<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
SCHEDULE TO
(Rule 14d-100)
TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
-----------------------
THERMEDICS DETECTION INC.
(Name of Subject Company)
DETECTION ACQUISITION, INC.
(Offeror)
CORPAK INC.
(Offeror)
THERMEDICS INC.
(Offeror)
THERMO ELECTRON CORPORATION
(Offeror)
COMMON STOCK, PAR VALUE $0.10 PER SHARE
(Title of Class of Securities)
CUSIP 88355E 10 5
(CUSIP Number of Class of Securities)
Seth H. Hoogasian, Esq.
General Counsel
Thermo Electron Corporation
81 Wyman Street
Waltham, Massachusetts 02454-9046
(781) 622-1000
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Filing Persons)
with a copy to:
David E. Redlick, Esq.
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
(617) 526-6000
-----------------------
<PAGE> 2
CALCULATION OF FILING FEE
<TABLE>
<S> <C> <C> <C>
Transaction Valuation(1): $26,472,976 Amount of Filing Fee(2): $5,294.60
- --------------------
</TABLE>
(1) For purposes of calculating fee only. This amount is based upon (a) the
maximum number of Shares to be purchased pursuant to the Offer and (b)
the price offered per Share.
(2) The amount of the filing fee, calculated in accordance with Regulation
240.0-11 under the Securities Exchange Act of 1934, as amended, equals
1/50 of one percent of the Transaction Valuation.
[ ] 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.
<TABLE>
<S> <C> <C>
Amount Previously Paid: Not applicable
Form or Registration No.: Not applicable
Filing Party: Not applicable
Date Filed: Not applicable
</TABLE>
[ ] 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.
[ ] issuer tender offer subject to Rule 13e-4.
[X] going-private transaction subject to Rule 13e-3.
[X] 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: [ ]
SCHEDULE 13D INFORMATION
-----------------------------------------------------------------------
1. NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Thermo Electron Corporation
IRS No. 04-2209186
-----------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
-----------------------------------------------------------------------
3. SEC USE ONLY
-----------------------------------------------------------------------
4. SOURCE OF FUNDS*
WC
-----------------------------------------------------------------------
<PAGE> 3
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]
-----------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
State of Delaware
-----------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES
BENEFICIALLY 17,180,198
OWNED BY -----------------------------------------------------
EACH
REPORTING 8. SHARED VOTING POWER
PERSON WITH
0
-----------------------------------------------------------------------
9. SOLE DISPOSITIVE POWER
17,180,198
-----------------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
0
-----------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
17,180,198
-----------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
-----------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
88.9%
-----------------------------------------------------------------------
14. TYPE OF REPORTING PERSON*
CO
-----------------------------------------------------------------------
<PAGE> 4
This Tender Offer Statement on Schedule TO (the "Statement")relates
to the offer by Detection Acquisition, Inc., a Delaware corporation (the
"Purchaser") and an indirect wholly-owned subsidiary of Thermedics Inc., a
Massachusetts corporation ("Thermedics"), to purchase all outstanding shares of
common stock, par value $0.10 per share (the "Shares"), of Thermedics Detection
Inc., a Massachusetts corporation (the "Company"), at a purchase price of $8.00
per Share net to the seller in cash, without interest thereon, upon the terms
and subject to the conditions set forth in the Offer to Purchase dated March 10,
2000 (the "Offer to Purchase"), a copy of which is attached hereto as Exhibit
12(a)(1), and in the related Letter of Transmittal (which, together with the
Offer to Purchase, constitute the "Offer"), a copy of which is attached hereto
as Exhibit 12(a)(2). The information in the Offer to Purchase under the captions
"Summary", "Introduction", "Special Factors", "The Tender Offer", "Certain
Federal Income Tax Consequences", "Price Range Of The Shares; Dividends",
"Certain Information Concerning The Company", "Certain Information Concerning
The Purchaser, Corpak, Thermedics And Thermo Electron", "Source And Amount Of
Funds", "The Merger; Appraisal Rights", "Miscellaneous" and "Fees And Expenses"
and Schedules I, II and III to the Offer to Purchase are incorporated herein by
reference as set forth below.
ITEM 1. SUMMARY TERM SHEET.
See the section of the Offer to Purchase captioned "Summary".
ITEM 2. SUBJECT COMPANY INFORMATION.
(a) See the section of the Offer to Purchase captioned "Certain
Information Concerning The Company".
(b) See the section of the Offer to Purchase captioned "Introduction".
(c) See the section of the Offer to Purchase captioned "Price Range Of
The Shares; Dividends".
ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON.
(a) See the section of the Offer to Purchase captioned "Certain
Information Concerning The Purchaser, Corpak, Thermedics And Thermo Electron"
and Schedule I to the Offer to Purchase ("Members Of The Boards Of Directors And
Executive Officers Of The Purchaser, Corpak, Thermedics And Thermo Electron").
(b) See the section of the Offer to Purchase captioned "Certain
Information Concerning The Purchaser, Corpak, Thermedics And Thermo Electron"
and Schedule I to the Offer to Purchase ("Members Of The Boards Of Directors And
Executive Officers Of The Purchaser, Corpak, Thermedics And Thermo Electron").
-1-
<PAGE> 5
(c) See the section of the Offer to Purchase captioned "Certain
Information Concerning The Purchaser, Corpak, Thermedics And Thermo Electron"
and Schedule I to the Offer to Purchase ("Members Of The Boards Of Directors And
Executive Officers Of The Purchaser, Corpak, Thermedics And Thermo Electron").
ITEM 4. TERMS OF THE TRANSACTION.
(a) See the sections of the Offer to Purchase captioned "Summary",
"Introduction", "Special Factors - The Merger", "Special Factors - Other
Possible Purchases Of Shares", "The Tender Offer - Terms Of The Offer;
Expiration Date", "The Tender Offer - Acceptance For Payment And Payment For
Shares", "The Tender Offer - Procedures For Accepting The Offer And Tendering
Shares", "The Tender Offer - Withdrawal Rights" and "Certain Federal Income Tax
Consequences".
ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
(a) See the sections of the Offer to Purchase captioned "Special
Factors - Conflicts Of Interest - Executive Officers and Directors of the
Company" and "Certain Information Concerning The Purchaser, Corpak, Thermedics
And Thermo Electron - Certain Transactions" and Schedule I to the Offer to
Purchase ("Members Of The Boards Of Directors And Executive Officers Of The
Purchaser, Corpak, Thermedics And Thermo Electron").
(b) See the sections of the Offer to Purchase captioned "Special
Factors - Background To The Offer And The Merger", "Special Factors - Conduct Of
The Company's Business After The Offer And The Merger" and "Certain Information
Concerning The Purchaser, Corpak, Thermedics And Thermo Electron - Certain
Transactions" and Schedule II to the Offer to Purchase ("Information Concerning
Transactions In The Common Stock Of The Company").
ITEM 6. PURPOSE OF THE TRANSACTION AND PLANS OR PROPOSALS.
(a) and (c)(1)-(7) See the sections of the Offer to Purchase captioned
"Introduction", "Special Factors - Background To The Offer And The Merger",
"Special Factors - Reasons For The Offer And The Merger", "Special Factors - The
Merger", "Special Factors - Other Possible Purchases Of Shares", "Special
Factors - Certain Effects Of The Offer And The Merger", "Special Factors -
Conduct Of The Company's Business After The Offer And The Merger", "Special
Factors - Conduct Of The Company's Business If The Offer Is Not Completed" and
"The Merger; Appraisal Rights".
ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a), (b) and (d) See the section of the Offer to Purchase captioned
"Source And Amount Of Funds".
-2-
<PAGE> 6
ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) See the section of the Offer to Purchase captioned "Introduction"
and Schedule I to the Offer to Purchase ("Members Of The Boards Of Directors And
Executive Officers Of The Purchaser, Corpak, Thermedics And Thermo Electron").
(b) See Schedule II to the Offer to Purchase ("Information Concerning
Transactions In The Common Stock Of The Company").
ITEM 9. PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED.
(a) See the sections of the Offer to Purchase captioned "Introduction"
and "Fees And Expenses".
ITEM 10. FINANCIAL STATEMENTS.
(a) The financial statements of the Purchaser, Corpak Inc., a
Massachusetts corporation ("Corpak") and a wholly-owned subsidiary of
Thermedics, Thermedics and Thermo Electron Corporation, a Delaware corporation
("Thermo Electron"), are not material to the Offer.
(b) The pro forma financial statements of the Purchaser, Corpak,
Thermedics and Thermo Electron are not material to the Offer.
ITEM 11. ADDITIONAL INFORMATION.
(a)(1) None.
(a)(2) See the sections of the Offer to Purchase captioned
"Introduction", "The Tender Offer - Acceptance For Payment And Payment For
Shares" and "The Tender Offer - Certain Legal Matters; Regulatory Approvals".
(a)(3) See the section of the Offer to Purchase captioned "Certain
Legal Matters; Regulatory Approvals."
(a)(4) See the section of the Offer to Purchase captioned "Special
Factors - Certain Effects Of The Offer And The Merger".
(a)(5) None.
(b) The information set forth in the Offer to Purchase and the Letter
of Transmittal is incorporated herein by reference.
ITEM 12. EXHIBITS.
(a)(1) Offer to Purchase dated March 10, 2000.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
-3-
<PAGE> 7
(a)(4) Letter from the Dealer Managers to Brokers, Dealers,
Commercial Banks, Trust Companies and Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Nominees.
(a)(6) Summary Advertisement as published on March 10, 2000.
(a)(7) Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9.
(a)(8) Press Release issued by Thermedics on January 31, 2000
(incorporated herein by reference to Exhibit 99 to the Current Report on Form
8-K of Thermedics filed with the Commission on February 1, 2000).
(a)(9) Press Release issued by Thermo Electron on January 31, 2000
(incorporated herein by reference to Exhibit 99 to the Current Report on Form
8-K of Thermo Electron filed with the Commission on February 1, 2000).
(a)(10) Press Release issued by Thermedics on March 10, 2000.
(a)(11) Press Release issued by Thermo Electron on March 6, 2000.
(b) Loan Agreement dated as of March 1, 2000 between Thermo
Electron and Thermedics.
(d) None.
(g) Slide Presentation of Thermo Electron to Financial Analysts.
(h) None.
ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3.
Item 2. Subject Company Information.
(d) See the section of the Offer to Purchase captioned
"Price Range Of The Shares; Dividends".
(e) See the section of the Offer to Purchase captioned
"Certain Information Concerning The Company".
(f) See Schedule II to the Offer to Purchase
("Information Concerning Transactions In The Common Stock Of The Company").
Item 4. Terms of the Transaction.
(c) None.
(d) See the section of the Offer to Purchase captioned
"The Merger; Appraisal Rights".
(e) See the section of the Offer to Purchase captioned
"Certain Information Concerning The Company".
(f) Not applicable.
-4-
<PAGE> 8
Item 5. Past Contacts, Transactions, Negotiations and Agreements.
(c) See the sections of the Offer to Purchase captioned
"Introduction" and "Special Factors - Background To The Offer And The Merger".
(e) See the sections of the Offer to Purchase captioned
"Special Factors - The Merger" and "Source And Amount Of Funds".
Item 6. Purposes of the Transaction and Plans or Proposals
(b) See the section of the Offer to Purchase captioned
"Special Factors - The Merger".
(c)(8) See the section of the Offer to Purchase captioned
"Special Factors - Certain Effects Of The Offer And The Merger".
Item 7. Purposes, Alternatives, Reasons and Effects.
(a), (b) and (c) See the sections of the Offer to Purchase
captioned "Introduction", "Special Factors - Background To The Offer And The
Merger", "Special Factors - Reasons For The Offer And The Merger" and "Special
Factors - Position Of Thermedics And Thermo Electron As To Fairness Of The Offer
And The Merger".
(d) See the sections of the Offer to Purchase captioned
"Special Factors - Certain Effects Of The Offer And The Merger", "Special
Factors - Conduct Of The Company's Business After The Offer And The Merger",
"Special Factors - Conduct Of The Company's Business If The Offer Is Not
Completed", "Certain Federal Income Tax Consequences" and "The Merger; Appraisal
Rights".
Item 8. Fairness of the Transaction.
(a), (b), (c), (d), (e) and (f) See the sections of the
Offer to Purchase captioned "Special Factors - Background To The Offer And The
Merger", "Special Factors - Position Of Thermedics And Thermo Electron As To
Fairness Of The Offer And The Merger", "Special Factors - Summary Of The
Advisors' Analysis And Opinion", "Special Factors - Certain Projected Financial
Data", "Special Factors - Other Possible Purchases Of Shares" and "Special
Factors - The Merger."
Item 9. Reports, Opinions, Appraisals and Negotiations.
(a), (b) and (c) See the sections of the Offer to Purchase
captioned "Special Factors - Summary Of The Advisors' Analysis And Opinion" and
"Special Factors - Certain Projected Financial Data".
Item 10. Source and Amount of Funds or Other Consideration.
(c) See the section of the Offer to Purchase captioned
"Fees And Expenses".
-5-
<PAGE> 9
Item 12. The Solicitation or Recommendation.
(d) See the section of the Offer to Purchase captioned
"Special Factors - Conflicts Of Interest".
(e) Except for the positions of the members of the
Special Committee of the Board of Directors of the Company and the Boards of
Directors of Thermo Electron and Thermedics as set forth in the sections of the
Offer to Purchase captioned "Special Factors - Background To The Offer And The
Merger" and "Special Factors - Position Of Thermedics And Thermo Electron As To
Fairness Of The Offer And The Merger", the filing persons are not aware of any
officer, director or affiliate of the Company or any person listed on Schedule I
to the Offer to Purchase who has made a recommendation either in support of or
against the Offer.
Item 13. Financial Statements.
(a)(1) The audited consolidated financial statements of the
Company as of and for the fiscal years ended January 2, 1999 and January 3, 1998
are incorporated herein by reference to the Consolidated Financial Statements of
the Company included as Exhibit 13 to the Company's Annual Report on Form 10-K
for the fiscal year ended January 2, 1999 filed with the Securities and Exchange
Commission (the "Commission") on March 16, 1999.
(2) The unaudited consolidated financial statements of
the Company for the three and nine month fiscal periods ended October 2, 1999
are incorporated herein by reference to Item 1 ("Financial Statements") of Part
I of the Company's Quarterly Report on Form 10-Q for the quarter ended October
2, 1999 filed with the Commission on November 5, 1999.
(3) See the section of the Offer to Purchase captioned
"Certain Information Concerning the Company - Selected Consolidated Financial
Information".
(b) Pro-forma financial statements of the Company are not
material to the Offer.
Item 14. Persons/Assets Retained, Employed, Compensated or Used.
(b) None.
Item 16. Exhibits.
(c) Opinion of J.P. Morgan Securities Inc. and The Beacon
Group Capital Services, LLC dated January 29, 2000.
(f) Statement of Appraisal Rights. See the section of the
Offer to Purchase captioned "The Merger; Appraisal Rights".
-6-
<PAGE> 10
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.
DETECTION ACQUISITION, INC.
By: /s/ John T. Keiser
_____________________________
Name: John T. Keiser
Title: President
CORPAK INC.
By: /s/ Sandra L. Lambert
_____________________________
Name: Sandra L. Lambert
Title: Clerk
THERMEDICS INC.
By: /s/ John T. Keiser
_____________________________
Name: John T. Keiser
Title: President and Chief
Executive Officer
THERMO ELECTRON CORPORATION
By: /s/ Theo Melas-Kyriazi
_____________________________
Name: Theo Melas-Kyriazi
Title: Vice President and Chief
Financial Officer
Date: March 10, 2000
-7-
<PAGE> 11
<TABLE>
<CAPTION>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
<S> <C>
12(a)(1) Offer to Purchase dated March 10, 2000
12(a)(2) Letter of Transmittal
12(a)(3) Notice of Guaranteed Delivery
12(a)(4) Letter from the Dealer Managers to Brokers,
Dealers, Commercial Banks, Trust Companies and
Nominees
12(a)(5) Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Nominees
12(a)(6) Summary Advertisement as published on March 10,
2000
12(a)(7) Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9
12(a)(8) Press Release issued by Thermedics on January 31,
2000 (incorporated herein by reference to Exhibit
99 to the Current Report on Form 8-K of Thermedics
filed with the Commission on February 1, 2000)
12(a)(9) Press Release issued by Thermo Electron on January
31, 2000 (incorporated herein by reference to
Exhibit 99 to the Current Report on Form 8-K by
Thermo Electron filed with the Commission on
February 1, 2000)
12(a)(10) Press Release issued by Thermedics on March 10,
2000
12(a)(11) Press Release issued by Thermo Electron on March
6, 2000
12(b) Loan Agreement dated March 1, 2000 between Thermo
Electron and Thermedics
12(c) Opinion of J.P. Morgan Securities Inc. and The
Beacon Group Capital Services, LLC dated January
29, 2000
12(d) Not applicable
12(e) Not applicable
12(f) Summary of Appraisal Rights (Included in Exhibit
12(a)(1) in the section captioned "The Merger;
Appraisal Rights")
12(g) Slide Presentation of Thermo Electron to Financial
Analysts
12(h) Not applicable
</TABLE>
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
THERMEDICS DETECTION INC.
AT
$8.00 NET PER SHARE
BY
DETECTION ACQUISITION, INC.
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
THERMEDICS INC.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, APRIL 6, 2000, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF
SHARES OF COMMON STOCK OF THERMEDICS DETECTION INC. (THE "COMPANY") WHICH,
TOGETHER WITH SHARES OWNED BY THERMO ELECTRON CORPORATION AND ITS SUBSIDIARIES,
INCLUDING THERMEDICS INC., CONSTITUTES AT LEAST NINETY PERCENT (90%) OF THE
OUTSTANDING SHARES OF THE COMPANY ON THE EXPIRATION DATE. AS OF JANUARY 28,
2000, THERMO ELECTRON CORPORATION AND ITS SUBSIDIARIES OWNED AN AGGREGATE OF
17,180,198 SHARES OF THE COMPANY'S OUTSTANDING COMMON STOCK, WHICH CONSTITUTED
88.9% OF THE OUTSTANDING SHARES OF COMMON STOCK ON SUCH DATE. THE OFFER IS ALSO
SUBJECT TO OTHER IMPORTANT TERMS AND CONDITIONS CONTAINED IN THIS OFFER TO
PURCHASE.
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THIS OFFER, PASSED UPON THE FAIRNESS
OR MERITS OF THIS OFFER OR DETERMINED WHETHER THIS OFFER TO PURCHASE IS ACCURATE
OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIME.
------------------------
The Dealer Managers for the Offer are:
J.P. MORGAN SECURITIES INC.
AND
THE BEACON GROUP CAPITAL SERVICES, LLC
March 10, 2000
<PAGE> 2
- --------------------------------------------------------------------------------
SUMMARY
Before you make any decision with respect to the tender offer, you should
read the following summary together with the more detailed information included
elsewhere in this Offer to Purchase. This summary and the remainder of this
Offer to Purchase include information regarding the tender offer, the proposed
subsequent short-form merger, Thermedics Detection Inc. and the position of
Thermedics Inc. and Thermo Electron Corporation regarding the fairness of the
terms of the tender offer and the merger.
- - PRINCIPAL TERMS OF THE TENDER OFFER AND THE MERGER.
- Tender Offer For All Outstanding Shares (pages 7 and 32). Detection
Acquisition, Inc., an indirect wholly-owned subsidiary of Thermedics
Inc., is offering to purchase in a tender offer all of the outstanding
shares of common stock of Thermedics Detection Inc. that Thermo Electron
Corporation and its subsidiaries, including Thermedics, do not currently
own.
- Affiliation of Thermedics Detection, Detection Acquisition, Corpak,
Thermedics and Thermo Electron (page 7). Thermedics Detection is a
majority-owned subsidiary of Corpak Inc., which in turn is a wholly-owned
subsidiary of Thermedics. Detection Acquisition is a wholly-owned
subsidiary of Corpak. Thermedics is a majority-owned subsidiary of Thermo
Electron. Certain officers and directors of Thermedics and Thermo
Electron are also officers or directors of Thermedics Detection. See
"Certain Information Concerning The Company" and "Certain Information
Concerning The Purchaser, Corpak, Thermedics And Thermo Electron."
- Tender Offer Price (pages 7 and 43). The consideration being offered in
the tender offer is $8.00 per share in cash. This price is equal to a
premium of approximately 11.3% over the last reported sale price of
Thermedics Detection common stock on the American Stock Exchange on the
last trading date prior to the initial announcement, on August 12, 1998,
of our intention to take Thermedics Detection private for cash or stock,
and a premium of approximately 4.9% over the last reported sale price of
Thermedics Detection common stock on the last trading date prior to the
announcement, on December 10, 1998, of our intention to take Thermedics
Detection private for cash. The last reported sale price of Thermedics
Detection common stock on the American Stock Exchange on January 28,
2000, the day prior to the date that the tender offer was announced, was
$7.9375 per share. The last reported sale price of Thermedics Detection
common stock on the American Stock Exchange on March 8, 2000 was $7.75
per share. For more information regarding the trading range of Thermedics
Detection common stock, see "Price Range Of The Shares; Dividends."
- Conditions to the Tender Offer (page 37). The tender offer is subject to
a number of conditions, including the condition that enough shares of
Thermedics Detection common stock are tendered and not withdrawn so that
on the expiration date of the tender offer Thermo Electron and its
subsidiaries, including Thermedics, will together own at least 90% of
Thermedics Detection's outstanding shares. Assuming that no outstanding
Thermedics Detection stock options are exercised, this 90% tender
condition will be met if at least 204,818 shares of Thermedics Detection
common stock are validly tendered and not withdrawn prior to the
expiration date of the tender offer. See "The Tender Offer--Certain
Conditions Of The Offer."
- Thermedics Detection Shares Outstanding; Ownership by Thermo Electron and
its Subsidiaries (page 7). As of January 28, 2000, Thermedics Detection
had 19,316,684 shares of common stock outstanding. In addition, options
to purchase 1,009,413 shares of Thermedics Detection common stock were
outstanding at such date. Thermo Electron and its subsidiaries owned in
the aggregate 17,180,198 shares of Thermedics Detection common stock, or
approximately 88.9% of the outstanding shares of Thermedics Detection
common stock, on January 28, 2000.
- Expiration of the Tender Offer (page 32). The tender offer will expire
at 12:00 midnight on April 6, 2000. We can elect at any time to extend
the tender offer. If we extend the tender offer,
- --------------------------------------------------------------------------------
2
<PAGE> 3
- --------------------------------------------------------------------------------
we will issue a press release announcing the extension. See "The Tender
Offer--Terms Of The Offer; Expiration Date."
- Procedures for Accepting the Tender Offer and Tendering Shares (page
34). In order for your shares of Thermedics Detection common stock to be
purchased in the tender offer, you must follow the procedures described
in "The Tender Offer--Procedures For Accepting The Offer And Tendering
Shares" and in the accompanying Letter of Transmittal prior to the
expiration of the tender offer.
- Payment for Tendered Shares (page 33). If all of the conditions of the
tender offer are satisfied or waived and your shares of Thermedics
Detection common stock are accepted for payment, we will pay you for your
shares promptly after the expiration of the tender offer. See "The Tender
Offer--Acceptance For Payment And Payment For Shares."
- Withdrawal Rights (page 37). You may withdraw shares that you have
tendered at any time on or prior to April 6, 2000, or, if the tender
offer is extended, prior to the expiration of the tender offer. Unless
accepted for payment on or prior to May 8, 2000, you may also withdraw
shares you have tendered at any time after that date. In order for a
withdrawal to be effective, American Stock Transfer & Trust Company, the
depositary for the tender offer, must receive your notice of withdrawal
prior to the expiration of the tender offer at one of the addresses on
the back cover of this Offer to Purchase. For more information on your
withdrawal rights, see "The Tender Offer--Withdrawal Rights."
- Subsequent Merger (pages 27 and 52). The tender offer is the first step
in Thermedics' plan to take Thermedics Detection private. If the tender
offer is completed, Thermo Electron and its subsidiaries, including
Thermedics, will together own at least 90% of Thermedics Detection's
outstanding shares. Promptly following the closing of the tender offer,
Corpak and Thermo Electron plan to contribute their shares of Thermedics
Detection common stock to Detection Acquisition in exchange for common
stock of Detection Acquisition. Corpak and Thermo Electron would then
cause Thermedics Detection to merge with and into Detection Acquisition
in a so-called "short-form" merger. In the Merger, Detection Acquisition
would be the surviving corporation and would change its name to
"Thermedics Detection Inc." After the merger, the surviving corporation
would be owned exclusively by Thermedics, through its ownership of
Corpak, and Thermo Electron. Detection Acquisition does not intend to
enter into a merger agreement with Thermedics Detection or to seek the
approval of the board of directors of Thermedics Detection for such
merger. Stockholders of Thermedics Detection who do not tender their
shares of Thermedics Detection common stock in the tender offer will not
be entitled to vote their shares with respect to this merger, but will
have a statutory right to demand a judicial appraisal of the fair value
of their shares of Thermedics Detection common stock. See "The Merger;
Appraisal Rights." The consideration in the merger would be the same
$8.00 per share in cash as is payable in the tender offer. See "Special
Factors--The Merger."
- Other Possible Purchases of Thermedics Detection Common Stock (page
27). If, after the tender offer is completed but prior to consummation
of the merger, the aggregate ownership by Thermo Electron and its
subsidiaries of the outstanding shares of Thermedics Detection common
stock should fall below 90% due to the exercise of outstanding options or
for any other reason, Detection Acquisition intends to acquire additional
shares of Thermedics Detection common stock on the open market or in
privately negotiated transactions to the extent required for the
aggregate ownership of Thermedics Detection common stock by Thermo
Electron and its subsidiaries to equal or exceed 90%. These purchases
would be made at market prices or privately negotiated prices at the time
of purchase, which may be higher or lower than the price of $8.00 per
share in the tender offer and the merger. See "Special Factors--Other
Possible Purchases of Shares."
- Source of Funds (page 51). The total amount of funds required for
Detection Acquisition to purchase all of the outstanding shares of
Thermedics Detection common stock pursuant to the tender offer and
merger, assuming no outstanding options are exercised, and to pay related
expenses
- --------------------------------------------------------------------------------
3
<PAGE> 4
- --------------------------------------------------------------------------------
is estimated to be approximately $18.5 million. Detection Acquisition
will obtain the funds to purchase the Thermedics Detection common stock
in the tender offer and the merger from Thermedics as a loan or a capital
contribution. Thermedics intends to use a combination of its own working
capital and borrowings from Thermo Electron to fund this loan or capital
contribution. Thermo Electron has committed to provide any required loan
financing to Thermedics. Because the tender offer and the merger are for
cash and Thermedics and Thermo Electron have access to sufficient cash to
fund the tender offer and the merger, we do not believe that the
financial condition of Thermedics, Thermo Electron, Corpak or Detection
Acquisition is relevant to your decision whether to tender your shares in
the tender offer. See "Source And Amount Of Funds."
- - THERMEDICS' AND THERMO ELECTRON'S POSITION ON THE FAIRNESS OF THE OFFER AND
THE MERGER (PAGE 15).
- Determinations of Boards of Directors of Thermedics and Thermo
Electron. The boards of directors of Thermedics and Thermo Electron
determined that the terms of the tender offer and the merger are fair to
the stockholders of Thermedics Detection. In considering the fairness of
the tender offer and the merger from a financial point of view to
Thermedics Detection's stockholders, the boards of directors of
Thermedics and Thermo Electron reviewed and relied in part upon an
analysis of the ranges of potential values of the shares of Thermedics
Detection common stock that resulted from the application of several
accepted valuation methodologies. This analysis, including the selection
of valuation methodologies, was prepared by J.P. Morgan Securities Inc.
and The Beacon Group Capital Services, LLC. J.P. Morgan and The Beacon
Group are the financial advisors to Thermedics and Thermo Electron in
connection with the tender offer and the merger and the reorganization of
Thermo Electron and its subsidiaries described below. For a discussion of
the factors that the boards of directors of Thermedics and Thermo
Electron considered in making their determinations as to the fairness of
the tender offer and the merger and a summary of the financial analysis
prepared by J.P. Morgan and The Beacon Group, see "Special
Factors--Position Of Thermedics And Thermo Electron As To Fairness Of The
Offer And The Merger" and "Special Factors--Summary Of The Advisors'
Analysis and Opinion."
- Negotiations with Special Committee of Thermedics Detection Board of
Directors. The boards of directors of Thermo Electron and Thermedics
determined to proceed with the tender offer and short-form merger after
negotiations with a special committee of the board of directors of
Thermedics Detection with respect to a long-form going private merger did
not result in an offer price that the special committee was prepared to
recommend to Thermedics Detection's stockholders as a fair price for
their shares. A long-form merger requires approval of both the board of
directors and stockholders of a company, while a short-form merger may be
approved by a stockholder owning 90% or more of a company's outstanding
voting securities acting alone. This special committee has informed
Thermedics that it has advised the board of directors of Thermedics
Detection to recommend that the stockholders of Thermedics Detection
reject the tender offer. On February 29, 2000, both members of the
special committee resigned from the board of directors of Thermedics
Detection. See "Special Factors--Background To The Offer And The
Merger--Going Private Merger Discussions."
- Potential Conflicts of Interest. Thermedics is the majority stockholder
of Thermedics Detection. Thermo Electron is the majority stockholder of
Thermedics. Some of the officers and directors of Thermedics and Thermo
Electron are also officers or directors of Thermedics Detection and own
shares of common stock of, or hold options to purchase shares of common
stock of, Thermo Electron, Thermedics and/or Thermedics Detection. As a
result, there are various potential or actual conflicts of interest in
connection with the tender offer and the merger. See "Special
Factors--Conflicts Of Interest."
- --------------------------------------------------------------------------------
4
<PAGE> 5
- --------------------------------------------------------------------------------
- - CONSEQUENCES OF THE OFFER AND THE MERGER (PAGE 28).
Completion of the tender offer and the merger would have the following
consequences:
- Thermedics and Thermo Electron would have complete control over
Thermedics Detection's business.
- Thermedics and Thermo Electron would own 100% of the equity interest in
Thermedics Detection's business and would solely have the benefit or
detriment of any change in Thermedics Detection's value.
- The shares of Thermedics Detection would no longer be listed on the
American Stock Exchange.
- Thermedics Detection would no longer be subject to the requirements of
the Securities Exchange Act of 1934, including requirements to file
annual and other periodic reports or to provide the type of going-private
disclosure contained in this offer to purchase.
If you do not tender your shares of Thermedics Detection common stock and
the tender offer is completed, your shares will remain outstanding until the
subsequent merger of Detection Acquisition and Thermedics Detection. After the
merger, each of your shares will, subject to statutory appraisal rights, be
converted into the right to receive $8.00 in cash, without interest.
- - APPRAISAL RIGHTS (PAGE 52).
If you tender your shares of Thermedics Detection common stock in the
tender offer, you will not be entitled to exercise statutory appraisal rights
under Massachusetts law. If you do not tender your shares in the tender offer,
upon the subsequent merger of Detection Acquisition and Thermedics Detection,
you will have a statutory right to dissent and demand payment of the judicially
appraised fair value of your Thermedics Detection shares plus a fair rate of
interest, if any, from the date of the vote of the board of directors of
Detection Acquisition approving the merger. This value may be more or less than
the $8.00 per share cash consideration in the tender offer and the merger. See
"The Merger; Appraisal Rights."
- - PURPOSE OF THE TENDER OFFER (PAGE 13).
On January 31, 2000, Thermo Electron announced that its board of directors
had authorized its management to proceed with a major reorganization of the
operations of Thermo Electron and its subsidiaries. As part of this
reorganization, Thermo Electron plans to acquire the public minority interests
in most of its subsidiaries that have minority investors, spin off its
separation technologies and fiber-based products business and its medical
products business and divest a variety of non-core businesses. The primary goal
of the reorganization is for Thermo Electron and each of its spun-off
subsidiaries to focus on its core business. The purpose of this tender offer and
the proposed subsequent merger is to acquire the minority public interest in
Thermedics Detection as part of Thermo Electron's overall reorganization and to
provide Thermedics Detection's stockholders with $8.00 in cash for each of their
shares of Thermedics Detection common stock. Following the tender offer and the
merger, Thermo Electron plans to retain Thermedics Detection as part of Thermo
Electron's core instrument business.
- - FOR MORE INFORMATION (PAGES 44 AND 47).
More information regarding Thermedics Detection, Thermedics and Thermo
Electron is available from their public filings with the Securities and Exchange
Commission. See "Certain Information Concerning the Company" and "Certain
Information Concerning the Purchaser, Corpak, Thermedics and Thermo Electron."
If you have any questions about the tender offer, please call the
information agent, D.F. King & Co., Inc. If you are a banker or broker, call
collect at (212) 269-5550. All others should call toll-free at (800) 290-6433.
- --------------------------------------------------------------------------------
5
<PAGE> 6
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
SUMMARY..................................................... 2
INTRODUCTION................................................ 7
SPECIAL FACTORS............................................. 9
THE TENDER OFFER............................................ 32
CERTAIN FEDERAL INCOME TAX CONSEQUENCES..................... 42
PRICE RANGE OF THE SHARES; DIVIDENDS........................ 43
CERTAIN INFORMATION CONCERNING THE COMPANY.................. 44
CERTAIN INFORMATION CONCERNING THE PURCHASER, CORPAK,
THERMEDICS AND THERMO ELECTRON............................ 47
SOURCE AND AMOUNT OF FUNDS.................................. 51
THE MERGER; APPRAISAL RIGHTS................................ 52
FEES AND EXPENSES........................................... 55
MISCELLANEOUS............................................... 56
</TABLE>
<TABLE>
<S> <C>
SCHEDULE I MEMBERS OF THE BOARDS OF DIRECTORS AND EXECUTIVE OFFICERS OF
THE PURCHASER, CORPAK, THERMEDICS AND THERMO ELECTRON
SCHEDULE II INFORMATION CONCERNING TRANSACTIONS IN THE COMMON STOCK OF
THE COMPANY
SCHEDULE III SECTIONS 86-98 OF THE MASSACHUSETTS BUSINESS CORPORATION LAW
</TABLE>
IMPORTANT
Any stockholder of the Company desiring to tender all or any portion of
such stockholder's Shares (as defined herein) should either (1) complete and
sign the accompanying Letter of Transmittal (or a facsimile thereof) in
accordance with the Instructions in the Letter of Transmittal, have such
stockholder's signature thereon guaranteed if required by the Instructions to
the Letter of Transmittal, mail or deliver the Letter of Transmittal (or a
manually signed facsimile) or, in the case of a book-entry transfer effected
pursuant to the procedures set forth in "The Tender Offer--Procedures For
Accepting The Offer And Tendering Shares," an Agent's Message (as defined
herein), and any other required documents to the Depositary (as defined herein),
and either deliver the certificates representing such Shares to the Depositary
along with the Letter of Transmittal (or a manually signed facsimile) or deliver
such Shares pursuant to the procedures for book-entry transfer set forth in "The
Tender Offer--Procedures For Accepting The Offer And Tendering Shares" or (2)
request such stockholder's broker, dealer, commercial bank, trust company or
other nominee to effect the transaction for such stockholder. Any stockholder
having Shares registered in the name of a broker, dealer, commercial bank, trust
company or other nominee must contact such broker, dealer, commercial bank,
trust company or other nominee if such stockholder desires to tender such
Shares.
A stockholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available, or who cannot comply in
a timely manner with the procedures for book-entry transfer, may tender such
Shares by following the procedures for guaranteed delivery set forth in "The
Tender Offer--Procedures For Accepting The Offer And Tendering Shares."
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or other tender offer materials may
be directed to the Information Agent or the Dealer Managers, at their respective
addresses and telephone numbers set forth on the back cover of this Offer to
Purchase. Stockholders may also contact their broker, dealer, commercial bank or
trust company for assistance concerning the Offer.
6
<PAGE> 7
TO THE HOLDERS OF COMMON STOCK OF THERMEDICS DETECTION INC.:
INTRODUCTION
Detection Acquisition, Inc. (the "Purchaser"), a Delaware corporation and
an indirect wholly-owned subsidiary of Thermedics Inc., a Massachusetts
corporation ("Thermedics"), hereby offers to purchase all outstanding shares of
common stock, par value $.10 per share (the "Shares"), of Thermedics Detection
Inc., a Massachusetts corporation (the "Company"), at a purchase price of $8.00
per Share (the "Offer Price"), net to the seller in cash, without interest
thereon, upon the terms and subject to the conditions set forth in this Offer to
Purchase and in the related Letter of Transmittal (which, together with any
amendments or supplements hereto or thereto, collectively constitute the
"Offer"). The Purchaser is a wholly-owned subsidiary of Corpak Inc., a
Massachusetts corporation ("Corpak"). Corpak is a wholly-owned subsidiary of
Thermedics. Thermedics is a majority-owned subsidiary of Thermo Electron
Corporation, a Delaware corporation ("Thermo Electron").
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF
SHARES WHICH, TOGETHER WITH THE SHARES OWNED BY THERMO ELECTRON AND ITS
SUBSIDIARIES, INCLUDING THERMEDICS, CONSTITUTES AT LEAST NINETY PERCENT (90%) OF
THE OUTSTANDING SHARES ON THE EXPIRATION DATE OF THE OFFER (THE "MINIMUM
CONDITION"). THE OFFER IS ALSO SUBJECT TO OTHER IMPORTANT TERMS AND CONDITIONS
CONTAINED IN THIS OFFER TO PURCHASE. SEE "THE TENDER OFFER--CERTAIN CONDITIONS
OF THE OFFER."
As of January 28, 2000, there were 19,316,684 Shares outstanding and
1,009,413 Shares reserved for issuance pursuant to options (the "Options")
outstanding as of such date under the Company's option plans. As of such date,
Corpak owned 16,150,248 Shares, or approximately 83.6% of the outstanding Shares
(79.5% assuming all outstanding Options are exercised). Of the Shares owned by
Corpak, 97,923 Shares have been reserved for issuance under stock options
granted by Thermedics under its stock option plans. As of January 28, 2000,
Thermo Electron owned 1,029,950 Shares, or approximately 5.3% of the outstanding
Shares (5.1% assuming all outstanding Options are exercised). Of the Shares
owned by Thermo Electron, 65,300 Shares have been reserved for issuance under
stock options granted under Thermo Electron's stock option plans.
Based upon the number of outstanding Shares as of January 28, 2000 and
assuming no Options are exercised, 204,818 Shares must be tendered in the Offer
in order to satisfy the Minimum Condition. Assuming all outstanding Options are
exercised, 1,113,290 Shares must be tendered in the Offer in order to satisfy
the Minimum Condition.
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the Letter of
Transmittal, stock transfer taxes with respect to the purchase by the Purchaser
of Shares pursuant to the Offer. The Purchaser will pay all fees and expenses of
J.P. Morgan Securities Inc. ("J.P. Morgan") and The Beacon Group Capital
Services, LLC ("The Beacon Group"), which are acting as the Dealer Managers (the
"Dealer Managers"), American Stock Transfer & Trust Company, which is acting as
the Depositary (the "Depositary"), and D.F. King & Co. Inc., which is acting as
the Information Agent (the "Information Agent"), in connection with the Offer.
See "Fees And Expenses."
This Offer to Purchase and the documents incorporated by reference in this
Offer to Purchase include certain forward-looking statements. These statements
appear throughout this Offer to Purchase and include statements regarding the
intent, belief or current expectations of Thermedics and Thermo Electron and
their Boards of Directors, including statements concerning Thermedics' and
Thermo Electron's strategies following completion of the Offer and their plans
with respect to the acquisition of all of the equity interests in the Company.
Such forward-looking statements are not guarantees of future performance and
involve risks and uncertainties. Actual results may differ materially from those
described in such forward-looking statements as a result of various factors.
7
<PAGE> 8
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION THAT SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
If the Offer is completed, Thermo Electron, Corpak and the Purchaser
together will own at least 90% of the Shares. Promptly following the closing of
the Offer, Corpak and Thermo Electron plan to contribute their Shares to the
Purchaser in exchange for common stock of the Purchaser. Thermo Electron and
Corpak would then cause the Company to merge with and into the Purchaser in a
so-called "short-form" merger between the Company and the Purchaser (the
"Merger"). After the Merger, the Purchaser would be the surviving corporation,
would change its name to "Thermedics Detection Inc." and would be owned
exclusively by Thermedics, through its ownership of Corpak, and Thermo Electron.
Stockholders of the Company who do not tender their Shares in the Offer would
not be entitled to vote on the Merger. The consideration per Share in the Merger
would be the same as the Offer Price.
If, after the Offer is completed but prior to consummation of the Merger,
the aggregate ownership by Thermo Electron and its subsidiaries of the
outstanding Shares should fall below 90% due to the exercise of outstanding
Options or for any other reason, the Purchaser intends to acquire additional
Shares on the open market or in privately negotiated transactions to the extent
required for such ownership to equal or exceed 90%. Any such purchases would be
made at market prices or privately negotiated prices at the time of purchase,
which may be higher or lower than the Offer Price. For a discussion of other
actions Thermedics and Thermo Electron may take if the Offer is not completed,
see "Special Factors--Conduct Of The Company's Business If The Offer Is Not
Completed."
The Purchaser, Corpak, Thermedics and Thermo Electron have filed with the
Securities and Exchange Commission (the "Commission") a Tender Offer Statement
on Schedule TO (including the information required by Schedule 13E-3) (the
"Schedule TO") under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), relating to the Offer, the Merger and other potential purchases
of Shares.
8
<PAGE> 9
SPECIAL FACTORS
BACKGROUND TO THE OFFER AND THE MERGER
THE THERMO ELECTRON REORGANIZATION. On January 31, 2000, Thermo Electron
announced that its Board of Directors had authorized its management to proceed
with a major reorganization of the operations of Thermo Electron and its
subsidiaries. As part of this reorganization, Thermo Electron plans to acquire
the public minority interest in most of its subsidiaries that have minority
investors, spin off its separation technologies and fiber-based products
business and its medical products business and divest a variety of non-core
businesses. The primary goal of the reorganization is for Thermo Electron and
each of its spun-off subsidiaries to focus on their respective core businesses.
The purpose of the Offer and the Merger is to acquire the minority public
interest in the Company as part of Thermo Electron's overall reorganization and
to provide the public stockholders of the Company with $8.00 per Share in cash.
Following the Offer and the Merger, Thermo Electron plans to retain the Company
as part of Thermo Electron's core instrument business.
THE COMPANY. The Company operates in two segments: Detection Instruments
and Laboratory Products. The Company's Detection Instruments segment develops,
manufactures and markets high-speed detection and measurements systems used for
quality assurance and security applications. The Company's Laboratory Products
segment develops, manufactures and markets products used to determine the
quality of a wide variety of items, including food, water and pharmaceuticals
and to measure the moisture content of raw, in-process and finished products. In
addition, the Laboratory Products segment manufactures specific ion-measurement
systems that are used to monitor water quality in the power, semiconductor,
petrochemical, paper, pharmaceutical and drinking water industries.
The Company operated as a division of Thermedics until its incorporation as
a Massachusetts corporation in December 1990. The Company completed its initial
public offering in March 1997. In the initial public offering, the Company sold
2,671,292 Shares to the public at a price of $11.50 per Share (for net proceeds
of $28.1 million).
GOING PRIVATE MERGER DISCUSSIONS. In August 1998, Thermo Electron
determined that it would benefit from a corporate restructuring that would
simplify its corporate structure, consolidate and strategically realign certain
businesses and increase the liquidity in the public stock of certain of its
publicly traded subsidiaries. Thermo Electron subsequently refined and expanded
this proposal and on January 31, 2000 announced the proposed reorganization
described above under "--The Thermo Electron Reorganization."
As part of the initial restructuring plan, Thermo Electron proposed on
August 12, 1998 that Thermedics' majority ownership of the Company be
transferred to Thermo Electron in exchange for a portion of the shares of
Thermedics common stock held by Thermo Electron. Thermo Electron proposed to
then transfer its equity interest in the Company to Thermo Instrument Systems
Inc. ("Thermo Instrument"), another majority-owned subsidiary of Thermo
Electron. Thermo Instrument would then take the Company private for either cash
or shares of Thermo Instrument common stock.
On December 10, 1998, Thermo Electron issued a press release announcing
revisions to its August 12, 1998 proposal. This revised proposal contemplated
that Thermo Electron would take the Company private as a wholly-owned subsidiary
of Thermo Electron. To this end, Thermedics proposed to transfer its Shares to
Thermo Electron as part of an exchange for Thermo Electron's wholly-owned
biomedical group, with Thermo Electron offering the stockholders of the Company
other than Thermo Electron and its subsidiaries (the "Public Stockholders") cash
in exchange for their Shares.
In May 1999, the Board of Directors of the Company formed a special
committee (the "Special Committee") to negotiate the terms of the proposed going
private transaction with Thermedics and Thermo Electron. The Special Committee
initially consisted solely of Matthew Weisman. Subsequently, Matthew Haggerty
was added to the Board of Directors of the Company and appointed to the Special
Committee. Neither of these individuals was otherwise affiliated with Thermo
Electron, Thermedics or any of their subsidiaries other than the Company. In
June 1999, the Special Committee retained Swidler Berlin Shereff Friedman, LLP
as its legal counsel.
9
<PAGE> 10
On July 21, 1999, Mr. Jonathan Wilk, Deputy General Counsel of Thermo
Electron, provided a memorandum to the Special Committee which summarized the
proposed structure of the acquisition of the outstanding Shares of the Company
by Thermo Electron and Thermedics.
In August 1999, the Special Committee engaged Banc of America Securities,
LLC ("Banc of America") as its financial advisor in connection with the proposed
transaction.
On August 30, 1999, Mr. Theo Melas-Kyriazi, the Chief Financial Officer of
Thermo Electron, Thermedics and the Company, provided the Special Committee with
a written proposal by Thermo Electron (the "August 30 Offer") to acquire all of
the outstanding Shares through a merger at a price of $9.50 per Share in cash.
The August 30 Offer was subject to the approval by the Boards of Directors of
Thermo Electron and Thermedics. Mr. Melas-Kyriazi indicated that the price of
$9.50 per Share was based upon the following considerations:
- The price of $9.50 represented a 25% premium over the price of the Shares
on December 9, 1998, the day before Thermo Electron announced the
proposed cash going private transaction regarding the Company.
- The price was higher than the range of values per Share calculated by
Thermo Electron using a discounted cash flow analysis. Thermo Electron
calculated the cash flows that the Company was expected to generate
during fiscal 1999 through 2003 based on the financial projections for
fiscal 1999 and 2000 prepared by the Company as part of its normal
operations (the "1999-2000 Projections") and projections prepared by
Thermo Electron, with the assistance of management of the Company, for
fiscal 2001 through 2003 (the "2001-2003 Projections"). Thermo Electron
also calculated a range of terminal asset values of the Company at the
end of the five-year period ending in fiscal 2003 by applying a multiple
of ten times earnings before interest and taxes ("EBIT"), a multiple of
nine times earnings before interest, taxes, amortization and depreciation
("EBITDA") and a multiple of 15 times net earnings. The cash flows and
ranges of terminal asset values were then discounted to present values
using discount rates of 15% and 17.5%. The present value of the cash
flows and the range of terminal asset values were then adjusted for the
Company's estimated 1999 fiscal year-end excess cash, option exercise
proceeds and total debt. This discounted cash flow analysis prepared by
Thermo Electron indicated a range of values of between $7.04 and $7.49
per Share based on an EBIT discounted cash flow analysis, $7.44 and $7.92
per Share based on an EBITDA discounted cash flow analysis and $7.02 and
$7.46 per Share based on a net earnings discounted cash flow analysis,
resulting in an average discounted cash flow range of values of between
$7.17 and $7.62 per Share. See "--Certain Projected Financial Data."
- The price was higher than $5.84, which was the median of the range of
values per Share from $4.20 to $10.15 calculated by Thermo Electron using
an analysis of multiples of EBIT, EBITDA, book value, net earnings and
revenues of the following publicly-traded companies that Thermo Electron
considered comparable to the Company: Mettler-Toledo International, Inc.,
Barringer Technologies, Inc., Invision Technologies, Inc., Vivid
Technologies, Inc., American Science and Engineering Inc. and Fairey
Group, plc.
During September and October 1999, Banc of America conducted a financial
due diligence review of the Company and the proposed transaction on behalf of
the Special Committee.
During a telephone conversation on September 30, 1999, Mr. R.C. Smith of
Banc of America informed Mr. Melas-Kyriazi of Mr. Smith's opinion that
discounted cash flow and comparable companies value analyses of the Company were
not appropriate due to disagreements between Thermo Electron and the Company's
management regarding the role that acquisitions would play in the growth
strategy for the Company. Mr. Smith informed Mr. Melas-Kyriazi that the Special
Committee expected a greater premium over the pre-announcement market price of
the Shares.
On November 9, 1999, Mr. Melas-Kyriazi met with the Special Committee. The
Special Committee informed Mr. Melas-Kyriazi that the August 30 Offer was not
acceptable. The Special Committee reiterated the concerns and views previously
expressed by Mr. Smith.
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<PAGE> 11
On November 18, 1999, Mr. Melas-Kyriazi met with the Special Committee and
representatives of Banc of America. The Special Committee again informed Mr.
Melas-Kyriazi that the August 30 Offer was not acceptable and that Thermo
Electron and Thermedics should pay a "customary" premium of at least 25% over
the then current market price. The Special Committee requested that Thermo
Electron and Thermedics increase their offer accordingly.
During a telephone conversation in December 1999, Mr. Melas-Kyriazi
reiterated the August 30 Offer to Mr. Haggerty, but Mr. Haggerty indicated that
the August 30 Offer remained unacceptable.
In December 1999, Thermo Electron retained J.P. Morgan and The Beacon Group
as its financial advisors for the purpose of advising Thermo Electron in
connection with its strategic alternatives, including advising Thermo Electron
in connection with the acquisition of the minority public interest in the
Company.
On January 12, 2000, Mr. Melas-Kyriazi stated to Mr. Haggerty that the
parties needed to agree on a method of proceeding to a resolution of the terms
of the transaction.
On a number of occasions on or about January 14, 2000, J.P. Morgan and The
Beacon Group discussed with the management of Thermo Electron the preliminary
results of their analysis of the ranges of potential values of the Shares that
resulted from the application of several accepted valuation methodologies. J.P.
Morgan and The Beacon Group subsequently presented the results of their analysis
to the Thermo Electron Board of Directors on January 18, 2000 and January 28,
2000 and to the Thermedics Board of Directors on January 25, 2000 and January
29, 2000. J.P. Morgan's and The Beacon Group's analysis indicated an estimated
range of equity values for the Shares of approximately $6.75 to $8.00 per Share
based on an analysis of the trading value of comparable companies, between $7.00
and $8.50 per Share based on an analysis of comparable buy-out transactions and
between $7.00 and $8.25 per Share based on an analysis of discounted cash flows.
See "--Summary Of The Advisors' Analysis and Opinion."
On January 21, 2000, Mr. Melas-Kyriazi submitted a revised offer of $8.00
per Share orally to counsel for the Special Committee, subject to approval of
the Boards of Directors of Thermo Electron and Thermedics. On the same day, Mr.
Wilk sent a letter to counsel for the Special Committee that confirmed the terms
of the oral offer made by Mr. Melas-Kyriazi revising Thermedics' and Thermo
Electron's existing offer to $8.00 per Share and indicating Thermedics' and
Thermo Electron's willingness to condition a merger upon the approval of a
majority of the Shares held by the Public Stockholders (the "January 21 Offer").
Mr. Wilk's letter stated that the offer would expire at noon on January 25,
2000.
On January 24, 2000, counsel for the Special Committee telephoned Mr. Wilk
and informed him that the Special Committee would not be in a position to
respond to the January 21 Offer by January 25, 2000.
On January 26, 2000, Mr. Weisman sent a letter to Dr. Richard F. Syron, the
Chairman and Chief Executive Officer of Thermo Electron, stating that the
"Special Committee [was] unprepared to recommend this down offer to minority
shareholders." The Special Committee expressed frustration with the pace of the
negotiations and asserted that Thermo Electron had been unresponsive to the
Special Committee's concerns. The Special Committee also asserted that
representatives of Thermo Electron had failed to consider certain qualitative
factors in valuing the Shares held by the Public Stockholders. The Special
Committee requested a meeting with Dr. Syron to discuss such qualitative
factors.
Because the Special Committee did not accept the January 21 Offer,
Thermedics and Thermo Electron determined not to proceed with negotiation of a
long-form merger with the Special Committee but instead to initiate the Offer
and the Merger.
On January 29, 2000, the Special Committee sent a report to the Board of
Directors of the Company. The report reviewed the history of the formation of
the Special Committee, its meetings with legal and financial advisors, the
August 30 Offer and the January 21 Offer. The report further provided in part:
"In November 1999 the Special Committee met alone with Theo
Melas-Kyriazi, Chief Financial Officer of Thermo Electron, to discuss
the Thermo Electron offer, and then again with Mr. Melas-Kyriazi, this
time with its financial advisor. The Special Committee informed Mr.
Melas-Kyriazi that, based upon the financial analysis performed by its
financial advisor, the $9.50 offer price was
11
<PAGE> 12
inadequate and requested that Thermo Electron increase its offer. The
Special Committee believed then and now that Thermo Electron considered
only certain quantitative factors in its analysis of the proposed offer
price for the minority stockholders and did not consider qualitative
factors.
Thermo Electron did not respond to the Special Committee's request
until last Friday, January 21, 2000, approximately two months after
the meeting with Mr. Melas-Kyriazi, and then with a decreased offer of
$8.00 per share. The lower offer was accompanied by a deadline to
respond to that offer by midday Tuesday, January 25, 2000. In a letter
sent by Matthew Weisman on behalf of the Special Committee on January
26, 2000 to Richard Syron, Chairman and Chief Executive of Thermo
Electron, Mr. Weisman indicated that the Special Committee was
unprepared to recommend this decreased offer to the minority
stockholders and also requested a meeting with Mr. Syron to discuss
the qualitative factors that it believes have not been properly
considered in the valuation of [Thermedics Detection] by Thermo
Electron."
Also on January 29, 2000, the Company's Board of Directors held a meeting
by telephone conference call at which representatives of Thermedics and Thermo
Electron described their intention to initiate the Offer and the Merger.
On January 31, 2000, Thermedics and Thermo Electron issued a press release
announcing the Offer and the Merger.
On February 16, 2000, the Special Committee distributed a memorandum to the
Board of Directors of the Company designated as the final report of the Special
Committee. The memorandum provided in part:
"As we stated in the January 29th Report, it is our continuing
position that we are unprepared to recommend to the minority
stockholders the $8.00 offer price. We believe that there are several
factors that were not considered by Thermo Electron/Thermedics in
their valuation analysis of the minority stockholders' interests. As
we indicated in the January 29th Report, despite repeated attempts on
the part of the Special Committee after our November 1999 meetings
with Theo Melas-Kyriazi, Chief Financial Officer of Thermo Electron,
Thermo Electron was unwilling to engage in any negotiation with
respect to its original offer and, on January 21, 2000, reduced its
offer to $8.00. Further, on January 26, 2000 we sent a letter to
Richard Syron, Chairman and Chief Executive Officer of Thermo
Electron, expressing our frustration with Thermo Electron's
responsiveness and requesting a meeting with him to discuss the
situation.
We believe that the factors set forth below have undermined the
market value of [Thermedics Detection] common stock and thereby
prevented the minority stockholders from obtaining an adequate value
for their shares. We believe that these factors have not been properly
considered by Thermo Electron/Thermedics.
1. From the time of raising approximately $20 million in its
initial public offering on a business plan premised, in part, on
acquisition growth, none of the funds raised in that offering
have been employed for that purpose.
2. The management of Thermo Electron blocked moving forward on
acquisition opportunities available to [Thermedics Detection],
despite the recommendations of [Thermedics Detection] management
and without advising the independent directors of [Thermedics
Detection] to participate in a Board review....
3. Without advising the independent directors of [Thermedics
Detection], management of Thermo Electron limited capital
expenditures recommended by management of [Thermedics
Detection], which research and development likely would have
enhanced the value of [Thermedics Detection].
4. With the uncertainty surrounding the proposed buy-out and the
resulting loss of focus of management, the performance of
[Thermedics Detection] has deteriorated and contributed to a
dramatic drop in the price of [Thermedics Detection's] stock.
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<PAGE> 13
5. The inordinate length of time since the announcement of the
buyout of [Thermedics Detection] by Thermo Electron (August
1998) has added uncertainty to [Thermedics Detection's]
situation and provided an extended period during which
[Thermedics Detection's] share price could, and did, decline.
a) The inordinate length of time it took Thermo Electron to
appoint a special committee (the functioning special
committee, as it is constituted today, was not appointed
until mid-July 1999).
b) The lack of responsiveness by Thermo Electron to the request
for information as part of the due diligence process
undertaken by the advisers to the Special Committee.
c) The lack of responsiveness to the Special Committee's
November 1999 request for a revised and an increased offer
for the minority stockholders' shares....
Based on the foregoing, it is the recommendation of the Special
Committee that the Board of Directors of [Thermedics Detection] advise
the minority stockholders of [Thermedics Detection] to reject the
Thermedics tender offer."
At a meeting of the Company's Board of Directors held on February 18, 2000,
the Special Committee presented its report to the members of the Company's Board
of Directors.
On February 29, 2000, the members of the Special Committee resigned as
directors of the Company.
At a meeting on March 8, 2000, the Company's Board of Directors determined
that the Company would not make a recommendation as to whether the Public
Stockholders should tender their Shares pursuant to the terms of the Offer.
On March 10, 2000, the Purchaser commenced the Offer.
REASONS FOR THE OFFER AND THE MERGER
ACTIONS OF THERMEDICS' BOARD OF DIRECTORS. On January 25, 2000 and January
29, 2000, the Board of Directors of Thermedics held meetings at which the
proposed plan to acquire the minority stockholder interest in the Company
through the Offer and the Merger was presented and discussed. Messrs. George N.
Hatsopoulos, John N. Hatsopoulos, John T. Keiser and John W. Wood, Jr., members
of Thermedics' Board of Directors, initially took part in each of these
meetings, but recused themselves from discussions of the terms of the Offer and
the Merger and from voting to approve the Offer. These directors recused
themselves because they were also officers or directors of the Company or hold
Shares or options to purchase Shares. No director of Thermedics present for the
vote approving the Offer objected to or abstained from such vote. Dr. Richard F.
Syron, a member of the Board of Directors of Thermedics at the time of the vote,
resigned as a director of Thermedics effective March 7, 2000.
BENEFITS AND DETRIMENTS TO THE COMPANY OF THE OFFER AND THE MERGER. In
determining whether to make the Offer and thereafter effect the Merger, the
Thermedics Board of Directors considered several factors, including the
financial performance and profitability of the Company and the potential
benefits to the Company's business if the Company were to become part of a
larger business unit. Thermedics' Board of Directors also considered the
following factors:
- the prospect of achieving greater marketing, operating and administrative
efficiency as a result of the Company's operations being conducted in a
more coordinated manner with Thermo Electron's other instruments
subsidiaries;
- the reduction in the amount of public information available to
competitors about the Company's businesses that would result from the
termination of the Company's obligations under the reporting requirements
of the Commission;
- the elimination of additional burdens on management associated with
public reporting and other tasks resulting from the Company's public
company status, including, for example, the dedication of time by and
resources of the Company's management and Board of Directors to
stockholder and analyst inquiries and investor and public relations;
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<PAGE> 14
- the decrease in costs, particularly those associated with being a public
company (for example, as a privately-held entity, the Company would no
longer be required to file quarterly, annual or other periodic reports
with the Commission or publish and distribute to its stockholders annual
reports and proxy statements), that Thermo Electron and Thermedics
anticipate could result in savings of approximately $450,000 per year,
including fees for an audit by an independent accounting firm and legal
fees;
- the greater flexibility that the Company's management would have to focus
on long-term business goals, as opposed to quarterly earnings, as a
non-reporting company, particularly in light of the potential volatility
in the Company's quarterly earnings; and
- recent public capital market trends affecting small-cap companies,
including perceived lack of interest by institutional investors in
companies with a limited public float.
The Board of Directors of Thermedics also considered the advantages and
disadvantages of certain alternatives to acquiring the minority stockholder
interest in the Company, including:
- a sale of its equity interest in the Company; and
- leaving the Company as a majority-owned, public subsidiary.
The first alternative, selling Thermedics' equity interests in the Company,
was briefly considered. It was not an alternative that was pursued at length,
given that Thermo Electron did not want to sell, and did not want Thermedics to
sell, its equity interest in the Company, but rather intended to retain the
Company as a part of Thermo Electron's core instrument businesses.
In the view of the Board of Directors of Thermedics, the principal
advantage of leaving the Company as a majority-owned, public subsidiary of
Thermedics was the ability of Thermedics to invest the cash that would be
required to buy the minority stockholder interest in the Company for other
purposes. The disadvantages of leaving the Company as a majority-owned, public
subsidiary which were considered by the Board of Directors of Thermedics
included the inability to achieve many of the benefits of taking the Company
private discussed above. The Board of Directors of Thermedics concluded that the
advantages of leaving the Company as a majority-owned, public subsidiary of
Thermedics were significantly outweighed by the disadvantages of doing so, and
accordingly that alternative was rejected.
CONSIDERATION OF LIQUIDITY AND SHARE PRICE; TIMING. The Board of Directors
of Thermedics also considered the relatively low volume of trading in the Shares
and considered that the Offer and the Merger would result in immediate, enhanced
liquidity for the Public Stockholders. The Board of Directors of Thermedics
considered trends in the price of the Shares in the past twelve months and
during the period between the Company's initial public offering and the
announcement of Thermedics' intention to take the Company private.
Thermedics and Thermo Electron have determined to make the Offer and effect
the Merger at this time as part of the larger reorganization of Thermo Electron
and its subsidiaries. The Company's stock price was not a significant factor in
the timing of Thermedics' and Thermo Electron's decision to acquire the minority
stockholder interest in the Company.
ALTERNATIVE STRUCTURE CONSIDERED. The Board of Directors of Thermedics
also considered whether to structure the transaction as a tender offer followed
by a short-form merger or as a long-form merger. In determining to structure the
transaction as a tender offer followed by a short-form merger, the Board of
Directors considered the following:
- The discussions with the Special Committee with respect to a long-form
merger were progressing at a pace that the Thermedics Board of Directors
did not consider acceptable. See "--Background To The Offer And The
Merger--Going Private Merger Discussions."
- Unless at least 90% of the outstanding Shares are owned by the Purchaser,
it could not effect a short-form merger. Unlike a long-form merger, the
approval of the Company's Board of Directors is not required to complete
a short-form merger. Consequently, once the Special Committee determined
not
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<PAGE> 15
to recommend the long-form merger contemplated by the January 21 Offer,
the Offer and the Merger potentially enabled Thermedics and Thermo
Electron to acquire all of the Shares without the approval of the Board
of Directors of the Company or the Special Committee.
- A tender offer followed by a short-form merger would permit Thermedics
and Thermo Electron to acquire the minority interest in the Company on an
expeditious basis and provide the Public Stockholders with a prompt
opportunity to receive the Offer Price of $8.00 per Share.
- In the Offer, each Public Stockholder would individually determine
whether to accept the Offer Price of $8.00 per Share.
- Public Stockholders who do not tender their Shares in the Offer could
preserve their appraisal rights in the Merger under state law.
After discussing the advantages and disadvantages of acquiring the minority
stockholder interest in the Company, including the alternative method of
acquiring such interests through a long-form merger, the Thermedics Board of
Directors authorized taking the Company private through a tender offer for all
of the Shares of the Company that Thermo Electron and its subsidiaries,
including Thermedics, did not already own, at a price per Share of $8.00 in
cash, to be followed by a short-form merger at the same price.
ACTIONS OF THERMO ELECTRON'S BOARD OF DIRECTORS. On January 18, 2000 and
January 28, 2000, the Board of Directors of Thermo Electron held special
meetings at which Thermo Electron's management presented the proposal for
Thermedics to acquire all of the Shares that Thermo Electron and its
subsidiaries did not already own as a part of the proposed corporate
reorganization of Thermo Electron and certain of its subsidiaries. Messrs.
George N. Hatsopoulos, John N. Hatsopoulos, Elias P. Gyftopoulos and Robert A.
McCabe, members of Thermo Electron's Board of Directors, initially took part in
each of these meetings but recused themselves from discussions of the terms of
the Offer and the Merger and from taking action with respect to the Offer. These
directors recused themselves because they hold Shares or Options to purchase
Shares. The Board of Directors of Thermo Electron considered all of the factors
relating to the Offer and the Merger referred to above that were considered by
Thermedics' Board of Directors. The Board of Directors of Thermo Electron also
discussed the fact that the acquisition by Thermedics of the minority
stockholder interest in the Company would advance the goal of Thermo Electron's
proposed corporate reorganization. After consideration of these factors, the
Board of Directors of Thermo Electron resolved that it would not object if
Thermedics determined to take the Company private through Thermedics'
acquisition for cash through the Offer and the Merger of all of the Shares held
by the Public Stockholders at a purchase price of $8.00 per Share. No director
of Thermo Electron present to vote on the resolution not to object if Thermedics
determined to effect the Offer and the Merger objected to or abstained from such
vote.
POSITION OF THERMEDICS AND THERMO ELECTRON AS TO FAIRNESS OF THE OFFER AND THE
MERGER
Because Corpak and Thermo Electron together currently own a majority of the
Shares, Thermo Electron, Thermedics, Corpak and the Purchaser are deemed
"affiliates" of the Company under Rule 12b-2 of the Exchange Act. Accordingly,
in compliance with Rule 13e-3 under the Exchange Act, the Boards of Directors of
Thermedics and Thermo Electron have considered the fairness of the Offer and the
Merger to the Public Stockholders.
DETERMINATIONS OF THE BOARDS OF DIRECTORS OF THERMEDICS AND THERMO
ELECTRON. In authorizing the Offer and the Merger, the Board of Directors of
each of Thermedics and Thermo Electron determined that the Offer and the Merger
are fair to the Public Stockholders. In reaching their determinations that the
terms of the Offer and the Merger are fair to the Public Stockholders, the
Boards of Directors of Thermedics and Thermo Electron considered the factors set
forth under this section captioned "Position of Thermedics And Thermo Electron
As To Fairness Of The Offer And The Merger," which constitute all of the
material factors considered by the Boards of Directors of Thermedics and Thermo
Electron in making their determinations.
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<PAGE> 16
The Boards of Directors of Thermedics and Thermo Electron determined that each
of the following factors supported their belief that the Offer and the Merger
are fair to the Public Stockholders:
- Financial analysis. In considering the fairness of the Offer and the
Merger from a financial point of view to the Company's stockholders,
including the Public Stockholders, the Boards of Directors of Thermedics
and Thermo Electron reviewed and relied in part upon an analysis of the
ranges of potential values of the Shares that result from the application
of several accepted valuation methodologies. This financial analysis,
including the selection of valuation methodologies, was prepared by J.P.
Morgan and The Beacon Group (the "Advisors") to assist the Boards of
Directors of Thermedics and Thermo Electron with their evaluation of the
Offer and the Merger. Thermo Electron retained J.P. Morgan and The Beacon
Group as its financial advisors for the purpose of advising Thermo
Electron in connection with its strategic alternatives, including
advising Thermo Electron and Thermedics in connection with the
acquisition of the minority interest in the Company. The financial
analyses undertaken by the Advisors included an analysis based upon
public trading multiples, comparable buy-out transactions and discounted
cash flows. The analysis of trading multiples of companies engaged in
businesses which the Advisors judged to be analogous to the Company's
business indicated an estimated range of equity values for the Shares of
approximately $6.75 to $8.00 per Share. The analysis of other buyout
transactions indicated an estimated range of equity values for the Shares
of between $7.00 and $8.50 per Share. The analysis based upon discounted
cash flows indicated an estimated range of equity values for the Shares
of between $7.00 and $8.25 per Share. See "--Summary of The Advisors'
Analysis and Opinion."
