SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE TO
TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
Thermedics Detection Inc.
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(Name of Subject Company (Issuer))
Thermedics Inc. (Offeror)
Thermo Electron Corporation (Affiliate of Offeror)
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(Names of Filing Persons (Identifying Status as Offeror,
Issuer or Other Person))
Common Stock, $.01 par value
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(Title of Class of Securities)
88355E 10 5
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(CUSIP Number of Class of Securities)
Seth H. Hoogasian, Esq.
General Counsel
c/o Thermo Electron Corporation
81 Wyman Street
Waltham, Massachusetts 02454-9046
(781) 622-1000
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(Name, Address, and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of Filing Persons)
CALCULATION OF FILING FEE
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Transaction Valuation* Amount of Filing Fee
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Filing relates solely to preliminary None.
communications made before the
commencement of a tender offer.
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* Set forth the amount on which the filing fee is calculated and state how it
was determined.
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[ ] Check the 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: _____________
Form or Registration No.: _____________
Filing Party: ________________________
Date Filed: _________________________
[X] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[X] third-party tender offer subject to Rule 14d-1.
[X] issuer tender offer subject to Rule 13e-4.
[X] going-private transaction subject to Rule 13e-3.
[ ] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results
of the tender offer: [ ]
<PAGE>
PRESS RELEASE:
Investor Contact: 781-622-1111
Media Contact: 781-622-1252
Thermedics to Take Public Subsidiaries Private;
Announces Thermo Electron's Proposed Exchange Offer
WOBURN, Mass., January 31, 2000 - Thermedics Inc. (ASE-TMD) announced today that
it plans to take private its Thermedics Detection Inc. and Thermo Sentron Inc.
subsidiaries. Thermedics also announced that its parent company, Thermo Electron
Corporation (NYSE-TMO), proposes to take it private. In addition, the company
announced that it will seek a buyer for its Thermo Cardiosystems Inc.
subsidiary. These actions are part of a major reorganization plan under which
Thermo Electron will spin in, spin off, and sell various businesses to focus
solely on its core measurement and detection instruments business.
Thermedics will make cash tender offers of $8.00 per share for Thermedics
Detection, and $15.50 per share for Thermo Sentron, in order to bring its own
equity ownership in each of these companies to at least 90 percent. If
successful, each of these companies would then be spun into Thermedics through a
"short-form" merger at the same cash prices as the tender offers.
Thermedics currently owns approximately 83.6 percent and 74.2 percent of
Thermedics Detection and Thermo Sentron, respectively. Thermo Electron, which
currently owns approximately 5.3 percent and 12.4 percent of Thermedics
Detection and Thermo Sentron, respectively, will tender its shares to Thermedics
in these tender offers.
Following these tender offers, Thermedics, in turn, would be taken
private. Thermo Electron has announced that it will conduct an exchange offer
for any and all of the outstanding shares of Thermedics common stock held by
minority shareholders. In the exchange offer, holders of Thermedics common stock
will receive shares of Thermo Electron common stock in exchange for their
Thermedics shares. Thermo Electron expects to announce the exchange ratio for
this transaction shortly after Thermedics conducts the tender offers for
Thermedics Detection and Thermo Sentron.
Thermo Electron, which currently owns approximately 75.7 percent of the
outstanding shares of Thermedics common stock, will condition the exchange offer
on receiving acceptances from holders of enough shares so that, when combined
with its current share ownership, Thermo Electron's ownership reaches at least
90 percent. If Thermo Electron achieves this 90-percent-ownership threshold, it
will acquire all remaining outstanding shares of Thermedics through a short-form
merger. In the short-form merger, minority shareholders who do not participate
in the exchange offer would also receive shares of Thermo Electron common stock
in exchange for their Thermedics common stock at the same ratio.
The tender offers and exchange offer will require Securities and Exchange
Commission clearance of necessary filings; the exchange offer will require
establishment of the exchange ratio. The short-form merger would not require
Thermedics board or shareholder approval.
Thermedics plans to conduct its subsidiary tender offers during the second
quarter of 2000. If Thermedics successfully obtains ownership of at least 90
percent of the outstanding Thermo Sentron and Thermedics Detection shares, it
expects to complete these spin-ins by the end of the second quarter of 2000.
