioShield
770-246-2000
ARROW-MAGNOLIA INTERNATIONAL, INC.
Morris Shwiff
Chairman
972-247-7111
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