- Information concerning the financial performance, condition, business
operations and prospects of the Company. The Boards of Directors of
Thermedics and Thermo Electron believed the Offer Price to be attractive
in light of the Company's current financial performance, profitability
and growth prospects. In addition, the Offer and the Merger would shift
the risk of the future financial performance of the Company from the
Public Stockholders, who do not have the power to control decisions made
as to the Company's business, entirely to Thermedics and Thermo Electron,
who do have the power to control the Company's business and who have the
resources to manage and bear the risks inherent in the business over the
long term. See "--Certain Projected Financial Data."
- The premium reflected in the Offer Price of $8.00 per Share. The Boards
of Directors of Thermedics and Thermo Electron considered the current and
historical trading prices of the Shares. The market price of the Shares
had declined from $11.875 on March 20, 1997, the date of the Company's
initial public offering, to $7.1875 on August 11, 1998, the trading date
immediately prior to Thermo Electron's announcement of its intention to
take the Company private for cash or stock, and to $7.625 on December 9,
1998, the trading date immediately prior to Thermo Electron's
announcement of its intention to take the Company private for cash. The
Offer Price represented a premium of 11.3% over the closing price on
August 11, 1998. The purchase by Thermedics would eliminate the exposure
of the Public Stockholders to any future or continued declines in the
price of the Shares. The Boards of Directors of Thermedics and Thermo
Electron believed that the market price of the Shares after the August
12, 1998 announcement reflected the financial markets' anticipation of
the consideration that would be paid to the Public Stockholders in a
going private transaction. See "--Certain Effects Of The Offer And The
Merger."
- Terms of the Offer. The Boards of Directors of Thermedics and Thermo
Electron considered the terms of the Offer and the Merger, including (1)
the amount and form of the consideration, (2) the limited number of
conditions to the obligations of the Purchaser, including the absence of
a financing condition, (3) the tender offer structure, which would
provide an expeditious means for the Public Stockholders to receive the
Offer Price and (4) the Minimum Condition.
- The market price and relative lack of liquidity for the Shares and the
liquidity that would be realized by the Public Stockholders from the
all-cash Offer. The Boards of Directors of Thermedics and Thermo
Electron believed that the liquidity that would result from the Offer and
the Merger would be beneficial to the Public Stockholders because
Thermedics' and Thermo Electron's combined signifi
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<PAGE> 17
cant ownership of Shares (1) results in a relatively small public float
that necessarily limits the amount of trading in the Shares and (2)
decreases the likelihood that a proposal to acquire the Shares would be
made by an independent entity without the consent of Thermedics and
Thermo Electron.
- Thermo Electron's and Thermedics' determination to retain their majority
ownership of the Company and not to seek a third party buyer for the
Company. Thermedics and Thermo Electron stated their current intention
to retain their majority holdings in the Company, which foreclosed the
opportunity to consider an alternative transaction with a third party
purchaser of the Company or otherwise provide liquidity to the Public
Stockholders. Accordingly, it is unlikely that finding a third party
buyer for the Company was a realistic option for the Public Stockholders.
Neither Thermedics nor Thermo Electron solicited or received an offer for
the Company from a third party in the prior two years.
PROCEDURAL FAIRNESS. The Boards of Directors of Thermedics and Thermo
Electron also determined that the Offer and the Merger are procedurally fair to
the Public Stockholders. In making such determination, the Boards of Directors
considered the following factors:
- Each Public Stockholder can individually determine whether to tender
Shares in the Offer.
- The Offer provides the opportunity for the Public Stockholders to sell
their Shares without incurring brokerage and other costs typically
associated with market sales.
- In determining the Offer Price, the Boards of Directors of Thermedics and
Thermo Electron relied in part upon an analysis prepared by the Advisors
of the ranges of potential values of the Shares that resulted from the
application of several accepted valuation methodologies. See "--Summary
Of The Advisors' Analysis and Opinion."
- Public Stockholders who believe that the terms of the Offer and the
Merger are not fair can pursue appraisal rights in the Merger under state
law.
CERTAIN NEGATIVE CONSIDERATIONS. The Boards of Directors of Thermedics and
Thermo Electron also considered the following factors, each of which they
considered to be negative, in their deliberations concerning the fairness of the
terms of the Offer and the Merger:
- Termination of participation in future growth of the Company. Following
the successful completion of the Offer and the Merger, the Public
Stockholders would cease to participate in the future earnings or growth,
if any, of the Company or benefit from increases, if any, in the value of
their holdings in the Company.
- Conflicts of Interest. The financial interests of Thermo Electron and
Thermedics are adverse as to the Offer Price to the financial interests
of the Public Stockholders. In addition, officers and directors of the
Company have actual or potential conflicts of interest in connection with
the Offer and the Merger. See "--Conflicts Of Interest."
- No Public Stockholder Approval. The Offer and the Merger do not provide
the Public Stockholders with an opportunity to vote on the proposed
transaction.
- Inability to Reach Agreement with Special Committee. The Boards of
Directors of Thermedics and Thermo Electron considered the negotiations
that had taken place with the Special Committee concerning a possible
long-form merger, the proposals the Special Committee had made for the
terms of such a merger and the fact that the Special Committee had
objected to the negotiations process and determined not to recommend such
a merger at the Offer Price. See "--Background To The Offer And The
Merger--Going Private Merger Discussions."
- No Unaffiliated Representative or Independent Director Approval. The
majority of the members of the Board of Directors of the Company who are
not employees of the Company have not retained an unaffiliated
representative to act solely on behalf of the Public Stockholders for
purposes of negotiating the terms of the Offer and the Merger or
preparing a report concerning the fairness of the Offer and the Merger.
In addition, such majority of the independent members of the Company's
Board of Directors
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<PAGE> 18
have not approved the Offer or the Merger. The Special Committee prepared
a report recommending that the Company's Board of Directors recommend
that the Public Stockholders reject the Offer.
OTHER FACTORS. The Boards of Directors of Thermedics and Thermo Electron
did not consider the net book value of the Company as a relevant factor in
assessing the Company's value and, accordingly, did not evaluate the fairness of
the Offer Price in relation to the Company's net book value. The Company's net
book value at January 1, 2000 was approximately $121.7 million, which would have
yielded a per Share valuation for the Company of $6.30. The Boards of Directors
relied in part upon valuation methodologies selected by the Advisors for the
purpose of their financial analysis, and the Boards of Directors of Thermedics
and Thermo Electron noted that the Advisors did not employ net book value in
their financial analysis. Moreover, the Boards of Directors of Thermedics and
Thermo Electron do not believe that an analysis based upon net book value is
appropriate for an instrument business. The Boards of Directors of Thermedics
and Thermo Electron believe that net book value is a valuation methodology more
typically used in the banking, utilities, real estate and financial services
industries.
The Boards of Directors of Thermedics and Thermo Electron also did not
consider "shopping" the Company to prospective purchasers. Shopping the Company
would not only entail substantial time delays and allocation of management's
time and energy, but would also disrupt and discourage the Company's employees
and create uncertainty among the Company's customers and suppliers. Furthermore,
Thermedics and Thermo Electron do not intend to sell the Company, but rather
intend to continue to operate the Company as part of Thermo Electron's core
instrument businesses.
The Boards of Directors of Thermedics and Thermo Electron did not consider
the Offer Price as compared to any implied liquidation value because it was not
contemplated that the Company be liquidated, whether or not the Offer and the
Merger were completed. See "--Conduct Of The Company's Business After The Offer
And The Merger."
RECENT PURCHASES OF SHARES BY THERMO ELECTRON AND THERMEDICS. See Schedule
II to this Offer to Purchase for information on purchases of Shares by Thermo
Electron, Thermedics and the Company during the past two years. These Share
acquisitions include purchases at prices exceeding the Offer Price.
CONCLUSIONS OF THE BOARDS OF DIRECTORS. The Thermedics and Thermo Electron
Boards of Directors concluded that, given the performance of the Shares between
the Company's initial public offering and the announcement of Thermedics'
intention to take the Company private, the uncertainties surrounding the
Company's future growth prospects and the limited trading market for the Shares,
the Offer and Merger would result in a fair treatment of the Public
Stockholders. In determining that the Offer and the Merger are fair to the
Public Stockholders, the Boards of Directors of Thermedics and Thermo Electron
considered the above factors as a whole and did not assign specific or relative
weights to them, other than that the Offer Price of $8.00 per Share in cash was
considered the most important factor.
In making the determination as to fairness, Thermedics and Thermo Electron
also had access to the 1999-2000 Projections and to financial projections for
the fourth quarter of fiscal 1999 and for fiscal 1999 and 2000 prepared by the
Company (the "2000 Projections"). See "--Certain Projected Financial Data."
SUMMARY OF THE ADVISORS' ANALYSIS AND OPINION
Thermo Electron retained J.P. Morgan and The Beacon Group as its exclusive
financial advisors for the purpose of advising Thermo Electron in connection
with its strategic alternatives, including advising Thermo Electron and
Thermedics in connection with the acquisition of the minority interest in the
Company. On a number of occasions on or about January 14, 2000, the Advisors
discussed with the management of Thermo Electron the preliminary results of
their analysis of the ranges of potential values of the Shares that resulted
from the application of several accepted valuation methodologies. The Advisors
subsequently presented an analysis to the Thermo Electron Board of Directors on
January 18, 2000 and January 28, 2000 and to the Thermedics Board of Directors
on January 25, 2000 and January 29, 2000. This financial analysis, including the
selection of valuation methodologies, was prepared by the Advisors to assist the
Boards of Directors of Thermedics and Thermo Electron with their evaluation of
the Offer and the Merger. At the January 28, 2000 and January 29, 2000 meetings
of the Boards of Thermo Electron and Thermedics, respectively, the Advisors also
orally delivered their opinion (the "Opinion"), subsequently confirmed in a
written opinion dated
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<PAGE> 19
January 29, 2000, that, as of such date and based upon and subject to the
various factors, assumptions and limitations set forth in their Opinion, the
consideration of $8.00 net per Share in cash to be paid pursuant to the Offer
and the Merger was fair from a financial point of view to Thermedics and Thermo
Electron.
THE ADVISORS' FINANCIAL ANALYSIS AND RELATED OPINION WAS PROVIDED TO THE
BOARDS OF DIRECTORS OF THERMEDICS AND THERMO ELECTRON. THE OPINION IS DIRECTED
ONLY TO THE FAIRNESS OF THE CONSIDERATION FROM A FINANCIAL POINT OF VIEW TO
THERMEDICS AND THERMO ELECTRON (AND NOT TO THE PUBLIC STOCKHOLDERS) AND DOES NOT
CONSTITUTE A RECOMMENDATION AS TO WHETHER OR NOT THE PUBLIC STOCKHOLDERS SHOULD
TENDER THEIR SHARES IN THE OFFER.
In conducting their financial analysis and rendering their Opinion, the
Advisors reviewed, among other things:
- the audited financial statements of the Company, Thermedics and Thermo
Electron for the fiscal year ended January 2, 1999;
- the unaudited financial statements of the Company, Thermedics and Thermo
Electron for the period ended October 2, 1999;
- current and historical market prices of the Shares;
- certain publicly available information concerning the business of the
Company and of certain other companies engaged in businesses deemed by
the Advisors to be comparable to those of the Company;
- the reported market prices for securities of certain other companies
deemed by the Advisors to be comparable to the Company;
- publicly available terms of certain transactions involving companies
deemed by the Advisors to be comparable to the Company and the
consideration paid for such companies;
- the terms of other business combinations deemed relevant by the Advisors;
- the 2000 Projections; and
- certain agreements with respect to outstanding indebtedness or
obligations of the Company, Thermedics and Thermo Electron.
The Advisors also held discussions with certain members of the management
of Thermedics and Thermo Electron with respect to certain aspects of the Offer
and the Merger. In addition, the Advisors held discussions with certain members
of management of Thermedics and Thermo Electron with respect to the past and
current business operations of the Company, the financial condition and future
prospects and operations of the Company and certain other matters believed
necessary or appropriate to the Advisors' inquiry. In addition, the Advisors
reviewed such other financial studies and analyses and considered such other
information as the Advisors deemed appropriate for the purposes of their
financial analysis and Opinion. The 2000 Projections were the only non-public
information prepared by the Company which were reviewed by the Advisors, and the
Advisors did not hold any discussions with management of the Company. No
limitation was placed upon the scope of the Advisors' investigation or valuation
methodologies by Thermedics or Thermo Electron.
The Advisors relied upon and assumed, without independent verification, the
accuracy and completeness of all information that was publicly available or that
was furnished to, or discussed with, the Advisors by Thermedics, Thermo Electron
and the Company or otherwise reviewed by the Advisors, and the Advisors have not
assumed any responsibility or liability therefor. The Advisors also assumed that
there have been no material changes in the Company's condition, results of
operations, business or prospects since the date of the most recent financial
statements made available to the Advisors. The Advisors have not conducted, and
did not assume any responsibility for conducting, any valuation, appraisal or
physical inspection of any of the Company's assets or liabilities (contingent or
otherwise), nor have any valuations or appraisals been provided to the Advisors.
In relying on the financial analyses, projections and estimates provided to, or
discussed with, the Advisors, the Advisors have assumed that they have been
reasonably prepared based on assumptions
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<PAGE> 20
reflecting the best currently available estimates and judgments by management as
to the expected future financial performance of the Company.
The 2000 Projections used by the Advisors were prepared by management of
the Company. None of the Company, Thermedics or Thermo Electron publicly
discloses internal management projections of the type used by the Advisors in
connection with the Advisors' analysis of the Offer and the Merger, and such
projections were not prepared with a view toward public disclosure. The 2000
Projections and the additional projections prepared by the Advisors were based
on numerous variables and assumptions that are inherently uncertain and may be
beyond the control of the management of the Company, Thermo Electron and
Thermedics, including, without limitation, factors related to general economic
and competitive conditions and prevailing interest rates. Accordingly, actual
results could vary significantly from those set forth in such projections. See
"--Certain Projected Financial Data."
The Advisors' financial analysis and Opinion are necessarily based on
economic, market and other conditions as in effect on, and the information made
available to the Advisors as of, the date of their Opinion. Subsequent
developments may affect the financial analysis and the conclusions in the
Opinion, and the Advisors do not have any obligation to update, revise or
reaffirm their financial analysis or Opinion.
In accordance with customary investment banking practice, the Advisors
employed generally accepted valuation methods in conducting their financial
analysis and reaching their Opinion. In undertaking their analysis, the Advisors
primarily relied on three valuation methodologies: comparable public trading
multiples, comparable transaction analysis and discounted cash flow analysis.
However, with respect to one of the Company's businesses, TMD Detection
Consolidated ("Consolidated"), the Advisors considered these methods
inappropriate due to its recent poor financial performance. The Advisors
therefore excluded the financial results of Consolidated for the purposes of
applying such valuation methodologies to the projected financial results of the
Company. The effect of such exclusion was to reduce the estimated revenues of
the Company for 1999 and 2000 by approximately 23% and to significantly increase
the Company's estimated net income for 1999 and 2000 by eliminating
Consolidated's operating loss. A value was estimated for Consolidated, which
represented less than 10% of the Company's estimated value, and then
reincorporated into the financial analysis to derive the equity value range per
Share for each valuation methodology. The following is a summary of the material
financial analyses undertaken by the Advisors with respect to the Company and
presented to the Boards of Directors of Thermo Electron and Thermedics:
Public Trading Multiples. Using publicly available information, the
Advisors compared selected financial data of the Company with similar data
for selected publicly traded companies engaged in businesses which the
Advisors judged to be analogous to the Company's business. The companies
selected by the Advisors were Mettler-Toledo International, Inc., Ametek
Inc., O.I. Corporation and CEM Corporation (the share price of CEM
Corporation used in the analysis was as of a date prior to the announcement
of its acquisition). These companies were selected, among other reasons,
because they compete in similar industries with fairly similar competitive
dynamics and growth potential. For each comparable company, publicly
available financial performance through the most recent last twelve months
was measured. In addition, the Advisors derived estimates of sales, EBITDA,
EBIT and net income for the year ended December 31, 2000 for each
comparable company from the Institutional Brokers Estimates System.
The Advisors applied a range of multiples derived from such analysis
to the Company's estimated (based upon the 2000 Projections) sales, EBITDA,
EBIT and net income for fiscal 1999 and 2000, and arrived at an estimated
range of equity values for the Shares of approximately $6.75 to $8.00 per
Share.
Selected Transaction Analysis. Using publicly available information,
the Advisors examined five selected transactions in which companies engaged
in businesses which the Advisors judged to be analogous to the Company's
were acquired within the last three years. Specifically, the Advisors
reviewed the following transactions (indicated as target/acquiror): CEM
Corporation/Investor Group, Hach Co./Danaher Corp., PerkinElmer-Instrument
Division/EG&G Inc., Drexelbrook Engineering Co./Ametek Inc. and BIE
Technologies Inc./Shareholders. The Advisors applied a range of multiples
derived from such analysis to the Company's estimated (based upon the 2000
Projections) sales,
20
<PAGE> 21
EBITDA, EBIT and net income for fiscal 1999, and arrived at an estimated
range of equity values for the Shares of between $7.00 and $8.50 per Share.
No company or transaction used in the comparable public trading
multiple analysis or the selected transaction analysis is identical to the
Company or the Offer and the Merger. Accordingly, an analysis of the
results of the foregoing necessarily involves complex considerations and
judgments concerning differences in financial and operating characteristics
of the Company and other factors that could affect the public trading value
of the companies to which they are being compared. In evaluating the
comparable companies, the Advisors made judgments and assumptions with
regard to industry performance, general business, economic, market and
financial conditions and other matters, many of which are beyond the
control of the Company.
Discounted Cash Flow Analysis. The Advisors conducted a discounted
cash flow analysis for the purpose of determining the fully diluted equity
value per Share. The Advisors calculated the unlevered free cash flows that
the Company is expected to generate during fiscal years 2000 through 2004
based upon financial projections prepared by the Advisors after discussions
with the management of Thermedics and Thermo Electron. The Advisors also
calculated a range of terminal asset values of the Company at the end of
the 5-year period ending 2004 by applying a perpetual growth rate ranging
from 0.5% to 1.5% to the unlevered free cash flow of the Company during the
final year of the 5-year period. The unlevered free cash flows and the
range of terminal asset values were then discounted to present values using
a range of discount rates from 9.5% to 10.5%, which were chosen by the
Advisors based upon an analysis of the Company's weighted average cost of
capital. The present value of the unlevered free cash flows and the range
of terminal asset values were then adjusted for the Company's estimated
1999 fiscal year-end excess cash, option exercise proceeds and total debt.
Based on this analysis, the Advisors calculated an estimated range of
equity values of between $7.00 and $8.25 per Share.
Historical Common Stock Performance. The Advisors conducted a
historical analysis of the closing price of the Shares over the 52-week
period prior to the date of their Opinion and also reviewed the closing
price of the Shares as of the date two weeks prior to the date of their
Opinion. During the 52-week period, based on trading prices on the American
Stock Exchange, the Company's Shares achieved a high trading price of
$10.875 on May 24, 1999 and a low trading price of $6.75 on December 31,
1999. On January 11, 2000, the closing price of the Shares was $7.3125 and
on January 25, 2000 the closing price of the Shares was $7.9375.
The summary set forth above does not purport to be, and is not, a complete
description of the financial analyses or data undertaken or presented by the
Advisors. The summary of the Advisors' Opinion set forth in this Offer to
Purchase is qualified in its entirety by reference to the full text of the
written Opinion. The full text of the Advisors' written Opinion, which sets
forth among other things the assumptions made, procedures followed, matters
considered and limitations on the scope of the review undertaken by J.P. Morgan
and The Beacon Group in conducting their financial analysis and in rendering
their Opinion, is attached as Exhibit 12(c) to the Schedule TO. The written
Opinion should be read carefully and in its entirety. A copy of the Advisors'
written Opinion will be made available for inspection and copying at the
principal office of Thermo Electron during its regular business hours upon
request from any record holder of the Shares or a representative of such person
designated as such in writing or may be obtained from the Schedule TO filed with
the Commission. Requests to have the Opinion made available should be directed
to the Corporate Secretary of Thermo Electron at the address set forth under
"Certain Information Concerning The Purchaser, Corpak, Thermedics And Thermo
Electron."
The preparation of the financial analysis and the related fairness Opinion
is a complex process and is not necessarily susceptible to partial analysis or
summary description. In arriving at their Opinion, the Advisors considered the
results of all of their analyses as a whole and did not attribute any particular
weight to any analysis or factor considered by them. The Advisors believe that
the summary set forth above and their analyses must be considered as a whole and
that selecting portions thereof, without considering all of their analyses,
could create an incomplete view of the processes underlying their analyses and
Opinion. In addition, the Advisors may have given various analyses and factors
more or less weight than other analyses and factors,
21
<PAGE> 22
and may have deemed various assumptions more or less probable than other
assumptions so that the ranges of valuation resulting from any particular
financial analysis described should not be taken as the Advisors' view of the
actual value of the Company. The Advisors based their analyses on assumptions
that they deemed reasonable, including assumptions concerning general business
and economic conditions and industry-specific factors. The other principal
assumptions upon which the Advisors based their analyses are set forth above
under the description of each such analysis. The Advisors' analyses are not
necessarily indicative of actual values or actual future results that might be
achieved, which values may be higher or lower than those indicated. Moreover,
the Advisors' analyses are not and do not purport to be appraisals or otherwise
reflective of the prices at which businesses actually could be bought or sold.
As described above, the Advisors' financial analysis and Opinion was only
one of many factors considered by the Boards of Directors of Thermedics and
Thermo Electron in their determination that the terms of the Offer and the
Merger are fair to the Public Stockholders and should not be viewed as
determinative of the views of the Boards of Directors of Thermedics and Thermo
Electron with respect to the value of the Company.
J.P. Morgan and The Beacon Group advised the Boards of Directors of Thermo
Electron and Thermedics in connection with the Offer and the Merger in part
because the Advisors had been retained to advise Thermo Electron in connection
with the overall reorganization of Thermo Electron and its subsidiaries. The
Boards of Directors of Thermo Electron and Thermedics also considered J.P.
Morgan's and The Beacon Group's experience and expertise. J.P. Morgan is an
international corporate and investment bank, and The Beacon Group is a
nationally recognized private investment banking firm. As part of their
investment banking businesses, J.P. Morgan and The Beacon Group are regularly
engaged in the valuation of businesses and securities in connection with mergers
and acquisitions, investments for passive and control purposes, negotiated
underwritings, competitive biddings, secondary distributions of listed and
unlisted securities, private placements and valuations for estate, corporate and
other purposes.
J.P. Morgan has advised Thermo Electron and Thermedics that, in the
ordinary course of its business, it or its affiliates may actively trade the
debt and/or equity securities of the Company, Thermedics, Thermo Electron and
their affiliates for their own account and for the accounts of customers and,
accordingly, may at any time hold a long or short term position in such
securities.
In October 1999, Thermo Electron engaged The Beacon Group as its financial
advisor in connection with Thermo Electron's proposed acquisition of the
outstanding shares held by public stockholders in certain subsidiaries. Thermo
Electron paid The Beacon Group $500,000 in fees for services rendered pursuant
to that engagement in connection with the acquisition of the outstanding
publicly-held shares of common stock of ThermoTrex Corporation and ThermoLase
Corporation.
As noted above, J.P. Morgan and The Beacon Group have acted as financial
advisors to Thermo Electron for the purpose of advising Thermo Electron in
connection with its strategic alternatives, including the proposed
reorganization of Thermo Electron and its subsidiaries. As part of the proposed
reorganization, it is contemplated that Thermo Electron will acquire the
publicly-held minority interest in Thermedics and that J.P. Morgan and The
Beacon Group will act as financial advisors to Thermo Electron in connection
with such acquisition.
Pursuant to a letter agreement among Thermo Electron and J.P. Morgan and
The Beacon Group dated January 17, 2000, Thermo Electron has agreed to pay each
of J.P. Morgan and The Beacon Group a fee of $500,000 for its services in
connection with the Offer and the Merger. In addition, J.P. Morgan and The
Beacon Group will be reimbursed for expenses incurred in connection with these
transactions. The letter agreement also relates to the overall proposed
reorganization of Thermo Electron and provides for separate fees for services
with respect to other elements of Thermo Electron's reorganization. These other
fees include a minimum retainer for each of J.P. Morgan and The Beacon Group of
$1.25 million, and the engagement letter provides for substantial additional
compensation if some or all of the other elements of Thermo Electron's
reorganization are completed. Thermo Electron has agreed to indemnify J.P.
Morgan and The Beacon Group and their affiliates against certain liabilities,
including liabilities under the federal securities laws, in connection with
their engagement.
22
<PAGE> 23
CERTAIN PROJECTED FINANCIAL DATA
The Company does not, as a matter of course, make public forecasts or
projections as to future sales, earnings or other income statement data, cash
flows or balance sheet and financial position information. However, Thermedics
and Thermo Electron had access to the 1999-2000 Projections and the 2000
Projections, made the 1999-2000 Projections available to the Special Committee
and made the 2000 Projections available to the Advisors. The 1999-2000
Projections and the 2000 Projections were prepared by the Company's management
in the regular course of its financial planning. The 2001-2003 Projections were
prepared by Thermo Electron, with the assistance of the Company's management,
for the sole purpose of preparing the discounted cash flow analysis included in
the August 30 Offer. The 1999-2000 Projections, the 2000 Projections and the
2001-2003 Projections are collectively referred to herein as the "Projections".
The following summaries of the 1999-2000 Projections and the 2000
Projections are included in this Offer to Purchase solely because the 1999-2000
Projections were made available to Thermedics, Thermo Electron and the Special
Committee, and the 2000 Projections were made available to Thermedics, Thermo
Electron and the Advisors. The 2001-2003 Projections are included in this Offer
to Purchase because they were provided to the Special Committee. The Projections
do not reflect any of the effects of the Offer, the Merger or other changes that
may in the future be deemed appropriate concerning the Company and its assets,
business, operations, properties, policies, corporate structure, capitalization
and management in light of the circumstances then existing. Thermedics and
Thermo Electron believe that the assumptions upon which the Projections are
based were reasonable at the time the Projections were prepared, given the
information known by management of the Company or Thermo Electron at such time.
The Projections were not prepared with a view toward public disclosure or
compliance with published guidelines of the Commission or the American Institute
of Certified Public Accountants regarding forward-looking information or
generally accepted accounting principles. Neither the Company's independent
auditors, nor any other independent accountants, have compiled, examined or
performed any procedures with respect to the prospective financial information
contained in the Projections nor have they expressed any opinion or given any
form of assurance on such information or its achievability, and they assume no
responsibility for, and disclaim any association with, such prospective
financial information. Furthermore, the Projections necessarily make numerous
assumptions, many of which are beyond the control of Thermedics and Thermo
Electron and may prove not to have been, or may no longer be, accurate.
Additionally, this information, except as otherwise indicated, does not reflect
revised prospects for the Company's businesses, changes in general business and
economic conditions, or any other transaction or event that has occurred or that
may occur and that was not anticipated at the time such information was
prepared. Accordingly, such information is not necessarily indicative of current
values or future performance, which may be significantly more favorable or less
favorable than as set forth below, and should not be regarded as a
representation that they will be achieved.
THE PROJECTIONS ARE NOT GUARANTEES OF PERFORMANCE. THEY INVOLVE RISKS,
UNCERTAINTIES AND ASSUMPTIONS. THE FUTURE FINANCIAL RESULTS AND STOCKHOLDER
VALUE OF THE COMPANY MAY MATERIALLY DIFFER FROM THOSE EXPRESSED IN THE
PROJECTIONS. MANY OF THE FACTORS THAT WILL DETERMINE THESE RESULTS AND VALUES
ARE BEYOND THE COMPANY'S ABILITY TO CONTROL OR PREDICT. STOCKHOLDERS ARE
CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THE PROJECTIONS. THERE CAN BE NO
ASSURANCE THAT THE PROJECTIONS WILL BE REALIZED OR THAT THE COMPANY'S FUTURE
FINANCIAL RESULTS WILL NOT MATERIALLY VARY FROM THE PROJECTIONS. THE COMPANY
DOES NOT INTEND TO UPDATE OR REVISE THE PROJECTIONS.
23
<PAGE> 24
The following are the 1999-2000 Projections:
1999-2000 PROJECTIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>
PROJECTED Q3 PROJECTED Q4 PROJECTED PROJECTED
1999 1999 1999 2000
<S> <C> <C> <C> <C>
SELECTED INCOME STATEMENT DATA:
Revenues.............................................. $17,768 $17,769 $74,136 $74,508
------- ------- ------- -------
Costs and Operating Expenses:
Cost of revenues.................................... 8,065 8,065 32,951 33,082
Operating expenses.................................. 7,463 7,431 31,926 30,699
------- ------- ------- -------
15,528 15,496 64,877 63,781
------- ------- ------- -------
Operating Income...................................... 2,240 2,273 9,259 10,727
Interest Income....................................... 300 300 1,280 1,200
Other Expense, Net.................................... -- -- (18) --
------- ------- ------- -------
Income Before Provision for Income Taxes.............. 2,540 2,573 10,521 11,927
Provision for Income Taxes............................ 991 1,004 4,104 4,651
------- ------- ------- -------
Net Income............................................ $ 1,549 $ 1,569 $ 6,417 $ 7,276
======= ======= ======= =======
SELECTED BALANCE SHEET DATA:
Accounts Receivable, Net.............................. $15,400 $15,300 $15,725 $14,600
Inventories........................................... 16,350 16,100 16,476 15,200
Prepaid Income Taxes and Other Current Assets......... 5,533 5,564 5,633 5,564
------- ------- ------- -------
Total Current Assets Excluding Cash and Investments... 37,283 36,964 37,834 35,364
Property, Plant, and Equipment:
Balance, beginning of period........................ 4,834 4,784 4,939 4,734
Additions........................................... 425 425 1,782 1,650
Depreciation expense................................ (475) (475) (1,821) (1,925)
Sales............................................... -- -- (165) --
------- ------- ------- -------
Balance, end of period.............................. 4,784 4,734 4,735 4,459
Cost in Excess of Net Assets of Acquired Companies.... 52,984 52,611 53,474 51,119
</TABLE>
24
<PAGE> 25
The following are the 2000 Projections:
2000 PROJECTIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>
PROJECTED Q4 PROJECTED PROJECTED
1999 1999 2000
<S> <C> <C> <C>
SELECTED INCOME STATEMENT DATA:
Revenues................................................ $17,100 $73,257 $75,050
------- ------- -------
Costs and Operating Expenses:
Cost of revenues...................................... 7,817 35,254 34,018
Selling, general, and administrative expenses......... 5,885 24,795 24,252
Research and development expenses..................... 2,079 8,434 7,700
------- ------- -------
15,781 68,483 65,970
------- ------- -------
Operating Income........................................ 1,319 4,774 9,080
Interest Income......................................... 400 1,490 1,600
Other Expense, Net...................................... (5) (27) (20)
------- ------- -------
Income Before Provision for Income Taxes................ 1,714 6,237 10,660
Provision for Income Taxes.............................. 97 1,292 4,162
------- ------- -------
Net Income.............................................. $ 1,617 $ 4,945 $ 6,498
======= ======= =======
SELECTED BALANCE SHEET DATA:
Accounts Receivable, Net................................ $14,600 $14,600 $14,100
Inventories............................................. 13,300 13,300 13,200
Prepaid Income Taxes and Other Current Assets........... 6,164 6,164 4,914
------- ------- -------
Total Current Assets Excluding Cash and Investments..... 34,064 34,064 32,214
Property, Plant and Equipment:
Balance, beginning of period.......................... 4,563 4,939 4,708
Additions............................................. 597 1,719 1,650
Depreciation expense.................................. (451) (1,772) (1,920)
Sales................................................. (1) (177) --
------- ------- -------
Balance, end of period................................ 4,708 4,709 4,438
Cost in Excess of Net Assets of Acquired Companies...... 52,747 52,747 51,283
</TABLE>
25
<PAGE> 26
The following are the 2001-2003 Projections:
2001-2003 PROJECTIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>
FISCAL YEAR
---------------------------------
2001 2002 2003
<S> <C> <C> <C>
Revenues.................................................... $77,200 $80,500 $83,800
Growth Rate............................................... 3.6% 4.3% 4.1%
Gross Profit................................................ $43,232 $45,241 $47,179
Gross Profit Margin....................................... 56.0% 56.2% 56.3%
EBIT (without goodwill amortization)........................ $13,985 $15,167 $16,059
EBIT Margin............................................... 18.1% 18.8% 19.2%
EBIAT--Earnings Before Interest After Taxes................. $ 8,391 $ 9,100 $ 9,635
NOA--Net Operating Assets................................... $27,627 $28,606 $29,613
NOA/Sales................................................. 35.8% 35.5% 35.3%
Increase (Decrease) NOA..................................... $ 107 $ 978 $ 1,007
Operating Cash Flows........................................ $ 8,284 $ 8,122 $ 8,628
</TABLE>
CONFLICTS OF INTEREST
THERMO ELECTRON AND THERMEDICS. The financial interests of Thermo Electron
and Thermedics are adverse as to the Offer Price to the financial interests of
the Public Stockholders.
DIRECTORS OF THERMO ELECTRON AND THERMEDICS. The members of the Boards of
Directors of Thermo Electron and Thermedics own common stock of, or hold options
to purchase the common stock of, Thermo Electron, Thermedics and/or the Company.
In addition, certain members of the Boards of Directors of Thermo Electron and
Thermedics are also officers of the Company. These positions and equity
interests present these directors with actual or potential conflicts of interest
in determining the fairness of the Offer and the Merger to the Public
Stockholders. See Schedule I to this Offer to Purchase for a listing of the
positions that the members of the Boards of Directors of Thermo Electron and
Thermedics hold with Thermo Electron, Thermedics and the Company and their
ownership of the common stock of Thermo Electron, Thermedics and the Company. To
the knowledge of each of the Purchaser, Corpak, Thermedics and Thermo Electron,
all of the directors and executive officers of Thermo Electron and Thermedics
who own Shares have advised Thermedics that they intend to tender their Shares
in the Offer.