Thermo Electron plans to conduct the exchange offer for Thermedics common stock
during the
-more-
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third quarter of 2000. If Thermo Electron successfully obtains ownership of at
least 90 percent of the outstanding Thermedics shares, it expects to complete
the spin-in of Thermedics by the end of the third quarter of 2000.
Obligations under Thermedics' 2.88% convertible subordinated debentures
due June 1, 2003, and its 0% convertible subordinated debentures due June 1,
2003, would be assumed by Thermo Electron in the short-form merger, and the
debentures would be convertible into Thermo Electron common stock.
Upon completion of the proposed Thermedics spin-in, Thermedics' medical
equipment businesses, excluding Thermo Cardiosystems, would be contributed to a
new medical products company, which, in turn, would be spun off from Thermo
Electron as a dividend to Thermo Electron shareholders. Thermedics Detection and
Thermo Sentron will remain businesses of the new focused Thermo Electron
measurement and detection instruments company.
Sale of Thermo Cardiosystems
Thermedics has also announced that it will seek a buyer for Thermo
Cardiosystems. Thermo Electron and Thermedics have concluded that Thermo
Cardiosystems would better prosper as part of another organization providing
greater focus, resources, and targeted marketing strength.
Thermedics Inc. develops, manufactures, and markets diverse product lines,
including implantable heart-assist devices and other biomedical products,
security instruments, and equipment that assures the quality of a wide variety
of consumer products and bulk materials. Thermedics is a public subsidiary of
Thermo Electron Corporation. More information is available on the Internet at
http://www.thermo.com/subsid/tmd1.html.
OTHER IMPORTANT INFORMATION:
THE TENDER OFFERS DESCRIBED IN THIS ANNOUNCEMENT FOR THE OUTSTANDING SHARES OF
THERMEDICS DETECTION AND THERMO SENTRON COMMON STOCK HAVE NOT YET COMMENCED. AS
SOON AS THE TENDER OFFERS COMMENCE, WE WILL FILE TENDER OFFER STATEMENTS WITH
THE SECURITIES AND EXCHANGE COMMISSION. YOU SHOULD READ THE TENDER OFFER
STATEMENTS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE TENDER OFFERS. YOU CAN OBTAIN THE TENDER OFFER STATEMENTS
AND OTHER DOCUMENTS THAT ARE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
FOR FREE ON THE SECURITIES AND EXCHANGE COMMISSION'S WEB SITE AT
HTTP://WWW.SEC.GOV. IF YOU WRITE US OR CALL US, WE WILL SEND YOU THESE DOCUMENTS
FOR FREE WHEN THEY ARE AVAILABLE:
O TENDER OFFER STATEMENTS (EXCEPT FOR EXHIBITS)
O OFFERS TO PURCHASE
O LETTERS OF TRANSMITTAL
O NOTICES OF GUARANTEED DELIVERY
YOU CAN CALL US AT (781) 622-1111 OR WRITE TO US AT:
INVESTOR RELATIONS DEPARTMENT
THERMEDICS INC.
81 WYMAN STREET, P.O. BOX 9046
WALTHAM, MA 02454-9046
-MORE-
<PAGE>
THE EXCHANGE OFFER BY THERMO ELECTRON FOR OUR COMMON STOCK THAT IS DESCRIBED IN
THIS ANNOUNCEMENT HAS NOT YET COMMENCED. ONCE THE EXCHANGE OFFER COMMENCES, WE
WILL FILE A SOLICITATION/RECOMMENDATION STATEMENT WITH THE SECURITIES AND
EXCHANGE COMMISSION. YOU SHOULD READ THIS DOCUMENT WHEN IT BECOMES AVAILABLE
BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE EXCHANGE OFFER. YOU CAN
OBTAIN THE SOLICITATION/RECOMMENDATION STATEMENT AND OTHER DOCUMENTS THAT WILL
BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR FREE WHEN THEY ARE
AVAILABLE ON THE SECURITIES AND EXCHANGE COMMISSION'S WEB SITE AT
HTTP://WWW.SEC.GOV. ALSO, IF YOU WRITE US OR CALL US AT THE ABOVE ADDRESS AND
PHONE NUMBER, WE WILL SEND YOU THE SOLICITATION/RECOMMENDATION STATEMENT FOR
FREE WHEN IT IS AVAILABLE.
The following constitutes a "Safe Harbor" statement under the Private Securities
Litigation Reform Act of 1995: This press release contains forward-looking
statements that involve a number of risks and uncertainties. Important factors
that could cause actual results to differ materially from those indicated by
such forward-looking statements are set forth under the heading "Forward-looking
Statements" in Exhibit 13 to the company's annual report on Form 10-K for the
year ended January 2, 1999. These include risks and uncertainties relating to:
government regulation and industry standards, competition and technological
change, intellectual property rights, reimbursement by insurers for medical
procedures, medical community acceptance of medical devices, availability of
materials and components, product liability, international operations, the
company's spinout and acquisition strategies, and the potential impact of the
year 2000 on processing date-sensitive information.
<PAGE>
# # #
SCRIPT:
Talking Points for Conference Call, January 31, 2000
We are announcing today a bold plan to deliver shareholder value by splitting
the company into three independent entities - vastly simplify Thermo Electron
There are three components:
1. Spinning in almost all remaining public subsidiaries
2. Spinning off to shareholders two companies: Thermo Fibertek and newly
created Medical Products company
3. Selling businesses with approximately $1.2 billion in revenues
Ultimately - when all is said and done - Thermo Electron will become ONE
integrated, publicly traded company
- TMO shareholders should have added value by owning three entirely
independent and separate companies:
Each focused on its own customers and markets
Each with strong competitive positions in the markets they address
Each with solid growth prospects.
- Spin-ins and spinoffs will eliminate structural complexity - easier
for both shareholders and managers
- TMO will focus solely on core measurement and detection business
- Divestitures will generate significant cash to support aggressive
growth plans for the measurement and detection instruments business
- fund internal growth and acquisitions
- Goal is to become pre-eminent global instrument company.
- Emerge as one highly integrated company
1
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This plan is result of six months of complete review of Thermo's operations
with help of McKinsey, J.P. Morgan, and the Beacon Group:
- Everything was on table in review of our businesses - we considered
every major alternative
- Our sole objective: create value for shareholders - this one, by far,
will offer the most value to shareholders
Timeframe:
- We recognize speed is very important - so we are proceeding on an
accelerated basis
- We have outlined in this plan definitive time frames and definitive
steps.
Spin-ins:
- Essentially completed: 9 of the 12 transactions announced in May
- Today we have announced the terms for the 3 remaining deals pending
from May
- As well as 7 new spin-ins
- We announced terms for 8 spin-ins this morning - 7 cash and 1 stock
- Our goal is to complete 7 cash spin-ins in Q2 - and to complete other
3 spin-ins in Q3
2
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Spin-offs:
- We are announcing the spin-off of Fibertek/Fibergen and a new Medical
Products company, created by combining many of our existing businesses
- Need favorable letter ruling from IRS - Had a positive meeting with
IRS to review our plans
- Time frame largely dictated by IRS: expect to complete spinoffs late
2000 or early 2001
Divestitures:
- We are announcing divestitures of businesses with revenues of $1.2
billion
- We expect these divestitures to generate proceeds of approximately $1
billion
- Already generated approximately $180 million in pretax proceeds from
divestitures we've completed since May
- Starting to work immediately on new divestitures and expect to
complete deals within one year - some already underway
- Selling many excellent businesses (e.g. Cardio and Retec) that have
strong prospects but will fit better with more strategically aligned
owner
Thermo Ecotek
- Committed to spin-in, but under new focused strategy, no longer a core
business. Continuing to evaluate strategic options
- Ecotek will proceed with its ongoing power projects using its own
resources to fund development
3
<PAGE>
Thermo Electron shareholders will own shares in three strong, independent
companies:
Fibertek
- Almost $250 million in revenues with strong core business addressing
paper industry and exciting Fibergen new venture focusing on
fiber-based composite materials
- Core business excellent bookings Q3+Q4, and rebounding from slump in
paper market
- Better able to raise capital to expand into other industries with
separation technology
- Large upside potential with Fibergen's new fiber-based composite
materials. Fibergen just starting to sell its new plastic wood
product. Fibergen has proprietary process to create competitive
product with very strong specs that addresses large potential market.