EXECUTIVE OFFICERS AND DIRECTORS OF THE COMPANY. In considering any
position that the Board of Directors of the Company may take with respect to the
Offer, the Public Stockholders should be aware that the executive officers and
certain directors of the Company have interests in connection with the Offer and
the Merger that present them with actual or potential conflicts of interest, as
summarized below.
Following consummation of the Offer and the Merger, Thermedics anticipates
that the board of directors of the Purchaser, as the corporation surviving the
Merger (the "Surviving Corporation"), will be comprised solely of members of the
Company's and Thermedics' management. Officers and directors of the Company who
own Shares will receive the Offer Price in the Offer or the Merger on the same
terms as the Public Stockholders.
As of January 28, 2000, the members of the Board of Directors and executive
officers of the Company owned in the aggregate 18,103 Shares and will receive a
payment for their Shares in the aggregate amount of $144,824, assuming that they
tender all of their Shares in the Offer or their Shares are acquired in the
Merger. To the knowledge of each of the Purchaser, Corpak, Thermedics and Thermo
Electron, all of the directors and executive officers of the Company who own
Shares have advised Thermedics that they intend to tender their Shares in the
Offer.
26
<PAGE> 27
In addition, as of January 28, 2000, such Board members and executive
officers of the Company held Options to acquire an aggregate of 252,800 Shares,
with exercise prices ranging from $7.56 to $11.99 per Share. Unvested Options
held by such persons will be assumed by Thermo Electron in the Merger and
converted into options to acquire shares of Thermo Electron's common stock on
the same terms as are applicable to all the other holders of Options. In the
case of vested Options held by such persons, the holders will be given the
opportunity to elect in the Merger either to convert the Options into options
for Thermo Electron common stock or to receive cash for their Options at the
Offer Price less the applicable exercise price. See "--Certain Effects Of The
Offer And The Merger--Assumption of Options by Thermo Electron."
Certain members of the Board of Directors of the Company and certain
executive officers of the Company are directors or officers of Thermo Electron
and/or Thermedics. All of such directors and executive officers of the Company
hold equity interests in Thermo Electron and Thermedics. Mr. Melas-Kyriazi, the
chief financial officer of the Company, is also the chief financial officer of
Thermo Electron and Thermedics. Mr. John T. Keiser, a director of the Company,
is chief operating officer, biomedical of Thermo Electron and is president and
chief executive officer of Thermedics. Mr. Earl R. Lewis, a director of the
Company, is chief operating officer, measurement and detection, of Thermo
Electron. Mr. Paul F. Kelleher, the chief accounting officer of the Company, is
also the chief accounting officer of Thermo Electron and Thermedics.
Consequently, certain of these directors and officers receive or have received
compensation not only from the Company but also from Thermo Electron, Thermedics
and/or their affiliates.
INDEMNIFICATION AGREEMENTS. Thermo Electron has entered into separate
indemnification agreements with each of the Company's executive officers and
directors providing for indemnification of and advancement of expenses to such
persons directly by Thermo Electron in the event that such person, by reason of
his or her status as a director or officer of the Company (or service as a
director, officer or fiduciary of another enterprise at the request of Thermo
Electron), is made or threatened to be made a party to any threatened, pending,
or completed action, suit or other proceeding, whether civil, criminal,
administrative or investigative, if the indemnitee acted in good faith and in a
manner the indemnitee reasonably believed to be in or not opposed to the best
interests of Thermo Electron, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
In the case of any threatened, pending or completed action, suit or proceeding
by or in the right of Thermo Electron, indemnification shall be made to the
maximum extent permitted under Delaware law.
OTHER POSSIBLE PURCHASES OF SHARES
If the Offer is successfully completed, Thermo Electron and its
subsidiaries will collectively own at least 90% of the outstanding Shares. If,
after the Offer is completed but prior to the effective date of the Merger (the
"Effective Date of the Merger"), as a result of the exercise of Options or for
any other reason, Thermo Electron and its subsidiaries collectively own less
than 90% of the outstanding Shares, the Purchaser intends to acquire additional
Shares in the open market or in privately negotiated transactions to the extent
required for Thermo Electron and its subsidiaries' collective ownership of
Shares to equal or exceed 90%. If the Offer is not completed, the Purchaser may
make open market or privately negotiated purchases of Shares to the extent
necessary in order for Thermo Electron and its subsidiaries collectively to own
at least 90% of the outstanding Shares. Such open market or privately negotiated
purchases would be made at market prices or privately negotiated prices at the
time of purchase, which may be higher or lower than the Offer Price.
THE MERGER
If the Offer is successfully completed, Corpak and Thermo Electron plan to
contribute the Shares they own to the Purchaser in exchange for capital stock of
the Purchaser and to cause the Company to merge into the Purchaser in a
short-form merger. The short-form merger would occur as soon as possible after
completion of the Offer. In the Merger, the Purchaser would be the surviving
corporation and would change its name to "Thermedics Detection Inc." The
surviving corporation would be owned exclusively by Thermo Electron and Corpak.
Under Massachusetts law, if the Purchaser owns at least 90% of the outstanding
Shares, the Purchaser would have the power to approve, adopt and consummate the
Merger without a vote of the Company's stockholders (other than the Purchaser)
or Board of Directors.
27
<PAGE> 28
On the Effective Date of the Merger, each outstanding Share (other than
Shares held by stockholders, if any, who are entitled to and perfect their
appraisal rights under Massachusetts law) would be cancelled and converted into
the right to receive the Offer Price in cash, without interest. After the
Merger, Thermedics and Thermo Electron will, directly or indirectly, own 100% of
the equity interest in the Surviving Corporation.
CERTAIN EFFECTS OF THE OFFER AND THE MERGER
GENERAL. Upon completion of the Offer and the Merger, Thermedics and
Thermo Electron would have complete control over the conduct of the Company's
business and together would have a 100% interest in the net book value and net
earnings of the Company. In addition, Thermedics and Thermo Electron would
receive the benefit of complete control over any future increases in the value
of the Company and would bear the complete risk of any losses incurred in the
operation of the Company and any decrease in the value of the Company. Thermo
Electron's and its subsidiaries' aggregate ownership of the Company prior to the
transactions contemplated by the Offer and the Merger was approximately 88.9%.
Upon completion of the Offer and the Merger, Thermo Electron's and its
subsidiaries' aggregate interest in the Company's net book value of
approximately $121.7 million on January 1, 2000 and net earnings of $5.1 million
for the year ended January 1, 2000 would increase from approximately 88.9% of
such amounts to 100% of such amounts.
BENEFITS AND DETRIMENTS TO THE PUBLIC STOCKHOLDERS. Upon completion of the
Offer and the Merger, the Public Stockholders would no longer have any interest
in, and would not be stockholders of, the Company and therefore would not
participate in the Company's future earnings and potential growth and would no
longer bear the risk of any decreases in the value of the Company. In addition,
the Public Stockholders would not share in any distribution of proceeds after
any sales of businesses of the Company, whether contemplated at the time of the
Offer or thereafter. See "--Conduct Of The Company's Business After The Offer
And The Merger." All of the Public Stockholders' other incidents of stock
ownership, such as the rights to vote on certain corporate decisions, to elect
directors, to receive distributions upon the liquidation of the Company and to
receive appraisal rights upon certain mergers or consolidations of the Company
(unless such appraisal rights are perfected in connection with the Merger), as
well as the benefit of potential increases in the value of their holdings in the
Company based on any improvements in the Company's future performance, would be
extinguished upon acceptance of Shares tendered in the Offer or, if not
tendered, upon completion of the Merger.
Upon completion of the Offer and the Merger, the Public Stockholders would
also not bear the risks of potential decreases in the value of their holdings in
the Company based on any downturns in the Company's future performance. Instead,
the Public Stockholders would have immediate liquidity in the form of the Offer
Price in place of an ongoing equity interest in the Company in the form of the
Shares. In summary, if the Offer and the Merger are completed, the Public
Stockholders would have no ongoing rights as stockholders of the Company (other
than statutory appraisal rights in the case of Public Stockholders who are
entitled to and perfect such rights under Massachusetts law).
POSSIBLE EFFECT OF THE OFFER AND OPEN MARKET PURCHASES ON THE MARKET FOR
SHARES. Following the completion of the Offer and prior to the Effective Date
of the Merger, the purchase of Shares by the Purchaser pursuant to the Offer or
any subsequent open market or privately negotiated purchases would reduce the
number of Shares that might otherwise trade publicly and may reduce the number
of holders of Shares. This could adversely affect the liquidity and market value
of the remaining Shares held by the public.
AMERICAN STOCK EXCHANGE LISTING. If the Offer and Merger are consummated,
the Shares would not meet the requirements for continued listing on the American
Stock Exchange and would be delisted. Assuming that the Merger occurs shortly
after the completion of the Offer, Thermo Electron and Thermedics do not expect
the American Stock Exchange to delist the Shares until after the Effective Date
of the Merger.
Following the closing of the Offer and prior to the Effective Date of the
Merger, depending upon the aggregate market value and the number of Shares not
purchased pursuant to the Offer or any subsequent open market or privately
negotiated purchases, as well as the number of Public Stockholders who are not
affiliated with Thermedics or Thermo Electron, the Shares may no longer meet the
quantitative requirements for continued listing on the American Stock Exchange.
The listing requirements of the American Stock Exchange
28
<PAGE> 29
require that an issuer have at least 200,000 publicly held shares, held by at
least 300 stockholders, with a market value of at least $1,000,000 and have
stockholders' equity of at least $2,000,000 or $4,000,000 (depending on
profitability levels during the issuer's four most recent fiscal years).
In the event that the Shares no longer meet the requirements for listing on
the American Stock Exchange, it is possible that the Shares would continue to
trade in the over-the-counter market prior to the Effective Date of the Merger
and that price or other quotations might still be available from other sources.
The extent of the public market for the Shares and the availability of such
quotations would, however, depend upon such factors as the number of holders
and/or the aggregate market value of such Shares remaining at such time, the
interest in maintaining a market in such Shares on the part of securities firms,
the possible termination of registration of such Shares under the Exchange Act,
as described below, and other factors. The Purchaser cannot predict whether a
reduction in the number of Shares that might otherwise trade publicly would have
an adverse or beneficial effect on the market price for or marketability of the
Shares or whether it would cause future market prices to be greater or less than
the price paid in the Offer and the Merger.
EXCHANGE ACT REGISTRATION. The Shares are currently registered under the
Exchange Act. If the Offer and the Merger are completed, however, the Company's
reporting obligations under the Exchange Act would terminate.
Prior to the Effective Date of the Merger, the purchase of Shares pursuant
to the Offer or open market or privately negotiated purchases following
consummation of the Offer may result in the Shares becoming eligible for
deregistration under the Exchange Act. Registration of the Shares may be
terminated upon application by the Company to the Commission if the Shares are
not listed on a national securities exchange (see "--American Stock Exchange
Listing") and there are fewer than 300 record holders of the Shares. Thermedics
presently intends to seek to cause the Company to terminate the registration of
the Shares under the Exchange Act as soon after the consummation of the Offer or
the Merger as the requirements for termination of registration are met.
The termination of the registration of the Shares under the Exchange Act
would substantially reduce the information required to be furnished by the
Company to holders of the Shares and would make certain provisions of the
Exchange Act, such as the short-swing profit recovery provisions of Section
16(b), the requirement of furnishing a proxy statement in connection with
stockholders' meetings pursuant to Section 14(a) and the requirements of Rule
13e-3 under the Exchange Act with respect to "going private" transactions, no
longer applicable to the Shares. Furthermore, "affiliates" of the Company and
persons holding "restricted securities" of the Company may be deprived of the
ability to dispose of the securities pursuant to Rule 144 under the Securities
Act. If registration of the Shares under the Exchange Act were terminated, the
Shares would no longer be "margin securities" or eligible for listing on the
American Stock Exchange.
MARGIN REGULATIONS. The Shares are currently "margin securities" under the
rules of the Board of Governors of the Federal Reserve System (the "Federal
Reserve Board"), which has the effect, among other things, of allowing brokers
to extend credit on the collateral of such Shares for the purpose of buying,
carrying or trading in securities ("purpose loans"). If the Offer and the Merger
are completed, the Shares would no longer be "margin securities." Following the
purchase of Shares pursuant to the Offer or any subsequent open market or
privately negotiated purchases and prior to the Effective Date of the Merger,
depending upon factors such as the number of record holders of the Shares and
the number and market value of publicly held Shares, the Shares might no longer
constitute "margin securities" for purposes of the Federal Reserve Board's
margin regulations and therefore no longer be used as collateral for purpose
loans made by brokers. In addition, if registration of the Shares under the
Exchange Act were terminated, the Shares would no longer constitute "margin
securities."
TREATMENT OF THERMEDICS DETECTION OPTIONS. The Company has, from time to
time, issued Options to acquire Shares pursuant to the Company's Equity
Incentive Plan and Employees Equity Incentive Plan (together, the "Plans"). On
the Effective Date of the Merger, each outstanding unvested Option under the
Company's Plans will be assumed by Thermo Electron and converted into options to
acquire shares of Thermo Electron common stock as provided below. In the case of
vested Options, the holders will be given the opportunity to elect in the Merger
either to convert the Options into vested options for Thermo Electron common
stock or to receive cash from Thermedics in an amount equal to the number of
Shares that have
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vested under such Option multiplied by the difference between the Offer Price
and the exercise price per Share of such Option. Each Option assumed by Thermo
Electron will continue to have, and be subject to, the same terms and
conditions, including the vesting of shares issuable upon the exercise thereof,
as were applicable to the Option immediately prior to the Effective Date of the
Merger, except that:
- each Option will be exercisable (or will become exercisable in accordance
with its terms) for that number of whole shares of Thermo Electron common
stock equal to the product of the number of Shares that were issuable
upon exercise of such Option immediately prior to the Effective Date of
the Merger multiplied by the Exchange Ratio (as defined below), rounded
down to the nearest whole number of shares of Thermo Electron common
stock, and
- the per share exercise price for the shares of Thermo Electron common
stock issuable upon exercise of such assumed Option will be equal to the
quotient determined by dividing the exercise price per Share at which
such Option was exercisable immediately prior to the Effective Date of
the Merger by the Exchange Ratio, rounded up to the nearest whole cent.
The "Exchange Ratio" is a fraction, the numerator of which is the Offer Price
and the denominator of which is the closing price of the Thermo Electron common
stock on the day immediately preceding the Effective Date of the Merger as
reported on the consolidated transactions tape.
ACCOUNTING TREATMENT. The Offer and the Merger would be accounted for as
the acquisition of a minority interest by Thermedics, using the purchase method
of accounting.
TAX CONSEQUENCES. For federal income tax purposes, the receipt of the cash
consideration by holders of the Shares pursuant to the Offer or the Merger will
be a taxable sale of the holder's Shares. See "Certain Federal Income Tax
Consequences."
CONDUCT OF THE COMPANY'S BUSINESS AFTER THE OFFER AND THE MERGER
Following Thermo Electron's reorganization, Thermo Electron plans to retain
the Surviving Corporation as part of Thermo Electron's core measurement and
detection instruments businesses. In connection with the reorganization of
Thermo Electron and its subsidiaries, Thermo Electron intends to evaluate ways
in which its instruments businesses, including the Company's business, can be
more efficiently integrated and operated. Thermedics and Thermo Electron do not
currently have any commitment or agreement for the sales of any of the Company's
businesses. Additionally, Thermo Electron and Thermedics do not currently
contemplate any material change in the composition of the Company's current
management, except that Thermedics intends to appoint a Board of Directors of
the Surviving Corporation comprised solely of members of the Company's and
Thermedics' management after the Merger.
In connection with its reorganization, Thermo Electron currently intends to
acquire all of the outstanding common stock of Thermedics that it does not
currently own. If such transaction is completed, the Surviving Corporation will
become an indirect wholly-owned subsidiary of Thermo Electron.
Except as otherwise described in this Offer to Purchase, the Purchaser,
Corpak, Thermedics and Thermo Electron do not have, as of the date of this Offer
to Purchase, any specific plans or proposals for:
- any extraordinary corporate transaction involving the Company after the
completion of the Offer and the Merger;
- any sale or transfer of a material amount of assets currently held by the
Company after the completion of the Offer and the Merger;
- any change in the Board of Directors or management of the Company;
- any material change in the Company's dividend rate or policy; or
- any other material change in the Company's corporate structure or
business.
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CONDUCT OF THE COMPANY'S BUSINESS IF THE OFFER IS NOT COMPLETED
If the Offer is not completed because the Minimum Condition or another
condition is not satisfied or waived, Thermo Electron and Thermedics expect that
the Company's current management will continue to operate the Company's business
substantially as presently operated. See "--Conduct Of The Company's Business
After The Offer And The Merger." However, Thermedics and Thermo Electron
anticipate that if the Offer is not completed, Thermedics and Thermo Electron
will re-evaluate the role of the Company within the overall reorganization
strategy being pursued by Thermo Electron. In particular, Thermedics and Thermo
Electron may consider:
- engaging in open market or privately negotiated purchases of Shares to
increase Thermo Electron's and its subsidiaries' aggregate ownership of
Shares to at least 90% of the outstanding Shares and then effecting a
short-form merger;
- proposing that the Purchaser and the Company enter into a long-form
merger agreement, which would require the approval of the Company's Board
of Directors, and voting all of their Shares in favor of such merger;
- keeping outstanding the public minority interest in the Company, in which
case the Public Stockholders would receive no cash for their Shares and
would bear the risk that the trading price per Share could decrease to a
price that is less than the Offer Price; or
- selling their interests in the Company or pursuing a sale of the entire
Company to a third party.
If Thermedics and Thermo Electron were to pursue any of these alternatives,
it may take considerably longer for the Public Stockholders to receive any
consideration for their Shares (other than through sales in the open market)
than if they had tendered their Shares in the Offer. Any such transaction may
result in proceeds per Share to the Public Stockholders that are more or less
than the Offer Price.
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THE TENDER OFFER
TERMS OF THE OFFER; EXPIRATION DATE
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will accept for payment and pay for all Shares
validly tendered prior to the Expiration Date (as defined below) and not
properly withdrawn as provided in "--Withdrawal Rights." The term "Expiration
Date" means 12:00 midnight, New York City time, on Thursday, April 6, 2000,
unless and until the Purchaser, in its sole discretion, shall have extended the
period during which the Offer is open, in which event the term "Expiration Date"
shall mean the latest time and date at which the Offer, as so extended by the
Purchaser, shall expire.
Subject to the applicable rules and regulations of the Commission, the
Purchaser expressly reserves the right, in its sole discretion, at any time and
from time to time, to extend the period during which the Offer is open for any
reason, including the failure to satisfy any of the conditions specified in
"--Certain Conditions Of The Offer," and thereby delay acceptance for payment
of, and payment for, any Shares, by giving oral or written notice of such
extension to the Depositary. There can be no assurance that the Purchaser will
exercise its right to extend the Offer. During any such extension, all Shares
previously tendered and not properly withdrawn will remain subject to the Offer,
subject to the rights of a tendering stockholder to withdraw such stockholder's
Shares. See "--Withdrawal Rights."
Subject to the applicable rules and regulations of the Commission, the
Purchaser also expressly reserves the right, in its sole discretion, at any time
and from time to time, to (1) terminate the Offer and not accept for payment (or
pay for) any Shares if any of the conditions referred to in "--Certain
Conditions Of The Offer" has not been satisfied or upon the occurrence and
during the continuance of any of the events specified in "--Certain Conditions
Of The Offer," and (2) waive any condition or amend the Offer in any respect, in
each case by giving oral or written notice of termination, waiver or amendment
to the Depositary and by making a public announcement thereof. The Purchaser
acknowledges (a) that Rule 14e-1(c) under the Exchange Act requires the
Purchaser to pay the consideration offered or return the Shares tendered
promptly after the termination or withdrawal of the Offer and (b) that the
Purchaser may not delay acceptance for payment of, or payment for, any Shares
upon the occurrence of any of the conditions specified in "--Certain Conditions
Of The Offer" without extending the period during which the Offer is open.
If the Minimum Condition or any other condition specified in "--Certain
Conditions Of The Offer" is not fulfilled by the Expiration Date, the Purchaser
reserves the right (but shall not be obligated) to (1) decline to purchase any
of the Shares tendered, return all tendered Shares to tendering stockholders and
terminate the Offer, (2) extend the Offer and retain all tendered Shares until
the expiration of the Offer, as extended, subject to the terms and conditions of
the Offer (including any rights of stockholders to withdraw their Shares), or
(3) waive or reduce the condition and, subject to complying with applicable
rules and regulations of the Commission, accept for payment and purchase all
Shares validly tendered.
Any extension, termination or amendment will be followed as promptly as
practicable by a public announcement thereof, such announcement, in the case of
an extension, to be made no later than 9:00 a.m., New York City time, on the
next business day after the previously scheduled Expiration Date. Without
limiting the manner in which the Purchaser may choose to make any public
announcement, except as provided by applicable law (including Rules 14d-4(c),
14d-6(d) and 14e-1 under the Exchange Act, which require that material changes
be promptly disseminated to holders of Shares), the Purchaser will have no
obligation to publish, advertise or otherwise communicate any such public
announcement other than by issuing a release to the Dow Jones News Service.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or waives a material condition of the Offer,
the Purchaser will disseminate additional tender offer materials (including by
public announcement as set forth above) and extend the Offer to the extent
required by Rules 14d-4(d), 14d-6(d) and 14e-1 under the Exchange Act. The
minimum period during which the Offer must remain open following material
changes in the terms of the Offer or information concerning the Offer, other
than a change in price, a change in percentage of securities sought or a change
in any dealer's
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soliciting fee, will depend upon the facts and circumstances, including the
relative materiality of the changes. With respect to a change in price or,
subject to certain limitations, a change in the percentage of securities sought
or a change in any dealer's soliciting fee, a minimum ten business day period
from the date of such change is generally required to allow for adequate
dissemination of such change to stockholders. Accordingly, if, prior to the
Expiration Date, the Purchaser decreases the number of Shares being sought,
increases the consideration offered pursuant to the Offer or adds a dealer's
soliciting fee, and if the Offer is scheduled to expire at any time earlier than
the period ending on the tenth business day from the date that notice of such
increase, decrease or addition is first published, sent or given to
stockholders, the Offer will be extended at least until the expiration of such
ten business day period. For purposes of the Offer, a "business day" means any
day other than a Saturday, Sunday or a federal holiday and consists of the time
period from 12:01 a.m. through 12:00 midnight, New York City time.
The Company has provided the Purchaser with the Company's stockholder list
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the related Letter of Transmittal
and, if required, other relevant material will be mailed to record holders of
Shares and will be furnished to brokers, dealers, commercial banks, trust
companies and similar persons whose names, or the names of whose nominees,
appear on the Company's stockholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of Shares.
ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will purchase by accepting for payment, and will
pay for, all Shares validly tendered prior to the Expiration Date and not
properly withdrawn (including Shares validly tendered and not withdrawn during
any extension of the Offer, if the Offer is extended, subject to the terms and
conditions of such extension), promptly after the Expiration Date. In addition,
subject to complying with Rule 14e-1 under the Exchange Act, the Purchaser
expressly reserves the right, in its sole discretion, to delay the acceptance
for payment of, or payment for, Shares in order to comply, in whole or in part,
with any applicable law.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of:
- certificates evidencing Shares ("Share Certificates") or timely
confirmation of a book-entry transfer of such Shares ("Book-Entry
Confirmation") into the Depositary's account at The Depository Trust
Company (the "Book-Entry Transfer Facility") pursuant to the procedures
set forth in "--Procedures For Accepting The Offer And Tendering Shares";
- the Letter of Transmittal (or a facsimile thereof), properly completed
and duly executed, with any required signature guarantees, or an Agent's
Message (as defined below) in connection with a book-entry transfer; and
- any other documents required by the Letter of Transmittal.
Accordingly, payment may be made to tendering stockholders at different
times if delivery of the Shares and other required documents occurs at different
times.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares which are the subject of such Book-Entry
Confirmation, that such participant has received and agrees to be bound by the
terms of the Letter of Transmittal and that the Purchaser may enforce such
agreement against such participant.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares validly tendered and not properly
withdrawn if, as and when the Purchaser gives oral or
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written notice to the Depositary of the Purchaser's acceptance for payment of
such Shares pursuant to the Offer. Upon the terms and subject to the conditions
of the Offer, payment for Shares so accepted for payment pursuant to the Offer
will be made by deposit of the aggregate purchase price therefor with the
Depositary, which will act as agent for tendering stockholders for the purpose
of receiving payment from the Purchaser and transmitting such payment to
stockholders whose Shares have been accepted for payment. UNDER NO CIRCUMSTANCES
WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE PAID, REGARDLESS OF ANY
EXTENSION OF THE OFFER OR DELAY IN MAKING SUCH PAYMENT. Upon the deposit of
funds with the Depositary for the purpose of making payment to validly tendering
stockholders, the Purchaser's obligation to make such payment shall be satisfied
and such tendering stockholders must thereafter look solely to the Depositary
for payment of the amounts owed to them by reason of the acceptance for payment
of Shares pursuant to the Offer.
If any tendered Shares are not accepted for payment pursuant to the terms
and conditions of the Offer for any reason, or if Share Certificates are
submitted for more Shares than are tendered, Share Certificates representing
Shares not purchased or not tendered will be returned, without expense, to the
tendering stockholder (or, in the case of Shares tendered by book-entry transfer
of such Shares into the Depositary's account at the Book-Entry Transfer Facility
pursuant to the procedures for book-entry transfer set forth in "--Procedures
For Accepting The Offer And Tendering Shares," such Shares will be credited to
an account maintained at the Book-Entry Transfer Facility), as soon as
practicable following expiration or termination of the Offer.
If, prior to the Expiration Date, the Purchaser increases the consideration
to be paid per Share, the Purchaser will pay such increased consideration for
all Shares purchased pursuant to the Offer, whether or not such Shares have been
tendered or purchased prior to such increase in consideration.
The Purchaser reserves the right to transfer or assign, in whole or in part
from time to time, to one or more of its affiliates, the right to purchase the
Shares tendered pursuant to the Offer, but any such transfer or assignment will
not relieve the Purchaser of its obligations under the Offer, nor will any such
transfer or assignment in any way prejudice the rights of tendering stockholders
to receive payment for Shares validly tendered and accepted for payment pursuant
to the Offer.
PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES
GENERAL. Except as set forth below, in order for Shares to be validly
tendered pursuant to the Offer, the Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed, together with any required
signature guarantees, or an Agent's Message in connection with a book-entry
delivery of Shares, and any other documents required by the Letter of
Transmittal, must be received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase prior to the Expiration Date,
and either (l) Share Certificates evidencing tendered Shares must be received by
the Depositary at such address or such Shares must be tendered pursuant to the
procedures for book-entry transfer set forth below (and a Book-Entry
Confirmation must be received by the Depositary), in each case prior to the
Expiration Date, or (2) the guaranteed delivery procedures set forth below must
be complied with.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering stockholders, by execution of
the Letter of Transmittal (or a facsimile thereof), waive any right to receive
any notice of the acceptance of their Shares for payment.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT THE SOLE OPTION AND RISK OF EACH TENDERING STOCKHOLDER AND,
EXCEPT AS OTHERWISE PROVIDED UNDER THIS HEADING "--PROCEDURES FOR ACCEPTING THE
OFFER AND TENDERING SHARES," THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY
RECEIVED BY THE DEPOSITARY. IF DELIVERY IS MADE BY MAIL, REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
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BOOK-ENTRY TRANSFER. The Depositary will make a request to establish
accounts with respect to the Shares at the Book-Entry Transfer Facility for
purposes of the Offer within two business days after the date of this Offer to
Purchase. Any financial institution that is a participant in the system of the
Book-Entry Transfer Facility may make book-entry delivery of Shares by causing
the Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at the Book-Entry Transfer Facility in accordance with the Book-Entry
Transfer Facility's procedures for such transfer. Although delivery of Shares
may be effected through book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility, the Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed, together with any required
signature guarantees, or an Agent's Message, and any other documents required by
the Letter of Transmittal, must, in any case, be received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase prior
to the Expiration Date in order for such Shares to be validly tendered pursuant
to the Offer, or the tendering stockholder must comply with the guaranteed
delivery procedures described below.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE
WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY
TO THE DEPOSITARY.
SIGNATURE GUARANTEES. Signatures on all Letters of Transmittal must be
guaranteed by a firm that is a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of the Securities
Transfer Agents Medallion Program, the Stock Exchanges' Medallion Program or the
New York Stock Exchange, Inc. Medallion Signature Program (an "Eligible
Institution"), unless Shares tendered thereby are tendered (1) by a registered
holder of Shares who has not completed either the box entitled "Special Delivery
Instructions" or the box entitled "Special Payment Instructions" on the Letter
of Transmittal or (2) for the account of an Eligible Institution. See
Instruction 1 of the Letter of Transmittal.
If the Share Certificates are registered in the name of a person other than
the signer of the Letter of Transmittal, or if payment is to be made, or Share
Certificates for unpurchased Shares are to be returned, to a person other than
the registered holder(s), then the tendered Share Certificates must be endorsed
or accompanied by appropriate stock powers signed exactly as the name(s) of the
registered holder(s) appear(s) on the Share Certificates with the signature(s)
on such Share Certificates or stock powers guaranteed by an Eligible Institution
as provided above and in the Letter of Transmittal. See Instructions 1 and 5 of
the Letter of Transmittal.
GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share Certificates are not immediately
available or time will not permit all of the required documents to reach the
Depositary prior to the Expiration Date, or the procedure for book-entry
transfer cannot be completed on a timely basis, such Shares may nevertheless be
tendered, provided that all of the following conditions are satisfied:
- such tender is made by or through an Eligible Institution;
- a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form provided by the Purchaser with the Letter of
Transmittal, is received by the Depositary, in accordance with the
procedure set forth as provided below, prior to the Expiration Date; and
- the Share Certificates (or a Book-Entry Confirmation) for all tendered
Shares, in proper form for transfer, in each case together with the
Letter of Transmittal (or a facsimile thereof), properly completed and
duly executed, with any required signature guarantees or, in the case of
a book-entry transfer, an Agent's Message, and any other documents
required by the Letter of Transmittal, are received by the Depositary
within three American Stock Exchange trading days after the date of
execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, facsimile transmission or mail to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in the Notice of
Guaranteed Delivery.
Notwithstanding any other provision of this Offer, payment for Shares
accepted for payment pursuant to the Offer will in all cases be made only after
timely receipt by the Depositary of Share Certificates therefor (or
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<PAGE> 36
Book-Entry Confirmation of the transfer of such Shares into the Depositary's
account at the Book-Entry Transfer Facility), a properly completed and duly
executed Letter of Transmittal (or a facsimile thereof), together with any
required signature guarantees or, in the case of a book-entry transfer, an
Agent's Message, and any other documents required by the Letter of Transmittal.
Accordingly, payment may not be made to all tendering stockholders at the same
time and will depend upon when Share Certificates or Book-Entry Confirmations of
such Shares are received by the Depositary.
BACKUP FEDERAL INCOME TAX WITHHOLDING. Under the U.S. federal income tax
laws, the Depositary may, under certain circumstances, be required to withhold
31% of the amount of any payments made to certain stockholders pursuant to the
Offer. To prevent such backup federal income tax withholding with respect to
payments made to certain stockholders of the purchase price of Shares purchased
pursuant to the Offer, each such stockholder must provide the Depositary with
such stockholder's correct taxpayer identification number and certify that such
stockholder is not subject to backup federal income tax withholding by
completing the Substitute Form W-9 included in the Letter of Transmittal. See
Instruction 9 of the Letter of Transmittal.
APPOINTMENT AS PROXY. By executing the Letter of Transmittal, a tendering
stockholder irrevocably appoints designees of the Purchaser as such
stockholder's attorneys-in-fact and proxies in the manner set forth in the
Letter of Transmittal, each with full power of substitution with respect to any
Shares tendered thereby (and with respect to any and all other Shares or other
securities issued or issuable in respect of such Shares on or after January 31,
2000). All such powers of attorney and proxies shall be considered irrevocable
and coupled with an interest in the tendered Shares. Such appointment will be
effective when, and only to the extent that, the Purchaser accepts the tendered
Shares for payment and deposits the purchase price therefor with the Depositary.
Upon such deposit, all prior powers of attorney and proxies given by such
stockholder at any time with respect to such Shares (and other Shares and
securities issued or issuable in respect of the tendered Shares on or after
January 31, 2000) will, without further action, be revoked, and no subsequent
powers of attorney or proxies may be given nor any subsequent written consents
be executed by such stockholder (and, if given or executed, will not be deemed
effective). Upon such deposit by the Purchaser, the designees of the Purchaser
will, with respect to such Shares and other securities, be empowered to exercise
all voting and other rights of such stockholder as they in their sole discretion
may deem proper at any annual or special meeting of the Company's stockholders,
or any adjournment or postponement thereof, or by written consent in lieu of any
such meeting or otherwise. The Purchaser reserves the right to require that, in
order for Shares to be deemed validly tendered, immediately upon the Purchaser's
payment for such Shares, the Purchaser must be able to exercise full voting and
other rights of a record and beneficial holder, including, without limitation,
voting at any meeting of stockholders or by written consent in lieu of any such
meeting.
DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including the time of receipt) and acceptance for payment of any
tendered Shares pursuant to any of the procedures described above will be
determined by the Purchaser, in its sole discretion, which determination will be
final and binding on all parties. The Purchaser reserves the absolute right to
reject any and all tenders of any particular Shares determined by it not to be
in appropriate form or for which the acceptance of or payment for may, in the
opinion of its counsel, be unlawful. The Purchaser also reserves the absolute
right to waive any of the conditions of the Offer or any defect or
irregularities in the tender of any particular Shares, whether or not similar
defects or irregularities are waived in the case of any other Shares. The
Purchaser's interpretations of the terms and conditions of the Offer (including
the Letter of Transmittal and Instructions thereto) will be final and binding.
No tender of Shares will be deemed to have been validly made until all defects
and irregularities have been cured or waived. None of the Purchaser, any of its
affiliates or assigns, the Dealer Managers, the Information Agent, the
Depositary or any other person will be under any duty to give notification of
any defects or irregularities in tenders or incur any liability for failure to
give any such notification.
THE PURCHASER'S ACCEPTANCE FOR PAYMENT OF SHARES TENDERED PURSUANT TO THE
OFFER WILL CONSTITUTE A BINDING AGREEMENT BETWEEN THE TENDERING STOCKHOLDER AND
THE PURCHASER UPON THE TERMS AND SUBJECT TO THE CONDITIONS OF THE OFFER.
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<PAGE> 37
WITHDRAWAL RIGHTS
Except as otherwise provided in this Section, tenders of Shares made
pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may
be withdrawn at any time prior to the Expiration Date and, unless previously
accepted for payment as provided herein, may also be withdrawn at any time after
May 8, 2000.
If the Purchaser extends the Offer, is delayed in, or delays, its
acceptance for payment or payment for Shares or is unable to accept for payment
or pay for Shares for any reason, then, without prejudice to the Purchaser's
other rights under the Offer, tendered Shares may nevertheless be retained by
the Depositary, on behalf of the Purchaser, and may not be withdrawn except to
the extent tendering stockholders are entitled to and duly exercise withdrawal
rights as described in this Section. Any such extension or delay will be
accompanied by an extension of the Offer to the extent required by law.
In order for a withdrawal to be effective, a written, telegraphic or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase. Any such notice of withdrawal must specify the name of the person who
tendered the Shares to be withdrawn, the number of Shares to be withdrawn and
the name of the registered holder of the Shares to be withdrawn, if different
from that of the person who tendered such Shares. If Share Certificates to be
withdrawn have been delivered or otherwise identified to the Depositary, then,
prior to the physical release of such Share Certificates, the tendering
stockholder must also submit the serial numbers shown on such Share Certificates
to the Depositary, and the signatures on the notice of withdrawal must be
guaranteed by an Eligible Institution, unless such Shares have been tendered for
the account of an Eligible Institution. If Shares have been tendered pursuant to
the procedures for book-entry transfer, as set forth in "--Procedures For
Accepting The Offer And Tendering Shares," any notice of withdrawal must specify
the name and number of the account at the Book-Entry Transfer Facility to be
credited with the withdrawn Shares and must otherwise comply with the procedures
of the Book-Entry Transfer Facility.
Withdrawals may not be revoked and any Shares properly withdrawn will
thereafter be deemed not to have been validly tendered for purposes of the
Offer. However, withdrawn Shares may be re-tendered at any time prior to the
Expiration Date by following the procedures described in "--Procedures For
Accepting The Offer And Tendering Shares."
All questions as to the form and validity (including the time of receipt)
of any notice of withdrawal will be determined by the Purchaser, in its sole
discretion, which determination will be final and binding on all parties. None
of the Purchaser, its affiliates or assigns, the Dealer Managers, the
Information Agent, the Depositary or any other person will be under any duty to
give notification of any defects or irregularities in any notice of withdrawal
or incur any liability for failure to give any such notification.
CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provisions of the Offer, and in addition to (and
not in limitation of) the Purchaser's rights to extend and amend the Offer at
any time in its sole discretion, the Purchaser shall not be required to accept
for payment or, subject to any applicable rules and regulations of the
Commission, including Rule 14e-1(c) under the Exchange Act (relating to the
Purchaser's obligation to pay for or return tendered Shares promptly after
termination or withdrawal of the Offer), pay for, and may delay the acceptance
for payment of or, subject to the restriction referred to above, the payment
for, any tendered Shares, and may amend or terminate the Offer if (1) the
Minimum Condition has not been satisfied or (2) at any time on or after March
10, 2000 and before the time of acceptance of the Shares for payment pursuant to
the Offer, any of the following events shall occur:
(a) any change shall have occurred in the business, properties,
assets, liabilities, capitalization, stockholders' equity, financial
condition, cash flows, operations, licenses, franchises or results of
operations of the Company or its subsidiaries which has a material adverse
effect on the Company and its subsidiaries taken as a whole; or
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<PAGE> 38
(b) any government or governmental authority or agency, whether
domestic, foreign or supranational (a "Governmental Entity"), shall have
instituted or threatened any action, proceeding, application, claim or
counterclaim, sought or obtained any judgment, order or injunction, or
taken any other action, which (i) challenges the acquisition by Thermo
Electron, Thermedics, Corpak or the Purchaser (or any other affiliate of
Thermo Electron) of any Shares pursuant to the Offer or the Merger,
restrains, prohibits or materially delays the making or consummation of the
Offer or the Merger, prohibits the performance of any of the contracts or
other arrangements entered into by Thermo Electron, Thermedics, Corpak or
the Purchaser (or any other affiliate of Thermo Electron) in connection
with the acquisition of the Shares or the Company, seeks to obtain any
material amount of damages, or otherwise directly or indirectly adversely
affects the Offer or the Merger, (ii) seeks to prohibit or limit materially
the ownership or operation by the Company, Thermo Electron, Thermedics,
Corpak or the Purchaser (or any other affiliate of Thermo Electron) of all
or any material portion of the business or assets of the Company or of
Thermo Electron and its affiliates, or to compel the Company, Thermo
Electron, Thermedics, Corpak or the Purchaser (or any other affiliate of
Thermo Electron) to dispose of or to hold separate all or any material
portion of the business or assets of Thermo Electron or any of its
affiliates or of the Company or any of its subsidiaries as a result of the
transactions contemplated by the Offer or the Merger, (iii) seeks to impose
any material limitation on the ability of the Company, Thermo Electron,
Thermedics, Corpak or the Purchaser (or any other affiliate of Thermo
Electron) to conduct the Company's or any subsidiary's business or own such
assets, (iv) seeks to impose or confirm any material limitation on the
ability of Thermo Electron, Thermedics, Corpak or the Purchaser (or any
other affiliate of Thermo Electron) to acquire or hold, or to exercise full
rights of ownership of, any Shares, including the right to vote such Shares
on all matters properly presented to the stockholders of the Company, (v)
seeks to require divestiture by Thermo Electron, Thermedics, Corpak or the
Purchaser or any of their affiliates of all or any of the Shares or (vi)
otherwise has resulted in or has a reasonable likelihood of resulting in, a
material adverse effect on the business, financial condition, results of
operation or prospects of the Company, Thermo Electron, Corpak or
Thermedics (a "Material Adverse Effect"); or
(c) there shall have been entered or issued any preliminary or
permanent judgment, order, decree, ruling or injunction or any other action
taken by any Governmental Entity or court, whether on its own initiative or
the initiative of any other person, which (i) restrains, prohibits or
materially delays the making or consummation of the Offer or the Merger,
prohibits the performance of any of the contracts or other arrangements
entered into by Thermo Electron, Thermedics, Corpak or the Purchaser (or
any other affiliate of Thermo Electron) in connection with the acquisition
of the Shares or the Company or otherwise directly or indirectly materially
adversely affects the Offer or the Merger, (ii) prohibits or limits
materially the ownership or operation by the Company, Thermo Electron,
Thermedics, Corpak or the Purchaser (or any other affiliate of Thermo
Electron) of all or any material portion of the business or assets of the
Company and its subsidiaries taken as a whole or of Thermo Electron,
Thermedics, Corpak or the Purchaser (or any other affiliate of Thermo
Electron), or compels the Company, Thermo Electron, Thermedics, Corpak or
the Purchaser (or any other affiliate of Thermo Electron) to dispose of or
to hold separate all or any material portion of the business or assets of
Thermo Electron or any of its affiliates or of the Company or any of its
subsidiaries as a result of the transactions contemplated by the Offer or
the Merger, (iii) imposes any material limitation on the ability of the
Company, Thermo Electron, Thermedics, Corpak or the Purchaser (or any other
affiliate of Thermo Electron) to conduct the Company's or any subsidiary's
business or own such assets, (iv) imposes or confirms any material
limitation on the ability of Thermo Electron, Thermedics, Corpak or the
Purchaser (or any other affiliate of Thermo Electron) to acquire or hold,
or to exercise full rights of ownership of, any Shares, including the right
to vote such Shares on all matters properly presented to the stockholders
of the Company, (v) requires divestiture by Thermo Electron, Thermedics,
Corpak or the Purchaser or any of their affiliates of all or any of the
Shares or (vi) otherwise has resulted in, or has a reasonable likelihood of
resulting in, a Material Adverse Effect; or
(d) there shall have been instituted or be pending before any
Governmental Entity or court any action, proceeding, application, claim or
counterclaim or any judgment, order or injunction sought or any other
action taken by any person or entity (other than a Governmental Entity)
which (i) challenges the
38
<PAGE> 39
acquisition by Thermo Electron, Thermedics, Corpak or the Purchaser (or any
other affiliate of Thermo Electron) of any Shares pursuant to the Offer or
the Merger, restrains, prohibits or materially delays the making or
consummation of the Offer or the Merger, prohibits the performance of any
of the contracts or other arrangements entered into by Thermo Electron,
Thermedics, Corpak or the Purchaser (or any other affiliate of Thermo
Electron) in connection with the acquisition of the Shares or the Company,
seeks to obtain any material amount of damages, or otherwise directly or
indirectly adversely affects the Offer or the Merger, (ii) seeks to
prohibit or limit materially the ownership or operation by the Company,
Thermo Electron, Thermedics, Corpak or the Purchaser (or any other
affiliate of Thermo Electron) of all or any material portion of the
business or assets of the Company or of Thermo Electron and its affiliates,
or to compel the Company, Thermo Electron, Thermedics, Corpak or the
Purchaser (or any other affiliate of Thermo Electron) to dispose of or to
hold separate all or any material portion of the business or assets of
Thermo Electron or any of its affiliates or of the Company or any of its
subsidiaries as a result of the transactions contemplated by the Offer or
the Merger, (iii) seeks to impose any material limitation on the ability of
the Company, Thermo Electron, Thermedics, Corpak or the Purchaser (or any
other affiliate of Thermo Electron) to conduct the Company's or any
subsidiary's business or own such assets, (iv) seeks to impose or confirm
any material limitation on the ability of Thermo Electron, Thermedics,
Corpak or the Purchaser (or any other affiliate of Thermo Electron) to
acquire or hold, or to exercise full rights of ownership of, any Shares,
including the right to vote such Shares on all matters properly presented
to the stockholders of the Company, (v) seeks to require divestiture by
Thermo Electron, Thermedics, Corpak or the Purchaser (or any other
affiliate of Thermo Electron) of all or any of the Shares or (vi) otherwise
has resulted in or, in the Purchaser's reasonable discretion, has a
reasonable likelihood of resulting in a Material Adverse Effect; and which
in the case of clause (i), (ii), (iii), (iv) or (v) is successful or the
Purchaser determines, in its reasonable discretion, has a reasonable
likelihood of being successful; or
(e) there shall be any statute, rule or regulation enacted,
promulgated, entered, enforced or deemed applicable to the Offer or the
Merger, or any other action shall have been taken by any Governmental
Entity or court that results in, directly or indirectly, any of the
consequences referred to in clauses (i) through (vi) of paragraph (b)
above; or
(f) there shall have occurred any general suspension of trading in, or
limitation on prices for, securities on the New York Stock Exchange,
American Stock Exchange or in the over-the-counter market (other than any
temporary suspension pursuant to a circuit breaker procedure then in effect
and lasting for not more than three trading hours), any declaration of a
banking moratorium by federal or New York authorities or general suspension
of payments in respect of lenders that regularly participate in the U.S.
market in loans, any material limitation by any federal, state or local
government or any court, administrative or regulatory agency or commission
or other governmental authority or agency in the United States that
materially affects the extension of credit generally by lenders that
regularly participate in the United States market in loans, any
commencement of a war involving the United States or any commencement of
armed hostilities or other national or international circumstance involving
the United States that has a material adverse effect on bank syndication or
financial markets in the United States or, in the case of any of the
foregoing occurrences existing on or at the time of the commencement of the
Offer, a material acceleration or worsening thereof; which in the
reasonable judgment of the Purchaser, in any such case, and regardless of
the circumstances giving rise to such condition, makes it inadvisable to
proceed with the Offer, the Merger and/or with such acceptance for payment
or payments.
The foregoing conditions are for the sole benefit of the Purchaser and its
affiliates and may be asserted by the Purchaser regardless of any circumstances
giving rise to any condition and may be waived by the Purchaser, in whole or in
part, at any time and from time to time in the reasonable discretion of the
Purchaser. The failure by the Purchaser (or any affiliate of the Purchaser) at
any time to exercise any of the foregoing rights will not be deemed a waiver of
any right, and each right will be deemed an ongoing right which may be asserted
at any time and from time to time.
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<PAGE> 40
CERTAIN LEGAL MATTERS; REGULATORY APPROVALS
GENERAL. Except as described below, none of Thermo Electron, Thermedics,
Corpak or the Purchaser is aware of any license or regulatory permit that
appears to be material to the business of the Company and its subsidiaries that
might be adversely affected by the Purchaser's acquisition of Shares as
contemplated herein.
Except as described in this section, none of Thermo Electron, Thermedics,
Corpak or the Purchaser is aware of any other material filing, approval or other
action by any federal or state governmental or administrative authority that
would be required for the acquisition of Shares by the Purchaser as contemplated
herein. Should any such other approval or action be required, it is currently
contemplated that such approval or other action would be sought. There is,
however, no present intention to delay the purchase of Shares tendered pursuant
to the Offer or the Merger pending the outcome of any such other approval or
action. There can be no assurance that any such other approval or action, if
needed, would be obtained without substantial conditions or that adverse
consequences might not result to the Purchaser's, Corpak's, Thermedics', Thermo
Electron's or the Company's business in the event that such other approvals were
not obtained or such other actions were not taken. The Purchaser's obligation
under the Offer to accept for payment and pay for Shares is subject to certain
conditions, including conditions relating to the legal matters discussed in this
section. See "--Certain Conditions Of The Offer."
ANTITRUST. The Purchaser believes that the Offer and the Merger are exempt
from the reporting requirements contained in the Hart-Scott-Rodino Antitrust
Improvements Act of 1976. Nevertheless, there can be no assurance that a
challenge to the Offer and the Merger on antitrust grounds will not be made, or,
if such challenge is made, what the result will be.
FOREIGN APPROVALS. The Company conducts business in a number of foreign
countries and jurisdictions. In connection with the acquisition of the Shares
pursuant to the Offer or the Merger, the laws of certain of those foreign
countries and jurisdictions may require the filing of information with, or the
obtaining of the approval or consent of, governmental authorities in such
countries and jurisdictions. The governments in such countries and jurisdictions
might attempt to impose additional conditions on the Company's operations
conducted in such countries and jurisdictions as a result of the acquisition of
the Shares pursuant to the Offer or the Merger. If such approvals or consents
are found to be required, the Purchaser intends to make the appropriate filings
and applications. In the event such a filing or application is made for the
requisite foreign approvals or consents, there can be no assurance that such
approvals or consents will be granted and, if such approvals or consents are
received, there can be no assurance as to the date of such approvals or
consents. In addition, there can be no assurance that the Purchaser will be able
to cause the Company or its subsidiaries to satisfy or comply with such laws or
that compliance or noncompliance will not have adverse consequences for the
Company or any subsidiary after purchase of the Shares pursuant to the Offer or
the Merger.
STATE ANTI-TAKEOVER STATUTES. Several Massachusetts statutes prohibit,
restrict or impose certain procedural and disclosure requirements with respect
to the acquisition of more than 10% of the outstanding shares of a Massachusetts
corporation and with respect to take-over bids and business combinations
involving a Massachusetts corporation. These are Chapters 110C, 110D and 110F of
the General Laws of the Commonwealth of Massachusetts. Based on Thermo
Electron's and its subsidiaries' equity holdings in the Company, the Purchaser
believes that neither the Offer nor the Merger is prohibited by these statutes.
A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, stockholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects, in such states. In 1982, in Edgar v. MITE Corp., the Supreme
Court of the United States invalidated on constitutional grounds the Illinois
Business Takeover Statute, which, as a matter of state securities law, made
takeovers of corporations meeting certain requirements more difficult. However,
in 1987 in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that
the State of Indiana may, as a matter of corporate law, and, in particular, with
respect to those aspects of corporate law concerning corporate governance,
constitutionally disqualify a potential acquiror from voting on the affairs of a
target corporation without the prior approval of the remaining stockholders. The
state law before the Supreme Court was by its terms applicable only to
corporations that had a substantial number of stockholders in that state and
were incorporated there.
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<PAGE> 41
The Company, directly or through subsidiaries, conducts business in a
number of states throughout the United States, some of which have enacted
takeover laws. None of Thermo Electron, Thermedics, Corpak or the Purchaser
knows whether any of these laws will, by their terms, apply to the Offer or the
Merger, and the Purchaser has not necessarily complied with any such laws.
Should any person seek to apply any state takeover law, the Purchaser will take
such action as then appears desirable, which may include challenging the
validity or applicability of any such statute in appropriate court proceedings.
In the event it is asserted that one or more state takeover laws is applicable
to the Offer or the Merger, and an appropriate court does not determine that it
is inapplicable or invalid as applied to the Offer or the Merger, the Purchaser
might be required to file certain information with, or receive approvals from,
the relevant state authorities. In addition, if enjoined, the Purchaser might be
unable to accept for payment any Shares tendered pursuant to the Offer or be
delayed in continuing or consummating the Offer. In such case, the Purchaser may
not be obligated to accept for payment any Shares tendered. See "--Certain
Conditions Of The Offer."
DIVIDENDS AND DISTRIBUTIONS
If, on or after January 31, 2000, the Company should declare or pay any
dividend or other distribution (including, without limitation, the issuance of
additional Shares pursuant to a stock dividend or stock split or the issuance of
rights for the purchase of any securities) with respect to the Shares that is
payable or distributable to stockholders of record on a date occurring prior to
the transfer to the name of the Purchaser or its nominees or transferees on the
Company's stock transfer records of the Shares purchased pursuant to the Offer,
then, without prejudice to the Purchaser's rights described in "--Certain
Conditions Of The Offer," (1) the purchase price per Share payable by the
Purchaser pursuant to the Offer will be reduced in the amount of any such cash
dividend or distribution, and (2) the whole of any non-cash dividend or
distribution (including, without limitation, additional Shares or rights as
aforesaid) will be required to be remitted promptly and transferred by each
tendering stockholder to the Depositary for the account of the Purchaser
accompanied by appropriate documentation of transfer. Pending such remittance or
appropriate assurance thereof, the Purchaser will be entitled to all rights and
privileges as owner of any such non-cash dividend, distribution or right, and
may withhold the entire purchase price or deduct from the purchase price the
amount of value of such non-cash dividend, distribution or right, as determined
by the Purchaser in its sole discretion.
If, on or after January 31, 2000, the Company should split the Shares or
combine or otherwise change the Shares or its capitalization, then, without
prejudice to the Purchaser's rights described under the heading "--Certain
Conditions Of The Offer," appropriate adjustments to reflect such split,
combination or change may be made by the Purchaser in the purchase price and
other terms of the Offer, including, without limitation, the number or type of
securities offered to be purchased.
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<PAGE> 42
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a general summary of the material U.S. federal income tax
consequences of the Offer and the Merger to the beneficial owners of Shares.
This summary is based upon the provisions of the Internal Revenue Code of 1986,
as amended (the "Code"), applicable treasury regulations thereunder, judicial
decisions and current administrative rulings as in effect on the date of this
Offer to Purchase. The discussion does not address all aspects of U.S. federal
income taxation that may be relevant to particular taxpayers in light of their
personal circumstances or to taxpayers subject to special treatment under the
Code (for example, life insurance companies, foreign corporations, foreign
partnerships, foreign estates or trusts, or individuals who are not citizens or
residents of the United States and beneficial owners whose Shares were acquired
pursuant to the exercise of warrants, employee stock options or otherwise as
compensation) and does not address any aspect of state, local, foreign or other
taxation.
The receipt of cash for Shares pursuant to the Offer or the Merger will be
a taxable transaction for federal income tax purposes under the Code, and may
also be a taxable transaction under applicable state, local or foreign income or
other tax laws. Generally, for federal income tax purposes, a beneficial owner
of Shares that tenders Shares pursuant to the Offer or surrenders Shares
pursuant to the Merger will recognize gain or loss equal to the difference
between the amount of cash received by the beneficial owner and the aggregate
tax basis in the Shares sold pursuant to the Offer or canceled and converted to
cash pursuant to the Merger. Gain or loss will be calculated separately for each
block of Shares purchased pursuant to the Offer or canceled and converted to
cash pursuant to the Merger.
Gain or loss on the disposition of Shares generally will be capital gain or
loss, assuming that the Shares are held as capital assets, and that a beneficial
owner of Shares does not, directly or under the attribution rules of Sections
304 and 318 of the Code, own Shares or stock of the Surviving Corporation
following the Offer and the Merger. Capital gains of individuals, estates and
trusts generally are subject to a maximum federal income tax rate of (i) 20% if,
at the time the tendered Shares are accepted for payment (in the case of the
Offer) or the Effective Time of the Merger (in the case of the Merger), the
beneficial owner held the Shares for more than one year or (ii) 39.6% if, at the
time the tendered Shares are accepted for payment (in the case of the Offer) or
the Effective Time of the Merger (in the case of the Merger), the beneficial
owner held the Shares for not more than one year. Capital gains of corporations
generally are taxed at the federal income tax rates applicable to corporate
ordinary income. In addition, the ability of both corporate and non-corporate
beneficial owners to use capital losses to offset ordinary income is limited.
In general, cash received by Public Stockholders who exercise statutory
appraisal rights ("Dissenting Stockholders") in respect of such appraisal rights
will result in the recognition of gain or loss to the Dissenting Stockholders.
Any such Dissenting Stockholder should consult with its tax advisor for a full
understanding of the tax consequences of the receipt of cash in respect of
appraisal rights pursuant to the Merger.
A beneficial owner may be subject to backup federal income tax withholding
at a rate of 31% with respect to the amount of cash received pursuant to the
Offer or the Merger unless the owner provides its tax identification number
("TIN") and certifies that such number is correct or properly certifies that it
is awaiting a TIN, or unless an exemption applies. A beneficial owner that does
not furnish its TIN may be subject to a penalty imposed by the Internal Revenue
Service. See "The Tender Offer--Procedures For Accepting The Offer And Tendering
Shares--Backup Federal Income Tax Withholding."
If backup withholding applies to a beneficial owner, the Depositary is
required to withhold 31% from payments to such owner. Backup withholding is not
an additional tax. Rather, the amount of the backup withholding can be credited
against the federal income tax liability of the person subject to the backup
withholding, provided that the required information is given to the Internal
Revenue Service. If backup withholding results in an overpayment of tax, a
refund can be obtained by the beneficial owner upon filing an income tax return.
EACH BENEFICIAL OWNER OF SHARES IS URGED TO CONSULT SUCH BENEFICIAL OWNER'S
TAX ADVISOR AS TO THE SPECIFIC TAX CONSEQUENCES TO SUCH BENEFICIAL OWNER OF THE
OFFER AND THE MERGER, INCLUDING THE APPLICATION OF STATE, LOCAL, FOREIGN AND
OTHER TAX LAWS.
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<PAGE> 43
PRICE RANGE OF THE SHARES; DIVIDENDS
PRICE RANGE OF SHARES. The Shares are listed on the American Stock
Exchange under the symbol "TDX". The following table sets forth the high and low
sales prices per Share on the American Stock Exchange, as reported in publicly
available sources for each of the periods indicated.
<TABLE>
<CAPTION>
HIGH LOW
<S> <C> <C>
Fiscal Year Ended January 2, 1999:
First Quarter............................................. $11 11/16 $8 5/8
Second Quarter............................................ $11 7/16 $7 7/8
Third Quarter............................................. $9 1/2 $6 1/16
Fourth Quarter............................................ $8 3/16 $6
Fiscal Year Ended January 1, 2000:
First Quarter............................................. $9 1/4 $7 3/4
Second Quarter............................................ $10 7/8 $7 7/8
Third Quarter............................................. $10 7/16 $9
Fourth Quarter............................................ $9 5/8 $6 3/4
Fiscal Year Ending December 30, 2000:
First Quarter (through March 8, 2000)..................... $8 1/8 $ 7
</TABLE>
As of January 28, 2000, there were 221 holders of record of the Shares and
in excess of 2,300 beneficial owners of the Shares.
On January 28, 2000, the last full trading day prior to the public
announcement of the Purchaser's intention to commence the Offer, the closing
sale price per Share, as reported on the American Stock Exchange, was $7.938. On
March 8, 2000, the latest practicable full trading day prior to the commencement
of the Offer, the closing sale price per Share, as reported on the American
Stock Exchange, was $7.75.
STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
DIVIDENDS. The Company has never declared or paid any cash dividends in
respect of the Shares.
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<PAGE> 44
CERTAIN INFORMATION CONCERNING THE COMPANY
Stockholders are urged to review the publicly available information
concerning the Company before acting on the Offer.
GENERAL. The Company operates in two segments: Detection Instruments and
Laboratory Products. The Company's Detection Instruments segment develops,
manufactures and markets high-speed detection and measurement systems used for
quality assurance and security applications. The Company's Laboratory Products
segment develops, manufactures and markets products used to determine the
quality of a wide variety of items, including food, water and pharmaceuticals
and to measure the moisture content of raw, in-process and finished products. In
addition, the Laboratory Products segment manufactures specific ion-measurement
systems that are used to monitor water quality in the power, semiconductor,
petrochemical, paper, pharmaceutical and drinking water industries. See "Special
Factors--Background To The Offer And The Merger--The Company." The principal
executive offices of the Company are located at 200 Mill Road, Chelmsford,
Massachusetts 01824, and its telephone number is (781) 622-1000.
The Company is subject to the disclosure requirements of the Exchange Act
and in accordance therewith is required to file reports, proxy statements and
other information with the Commission relating to its business, financial
condition and other matters. In addition, the Company is required to file within
10 business days of the commencement of this Offer, and to distribute to the
Company's Stockholders, a statement on Schedule 14D-9 regarding its
recommendation to the Company's stockholders with respect to the Offer. Such
reports, proxy statements, Schedule 14D-9 and other information are available
for inspection at the Commission's public reference facilities at 450 Fifth
Street, N.W., Washington, D.C. 20549 and should also be available for inspection
at the regional offices of the Commission located at 7 World Trade Center, Suite
1300, New York, New York 10048 and Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies may be obtained at prescribed rates
from the Commission's principal office at 450 Fifth Street, N.W., Washington,
D.C. 20549. The Commission also maintains a web site that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission at http://www.sec.gov. In addition,
certain material filed by the Company may also be available for inspection at
the offices of the American Stock Exchange, 86 Trinity Place, New York, NY
10006-1881.
None of Thermo Electron, Thermedics, Corpak or the Purchaser intends to
grant unaffiliated stockholders special access to the Company's records in
connection with the Offer. None of Thermo Electron, Thermedics, Corpak or the
Purchaser intends to obtain counsel to or appraisal services for unaffiliated
stockholders of the Company.
FINANCIAL INFORMATION. Set forth below is certain selected consolidated
financial information with respect to the Company and its subsidiaries excerpted
or derived from the audited consolidated financial statements contained in the
Company's Annual Report on Form 10-K for its fiscal year ended January 2, 1999
and the unaudited financial statements contained in the Company's Quarterly
Reports on Form 10-Q for the quarters ended October 2, 1999 and October 3, 1998
(collectively, the "Company Reports"). More comprehensive financial information
is included in the Company Reports and in other documents filed by the Company
with the Commission (which may be inspected or obtained in the manner set forth
above), and the following financial information is qualified in its entirety by
reference to the Company Reports and other documents and all of the financial
information (including any related notes) contained therein or incorporated
therein by reference.
44
<PAGE> 45
The selected financial information presented below as of and for the fiscal
years ended January 2, 1999, January 3, 1998, December 28, 1996, December 30,
1995 and December 31, 1994 has been derived from the Company's Consolidated
Financial Statements, which have been audited by Arthur Andersen LLP. The
selected financial information as of and for the nine months ended October 2,
1999 and October 3, 1998 has not been audited. The results of operations for the
nine months ended October 2, 1999 are not necessarily indicative of results for
the entire year.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
NINE MONTHS ENDED
-------------------
OCT. 2, OCT. 3,
1999 1998 1998 1997(A) 1996(B) 1995(C) 1994
-------- -------- -------- -------- -------- ------- -------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Revenues.............................. $ 56,157 $ 71,234 $ 91,575 $104,374 $ 94,604 $32,943 $50,343
Net Income............................ 3,328 6,952 8,671 12,506 5,299 2,173 6,380
Basic and Diluted Earnings per
Share............................... .17 .36 .45 .67 .33 .21 .63
Weighted Average Shares:
Basic............................... 19,317 19,317 19,317 18,721 16,236 10,000 10,000
Diluted............................. 19,356 19,323 19,321 18,732 16,253 10,003 10,003
BALANCE SHEET DATA (AT END OF PERIOD):
Working Capital....................... $ 62,167 $ 55,385 $ 57,621 $ 46,345 $ 32,315 $19,369 $ 6,116
Total Assets.......................... 133,021 133,610 132,506 148,265 116,058 84,595 17,793
Long-term Obligations................. 103 -- 127 -- 21,200 -- --
Shareholders' Investment.............. 120,507 116,008 117,893 107,346 75,454 69,215 9,208
OTHER DATA:
Book Value per Share.................. $ 6.24 $ 6.01 $ 6.10 $ 5.56
Cash Dividends........................ -- -- -- -- -- -- --
Ratio of Earnings to Fixed
Charges(d).......................... 12.10x 13.85x 13.94x 11.88x
</TABLE>
- ------------------------------
(a) Reflects the March 1997 initial public offering of the Company's common
stock for net proceeds of $28.1 million.
(b) Reflects the January 1996 acquisition of Moisture Systems Corporation and
Rutter & Co. B.V. and the March and November 1996 private placements of the
Company's common stock for aggregate net proceeds of $7.0 million.
(c) Reflects the December 1995 acquisition of Orion Research, Inc. by
Thermedics.
(d) For purposes of computing the ratios of earnings to fixed charges,
"earnings" represent income before taxes, plus fixed charges. "Fixed
charges" consist of interest on indebtedness and one-third of rental
expense, which is deemed to be the interest component of such rental
expense.
45
<PAGE> 46
RECENTLY RELEASED FINANCIAL DATA. The selected financial information of
the Company presented below for the three and twelve month periods ended January
1, 2000 and January 2, 1999 were publicly released by the Company on February
17, 2000. With the exception of the financial information for the twelve months
ended January 2, 1999, this financial information is not audited and full
financial statements reflecting such information have not yet been filed with
the Commission.
CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
THREE MONTHS ENDED TWELVE MONTHS ENDED
---------------------------- ----------------------------
JAN. 1, 2000 JAN. 2, 1999 JAN. 1, 2000 JAN. 2, 1999
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Revenues.................................... $17,427 $20,341 $73,584 $91,575
------- ------- ------- -------
Costs and Operating Expenses:
Cost of revenues(a)....................... 7,788 10,004 35,225 42,251
Selling, general, and administrative
expenses............................... 6,379 5,772 25,289 26,744
Research and development expenses......... 1,670 2,219 8,025 9,645
------- ------- ------- -------
15,837 17,995 68,539 78,640
------- ------- ------- -------
Operating Income............................ 1,590 2,346 5,045 12,935
Interest Income............................. 460 330 1,550 1,536
Interest Expense............................ -- -- -- (303)
Other Income (Expense), Net................. 7 -- (15) (1)
------- ------- ------- -------
Income Before Provision for Income Taxes.... 2,057 2,676 6,580 14,167
Provision for Income Taxes(b)............... 309 957 1,504 5,496
------- ------- ------- -------
Net Income.................................. $ 1,748 $ 1,719 $ 5,076 $ 8,671
======= ======= ======= =======
Basic and Diluted Earnings per Share........ $ .09 $ .09 $ .26 $ .45
======= ======= ======= =======
Weighted Average Shares:
Basic..................................... 19,317 19,317 19,317 19,317
======= ======= ======= =======
Diluted................................... 19,350 19,317 19,355 19,321
======= ======= ======= =======
</TABLE>
- ------------------------------
(a) Includes inventory provisions of $1.9 million in the twelve months ended
January 1, 2000.
(b) Includes research and development tax credits of $0.2 million and $1.1
million in the three- and twelve-month periods ended January 1, 2000,
respectively.
46
<PAGE> 47
CERTAIN INFORMATION CONCERNING THE PURCHASER, CORPAK,
THERMEDICS AND THERMO ELECTRON
THE PURCHASER
The Purchaser is a newly organized, wholly-owned subsidiary of Corpak
formed for the purpose of making the Offer. The Purchaser is organized under the
laws of the State of Delaware. The Purchaser's principal executive offices are
located at 81 Wyman Street, P.O. Box 9046, Waltham, Massachusetts 02454-9046,
and its telephone number is (781) 622-1000.
The name, business address, principal occupation, employment history and
citizenship of each of the executive officers and directors of the Purchaser are
set forth on Schedule I hereto.
During the past five years, the Purchaser has not been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
been a party to any judicial or administrative proceeding (except for any
matters that were dismissed without sanction or settlement) that resulted in a
judgment, decree or final order enjoining the Purchaser from future violations
of, or prohibiting activities subject to, federal or state securities laws, or a
finding of any violation of federal or state securities laws.
CORPAK
Corpak, a Massachusetts corporation and a wholly-owned subsidiary of
Thermedics, designs, manufactures and markets enteral feeding systems that
introduce special nutritional solutions into the stomach or the small intestine
through tubes entering the nose or stomach. Enteral therapy is used for patients
who are unable to eat or digest food normally or who require high levels of
nutritional support. Corpak's products include bags for nutritional fluids,
delivery pumps, associated pump sets that hook up to the pumps and feeding
tubes. In addition, Corpak markets catheters for peritoneal dialysis. Corpak's
principal executive offices are located at 81 Wyman Street, P.O. Box 9046,
Waltham, Massachusetts 02454-9046, and its telephone number is (781) 622-1000.
The name, business address, principal occupation, employment history and
citizenship of each of the executive officers and directors of Corpak are set
forth on Schedule I hereto.