Medical Products company
- Approximately $350 million in revenues consisting mostly of
respiratory and pulmonary care, as well as in neurodiagnostic and
patient monitoring businesses.
- Strong niche positions - #1 in neurodiagnostic and monitoring
equipment (lots of potential with new trend toward telemedicine and
remote monitoring) and #2 in respiratory and pulmonary care products,
highly profitable businesses
- Now will be managed for higher revenue growth
- Started search for CEO with strong medical products industry
background
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<PAGE>
The New Thermo Electron - Measurement and Detection Instruments
- Roughly $2.5 billion company with strong position in many markets it
addresses
- If you look at the current market valuation of our instruments
business compared to our principal competitors, you will see that we
are substantially undervalued
- Strong growth prospects, particularly in our businesses that serve
customers in life sciences and telecommunication industries.
- We plan to invest significant resources in expanding these two areas -
through internal R&D, strategic partnerships, and complementary
acquisitions
- And we will have the money to do it - nearly a billion dollars from
divestitures
Thermo Electron vision is very clear and straightforward:
To channel ALL our resources - financial, human, and technological - to become
the preeminent provider of measurement and detection instruments in exciting
markets, such as life sciences and telecommunications
- Thermo Electron tradition of product innovation and excellence
continues
- Our mission remains the same: use technology to solve society's
pressing problems by identifying and bringing new technologies to the
marketplace and providing superior value to our customers
- Renewed focus on growth - with an emphasis on internal growth
Thermo Electron is poised to deliver value to shareholders, employees, and
customers - We're very excited about this plan and have already hit the ground
running
5
<PAGE>
OTHER IMPORTANT INFORMATION:
THE TENDER OFFERS DESCRIBED IN THIS ANNOUNCEMENT FOR THE OUTSTANDING SHARES OF
THERMEDICS DETECTION AND THERMO SENTRON COMMON STOCK HAVE NOT YET COMMENCED. AS
SOON AS THE TENDER OFFERS COMMENCE, WE WILL FILE TENDER OFFER STATEMENTS WITH
THE SECURITIES AND EXCHANGE COMMISSION. YOU SHOULD READ THE TENDER OFFER
STATEMENTS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE TENDER OFFERS. YOU CAN OBTAIN THE TENDER OFFER STATEMENTS
AND OTHER DOCUMENTS THAT ARE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
FOR FREE ON THE SECURITIES AND EXCHANGE COMMISSION'S WEB SITE AT
HTTP://WWW.SEC.GOV. IF YOU WRITE US OR CALL US, WE WILL SEND YOU THESE DOCUMENTS
FOR FREE WHEN THEY ARE AVAILABLE:
O TENDER OFFER STATEMENTS (EXCEPT FOR EXHIBITS)
O OFFERS TO PURCHASE
O LETTERS OF TRANSMITTAL
O NOTICES OF GUARANTEED DELIVERY
YOU CAN CALL US AT (781) 622-1111 OR WRITE TO US AT:
INVESTOR RELATIONS DEPARTMENT
THERMEDICS INC.
81 WYMAN STREET, P.O. BOX 9046
WALTHAM, MA 02454-9046
-MORE-
<PAGE>
THE EXCHANGE OFFER BY THERMO ELECTRON FOR OUR COMMON STOCK THAT IS DESCRIBED IN
THIS ANNOUNCEMENT HAS NOT YET COMMENCED. ONCE THE EXCHANGE OFFER COMMENCES, WE
WILL FILE A SOLICITATION/RECOMMENDATION STATEMENT WITH THE SECURITIES AND
EXCHANGE COMMISSION. YOU SHOULD READ THIS DOCUMENT WHEN IT BECOMES AVAILABLE
BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE EXCHANGE OFFER. YOU CAN
OBTAIN THE SOLICITATION/RECOMMENDATION STATEMENT AND OTHER DOCUMENTS THAT WILL
BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR FREE WHEN THEY ARE
AVAILABLE ON THE SECURITIES AND EXCHANGE COMMISSION'S WEB SITE AT
HTTP://WWW.SEC.GOV. ALSO, IF YOU WRITE US OR CALL US AT THE ABOVE ADDRESS AND
PHONE NUMBER, WE WILL SEND YOU THE SOLICITATION/RECOMMENDATION STATEMENT FOR
FREE WHEN IT IS AVAILABLE.