During the past five years, Corpak has not been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or been a
party to any judicial or administrative proceeding (except for any matters that
were dismissed without sanction or settlement) that resulted in a judgment,
decree or final order enjoining Corpak from future violations of, or prohibiting
activities subject to, federal or state securities laws, or a finding of any
violation of federal or state securities laws.
THERMEDICS
Thermedics, a Massachusetts corporation, develops, manufactures and markets
diverse product lines, including implantable heart assist devices and other
biomedical products, security instruments and equipment, that assure the quality
of a wide variety of consumer products and bulk materials.
Thermedics' businesses operate in the following segments: Quality Assurance
and Security Products, Precision Weighing and Inspection Equipment, Heart Assist
and Blood Testing Devices, Power Electronics and Test Equipment and Respiratory
Care Products.
Quality assurance and security products. Through the Company, Thermedics'
Quality Assurance and Security Products segment develops, manufactures and
markets high-speed detection and measurement instruments used in a variety
of on-line industrial process and security applications, and for laboratory
analysis.
Precision weighing and inspection equipment. Thermedics' Precision
Weighing and Inspection Equipment segment includes Thermo Sentron Inc.,
which develops, manufactures and markets high-speed precision-weighing and
inspection equipment for industrial production and packaging lines.
47
<PAGE> 48
Heart assist and blood testing devices. Thermedics' Heart Assist and Blood
Testing Devices segment consists of the Thermo Cardiosystems Inc.
subsidiary, which has developed two implantable left ventricular-assist
systems (LVAS): a pneumatic, or air-driven, system and an electric version.
Thermo Cardiosystems' International Technidyne Corporation subsidiary is a
leading manufacturer of near-patient, whole-blood coagulation testing
equipment and related disposables and also manufactures premium-quality,
single-use skin-incision devices.
Power electronics and test equipment. Thermedics' Power Electronics and
Test Equipment segment, through the Thermo Voltek Corp. subsidiary,
designs, manufactures and markets a range of products related to power
amplification, conversion and quality.
Respiratory Care Products. Erich Jaeger, GmbH, acquired in July 1999,
develops and manufactures equipment for lung function, cardio-respiratory
and sleep disorder diagnosis and monitoring.
Thermedics' common stock is listed on the American Stock Exchange under the
symbol "TMD". The principal executive offices of Thermedics are located at 470
Wildwood Street, P.O. Box 2999, Woburn, Massachusetts 01888-1799, and its
telephone number is (781) 622-1000.
Thermedics is subject to the disclosure requirements of the Exchange Act
and in accordance therewith is required to file reports, proxy statements and
other information with the Commission relating to its business, financial
condition and other matters. Such reports, proxy statements and other
information are available for inspection and copying at prescribed rates at the
offices of the Commission and the American Stock Exchange as set forth under
"Certain Information Concerning The Company."
The name, business address, principal occupation, five-year employment
history and citizenship of each of the directors and executive officers of
Thermedics are set forth in Schedule I hereto.
During the past five years, Thermedics has not been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or been a
party to any judicial or administrative proceeding (except for any matters that
were dismissed without sanction or settlement) that resulted in a judgment,
decree or final order enjoining Thermedics from future violations of, or
prohibiting activities subject to, federal or state securities laws, or a
finding of any violation of federal or state securities laws.
THERMO ELECTRON
Thermo Electron, a Delaware corporation, and its subsidiaries develop and
manufacture a broad range of products that are sold worldwide. Thermo Electron
is a world leader in monitoring, analytical and biomedical instrumentation;
biomedical products including heart-assist devices, respiratory-care equipment
and mammography systems; and paper recycling and papermaking equipment. Thermo
Electron also develops alternative-energy systems and clean fuels, provides a
range of services including industrial outsourcing and environmental-liability
management and conducts research and development in advanced imaging, laser and
electronic information-management technologies. Thermo Electron performs its
business through wholly-owned subsidiaries and divisions, as well as majority
owned subsidiaries that are partially owned by public or private investors.
On January 31, 2000, Thermo Electron announced that its Board of Directors
had authorized its management to proceed with a major reorganization of the
operations of Thermo Electron and its subsidiaries. As part of this
reorganization, Thermo Electron plans to acquire the public minority interest in
most of its subsidiaries that have minority investors, spin off its separation
technologies and fiber-based products business and its medical products business
and divest a variety of non-core businesses. The primary goal of this
reorganization is for Thermo Electron and each of its spun-off subsidiaries to
focus on its respective core business. The purpose of the Offer and the Merger
is to acquire the minority public interest in the Company as part of Thermo
Electron's overall reorganization and to provide the Public Stockholders with
$8.00 per Share in cash. Following the Offer and the Merger, Thermo Electron
plans to retain the Company as part of Thermo Electron's core instrument
business.
48
<PAGE> 49
Thermo Electron's common stock is listed on the New York Stock Exchange
under the symbol "TMO". The principal executive offices of Thermo Electron are
located at 81 Wyman Street, P.O. Box 9046, Waltham, Massachusetts 02454-9046,
and its telephone number is (781) 622-1000.
Thermo Electron is subject to the disclosure requirements of the Exchange
Act and in accordance therewith is required to file reports, proxy statements
and other information with the Commission relating to its business, financial
condition and other matters. Such reports, proxy statements and other
information are available for inspection and copying at prescribed rates at the
offices of the Commission as set forth under "Certain Information Concerning The
Company." In addition, certain material filed by Thermo Electron may also be
available for inspection at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005.
The name, business address, principal occupation, five-year employment
history and citizenship of each of the directors and executive officers of
Thermo Electron are set forth in Schedule I hereto.
During the past five years, Thermo Electron has not been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
been a party to any judicial or administrative proceeding (except for any
matters that were dismissed without sanction or settlement) that resulted in a
judgment, decree or final order enjoining Thermo Electron from future violations
of, or prohibiting activities subject to, federal or state securities laws, or a
finding of any violation of federal or state securities laws.
CERTAIN TRANSACTIONS
Except as otherwise set forth in this Offer to Purchase, none of the
Purchaser, Corpak, Thermedics or Thermo Electron or, to the best knowledge of
the Purchaser, Corpak, Thermedics and Thermo Electron, any of the persons listed
on Schedule I hereto, has any contract, arrangement, understanding or
relationship with any other person with respect to any Shares or other
securities of the Company, including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or voting of
any such Shares or other securities, joint ventures, loan or option
arrangements, puts or calls, guaranties of loans, guaranties against loss or the
giving or withholding of proxies.
PRIOR CONTACTS. Except as set forth in this Offer to Purchase
(particularly the section entitled "Special Factors--Background To The Offer And
The Merger"), since January 1, 1998, there have been no contacts, negotiations
or transactions between the Purchaser, Corpak, Thermedics, Thermo Electron, any
subsidiary of the Purchaser, Corpak, Thermedics or Thermo Electron or, to the
best knowledge of the Purchaser, Corpak, Thermedics and Thermo Electron, any of
the persons listed on Schedule I hereto, on the one hand, and the Company or any
of its officers, directors or affiliates, on the other hand, concerning a
merger, consolidation or acquisition, a tender offer or other acquisition of
securities, an election of directors, or a sale or other transfer of a material
amount of assets, other than votes cast by Thermo Electron or Thermedics for the
election of directors of the Company in the normal course.
PRIOR BUSINESS RELATIONSHIPS. Except as set forth in this Offer to
Purchase, none of the Purchaser, Corpak, Thermedics or Thermo Electron or, to
the best knowledge of the Purchaser, Corpak, Thermedics or Thermo Electron, any
of the persons listed on Schedule I hereto has, since January 1, 1998, had any
business relationships or transactions with the Company or any of its executive
officers, directors or affiliates that would require disclosure herein under the
rules and regulations of the Commission applicable to the Offer or the Merger.
TRANSACTIONS BETWEEN THE COMPANY AND THERMEDICS OR THERMO ELECTRON. On May
6, 1998, the Company entered into an Agreement and Plan of Reorganization with
Thermedics, Orion Research Inc. ("Orion Research"), a wholly-owned subsidiary of
Thermedics, and Orion Acquisition Inc., a wholly-owned subsidiary of the
Company. The agreement provided for the acquisition by the Company of Orion
Research in exchange for the issuance of 5,961,225 shares of the Company's
common stock to Thermedics. Based on the average of the closing prices of the
Company's common stock as reported on the American Stock Exchange for the five
trading days ending on April 13, 1998 (the date preceding the Company's
announcement of its
49
<PAGE> 50
intention to acquire Orion Research), the shares to be issued to Thermedics had
a value of $65,800,000 prior to such announcement.
FINANCIAL INFORMATION. Because the Offer Price will be paid in cash, the
Purchaser, Corpak, Thermedics and Thermo Electron do not believe that financial
information with respect to the Purchaser, Corpak, Thermedics, Thermo Electron
and their subsidiaries would be material to a stockholder's evaluation of the
Offer and the Merger. Financial information concerning Thermedics, Thermo
Electron and their subsidiaries is filed by Thermedics and Thermo Electron with
the Commission (which may be inspected and copies thereof obtained at the
offices of the Commission as set forth in "Certain Information Concerning The
Company").
50
<PAGE> 51
SOURCE AND AMOUNT OF FUNDS
The total amount of funds required by the Purchaser to purchase all of the
outstanding Shares pursuant to the Offer and the Merger, and to pay related fees
and expenses, is estimated to be approximately $18.5 million. The Purchaser will
obtain the funds to purchase the Shares in the Offer and the Merger from
Thermedics as a loan or capital contribution. Thermedics will use a combination
of its own working capital and borrowings from Thermo Electron to fund this loan
or capital contribution. Thermo Electron has committed to provide any required
financing to Thermedics. Any loan by Thermo Electron to Thermedics will be
evidenced by an unsecured note due September 1, 2000 that will bear interest at
a floating rate equal to the 30-day Dealer Commercial Paper Rate (the "DCP
Rate") plus 150 basis points, adjusted at the beginning of each fiscal month of
Thermedics. The interest rate of the note will be reduced to the DCP Rate plus
50 basis points to the extent of any funds invested by Thermedics'
majority-owned subsidiaries in Thermo Electron's cash management arrangement.
Thermedics does not have any arrangement with respect to the repayment of any
such loan.
51
<PAGE> 52
THE MERGER; APPRAISAL RIGHTS
THE MERGER
Following the consummation of the Offer, subject to the terms and
conditions and in accordance with the Chapter 156B of the Massachusetts General
Laws (the "Massachusetts Business Corporation Law"), Thermedics plans to cause
the Company to merge with and into the Purchaser. Upon the Effective Date of the
Merger:
- each Share issued and outstanding immediately prior to the Effective Date
of the Merger (other than Shares held by Public Stockholders, if any, who
are entitled to and who properly exercise their dissenters' rights (See
"--Appraisal Rights" below) under the Massachusetts Business Corporation
Law) will be cancelled and extinguished and be converted into and become
a right to receive the Offer Price per Share; and
- each outstanding share of the Purchaser's capital stock issued and
outstanding immediately prior to the Effective Date of the Merger will be
converted into one validly issued, fully paid and nonassessable share of
common stock of the Surviving Corporation. In the Merger, the Purchaser
would be the Surviving Corporation and would change its name to
"Thermedics Detection Inc." As a result of the Merger, Corpak and Thermo
Electron will own all of the outstanding equity interests in the
Surviving Corporation.
Under the Massachusetts Business Corporation Law, if the Purchaser holds at
least 90% of the outstanding Shares, the Purchaser would have the power to
effect the Merger without a vote of the Company's Board of Directors or other
stockholders. The Purchaser intends to take all necessary and appropriate action
to cause the Merger to become effective as soon as reasonably practicable after
the consummation of the Offer and without a meeting of the Company's
stockholders.
APPRAISAL RIGHTS
Stockholders who tender their Shares in the Offer are not entitled to
appraisal rights under the Massachusetts Business Corporation Law. If the
Purchaser effects the Merger, then Company stockholders who do not tender their
Shares to the Purchaser pursuant to the Offer would have the right to demand an
appraisal of the fair value of their Shares in accordance with the provisions of
Sections 89 through 98 of the Massachusetts Business Corporation Law (the
"Massachusetts Appraisal Statute"), which sets forth the rights and obligations
of Company stockholders demanding an appraisal and the procedures to be
followed.
The following is a summary of the procedures to be followed under the
Massachusetts Appraisal Statute, the full text of which is attached to this
Offer to Purchase as Schedule III. The summary does not purport to be a complete
statement of, and is qualified in its entirety by reference to, the
Massachusetts Appraisal Statute and to any amendments to such statute after the
date of this Offer to Purchase. Failure to follow the Massachusetts Appraisal
Statute procedures may result in termination or waiver of appraisal rights under
the Massachusetts Appraisal Statute. If the Merger is consummated, any Company
stockholder who desires to exercise his appraisal rights should review carefully
the Massachusetts Appraisal Statute and is urged to consult his legal advisor
before electing or attempting to exercise such rights.
Only a holder of record of Shares on the Effective Date of the Merger would
be entitled to seek appraisal. The demand for appraisal must be executed by or
for the holder of record, fully and correctly, as such holder's name appears on
the holder's Share Certificates. If the Shares are owned of record in a
fiduciary capacity, such as by a trustee, guardian or custodian, the demand
should be made in that capacity, and if the Shares are owned of record by more
than one person, as in a joint tenancy or tenancy in common, the demand must be
made by or for all owners of record. An authorized agent, including one or more
joint owners, could execute the demand for appraisal for a holder of record;
however, such agent must identify the record owner or owners and expressly
disclose in such demand that the agent is acting as agent for the record owner
or owners of such Shares.
52
<PAGE> 53
A record holder such as a broker who holds Shares as a nominee for
beneficial owners, some of whom desire to demand appraisal, would be required to
exercise appraisal rights on behalf of such beneficial owners with respect to
the Shares held for such beneficial owners. In such case, the written demand for
appraisal should set forth the number of Shares covered by it. Unless a demand
for appraisal specifies a number of Shares, such demand will be presumed to
cover all Shares held in the name of such record owner.
The Surviving Corporation would mail written notice to the stockholders of
record of the Company on the Effective Date of the Merger of the approval and
consummation of the Merger and the availability of appraisal rights under the
Massachusetts Appraisal Statute within ten days after the Effective Date of the
Merger (the "Merger Notice"). Any stockholder entitled to appraisal rights would
have the right, on or before the date that is 20 days after the date of mailing
of the Merger Notice, to demand in writing from the Surviving Corporation an
appraisal of his Shares. Such demand will be sufficient if it reasonably informs
the Surviving Corporation of the identity of the stockholder and that the
stockholder intends to demand an appraisal of the fair value of his or her
Shares. Failure to make such a demand on or before the date that is 20 days
after the date of mailing of the Merger Notice would foreclose a stockholders'
rights to appraisal.
A stockholder could withdraw his demand for appraisal only with the
approval of the Surviving Corporation. Upon withdrawal of a demand for
appraisal, a stockholder would be entitled to receive the Offer Price.
If, following the Merger, a stockholder perfects a demand for payment of
his or her Shares as provided above (each, a "Dissenting Stockholder"), and if
the Surviving Corporation and such Dissenting Stockholder are able to reach
agreement on the fair value of the Shares, the Surviving Corporation will pay to
the Dissenting Stockholder the fair value of such Shares, as the case may be,
within 30 days after the expiration of the 20-day period during which the demand
for appraisal may be made (the "30-Day Period"). If within the 30-Day Period the
parties fail to agree as to the fair value of such Shares, either the Surviving
Corporation or the Dissenting Stockholder may have the fair value of the Shares
of all Dissenting Stockholders determined by judicial proceedings by filing a
bill in equity in the Massachusetts Superior Court for Middlesex County within
four months after the expiration of the 30-Day Period. While Massachusetts
courts have broad discretion in determining fair value of stock of dissenting
stockholders, Massachusetts courts have generally used a weighted average of the
market, earnings and asset values for the stock. The Massachusetts Supreme
Judicial Court has recently held that such method is an appropriate, but not
mandated, approach to determining the fair value of stock of dissenting
stockholders, and that such valuation is within the discretion of the trial
judge. A fair rate of interest, if any, shall be paid by the Surviving
Corporation on any award determined by the Court from the date of the vote of
the Board of Directors of the Purchaser approving the Merger. If (i) no suit is
filed to determine the value of the Shares within four months of the expiration
of the 30-Day Period, (ii) any such suit is dismissed as to that Dissenting
Stockholder or (iii) the Dissenting Stockholder withdraws his, her or its
objection in writing with the written approval of the Surviving Corporation, the
Dissenting Stockholder will have only the rights of a nondissenting stockholder
to receive the Offer Price.
Under Massachusetts statutory law, the enforcement by a Dissenting
Stockholder of such Dissenting Stockholder's right to receive payment for his or
her shares in the manner provided by the Massachusetts Appraisal Statute is
stated to be the exclusive remedy of a stockholder objecting to the Merger,
except upon the grounds that consummation of the Merger will be or is illegal or
fraudulent as to such stockholder. The Massachusetts Supreme Judicial Court,
however, has held that Dissenting Stockholders are not limited to the statutory
remedy of judicial appraisal in cases where violations of fiduciary duty are
found.
Stockholders considering seeking appraisal should have in mind that the
fair value of their Shares determined under the Massachusetts Appraisal Statute
could be more, the same or less than the Offer Price and that investment banking
opinions as to fairness from a financial point of view are not necessarily
opinions as to fair value under the Massachusetts Appraisal Statute.
From and after the Effective Date of the Merger, Dissenting Stockholders
would not be entitled to vote their Shares for any purpose and would not be
entitled to receive payment of dividends or other distributions in respect of
such Shares payable to stockholders of record thereafter.
53
<PAGE> 54
THE FOREGOING SUMMARY DOES NOT PURPORT TO BE A COMPLETE STATEMENT OF THE
PROCEDURES TO BE FOLLOWED BY STOCKHOLDERS DESIRING TO EXERCISE THEIR DISSENTING
APPRAISAL RIGHTS AND IS QUALIFIED IN ITS ENTIRETY BY EXPRESS REFERENCE TO THE
MASSACHUSETTS APPRAISAL STATUTE, THE FULL TEXT OF WHICH IS ATTACHED HERETO AS
SCHEDULE III. STOCKHOLDERS ARE URGED TO READ SCHEDULE III IN ITS ENTIRETY SINCE
FAILURE TO COMPLY WITH THE PROCEDURES SET FORTH THEREIN MAY RESULT IN THE LOSS
OF APPRAISAL RIGHTS.
54
<PAGE> 55
FEES AND EXPENSES
The Advisors are acting as financial advisors to Thermedics and Thermo
Electron in connection with the Offer and the Merger. The Advisors are also
acting as Dealer Managers in connection with the Offer. For a discussion of the
fees to be paid to the Advisors in connection with Offer and the Merger, see
"Special Factors--Summary Of The Advisors' Analysis and Opinion."
The Purchaser has retained D.F. King & Co., Inc. to act as the Information
Agent and American Stock Transfer & Trust Company to act as the Depositary in
connection with the Offer. The Information Agent may contact holders of Shares
by mail, telephone, telex, telecopy, telegraph and personal interview and may
request brokers, dealers, commercial banks, trust companies and other nominees
to forward the Offer material to beneficial owners. Each of the Information
Agent and the Depositary will receive reasonable and customary compensation for
its services and will be reimbursed for certain reasonable out-of-pocket
expenses and will be indemnified against certain liabilities and expenses in
connection with the Offer, including certain liabilities under U.S. federal
securities laws.
The Purchaser will not pay any fees or commissions to any broker or dealer
or any other person for soliciting tenders of Shares pursuant to the Offer
(other than to the Dealer Managers and the Information Agent). Brokers, dealers,
commercial banks and trust companies will, upon request, be reimbursed by the
Purchaser for customary mailing and handling expenses incurred by them in
forwarding materials to their customers.
The following is an estimate of fees and expenses to be incurred by the
Purchaser in connection with the Offer:
<TABLE>
<S> <C>
Financial Advisors.......................................... $1,000,000
Legal....................................................... 250,000
Printing.................................................... 100,000
Advertising................................................. 25,000
Filing...................................................... 5,295
Depositary.................................................. 7,500
Information Agent (including mailing)....................... 12,000
Miscellaneous............................................... 100,205
----------
$1,500,000
==========
</TABLE>
The Company will not pay any of the fees and expenses to be incurred by the
Purchaser in connection with the Offer.
55
<PAGE> 56
MISCELLANEOUS
The Offer is being made solely by this Offer to Purchase and the related
Letter of Transmittal and is being made to all holders of Shares. The Offer is
not being made to (nor will tenders be accepted from or on behalf of) holders of
Shares in any jurisdiction in which the making of the Offer or the acceptance
thereof would not be in compliance with the laws of such jurisdiction. In any
jurisdiction where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of the Purchaser by the Dealer Managers or one or more registered brokers
or dealers licensed under the laws of such jurisdiction.
Thermo Electron, Thermedics, Corpak and the Purchaser have filed with the
Commission a Schedule TO together with exhibits, pursuant to Rule 14d-3 and Rule
13e-3 promulgated by the Commission under the Exchange Act, furnishing certain
additional information with respect to the Offer. Such statement and any
amendments thereto, including exhibits, may be examined and copies may be
obtained at the same places and in the same manner as set forth with respect to
information about the Company in "Certain Information Concerning The Company"
(except that such statement and amendments may not be available in the regional
offices of the Commission).
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER NOT CONTAINED HEREIN OR IN THE LETTER
OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED ON AS HAVING BEEN AUTHORIZED.
March 10, 2000
56
<PAGE> 57
SCHEDULE I
MEMBERS OF THE BOARDS OF DIRECTORS AND
EXECUTIVE OFFICERS OF THE PURCHASER, CORPAK,
THERMEDICS AND THERMO ELECTRON
DIRECTOR AND EXECUTIVE OFFICER OF THE PURCHASER
Mr. John T. Keiser is the sole director and president of the Purchaser.
Biographical and other information with respect to Mr. Keiser is set forth below
under "--Directors and Executive Officers of Thermedics."
DIRECTORS AND EXECUTIVE OFFICERS OF CORPAK
The name, business address, position with Corpak, present principal
occupation or employment and five-year employment history of each of the
directors and executive officers of Corpak, together with the names, principal
businesses and addresses of any corporations or other organizations in which
such principal occupations are conducted, are set forth below. Unless otherwise
indicated, each occupation set forth refers to Corpak, each individual is a
United States citizen and each individual's business address is 81 Wyman Street,
Waltham, Massachusetts 02454. Unless otherwise indicated, to the knowledge of
each of the Purchaser, Corpak, Thermedics and Thermo Electron, no director or
executive officer of Corpak beneficially owns any Shares (or rights to acquire
Shares). Unless otherwise indicated, to the knowledge of each of the Purchaser,
Corpak, Thermedics and Thermo Electron, no director or executive officer of
Corpak has been convicted in a criminal proceeding during the last five years
(excluding traffic violations or similar misdemeanors) and no director or
executive officer of Corpak was a party to any judicial or administrative
proceeding during the last five years (except for any matters that were
dismissed without sanction or settlement) that resulted in a judgement, decree
or final order enjoining the person from future violations of, or prohibiting
activities subject to, federal or state securities laws, or a finding of any
violation of federal or state securities laws.
JOHN T. KEISER Mr. Keiser, 64, has been a director and chairman of
the board of Corpak since March 1998. Biographical
and other information with respect to Mr. Keiser is
set forth below under "--Directors and Executive
Officers of Thermedics."
THOMAS I. KUHN Mr. Kuhn, 45, has been a director of Corpak since
May 1996 and its president and chief operating
officer since August 1992. Mr. Kuhn's business
address is 100 Chaddick Drive, Wheeling, IL 60090.
STOCK OWNERSHIP. The following table sets forth the beneficial ownership
of common stock of the Company, as well as the common stock of Thermedics and
Thermo Electron, as of January 31, 2000, with respect to each director and
executive officer of Corpak. No director or executive officer of Corpak
beneficially owns any shares of capital stock of the Purchaser or Corpak. While
certain directors and executive officers of Corpak are also directors and
executive officers of Thermo Electron or its subsidiaries, all such persons
disclaim beneficial ownership of the shares of common stock beneficially owned
by Thermo Electron.
<TABLE>
<CAPTION>
THERMEDICS THERMO ELECTRON
NAME(1) DETECTION INC.(2) THERMEDICS INC.(3) CORPORATION(4)
<S> <C> <C> <C>
John T. Keiser.............................. 17,000 194,693 331,636
Thomas I. Kuhn.............................. 0 38,941 5,626
All directors and current executive officers
as a group (2 persons).................... 17,000 233,634 337,262
</TABLE>
- ------------------------------
(1) Except as reflected in the footnotes to this table, shares beneficially
owned consist of shares owned by the indicated person or by that person for
the benefit of minor children, and all share ownership includes sole voting
and investment power.
(2) Shares of the common stock of the Company beneficially owned by Mr. Keiser
and all directors and current executive officers as a group include 17,000
and 17,000 shares, respectively, that such person or group has the right to
acquire within 60 days of January 31, 2000 through the exercise of stock
options. No director or current executive officer beneficially owned more
than 1% of the Company's common
I-1
<PAGE> 58
stock outstanding as of January 31, 2000; all directors and current
executive officers as a group beneficially owned less than 1% of such common
stock outstanding as of such date.
(3) Shares of the common stock of Thermedics beneficially owned by Mr. Keiser,
Mr. Kuhn and all directors and current executive officers as a group include
187,900, 34,100 and 222,000 shares, respectively, that such person or group
had the right to acquire within 60 days of January 31, 2000 through the
exercise of stock options. No director or current executive officer
beneficially owned more than 1% of the Thermedics common stock outstanding
as of January 31, 2000; all directors and current executive officers as a
group beneficially owned less than 1% of such common stock outstanding as of
such date.
(4) Shares of the common stock of Thermo Electron beneficially owned by Mr.
Keiser, Mr. Kuhn and all directors and current executive officers as a group
include 263,230, 4,950 and 268,180 shares, respectively, that such person or
group has the right to acquire within 60 days of January 31, 2000 through
the exercise of stock options. No director or current executive officer
beneficially owned more than 1% of the Thermo Electron common stock
outstanding as of January 31, 2000 all directors and current executive
officers as a group beneficially owned less than 1% of such common stock
outstanding as of such date.
DIRECTORS AND EXECUTIVE OFFICERS OF THERMEDICS
The name, business address, position with Thermedics, present principal
occupation or employment and five-year employment history of each of the
directors and executive officers of Thermedics, together with the names,
principal businesses and addresses of any corporations or other organizations in
which such principal occupations are conducted, are set forth below. Unless
otherwise indicated, each occupation set forth refers to Thermedics, each
individual is a United States citizen and each individual's business address is
81 Wyman Street, Waltham, Massachusetts 02454. Unless otherwise indicated, to
the knowledge of each of the Purchaser, Corpak, Thermedics and Thermo Electron,
no director or executive officer of Thermedics beneficially owns any Shares (or
rights to acquire Shares). Unless otherwise indicated, to the knowledge of each
of the Purchaser, Corpak, Thermedics and Thermo Electron, no director or
executive officer of Thermedics has been convicted in a criminal proceeding
during the last five years (excluding traffic violations or similar
misdemeanors) and no director or executive officer of Thermedics was a party to
any judicial or administrative proceeding during the last five years (except for
any matters that were dismissed without sanction or settlement) that resulted in
a judgement, decree or final order enjoining the person from future violations
of, or prohibiting activities subject to, federal or state securities laws, or a
finding of any violation of federal or state securities laws. Dr. Richard F.
Syron resigned from the Board of Directors of Thermedics effective March 7,
2000. Mr. John N. Hatsopoulos resigned from the Board of Directors of Thermedics
effective February 21, 2000.
T. ANTHONY BROOKS Mr. Brooks, 60, has been a director of Thermedics
since September 1998. Mr. Brooks was a managing
director and member of the operating committee of
Lehman Brothers Inc., a financial services firm
located at 3 World Financial Center, New York, NY
10285 from 1991 until his retirement in 1997. While
at Lehman Brothers Inc., Mr. Brooks was the head of
the European equity division from 1995 to 1996.
PETER O. CRISP Mr. Crisp, 67, has been a director of Thermedics
since 1983. Mr. Crisp was a general partner of
Venrock Associates, a venture capital investment
firm located at 30 Rockefeller Plaza, New York, NY
10112, for more than five years until his
retirement in September 1997. He has been the vice
chairman of Rockefeller Financial Services, Inc.
since December 1997. Mr. Crisp is also a director
of American Superconductor Corporation, Evans &
Sutherland Computer Corporation, Thermo Electron,
ThermoTrex Corporation and United States Trust
Corporation.
PAUL F. FERRARI Mr. Ferrari, 69, has been a director of Thermedics
since 1991. Mr. Ferrari was a vice president of
Thermo Electron from 1988 until his retirement at
the end of 1990. Mr. Ferrari is also a director of
General Scanning Inc. and ThermoTrex Corporation.
I-2
<PAGE> 59
GEORGE N. HATSOPOULOS Dr. Hatsopoulos, 73, has been a director of
Thermedics since 1983. He served as president,
chief executive officer and chairman of the board
of Thermo Electron from 1956 until January 1997,
June 1999 and January 2000, respectively. Dr.
Hatsopoulos is also a director of Photoelectron
Corporation, Thermo Ecotek Corporation, Thermo
Electron, Thermo Fibertek Inc., Thermo Instrument
Systems Inc. and ThermoTrex Corporation.
JOHN T. KEISER Mr. Keiser, 64, has been a director of Thermedics
since April 1997. He has been the president and
chief executive officer of Thermedics since March
1998 and December 1998, respectively. From 1994
until March 1998, Mr. Keiser served as a senior
vice president of Thermedics. Mr. Keiser has been
the chief operating officer, biomedical, of Thermo
Electron since September 1998, and a vice president
from April 1997 until his promotion. He has also
been the president of Thermo Electron's wholly
owned biomedical group, a manufacturer of medical
equipment and instruments, since 1994. Mr. Keiser
is a director of Metrika Systems Corporation, the
Company, Thermo Cardiosystems Inc., ThermoLase
Corporation, Thermo Sentron Inc., ThermoTrex
Corporation and Trex Medical Corporation.
JOHN W. WOOD JR. Mr. Wood, 56, has been a director of Thermedics
since 1984 and chairman of the board since March
1998. Mr. Wood was president and chief executive
officer of Thermedics from 1984 to March 1998. Mr.
Wood has been a senior vice president of Thermo
Electron since December 1995, and, prior to that
promotion, was a vice president of Thermo Electron
from September 1994 to December 1995.
NICHOLAS T. ZERVAS Dr. Zervas, 70, has been a director of Thermedics
since 1987. Dr. Zervas has been Chief of
Neurosurgical Service, Massachusetts General
Hospital, located at 55 Fruit Street, Boston, MA
02114, since 1977. Dr. Zervas is also a director of
Thermo Cardiosystems Inc., ThermoLase Corporation
and ThermoTrex Corporation.
PAUL F. KELLEHER Mr. Kelleher, 57, has been the chief accounting
officer of Thermedics since March 1986. Mr.
Kelleher also has served as the senior vice
president, finance and administration, of Thermo
Electron since June 1997, and served as its vice
president, finance from 1987 until 1997. Mr.
Kelleher served as Thermo Electron's controller
from 1982 until January 1996. Mr. Kelleher is a
director of ThermoLase Corporation.
THEO MELAS-KYRIAZI Mr. Melas-Kyriazi, 40, has been the chief financial
officer of Thermedics since January 1999. Mr.
Melas-Kyriazi also has served as a vice president
of Thermo Electron since March 1998 and its chief
financial officer since January 1999. Prior to his
appointment as a vice president of Thermo Electron,
Mr. Melas-Kyriazi served as president and chief
executive officer of ThermoSpectra Corporation from
its inception in August 1994 until March 1998. He
is a director of ThermoRetec Corporation. Mr.
Melas-Kyriazi is a citizen of Greece.
VICTOR L. POIRIER Mr. Poirier, 58, has been a senior vice president
of Thermedics since 1985. He has also been
president and chief technical officer of Thermo
Cardiosystems Inc., a majority-owned subsidiary of
Thermedics located at 470 Wildwood Street, Woburn,
Massachusetts 01888-2697 since 1990 and 1999,
respectively, and was its chief executive officer
from 1991 to November 1998.
I-3
<PAGE> 60
STOCK OWNERSHIP. The following table sets forth the beneficial ownership
of common stock of the Company, as well as the common stock of Thermedics and
Thermo Electron, as of January 31, 2000, with respect to each director and
executive officer of Thermedics. No director or executive officer of Thermedics
beneficially owns any shares of capital stock of the Purchaser or Corpak. While
certain directors and executive officers of Thermedics are also directors and
executive officers of Thermo Electron or its subsidiaries, all such persons
disclaim beneficial ownership of the shares of common stock beneficially owned
by Thermo Electron.
<TABLE>
<CAPTION>
THERMEDICS THERMO ELECTRON
NAME(1) DETECTION INC.(2) THERMEDICS INC.(3) CORPORATION(4)
<S> <C> <C> <C>
T. Anthony Brooks................................ 0 5,367 0
Peter O. Crisp................................... 0 37,076 121,767
Paul F. Ferrari.................................. 599 11,050 16,482
George N. Hatsopoulos............................ 21,197 63,681 3,909,357
John T. Keiser................................... 17,000 194,693 331,636
Paul F. Kelleher................................. 5,100 20,360 213,530
Theo Melas-Kyriazi............................... 0 11,861 458,532
Victor L. Poirier................................ 0 69,455 53,880
John W. Wood Jr.................................. 37,251 233,200 293,550
Nicholas T. Zervas............................... 0 22,064 0
All directors and current executive officers as a
group (10 persons)............................. 81,147 668,807 5,398,734
</TABLE>
- ------------------------------
(1) Except as reflected in the footnotes to this table, shares beneficially
owned consist of shares owned by the indicated person or by that person for
the benefit of minor children, and all share ownership includes sole voting
and investment power.
(2) Shares of the common stock of the Company beneficially owned by Dr.
Hatsopoulos, Mr. Keiser, Mr. Kelleher, Mr. Wood and all directors and
current executive officers as a group include 20,000, 17,000, 5,000, 20,000
and 62,000 shares, respectively, that such person or group has the right to
acquire within 60 days of January 31, 2000 through the exercise of stock
options. Shares beneficially owned by Dr. Hatsopoulos include 57 shares held
by his spouse. No director or current executive officer beneficially owned
more than 1% of the Company's common stock outstanding as of January 31,
2000; all directors and current executive officers as a group beneficially
owned less than 1% of such common stock outstanding as of such date.
(3) Shares of the Thermedics common stock beneficially owned by Mr. Brooks, Mr.
Crisp, Mr. Ferrari, Mr. Keiser, Mr. Kelleher, Mr. Poirier, Mr. Wood, and all
directors and current executive officers as a group include 1,000, 9,000,
8,950, 187,900, 10,000, 25,000, 174,150 and 416,000 shares, respectively,
that such person or group had the right to acquire within 60 days of January
31, 2000 through the exercise of stock options. Shares beneficially owned by
Dr. Hatsopoulos, Mr. Kelleher, Mr. Melas-Kyriazi and all directors and
current executive officers as a group include 1,635, 1,294, 1,119 and 4,048
shares, respectively, allocated through January 31, 2000 to their respective
accounts maintained pursuant to Thermo Electron's employee stock ownership
plan (the "ESOP"), of which the trustees, who have investment power over its
assets, are executive officers of Thermo Electron. Shares beneficially owned
by Mr. Brooks, Mr. Crisp, Dr. Zervas and all directors and current executive
officers as a group include 1,367, 9,971, 10,364 and 21,702 shares,
respectively, that had been allocated through January 1, 2000 to their
respective accounts maintained under the Deferred Compensation Plan. Shares
beneficially owned by Dr. Hatsopoulos include 654 shares held by Dr.
Hatsopoulos' spouse and 50,000 shares that a family limited partnership
indirectly controlled by Dr. Hatsopoulos has the right to acquire within 60
days of January 31, 2000 through the exercise of stock options. Dr.
Hatsopoulos disclaims beneficial interest in the shares owned by the family
limited partnership except to the extent of his pecuniary interest therein.
Shares beneficially owned by Mr. Wood include 2,600 shares held in custodial
accounts for the benefit of two minor children. No director or current
executive officer beneficially owned more than 1% of the
I-4
<PAGE> 61
Thermedics common stock outstanding as of January 31, 2000; all directors
and current executive officers as a group beneficially owned 1.59% of the
Thermedics common stock outstanding as of such date.
(4) Shares of the common stock of Thermo Electron beneficially owned by Mr.
Crisp, Dr. Hatsopoulos, Mr. Keiser, Mr. Kelleher, Mr. Melas-Kyriazi, Mr.
Poirier, Mr. Wood and all directors and current executive officers as a
group include 25,596, 25,448, 263,230, 179,359, 384,361, 46,123, 249,298 and
1,173,415 shares, respectively, that such person or group has the right to
acquire within 60 days of January 31, 2000 through the exercise of stock
options. Shares beneficially owned by Dr. Hatsopoulos, Mr. Kelleher, Mr.
Melas-Kyriazi and all directors and current executive officers as a group
include 2,266, 1,426, 1,071 and 4,763 shares, respectively, allocated to
their respective accounts maintained pursuant to Thermo Electron's ESOP, of
which the trustees, who have investment power over its assets, are executive
officers of Thermo Electron. Shares beneficially owned by Mr. Crisp and all
directors and current executive officers as a group include 49,277 shares
allocated through January 1, 2000 to Mr. Crisp's account maintained pursuant
to Thermo Electron's deferred compensation plan for directors. Shares
beneficially owned by Dr. Hatsopoulos include 144,437 shares held by his
spouse, 311,708 shares held by a family trust of which his spouse is the
trustee and 566,262 shares held by a family limited partnership indirectly
controlled by Dr. Hatsopoulos. Shares beneficially owned by Dr. Hatsopoulos
also include 50,000 shares that a family trust, of which Dr. Hatsopoulos'
spouse is the trustee, has the right to acquire within 60 days of January
31, 2000 and 2,149,500 shares that a family limited partnership indirectly
controlled by Dr. Hatsopoulos has the right to acquire within 60 days of
January 31, 2000 through the exercise of stock options. Dr. Hatsopoulos
disclaims beneficial interest in the shares owned by the family limited
partnership except to the extent of his pecuniary interest therein. Except
for Dr. Hatsopoulos, who beneficially owned 2.44% of the Thermo Electron
common stock outstanding as of January 31, 2000, no director or current
executive officer beneficially owned more than 1% of such common stock
outstanding as of such date; all directors and current executive officers as
a group beneficially owned approximately 3.42% of the Thermo Electron common
stock outstanding as of such date.
DIRECTORS AND EXECUTIVE OFFICERS OF THERMO ELECTRON
The name, business address, position with Thermo Electron, present
principal occupation or employment and five-year employment history of each of
the directors and executive officers of Thermo Electron, together with the
names, principal businesses and addresses of any corporations or other
organizations in which such principal occupations are conducted, are set forth
below. Unless otherwise indicated, each occupation set forth refers to Thermo
Electron, each individual is a United States citizen and each individual's
business address is 81 Wyman Street, Waltham, Massachusetts 02454. Unless
otherwise indicated, to the knowledge of each of the Purchaser, Corpak,
Thermedics and Thermo Electron, no director or executive officer of Thermo
Electron beneficially owns any Shares (or rights to acquire Shares). Unless
otherwise indicated, to the knowledge of each of the Purchaser, Corpak,
Thermedics and Thermo Electron, no director or executive officer of Thermo
Electron has been convicted in a criminal proceeding during the last five years
(excluding traffic violations or similar misdemeanors) and no director or
executive officer of Thermo Electron was a party to any judicial or
administrative proceeding during the last five years (except for any matters
that were dismissed without sanction or settlement) that resulted in a
judgement, decree or final order enjoining the person from future violations of,
or prohibiting activities subject to, federal or state securities laws, or a
finding of any violation of federal or state securities laws. Mr. John N.
Hatsopoulos resigned from the Board of Directors of Thermo Electron effective
February 21, 2000.
SAMUEL W. BODMAN Mr. Bodman, 61, has been a director of Thermo
Electron since May 1999. Since 1988, Mr. Bodman has
served as the chairman and chief executive officer
of Cabot Corporation, a manufacturer of specialty
chemicals and materials located at 75 State Street,
Boston, MA 02109. Mr. Bodman is also a director of
Cabot Corporation, John Hancock Financial Services,
Inc., Security Capital Group Incorporated and
Westvaco Corporation.
I-5
<PAGE> 62
PETER O. CRISP Mr. Crisp, 67, has been a director of Thermo
Electron since 1974. Mr. Crisp was a general
partner of Venrock Associates, a venture capital
investment firm located at 30 Rockefeller Plaza,
New York, NY 10112, for more than five years until
his retirement in September 1997. He has been the
vice chairman of Rockefeller Financial Services,
Inc. since December 1997. Mr. Crisp is also a
director of American Superconductor Corporation,
Evans & Sutherland Computer Corporation, NovaCare
Inc., Thermedics, ThermoTrex Corporation and United
States Trust Corporation.
ELIAS P. GYFTOPOULOS Dr. Gyftopoulos, 72, has been a director of Thermo
Electron since 1976. Dr. Gyftopoulos is Professor
Emeritus of the Massachusetts Institute of
Technology, where he was the Ford Professor of
Mechanical Engineering and of Nuclear Engineering
for more than 20 years until his retirement in
1996. Dr. Gyftopoulos is also a director of Thermo
BioAnalysis Corporation, Thermo Cardiosystems Inc.,
ThermoLase Corporation, ThermoRetec Corporation and
Trex Medical Corporation.
GEORGE N. HATSOPOULOS Dr. Hatsopoulos, 73, has been a director of Thermo
Electron since he founded Thermo Electron in 1956.
He served as president, chief executive officer and
chairman of the board of Thermo Electron from 1956
until January 1997, June 1999 and January 2000,
respectively. Dr. Hatsopoulos is also a director of
Photoelectron Corporation, Thermedics, Thermo
Ecotek Corporation, Thermo Fibertek Inc., Thermo
Instrument Systems Inc. and ThermoTrex Corporation.
FRANK JUNGERS Mr. Jungers, 73, has been a director of Thermo
Electron since 1978. Mr. Jungers has been a
consultant on business and energy matters since
1977. His business address is 822 N.W. Murray
Boulevard, Suite 242, Portland, OR 97229. Mr.
Jungers is also a director of The AES Corporation,
Donaldson, Lufkin & Jenrette, Inc., Georgia-Pacific
Corporation, ONIX Systems Inc., Statia Terminals
Group N.V., Thermo Ecotek Corporation and
ThermoQuest Corporation.
ROBERT A. MCCABE Mr. McCabe, 65, has been a director of Thermo
Electron since 1962. He has been the chairman of
Pilot Capital Corporation, located at 444 Madison
Avenue, Suite 2103, New York, NY 10022, which is
engaged in private investments, since 1998. Mr.
McCabe was the president of Pilot Capital
Corporation from 1987 to 1998. Mr. McCabe is also a
director of Atlantic Bank & Trust Company, Burns
International Services Corporation, Church & Dwight
Company and Thermo Optek Corporation.
HUTHAM S. OLAYAN Ms. Olayan, 46, has been a director of Thermo
Electron since 1987. She has served since 1995 as
president and a director of Olayan America
Corporation, a member of the Olayan Group, and as
president and a director of Competrol Real Estate
Limited, another member of the Olayan Group, from
1986 until its merger into Olayan America
Corporation in 1997. The surviving company, which
is located at 505 Park Avenue, Suite 1100, New
York, NY 10022, is engaged in private investments,
including real estate, and advisory services. Ms.
Olayan is also a director of Trex Medical
Corporation. Ms. Olayan is a citizen of Saudi
Arabia.
ROBERT W. O'LEARY Mr. O'Leary, 56, has been a director of Thermo
Electron since June 1998. He has been the president
and chairman of Premier, Inc., a
I-6
<PAGE> 63
strategic alliance of not-for-profit health care
and hospital systems located at 12225 El Camino
Real, San Diego, CA 92130, since 1995. Mr. O'Leary
is also a director of Eco Soil Systems, Inc.
RICHARD F. SYRON Dr. Syron, 56, has been a director of Thermo
Electron since September 1997, its president and
chief executive officer since June 1999 and
chairman of the board since January 2000. From
April 1994 until May 1999, Dr. Syron was the
chairman and chief executive officer of the
American Stock Exchange Inc. located at 86 Trinity
Place, New York, NY 10006-1881. Dr. Syron is also a
director of Dreyfus Corporation, John Hancock
Financial Services, Inc. and Thermo Fibertek.
ROGER D. WELLINGTON Mr. Wellington, 73, has been a director of Thermo
Electron since 1986. Mr. Wellington serves as the
president and chief executive officer of Wellington
Consultants, Inc. and Wellington Associates Inc.,
international business consulting firms he founded
in 1994 and 1989, respectively, each of which is
located at P.O. Box 8186, 5555 Gulf of Mexico
Drive, Unit 302, Longboat Key, FL 34228. Mr.
Wellington is also a director of Photoelectron
Corporation and Thermo Fibergen Inc.
BRIAN D. HOLT Mr. Holt, 51, became the chief operating officer,
energy and environment, of Thermo Electron in
September 1998. Mr. Holt has been the president and
chief executive officer of Thermo Ecotek
Corporation, a majority-owned subsidiary of Thermo
Electron located at 245 Winter Street, Waltham, MA
02451, that is involved in clean-power resources,
clean fuels, and naturally derived products for
protecting crops since February 1994. From March
1996 to September 1998, he was a vice president of
Thermo Electron. Mr. Holt is also a director of The
Randers Killam Group Inc., Thermo Ecotek
Corporation, ThermoRetec Corporation and Thermo
TerraTech Inc.
JOHN T. KEISER Mr. Keiser, 64, became chief operating officer,
biomedical, of Thermo Electron in September 1998
and was a vice president from April 1997 until his
promotion. Mr. Keiser has been the president and
chief executive officer of Thermedics since March
1998 and December 1998, respectively, and served as
a senior vice president of Thermedics from 1994
until his promotion to president. He has also been
the president of Thermo Electron's wholly owned
biomedical group, a manufacturer of medical
equipment and instruments, since 1994. Mr. Keiser
is a director of Metrika Systems Corporation,
Thermedics Inc., the Company, Thermo Cardiosystems
Inc., ThermoLase Corporation, Thermo Sentron Inc.,
ThermoTrex Corporation and Trex Medical
Corporation.
PAUL F. KELLEHER Mr. Kelleher, 57, has been the senior vice
president, finance and administration, of Thermo
Electron since June 1997, and served as its vice
president, finance from 1987 until 1997. Mr.
Kelleher served as Thermo Electron's controller
from 1982 until January 1996. Mr. Kelleher is a
director of ThermoLase Corporation.
EARL R. LEWIS Mr. Lewis, 56, became chief operating officer,
measurement and detection, of Thermo Electron in
September 1998, and served as senior vice president
of Thermo Electron from June 1998 to September 1998
and vice president from September 1996 to June
1998. Mr. Lewis has been president and chief
executive officer of Thermo Instrument Systems
Inc., a manufacturer of measurement and detection
instruments, since March 1997 and January 1998,
respectively, and was chief operating
I-7
<PAGE> 64
officer from January 1996 to January 1998. Prior to
that time, he was executive vice president of
Thermo Instrument Systems Inc. from January 1996 to
March 1997 and senior vice president from January
1994 to January 1996. Mr. Lewis served as chief
executive officer of Thermo Optek Corporation, a
majority-owned subsidiary of Thermo Instrument
Systems Inc. and a manufacturer of analytical
instruments that measure energy and light for
purposes of materials analysis, characterization
and preparation, from its inception in August 1995
to January 1998. Mr. Lewis is a director of FLIR
Systems Inc., Metrika Systems Corporation, ONIX
Systems Inc., SpectRx Inc., Spectra-Physics Lasers,
Inc., Thermo BioAnalysis Corporation, Thermo
Instrument Systems Inc., Thermo Optek Corporation,
ThermoQuest Corporation and the Company.
THEO MELAS-KYRIAZI Mr. Melas-Kyriazi, 40, has been a vice president of
Thermo Electron since March 1998 and its chief
financial officer since January 1999. Prior to his
appointment as a vice president of Thermo Electron,
Mr. Melas-Kyriazi served as president and chief
executive officer of ThermoSpectra Corporation from
its inception in August 1994 until March 1998. He
is a director of ThermoRetec Corporation. Mr.
Melas-Kyriazi is a citizen of Greece.
WILLIAM A. RAINVILLE Mr. Rainville, 58, became chief operating officer,
recycling and resource recovery, of Thermo Electron
in September 1998. Mr. Rainville was a senior vice
president of Thermo Electron from March 1993 to
September 1998, and a vice president of Thermo
Electron from 1986 to 1993. He has been president
and chief executive officer of Thermo Fibertek
Inc., a majority-owned subsidiary of Thermo
Electron located at 245 Winter Street, Waltham, MA
02451 that develops and manufactures equipment and
products for the papermaking and paper-recycling
industries, since its inception in 1991. Mr.
Rainville is also a director of Thermo Ecotek
Corporation, Thermo Fibergen Inc., Thermo Fibertek
Inc., ThermoRetec Corporation and Thermo TerraTech
Inc.
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<PAGE> 65
STOCK OWNERSHIP. The following table sets forth the beneficial ownership
of common stock of the Company, as well as the common stock of Thermedics and
Thermo Electron, as of January 31, 2000, with respect to each director and
executive officer of Thermo Electron. No director or executive officer of Thermo
Electron beneficially owns any shares of capital stock of the Purchaser or
Corpak. The directors and executive officers of Thermo Electron disclaim
beneficial ownership of the shares of common stock beneficially owned by Thermo
Electron.
<TABLE>
<CAPTION>
THERMEDICS THERMEDICS THERMO ELECTRON
NAME(1) DETECTION INC.(2) INC.(3) CORPORATION(4)
<S> <C> <C> <C>
Samuel W. Bodman................................. 0 0 27,599
Peter O. Crisp................................... 0 37,076 121,767
Elias P. Gyftopoulos............................. 600 8,298 91,399
George N. Hatsopoulos............................ 21,197 63,681 3,909,357
Brian D. Holt.................................... 2,000 0 322,941
Frank Jungers.................................... 0 3,000 171,021
John T. Keiser................................... 17,000 194,693 331,636
Paul F. Kelleher................................. 5,100 20,360 213,530
Earl R. Lewis.................................... 2,003 0 215,477
Robert A. McCabe................................. 9,000 2,498 66,326
Theo Melas-Kyriazi............................... 0 11,861 458,532
Hutham S. Olayan................................. 0 0 49,568
Robert W. O'Leary................................ 0 0 43,830
William A. Rainville............................. 10,000 0 361,499
Richard F. Syron................................. 0 0 1,074,006
Roger D. Wellington.............................. 0 0 55,795
All directors and current executive officers as a
group (16 persons)............................. 66,900 341,467 7,514,283
</TABLE>
- ------------------------------
(1) Except as reflected in the footnotes to this table, shares beneficially
owned consist of shares owned by the indicated person or by that person for
the benefit of minor children, and all share ownership includes sole voting
and investment power.
(2) Shares of the common stock of the Company beneficially owned by Dr.
Hatsopoulos, Mr. Holt, Mr. Keiser, Kelleher, Mr. Lewis, Mr. Rainville and
all directors and current executive officers as a group include 20,000,
2,000, 17,000, 5,000, 2,000, 10,000 and 56,000 shares, respectively, that
such person or members of the group have the right to acquire within 60 days
of January 31, 2000 through the exercise of stock options. Shares
beneficially owned by Dr. Hatsopoulos include 57 shares held by his spouse.
Shares beneficially owned by Mr. McCabe include 9,000 shares held in a trust
of which he and members of his family are trustees. The directors and
current executive officers did not individually or as a group beneficially
own more than 1% of the Company's common stock outstanding as of January 31,
2000.
(3) Shares of the common stock of Thermedics beneficially owned by Mr. Crisp,
Dr. Gyftopoulos, Mr. Keiser, Mr. Kelleher, and all directors and current
executive officers as a group include 9,000, 2,750, 187,900, 10,000 and
209,650 shares, respectively, that such person or members of the group have
the right to acquire within 60 days of January 31, 2000 through the exercise
of stock options. Shares beneficially owned by Dr. Hatsopoulos, Mr.
Kelleher, Mr. Melas-Kyriazi and all directors and current executive officers
as a group include 1,635, 1,294, 1,119 and 4,048 shares, respectively,
allocated to their respective accounts maintained pursuant to Thermo
Electron's ESOP, of which the trustees, who have investment power over its
assets, are executive officers of Thermo Electron. Shares beneficially owned
by Mr. Crisp and all directors and current executive officers as a group
include 9,971 shares allocated to Mr. Crisp's account maintained pursuant to
Thermedics' deferred compensation plan for directors. Shares beneficially
owned by Dr. Hatsopoulos include 654 shares held by his spouse and 50,000
shares that a family limited partnership indirectly controlled by Dr.
Hatsopoulos has the right to acquire within 60 days of January 31, 2000
through the exercise of stock options. Dr. Hatsopoulos disclaims beneficial
interest in
I-9
<PAGE> 66
the shares owned by the family limited partnership except to the extent of
his pecuniary interest therein. No director or current executive officer
beneficially owned more than 1% of the Thermedics common stock outstanding
as of January 31, 2000; all directors and current executive officers as a
group beneficially owned less than 1% of the Thermedics common stock
outstanding as of January 31, 2000.
(4) Shares of the common stock of Thermo Electron beneficially owned by Mr.
Bodman, Mr. Crisp, Dr. Gyftopoulos, Dr. Hatsopoulos, Mr. Holt, Mr. Jungers,
Mr. Keiser, Mr. Kelleher, Mr. Lewis, Mr. McCabe, Mr. Melas-Kyriazi, Ms.
Olayan, Mr. O'Leary, Mr. Rainville, Dr. Syron, Mr. Wellington and all
directors and current executive officers as a group include 26,000, 25,596,
27,442, 25,448, 284,948, 24,673, 263,230, 179,359, 212,278, 27,442, 384,361,
27,442, 27,000, 294,630, 1,011,000, 24,673 and 2,865,522 shares,
respectively, that such person or members of the group have the right to
acquire within 60 days of January 31, 2000 through the exercise of stock
options. Shares beneficially owned by Dr. Hatsopoulos, Mr. Kelleher, Mr.
Melas-Kyriazi and all directors and current executive officers as a group
include 2,266, 1,426, 1,071 and 4,763 shares, respectively, allocated to
their respective accounts maintained pursuant to Thermo Electron's ESOP, of
which the trustees, who have investment power over its assets, are executive
officers of Thermo Electron. Shares beneficially owned by Mr. Bodman, Mr.
Crisp, Dr. Gyftopoulos, Mr. Jungers, Mr. McCabe, Ms. Olayan, Mr. O'Leary,
Dr. Syron, Mr. Wellington and all directors and current executive officers
as a group include 1,599, 49,277, 1,378, 80,427, 34,725, 19,876, 3,830,
2,506, 26,342 and 219,960 shares, respectively, allocated to accounts
maintained pursuant to Thermo Electron's Deferred Compensation Plan. Shares
beneficially owned by Dr. Hatsopoulos include 144,437 shares held by his
spouse, 311,708 shares held by a family trust of which his spouse is the
trustee and 566,262 shares held by a family limited partnership indirectly
controlled by Dr. Hatsopoulos. Shares beneficially owned by Dr. Hatsopoulos
also include 50,000 shares that a family trust, of which Dr. Hatsopoulos'
spouse is the trustee, has the right to acquire within 60 days of January
31, 2000 and 2,149,500 shares that a family limited partnership indirectly
controlled by Dr. Hatsopoulos has the right to acquire within 60 days of
January 31, 2000 through the exercise of stock options. Dr. Hatsopoulos
disclaims beneficial interest in the shares owned by the family limited
partnership except to the extent of his pecuniary interest therein. Shares
beneficially owned by Ms. Olayan do not include 6,150,000 shares owned by
Crescent Holding GmbH, a member of the Olayan Group. Crescent Holding GmbH
is indirectly controlled by Suliman S. Olayan, Ms. Olayan's father. Ms.
Olayan disclaims beneficial ownership of the shares owned by Crescent
Holding GmbH. Except for Dr. Hatsopoulos, who beneficially owned 2.44% of
the Thermo Electron common stock outstanding as of January 31, 2000, no
director or current executive officer beneficially owned more than 1% of the
Thermo Electron common stock outstanding as of such date; all directors and
current executive officers as a group beneficially owned 4.71% of the Thermo
Electron common stock outstanding as of January 31, 2000.
I-10
<PAGE> 67
SCHEDULE II
INFORMATION CONCERNING TRANSACTIONS IN THE COMMON STOCK
OF THE COMPANY
The following table sets forth information with respect to purchases of the
Company's common stock by the Company, Corpak, Thermedics, the Purchaser and
Thermo Electron since January 4, 1998 (the commencement of the Company's second
full fiscal year preceding the date of this Offer to Purchase).
<TABLE>
<CAPTION>
AVERAGE PURCHASE
NUMBER OF RANGE OF PRICES PRICE PER SHARE
SHARES PURCHASED PAID PER SHARE PAID DURING
QUARTER/YEAR PURCHASER DURING QUARTER DURING QUARTER(1) QUARTER (1)
<S> <C> <C> <C> <C>
1st Quarter 1998......... Thermo Electron 196,100 $9.25 - 11.625 $11.0535
2nd Quarter 1998......... Thermo Electron 352,450 8.75 - 11.4375 9.6945
2nd Quarter 1998......... Thermedics 161,500 8.00 - 11.4375 9.7124
3rd Quarter 1998......... Thermo Electron 17,000 9.0625 - 9.0625 9.0625
4th Quarter 1998......... Thermo Electron 316,900 6.50 - 8.125 7.4635
1st Quarter 1999......... Thermo Electron 147,500 7.75 - 9.25 8.6366
</TABLE>
- ------------------------------
(1) Prices per share of the Company's common stock are net of commissions paid
by the respective purchasers.
There were no transactions in the Company's common stock effected during
the 60 days preceding the date of this Offer to Purchase by Corpak, Thermedics,
the Purchaser, Thermo Electron or, to the best knowledge of the Purchaser,
Corpak, Thermedics and Thermo Electron, the Company or the directors and
executive officers of any of the Company, Corpak, Thermedics, the Purchaser or
Thermo Electron.
II-1
<PAGE> 68
SCHEDULE III
SECTIONS 86-98 OF THE MASSACHUSETTS BUSINESS CORPORATION LAW
SEC. 86. SECTIONS APPLICABLE TO APPRAISAL; PREREQUISITES
If a corporation proposes to take a corporate action as to which any
section of this chapter provides that a stockholder who objects to such action
shall have the right to demand payment for his shares and an appraisal thereof,
sections eighty-seven to ninety-eight, inclusive, shall apply except as
otherwise specifically provided in any section of this chapter. Except as
provided in sections eighty-two and eighty-three, no stockholder shall have such
right unless (1) he files with the corporation before the taking of the vote of
the shareholders on such corporate action, written objection to the proposed
action stating that he intends to demand payment for his shares if the action is
taken and (2) his shares are not voted in favor of the proposed action.
Added by St. 1964, c. 723, sec. 1. Amended by St. 1965, c. 685, sec. 40; St.
1973, c. 749, sec. 1.
SEC. 87. STATEMENT OF RIGHTS OF OBJECTING STOCKHOLDERS IN NOTICE OF MEETING;
FORM
The notice of the meeting of stockholders at which the approval of such
proposed action is to be considered shall contain a statement of the rights of
objecting stockholders. The giving of such notice shall not be deemed to create
any rights in any stockholder receiving the same to demand payment for his
stock, and the directors may authorize the inclusion in any such notice of a
statement of opinion by the management as to the existence or non-existence of
the right of the stockholders to demand payment for their stock on account of
the proposed corporate action. The notice may be in such form as the directors
or officers calling the meeting deem advisable, but the following form of notice
shall be sufficient to comply with this section:
"If the action proposed is approved by the stockholders at the meeting and
effected by the corporation, any stockholder (1) who files with the corporation
before the taking of the vote on the approval of such action, written objection
to the proposed action stating that he intends to demand payment for his shares
if the action is taken and (2) whose shares are not voted in favor of such
action has or may have the right to demand in writing from the corporation (or,
in the case of a consolidation or merger, the name of the resulting or surviving
corporation shall be inserted), within twenty days after the date of mailing to
him of notice in writing that the corporate action has become effective, payment
for his shares and an appraisal of the value thereof. Such corporation and any
such stockholder shall in such cases have the rights and duties and shall follow
the procedure set forth in sections 88 to 98, inclusive, of chapter 156B of the
General Laws of Massachusetts."
Added by St. 1964, c. 723, sec. 1. Amended by St. 1973, c. 749, sec. 2.
SEC. 88. NOTICE OF EFFECTIVENESS OF ACTION OBJECTED TO
The corporation taking such action, or in the case of a merger or
consolidation the surviving or resulting corporation, shall, within ten days
after the date on which such corporate action became effective, notify each
stockholder who filed a written objection meeting the requirements of section
eighty-six and whose shares were not voted in favor of the approval of such
action, that the action approved at the meeting of the corporation of which he
is a stockholder has become effective. The giving of such notice shall not be
deemed to create any rights in any stockholder receiving the same to demand
payment for his stock. The notice shall be sent by registered or certified mail,
addressed to the stockholder at his last known address as it appears in the
records of the corporation.
Added by St. 1964, c. 723, sec. 1. Amended by St. 1973, c. 749, sec. 3.
SEC. 89. DEMAND FOR PAYMENT; TIME FOR PAYMENT
If within twenty days after the date of mailing of a notice under
subsection (e) of section eighty-two, subsection (f) of section eighty-three, or
section eighty-eight, any stockholder to whom the corporation was required to
give such notice shall demand in writing from the corporation taking such
action, or in the case of a consolidation or merger from the resulting or
surviving corporation, payment for his stock, the corporation
III-1
<PAGE> 69
upon which such demand is made shall pay to him the fair value of his stock
within thirty days after the expiration of the period during which such demand
may be made.
Added by St. 1964, c. 723, sec. 1. Amended by St. 1973, c. 749, sec. 4.
SEC. 90. DEMAND FOR DETERMINATION OF VALUE; BILL IN EQUITY; VENUE
If during the period of thirty days provided for in section eighty-nine the
corporation upon which such demand is made and any such objecting stockholder
fail to agree as to the value of such stock, such corporation or any such
stockholder may within four months after the expiration of such thirty-day
period demand a determination of the value of the stock of all such objecting
stockholders by a bill in equity filed in the superior court in the county where
the corporation in which such objecting stockholder held stock had or has its
principal office in the commonwealth.
Added by St. 1964, c. 723, sec. 1.
SEC. 91. PARTIES TO SUIT TO DETERMINE VALUE; SERVICE
If the bill is filed by the corporation, it shall name as parties
respondent all stockholders who have demanded payment for their shares and with
whom the corporation has not reached agreement as to the value thereof. If the
bill is filed by a stockholder, he shall bring the bill in his own behalf and in
behalf of all other stockholders who have demanded payment for their shares and
with whom the corporation has not reached agreement as to the value thereof, and
service of the bill shall be made upon the corporation by subpoena with a copy
of the bill annexed. The corporation shall file with its answer a duly verified
list of all such other stockholders, and such stockholders shall thereupon be
deemed to have been added as parties to the bill. The corporation shall give
notice in such form and returnable on such date as the court shall order to each
stockholder party to the bill by registered or certified mail, addressed to the
last known address of such stockholder as shown in the records of the
corporation, and the court may order such additional notice by publication or
otherwise as it deems advisable. Each stockholder who makes demand as provided
in section eighty-nine shall be deemed to have consented to the provisions of
this section relating to notice, and the giving of notice by the corporation to
any such stockholder in compliance with the order of the court shall be a
sufficient service of process on him. Failure to give notice to any stockholder
making demand shall not invalidate the proceedings as to other stockholders to
whom notice was properly given, and the court may at any time before the entry
of a final decree make supplementary orders of notice.
Added by St. 1964, c. 723, sec. 1.
SEC. 92. DECREE DETERMINING VALUE AND ORDERING PAYMENT; VALUATION DATE
After hearing the court shall enter a decree determining the fair value of
the stock of those stockholders who have become entitled to the valuation of and
payment for their shares, and shall order the corporation to make payment of
such value, together with interest, if any, as hereinafter provided, to the
stockholders entitled thereto upon the transfer by them to the corporation of
the certificates representing such stock if certificated or, if uncertificated,
upon receipt of an instruction transferring such stock to the corporation. For
this purpose, the value of the shares shall be determined as of the day
preceding the date of the vote approving the proposed corporate action and shall
be exclusive of any element of value arising from the expectation or
accomplishment of the proposed corporate action.
Added by St. 1964, c. 723, sec. 1. Amended by St. 1983, c. 522, sec. 22.
SEC. 93. REFERENCE TO SPECIAL MASTER
The court in its discretion may refer the bill or any question arising
thereunder to a special master to hear the parties, make findings and report the
same to the court, all in accordance with the usual practice in suits in equity
in the superior court.
Added by St. 1964, c. 723, sec. 1.
III-2
<PAGE> 70
SEC. 94. NOTATION ON STOCK CERTIFICATES OF PENDENCY OF BILL
On motion the court may order stockholder parties to the bill to submit
their certificates of stock to the corporation for the notation thereon of the
pendency of the bill and may order the corporation to note such pendency in its
records with respect to any uncertificated shares held by such stockholder
parties, and may on motion dismiss the bill as to any stockholder who fails to
comply with such order.
Added by St. 1964, c. 723, sec. 1. Amended by St. 1983, c. 522, sec. 23.
SEC. 95. COSTS; INTEREST
The costs of the bill, including the reasonable compensation and expenses
of any master appointed by the court, but exclusive of fees of counsel or of
experts retained by any party, shall be determined by the court and taxed upon
the parties to the bill, or any of them, in such manner as appears to be
equitable, except that all costs of giving notice to stockholders as provided in
this chapter shall be paid by the corporation. Interest shall be paid upon any
award from the date of the vote approving the proposed corporate action, and the
court may on application of any interested party determine the amount of
interest to be paid in the case of any stockholder.
Added by St. 1964, c. 723, sec. 1. Amended by St. 1965, c. 685, sec. 41.
SEC. 96. DIVIDENDS AND VOTING RIGHTS AFTER DEMAND FOR PAYMENT
Any stockholder who has demanded payment for his stock as provided in this
chapter shall not thereafter be entitled to notice of any meeting of
stockholders or to vote such stock for any purpose and shall not be entitled to
the payment of dividends or other distribution on the stock (except dividends or
other distributions payable to stockholders of record at a date which is prior
to the date of the vote approving the proposed corporate action) unless:
(1) A bill shall not be filed within the time provided in section ninety;
(2) A bill, if filed, shall be dismissed as to such stockholder; or
(3) Such stockholder shall with the written approval of the corporation, or
in the case of a consolidation or merger, the resulting or surviving
corporation, deliver to it a written withdrawal of his objections to
and an acceptance of such corporate action.
Notwithstanding the provisions of clauses (1) to (3), inclusive, said
stockholder shall have only the rights of a stockholder who did not so demand
payment for his stock as provided in this chapter.
Added by St. 1964, c. 723, sec. 1. Amended by St. 1982, c. 149.
SEC. 97. STATUS OF SHARES PAID FOR
The shares of the corporation paid for by the corporation pursuant to the
provisions of this chapter shall have the status of treasury stock, or in the
case of a consolidation or merger the shares or the securities of the resulting
or surviving corporation into which the shares of such objecting stockholder
would have been converted had he not objected to such consolidation or merger
shall have the status of treasury stock or securities.
Added by St. 1964, c. 723, sec. 1. Amended by St. 1965, c. 685, sec. 42.
SEC. 98. EXCLUSIVE REMEDY; EXCEPTION
The enforcement by a stockholder of his right to receive payment for his
shares in the manner provided in this chapter shall be an exclusive remedy
except that this chapter shall not exclude the right of such stockholder to
bring or maintain an appropriate proceeding to obtain relief on the ground that
such corporate action will be or is illegal or fraudulent as to him.
Added by St. 1964, c. 723, sec. 1. Amended by St. 1965, c. 685, sec. 43.
III-3
<PAGE> 71
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal and certificates evidencing Shares and any
other required documents should be sent or delivered by each stockholder or his
broker, dealer, commercial bank, trust company or other nominee to the
Depositary at one of its addresses set forth below:
The Depositary for the Offer is:
AMERICAN STOCK TRANSFER & TRUST COMPANY
<TABLE>
<S> <C> <C>
By Mail: By Hand or Overnight Courier:
40 Wall Street 40 Wall Street
46th Floor 46th Floor
New York, New York 10005 New York, New York 10005
Attn: Reorganization Department Attn: Reorganization Department
By Facsimile Transmission:
(718) 234-5001
Confirm by Telephone:
(718) 921-8200
</TABLE>
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or other tender offer materials may
be directed to the Information Agent or the Dealer Managers at their respective
addresses and telephone numbers set forth below. Stockholders may also contact
their broker, dealer, bank or trust company for assistance concerning the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street, 20th Floor
New York, NY 10005
Bankers and Brokers Call Collect (212) 269-5550
All Others Call Toll-Free (800) 290-6433
The Dealer Managers for the Offer are:
J.P. MORGAN SECURITIES INC.
60 Wall Street
New York, NY 10260
(877) 869-0656
THE BEACON GROUP CAPITAL SERVICES, LLC
399 Park Avenue
New York, NY 10022
(212) 339-9100
<PAGE> 1
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
THERMEDICS DETECTION INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED MARCH 10, 2000
BY
DETECTION ACQUISITION, INC.
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
THERMEDICS INC.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, APRIL 6, 2000, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
The Depositary for the Offer is:
AMERICAN STOCK TRANSFER & TRUST COMPANY
<TABLE>
<S> <C>
By Mail: By Hand or Overnight Courier:
40 Wall Street 40 Wall Street
46th Floor 46th Floor
New York, NY 10005 New York, NY 10005
Attn: Reorganization Department Attn: Reorganization Department
</TABLE>
By Facsimile Transmission:
(718) 234-5001
Confirm by Telephone:
(718) 921-8200
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE, OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN
AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS
LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE PROVIDED THEREFOR AND COMPLETE
THE SUBSTITUTE FORM W-9 SET FORTH BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by holders of Shares (as
defined below) either if certificates evidencing Shares ("Share Certificates")
are to be forwarded herewith or, unless an Agent's Message (as defined in the
section of the Offer to Purchase dated March 10, 2000 (the "Offer to Purchase")
captioned "The Tender Offer -- Acceptance For Payment And Payment For Shares")
is utilized, if delivery of Shares is to be made by book-entry transfer into the
account of American Stock Transfer & Trust Company, as Depositary (the
"Depositary"), at The Depository Trust Company ("DTC") pursuant to the
procedures set forth in the section of the Offer to Purchase captioned "The
Tender Offer -- Procedures For Accepting The Offer And Tendering Shares."
Stockholders who tender Shares by book-entry transfer are referred to herein as
"Book-Entry Stockholders."
Stockholders whose Share Certificates are not immediately available or who
cannot deliver their Share Certificates and all other documents required hereby
to the Depositary prior to the Expiration Date (as defined in the section of the
Offer to Purchase captioned "The Tender Offer -- Terms Of The Offer; Expiration
Date"), or who cannot complete the procedures for delivery by book-entry
transfer on a timely basis, may tender their Shares according to the guaranteed
delivery procedures set forth in the section of the Offer to Purchase captioned
"The Tender Offer -- Procedures For Accepting The Offer And Tendering Shares."
See Instruction 2. DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S
PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
<PAGE> 2
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED DESCRIPTION OF SHARES TENDERED
- ------------------------------------------------------------------------------------------------------------------------------------
SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) (ATTACH ADDITIONAL SIGNED LIST, IF NECESSARY).
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR(S) ON SHARE CERTIFICATE(S)) SEE INSTRUCTION 3.
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF SHARES
SHARE REPRESENTED NUMBER
CERTIFICATE BY SHARE OF SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
<S> <C> <C> <C>
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
TOTAL SHARES
- ------------------------------------------------------------------------------------------------------------------------------------
* Need not be completed by Book-Entry Stockholders.
** Unless otherwise indicated, all Shares represented by Share Certificates
delivered to the Depositary will be deemed to have been tendered. See
Instruction 4.
IF ANY SHARE CERTIFICATES HAVE BEEN LOST OR DESTROYED, SEE INSTRUCTION 11.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
[ ] CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN
ACCOUNT MAINTAINED BY THE DEPOSITARY WITH DTC AND COMPLETE THE FOLLOWING
(ONLY PARTICIPANTS IN DTC MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution: ______________________________________________
DTC Account Number: _________________________________________________________
DTC Transaction Code Number: ________________________________________________
[ ] CHECK HERE IF SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING
(PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY):
Name(s) of Registered Holder(s): ____________________________________________
Window Ticket Number (if any): ______________________________________________
Date of Execution of Notice of Guaranteed Delivery: _________________________
Name of Institution that Guaranteed Delivery: _______________________________
If delivered by Book-Entry Transfer: ________________________________________
DTC Account Number: _________________________________________________________
DTC Transaction Code Number: ________________________________________________
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to Detection Acquisition, Inc. (the
"Purchaser"), a Delaware corporation and an indirect wholly-owned subsidiary of
Thermedics Inc., a Massachusetts corporation ("Thermedics"), the above-described
shares of common stock, par value $0.10 per share (the "Shares"), of Thermedics
Detection Inc., a Massachusetts corporation (the "Company"), pursuant to the
Purchaser's offer to purchase all of the outstanding Shares at a price of $8.00
per Share, net to the seller in cash, without interest thereon, upon the terms
and subject to the conditions set forth in the Offer to Purchase and in this
Letter of Transmittal (which, together with any amendments or supplements
thereto or hereto, collectively constitute the "Offer"), receipt of each of
which is hereby acknowledged. The undersigned understands that the Purchaser
reserves the right to transfer or assign, in whole or from time to time in part,
to one or more of its affiliates, the right to purchase all or any portion of
the Shares tendered pursuant to the Offer.
Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith in accordance with the terms and subject to the conditions of
the Offer, including, if the Offer is extended or amended, the terms and
conditions of any such extension or amendment, the undersigned hereby sells,
assigns and transfers to, or upon the order of, the Purchaser
2
<PAGE> 3
all right, title and interest in and to all of the Shares that are being
tendered hereby and any and all dividends and distributions, including, without
limitation, distributions of additional Shares or rights declared, paid or
issued with respect to the tendered Shares on or after January 31, 2000
(collectively, "Distributions"), and irrevocably constitutes and appoints the
Depositary the true and lawful agent and attorney-in-fact of the undersigned
with respect to such Shares and any Distributions with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest) to (a) deliver such Share Certificates and any
Distributions, or transfer ownership of such Shares and any Distributions on the
account books maintained by DTC, together in either case with appropriate
evidences of transfer and authenticity, to, or upon the order of, the Purchaser,
upon receipt by the Depositary, as the undersigned's agent, of the purchase
price, (b) present such Shares and any Distributions for transfer on the books
of the Company, and (c) receive all benefits and otherwise exercise all rights
of record and beneficial ownership of such Shares and any Distributions, all in
accordance with the terms and subject to the conditions of the Offer.
The undersigned hereby irrevocably appoints John T. Keiser, Kenneth J.
Apicerno, Sandra L. Lambert and Seth H. Hoogasian in their respective capacities
as officers of the Purchaser or one of its affiliates, and any individuals who
shall hereafter succeed to any such office of the Purchaser or one of its
affiliates, and each of them or any other designees of the Purchaser, as
attorneys-in-fact and proxies of the undersigned, each with full power of
substitution, to the full extent of the undersigned's rights with respect to the
Shares tendered by the undersigned and accepted for payment and paid for by the
Purchaser and any Distributions. This power of attorney and proxy shall be
considered irrevocable and coupled with an interest in the tendered Shares. Such
appointment will be effective when, and only to the extent that, the Purchaser
accepts such Shares for payment and deposits the purchase price therefor with
the Depositary. Upon such deposit, all prior powers of attorney and proxies
given by the undersigned at any time with respect to such Shares and any
Distributions will, without further action, be revoked, and no subsequent powers
of attorney or proxies may be given nor any subsequent written consents executed
by the undersigned (and, if given or executed, will not be deemed effective).
Upon such deposit by the Purchaser, the designees of the Purchaser will, with
respect to such Shares and any Distributions, be empowered to exercise all
voting and other rights of the undersigned as they in their sole discretion may
deem proper at any annual or special meeting of the Company's stockholders, or
any adjournment or postponement thereof, by written consent in lieu of any such
meeting or otherwise. The Purchaser reserves the right to require that, in order
for Shares to be deemed validly tendered, immediately upon the Purchaser's
payment for such Shares, the Purchaser must be able to exercise full voting
rights and other rights of a record and beneficial owner with respect to such
Shares and any Distributions, including, without limitation, voting at any
meeting of stockholders or by written consent in lieu of any such meeting.
The undersigned hereby represents and warrants that (a) the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and any Distributions and (b) when the Shares are accepted for
payment by the Purchaser, the Purchaser will acquire good, marketable and
unencumbered title to the Shares and any Distributions, free and clear of all
liens, restrictions, charges and encumbrances, and the same will not be subject
to any adverse claim. The undersigned, upon request, shall execute and deliver
any additional documents deemed by the Depositary or the Purchaser to be
necessary or desirable to complete the sale, assignment and transfer of the
Shares tendered hereby and any Distributions. In addition, the undersigned shall
promptly remit and transfer to the Depositary for the account of the Purchaser
any Distribution in respect of the Shares tendered hereby, accompanied by
appropriate documentation of transfer, and, pending such remittance or
appropriate assurance thereof, the Purchaser shall be, subject to applicable
law, entitled to all rights and privileges as record and beneficial owner of any
such Distribution and may withhold the entire purchase price of Shares tendered
hereby or deduct from the purchase price the amount or value of any such
Distribution, as determined by the Purchaser in its sole discretion.
No authority herein conferred or agreed to be conferred shall be affected
by, and all authority herein conferred or agreed to be conferred shall survive,
the death or incapacity of the undersigned and any obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned.
Except as otherwise provided in the Offer to Purchase, tenders of Shares
made pursuant to the Offer are irrevocable. Shares tendered pursuant to the
Offer may be withdrawn at any time prior to the Expiration Date (as defined in
the section of the Offer to Purchase captioned "The Tender Offer--Terms Of The
Offer; Expiration Date") and, unless theretofore accepted for payment by the
Purchaser pursuant to the Offer, may also be withdrawn at any time after May 8,
2000. See the section of the Offer to Purchase captioned "The Tender Offer
-- Withdrawal Rights."
The undersigned understands that tenders of Shares pursuant to any of the
procedures described in the section of the Offer to Purchase captioned "The
Tender Offer -- Procedures For Accepting The Offer And Tendering Shares" and in
the Instructions hereto will constitute the undersigned's acceptance of the
terms and conditions of the Offer. The Purchaser's acceptance of such Shares for
payment will constitute a binding agreement between the undersigned and the
Purchaser upon the terms and subject to the conditions set forth in the Offer.
The undersigned understands that the Offer is conditioned upon, among other
things set forth in the Offer to Purchase, there being validly tendered and not
withdrawn prior to the expiration of the Offer that number of Shares
3
<PAGE> 4
which, together with the Shares held by Thermo Electron Corporation and its
subsidiaries, including Thermedics, constitutes at least ninety percent (90%) of
the Shares outstanding on the Expiration Date.
The undersigned understands that, under certain circumstances set forth in
the Offer to Purchase, the Purchaser may terminate or amend the Offer or may not
be required to accept for payment any of the Shares tendered herewith.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price of all Shares accepted for payment
and issue or return any Share Certificate(s) for Shares not tendered or not
purchased in the name(s) of the registered holder(s) appearing under
"Description of Shares Tendered." Similarly, unless otherwise indicated herein
under "Special Delivery Instructions," please mail the check for the purchase
price of all Shares accepted for payment and return any Share Certificate(s) for
Shares not tendered or not purchased (and accompanying documents, as
appropriate) to the address of the registered holder(s) appearing under
"Description of Shares Tendered." In the event that both the "Special Delivery
Instructions" and the "Special Payment Instructions" boxes are completed, please
issue the check for the purchase price of all Shares accepted for payment and
return any Share Certificate(s) for Shares not tendered or not purchased in the
name(s) of, and deliver such check and return such Share Certificate(s) to, the
person(s) so indicated. Please credit any Shares tendered herewith by book-entry
transfer that are not purchased by crediting the DTC account designated above.
The undersigned recognizes that the Purchaser has no obligation pursuant to the
"Special Payment Instructions" to transfer any Shares from the name(s) of the
registered holder(s) thereof if the Purchaser does not accept for payment any of
the Shares tendered hereby.
- --------------------------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Share Certificate(s) evidencing Shares not
tendered or not purchased or the check for the purchase price of Shares
accepted for payment are to be issued in the name of someone other than
the undersigned.
Issue: [ ] check [ ] certificates to:
Name: _________________________________________________________________
(PLEASE PRINT)
Address: ______________________________________________________________
_______________________________________________________________________
(INCLUDE ZIP CODE)
__________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NO.)
(SEE SUBSTITUTE FORM W-9 BELOW)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Share Certificate(s) evidencing Shares not
tendered or not purchased or the check for the purchase price of Shares
accepted for payment are to be sent to someone other than the undersigned
or to the undersigned at an address other than that shown above.
Mail: [ ] check [ ] certificates to:
Name: __________________________________________________________________
(PLEASE PRINT)
Address: _______________________________________________________________
________________________________________________________________________
(INCLUDE ZIP CODE)
________________________________________________________________________
- --------------------------------------------------------------------------------
4
<PAGE> 5
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <S>
SIGN IMPORTANT SIGN
HERE SIGN HERE AND COMPLETE SUBSTITUTE FORM W-9 BELOW HERE
--> X _________________________________________________________________ <--
--> X _________________________________________________________________ <--
</TABLE>
SIGNATURE(S) OF HOLDER(S)
Dated: ________________________, 2000
(Must be signed by the registered holder(s) exactly as name(s)
appear(s) on Share Certificate(s) or on a security position listing
or by person(s) authorized to become registered holder(s) by
certificates and documents transmitted herewith. If signature is by
a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other acting in a fiduciary or
representative capacity, please provide the following information.
See Instruction 5.)
Name(s): __________________________________________________________
___________________________________________________________________
___________________________________________________________________
(PLEASE PRINT)
Capacity (Full Title): ____________________________________________
___________________________________________________________________
___________________________________________________________________
Address: __________________________________________________________
___________________________________________________________________
___________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number: ___________________________________
Tax Identification or Social Security No.: ________________________
Dated: ___________________________, 2000
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature: _____________________________________________
Name: _____________________________________________________________
(PLEASE PRINT)
Title: ____________________________________________________________
Name of Firm: _____________________________________________________
(PLEASE PRINT)
Address: __________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number: ___________________________________
Dated: ___________________________, 2000
- --------------------------------------------------------------------------------
5
<PAGE> 6
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) of Shares (which term, for purposes of this document, shall
include any DTC participant whose name appears on a security position listing as
the owner of Share(s)) tendered herewith, unless such holder(s) has (have)
completed either the box entitled "Special Payment Instructions" or the box
entitled "Special Delivery Instructions," or (b) if such Share(s) are tendered
for the account of a firm which is a commercial bank, broker, dealer, credit
union, savings association or other entity which is a member in good standing of
the Securities Transfer Agents Medallion Program, the Stock Exchanges' Medallion
Program or the New York Stock Exchange, Inc. Medallion Signature Program (each
of the foregoing being referred to as an "Eligible Institution"). In all other
cases, all signatures on this Letter of Transmittal must be guaranteed by an
Eligible Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Certificates. This Letter of
Transmittal is to be completed by stockholders either if Share Certificates are
to be forwarded herewith or, unless an Agent's Message is utilized, if delivery
of Shares is to be made by book-entry transfer pursuant to the procedures set
forth in the section of the Offer to Purchase captioned "The Tender
Offer -- Procedures For Accepting The Offer And Tendering Shares." In order for
Shares to be validly tendered pursuant to the Offer, this Letter of Transmittal
(or a facsimile hereof), properly completed and duly executed, together with any
required signature guarantees, or an Agent's Message in connection with a
book-entry delivery of Shares, and any other documents required by this Letter
of Transmittal, must be received by the Depositary at one of its addresses set
forth on the front cover hereof prior to the Expiration Date and either (i)
Share Certificates evidencing tendered Shares must be received by the Depositary
at such address or such Shares must be tendered by book-entry transfer and a
timely confirmation of such book-entry transfer (a "Book-Entry Confirmation")
must be received by the Depositary, in each case prior to the Expiration Date or
(ii) the guaranteed delivery procedures described in the following sentence must
be complied with. Stockholders whose Share Certificates are not immediately
available or who cannot deliver their Share Certificates and all other required
documents to reach the Depositary prior to the Expiration Date or who cannot
complete the procedure for delivery by book-entry transfer on a timely basis may
tender their Shares by properly completing and duly executing a Notice of
Guaranteed Delivery pursuant to the guaranteed delivery procedures set forth in
the section of the Offer to Purchase captioned "The Tender Offer -- Procedures
For Accepting The Offer And Tendering Shares." Pursuant to such procedures: (i)
such tender must be made by or through an Eligible Institution; (ii) a properly
completed and duly executed Notice of Guaranteed Delivery, substantially in the
form made available by the Purchaser, must be received by the Depositary prior
to the Expiration Date; and (iii) the Share Certificates (or a Book-Entry
Confirmation) evidencing all tendered Shares, in proper form for transfer,
together with this Letter of Transmittal (or a facsimile hereof), properly
completed and duly executed, with any required signature guarantees (or, in the
case of a book-entry delivery, an Agent's Message), and any other documents
required by this Letter of Transmittal, must be received by the Depositary
within three American Stock Exchange trading days after the date of execution of
such Notice of Guaranteed Delivery.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH DTC, IS AT THE SOLE
OPTION AND RISK OF THE TENDERING STOCKHOLDER AND THE DELIVERY WILL BE DEEMED
MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted. All
tendering stockholders, by execution of this Letter of Transmittal (or a
facsimile hereof), waive any right to receive any notice of the acceptance of
their Shares for payment.
If Share Certificates are forwarded to the Depositary in multiple
deliveries, a properly completed and duly executed Letter of Transmittal must
accompany each such delivery.
3. Inadequate Space. If the space provided herein is inadequate, the
Share Certificate numbers, the number of Shares and any other required
information should be listed on a separate signed schedule attached hereto and
referenced in the box entitled "Description of Shares Tendered."
4. Partial Tenders. (Not Applicable to Book-Entry Stockholders.) If
fewer than all the Shares evidenced by any Share Certificate submitted to the
Depositary herewith are to be tendered, fill in the number of Shares which are
to be
6
<PAGE> 7
tendered in the box entitled "Number of Shares Tendered." In such cases, new
Share Certificate(s) evidencing the Shares that were evidenced by the Share
Certificate(s) delivered to the Depositary herewith, but which were not tendered
hereby, will be sent to the registered holder(s) shown above, unless otherwise
provided in the box entitled "Special Delivery Instructions," as soon as
practicable after the expiration or termination of the Offer. All Shares
represented by Share Certificates delivered to the Depositary will be deemed to
have been tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal, Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the Share Certificate(s) without alteration, enlargement or any
change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any of the tendered Shares are registered in the names of different
holders, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of Share
Certificates.
If this Letter of Transmittal or any Share Certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to the Purchaser of such person's authority so to act must be
submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and tendered hereby, no endorsements of Share Certificates or
separate stock powers are required, unless payment is to be made to, or Share
Certificates evidencing Shares not tendered or not purchased are to be issued in
the name of, a person other than the registered holder(s), in which case, the
Share Certificate(s) evidencing the Shares tendered hereby must be endorsed or
accompanied by appropriate stock powers signed exactly as the name(s) of the
registered holder(s) appear(s) on such Share Certificate(s). Signatures on such
Share Certificate(s) or stock powers must be guaranteed by an Eligible
Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Share Certificate(s) listed and tendered hereby, the
Share Certificate(s) must be endorsed or accompanied by appropriate stock
powers, in either case signed exactly as the name(s) of the registered holder(s)
appear on such Share Certificate(s). Signature(s) on such Share Certificate(s)
and stock powers must be guaranteed by an Eligible Institution.
6. Stock Transfer Taxes. Except as set forth in this Instruction 6, the
Purchaser will pay or cause to be paid any stock transfer taxes with respect to
the transfer and sale of Shares to it or its order pursuant to the Offer. If,
however, payment of the purchase price of Shares accepted for payment is to be
made to, or if Share Certificate(s) evidencing Shares not tendered or not
purchased are to be issued in the name of, any person other than the registered
holder(s), or if tendered Share Certificates are registered in the name of any
person other than the person(s) signing this Letter of Transmittal, then the
amount of any stock transfer taxes (whether imposed on the registered holder(s)
or such person or otherwise) payable on account of the transfer to such other
person will be deducted from the purchase price unless satisfactory evidence of
the payment of such taxes, or an exemption therefrom, is submitted.
EXCEPT AS SET FORTH IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE SHARE CERTIFICATE(S) TENDERED HEREBY.
7. Special Payment and Delivery Instructions. If a check for the purchase
price of Shares accepted for payment is to be issued in the name of, or Share
Certificate(s) evidencing Shares not tendered or not purchased are to be issued
or returned to, a person other than the signer of this Letter of Transmittal or
if a check or such Share Certificate(s) are to be returned to a person other
than the signer of this Letter of Transmittal or to an address of the signer
other than that shown in this Letter of Transmittal, the appropriate boxes on
this Letter of Transmittal must be completed.
8. Waiver of Conditions. The conditions of the Offer may be waived by the
Purchaser, in whole or in part, at any time and from time to time in its sole
discretion.
9. Substitute Form W-9. Under U.S. federal income tax law, a stockholder
whose tendered Shares are purchased is required to provide the Depositary with
such stockholder's correct taxpayer identification number ("TIN") (e.g., social
security number or employer identification number) on Substitute Form W-9 below
and to certify whether such
7
<PAGE> 8
stockholder is subject to backup withholding of federal income tax. If a
tendering stockholder has been notified by the Internal Revenue Service (the
"IRS") that such stockholder is subject to backup withholding, such stockholder
must cross out item 2 of the Certification box (Part 2) of the Substitute Form
W-9, unless such stockholder has since been notified by the IRS that such
stockholder is no longer subject to backup withholding. Failure to provide the
information on the Substitute Form W-9 may subject the tendering stockholder to
federal income tax withholding at the rate of 31% on the payment of the purchase
price of all Shares purchased from the stockholder. If the Depositary is not
provided with the correct TIN, the IRS may subject the stockholder or other
payee to a $50 penalty.
Certain stockholders are not subject to these backup withholding and
reporting requirements. Exempt recipients, such as corporations, are also
requested to provide their TIN and check the "Exempt" box in Part 3. Foreign
individuals or entities must submit a Form W-8 or W-8BEN, signed under penalties
of perjury, attesting to their foreign status. A Form W-8 or W8-BEN can be
obtained from the Depositary. See the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for more instructions.
IF BACKUP WITHHOLDING APPLIES, THE DEPOSITARY IS REQUIRED TO WITHHOLD 31%
OF ANY PAYMENTS MADE TO THE STOCKHOLDER OR OTHER PAYEE. BACKUP WITHHOLDING IS
NOT AN ADDITIONAL TAX. RATHER, THE TAX LIABILITY OF PERSONS SUBJECT TO BACKUP
WITHHOLDING WILL BE REDUCED BY THE AMOUNT OF TAX WITHHELD. IF WITHHOLDING
RESULTS IN AN OVERPAYMENT OF TAXES, A REFUND MAY BE OBTAINED FROM THE IRS.
The "Awaiting TIN" box in Part 3 of the Substitute Form W-9 may be checked
if the tendering stockholder has not been issued a TIN and has applied for a TIN
or intends to apply for a TIN in the near future. If the "Awaiting TIN" box in
Part 3 is checked, the stockholder or other payee must also complete the
Certificate of Awaiting Taxpayer Identification Number below in order to avoid
backup withholding. If the "Awaiting TIN" box in Part 3 is checked and the
Certificate of Awaiting Taxpayer Identification Number is completed, the
Depositary will withhold 31% of all payments made unless a properly certified
TIN is provided to the Depositary within 60 days.
The stockholder is required to give the Depositary the TIN of the record
owner of the Shares or of the last transferee appearing on the transfers
attached to, or endorsed on, the Shares. If the Shares are in more than one name
or are not in the name of the actual owner, consult the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional guidance on which number to report.
10. Questions and Requests for Assistance or Additional Copies. Questions
and requests for assistance may be directed to the Dealer Managers or the
Information Agent at their respective addresses and telephone numbers set forth
below. Additional copies of the Offer to Purchase, this Letter of Transmittal
and all other tender offer materials may be obtained from the Information Agent
or from brokers, dealers, commercial banks or trust companies at the Purchaser's
expense.
11. Lost, Destroyed or Stolen Certificates. If any Share Certificate has
been lost, destroyed or stolen, the stockholder should promptly notify the
Depositary. The stockholder will then be instructed as to the steps that must be
taken in order to replace such Share Certificate. This Letter of Transmittal and
related documents cannot be processed until the procedures for replacing lost,
destroyed or stolen Share Certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF), PROPERLY
COMPLETED AND DULY EXECUTED, OR, IF APPROPRIATE, AN AGENT'S MESSAGE, TOGETHER
WITH SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER
REQUIRED DOCUMENTS, OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF
GUARANTEED DELIVERY, MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION
DATE.
8
<PAGE> 9
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
PAYER'S NAME: AMERICAN STOCK TRANSFER & TRUST COMPANY
- ----------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT _______________________________
FORM W-9 AND CERTIFY BY SIGNING AND DATING BELOW: Social security number
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE or
PAYER'S REQUEST FOR _______________________________
TAXPAYER IDENTIFICATION Employer identification
NUMBER (TIN) number
(If Awaiting TIN, write "Applied
For")
-----------------------------------------------------------------------------------------
PART 2 -- CERTIFICATION -- Under penalties of PART 3 --
perjury, I certify that: [ ] Awaiting TIN
(1) The number shown on this form is my correct [ ] Exempt
Taxpayer Identification Number (or I am waiting for a
number to be issued to me); and
(2) I am not subject to backup withholding because:
(a) I am exempt from backup withholding, or
(b) I have not been notified by the Internal
Revenue Service (the "IRS") that I am subject to
backup withholding as a result of a failure
to report all interest or dividends, or
(c) the IRS has notified me that I am no longer
subject to backup withholding.
-----------------------------------------------------------------------------------------
CERTIFICATION INSTRUCTIONS -- You must cross out Item (2) above if you have been
notified by the IRS that you are subject to backup withholding because of underreporting
interest or dividends on your tax return. However, if after being notified by the IRS
that you are subject to backup withholding you received another notification from the
IRS that you are no longer subject to backup withholding, do not cross out such item
(2).
- ----------------------------------------------------------------------------------------------------------------------------
SIGN HERE > SIGNATURE ____________________________ DATE ______________, 2000
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
9
<PAGE> 10
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
CHECKED THE "AWAITING TIN" BOX IN PART 3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
- --------------------------------------------------------------------------------
I certify under penalties of perjury that a Taxpayer Identification Number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a Taxpayer Identification Number to the appropriate
Internal Revenue Service Center or Social Security Administration Office, or (2)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a Taxpayer Identification Number, 31% of all reportable
payments made to me may be withheld until I provide a Taxpayer Identification
Number with required certifications, which should be provided within 60 days.
Signature: ______________________________ Dated: ___________________, 2000
- --------------------------------------------------------------------------------
10
<PAGE> 11
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street, 20th Floor
New York, NY 10005
Bankers and Brokers Call Collect (212) 269-5550
All Others Call Toll-Free (800) 290-6433
The Dealer Managers for the Offer are:
J.P. MORGAN SECURITIES INC.
60 Wall Street
New York, NY 10260
(877) 869-0656
THE BEACON GROUP CAPITAL SERVICES, LLC
399 Park Avenue
New York, NY 10022
(212) 339-9100
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
THERMEDICS DETECTION INC.
As set forth in the section captioned "The Tender Offer -- Procedures For
Accepting The Offer And Tendering Shares" in the Offer to Purchase described
below, this Notice of Guaranteed Delivery or one substantially in the form
hereof must be used to tender shares of common stock, par value $0.10 per share
(the "Shares"), of Thermedics Detection Inc., a Massachusetts corporation (the
"Company"), pursuant to the Offer (as defined below) if certificates evidencing
Shares are not immediately available or the certificates evidencing Shares and
all other required documents cannot be delivered to American Stock Transfer &
Trust Company (the "Depositary") prior to the Expiration Date (as defined in the
Offer of Purchase), or if the procedures for delivery by book-entry transfer
cannot be completed on a timely basis. This instrument may be delivered by hand
or transmitted by facsimile transmission, overnight courier or mail to the
Depositary.
The Depositary for the Offer is:
AMERICAN STOCK TRANSFER & TRUST COMPANY
<TABLE>
<S> <C>
By Mail: By Hand or Overnight Courier:
40 Wall Street 40 Wall Street
46th Floor 46th Floor
New York, New York 10005 New York, New York 10005
Attn: Reorganization Department Attn: Reorganization Department
</TABLE>
By Facsimile Transmission:
(718) 234-5001
Confirm by Telephone:
(718) 921-8200
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER
THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an Eligible Institution (as defined in the Offer to Purchase)
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box in the Letter of Transmittal.
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to Detection Acquisition, Inc., a Delaware
corporation and an indirect wholly-owned subsidiary of Thermedics Inc., a
Massachusetts corporation, upon the terms and subject to the conditions set
forth in the Offer to Purchase dated March 10, 2000 (the "Offer to Purchase")
and in the related Letter of Transmittal (which, together with any amendments or
supplements thereto, collectively constitute the "Offer"), receipt of each of
which is hereby acknowledged, the number of Shares indicated below pursuant to
the guaranteed delivery procedures set forth in the section of the Offer to
Purchase captioned "The Tender Offer -- Procedures For Accepting The Offer And
Tendering Shares."
- --------------------------------------------------------------------------------
Signature(s): ______________________________________________
Name(s) of Record Holder(s): _______________________________
____________________________________________________________
____________________________________________________________
Please Type or Print
Number of Shares: __________________________________________
Share Certificate No(s).(if available): ____________________
____________________________________________________________
____________________________________________________________
Dated: _______________________________________________, 2000
Address: ___________________________________________________
____________________________________________________________
Zip Code
Area Code and Tel. No.(s): _________________________________
Check box if Shares will be tendered by book-entry
transfer: [ ]
DTC Account Number: ________________________________________
GUARANTEE
(Not to be used for signature guarantees)
The undersigned, a firm which is a commercial bank, broker, dealer,
credit union, savings association or other entity which is a member in good
standing of the Securities Transfer Agents Medallion Program, the Stock
Exchanges' Medallion Program or the New York Stock Exchange, Inc. Medallion
Signature Program, hereby guarantees to either deliver to the Depositary
certificates evidencing all the Shares tendered hereby, in proper form for
transfer, or to deliver such Shares pursuant to the procedure for book-entry
transfer into the Depositary's account at The Depository Trust Company, in
either case together with the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees
or an Agent's Message (as defined in the Offer to Purchase) in the case of a
book-entry transfer, and any other required documents, all within three
American Stock Exchange trading days after the date hereof.
Name of Firm: _________________________________________________________________
Address: ______________________________________________________________________
_______________________________________________________________________________
Zip Code
Area Code and Tel. No.: _______________________________________________________
Authorized Signature: _________________________________________________________
Name: _________________________________________________________________________
Title: ________________________________________________________________________
Dated: __________________________________________________________________, 2000
NOTE: DO NOT SEND CERTIFICATES WITH THIS NOTICE OF GUARANTEED DELIVERY.
CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
- --------------------------------------------------------------------------------
2
<PAGE> 1
<TABLE>
<S> <C>
J.P. MORGAN SECURITIES INC. THE BEACON GROUP CAPITAL SERVICES, LLC
60 WALL STREET 399 PARK AVENUE, 17TH FLOOR
NEW YORK, NY 10260 NEW YORK, NY 10022
(877) 869-0656 (212) 339-9100
</TABLE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
THERMEDICS DETECTION INC.
AT
$8.00 NET PER SHARE
BY
DETECTION ACQUISITION, INC.
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
THERMEDICS INC.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, APRIL 6, 2000, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
March 10, 2000
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by Detection Acquisition, Inc., a Delaware
corporation (the "Purchaser") and an indirect wholly-owned subsidiary of
Thermedics Inc., a Massachusetts corporation ("Thermedics"), to act as Dealer
Managers in connection with the Purchaser's offer to purchase all outstanding
shares of common stock, par value $0.10 per share (the "Shares"), of Thermedics
Detection Inc., a Massachusetts corporation (the "Company"), at a purchase price
of $8.00 per Share, net to the seller in cash, without interest thereon, upon
the terms and subject to the conditions set forth in the Offer to Purchase dated
March 10, 2000 (the "Offer to Purchase") and in the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer") enclosed herewith.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS DESCRIBED IN THE OFFER TO
PURCHASE, THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION
OF THE OFFER THAT NUMBER OF SHARES WHICH, TOGETHER WITH SHARES OWNED BY THERMO
ELECTRON CORPORATION AND ITS SUBSIDIARIES, INCLUDING THERMEDICS, CONSTITUTES AT
LEAST NINETY PERCENT (90%) OF THE OUTSTANDING SHARES ON THE EXPIRATION DATE (AS
DEFINED IN THE SECTION OF THE OFFER TO PURCHASE CAPTIONED "THE TENDER
OFFER -- TERMS OF THE OFFER; EXPIRATION DATE"). THE OFFER IS ALSO SUBJECT TO
OTHER IMPORTANT TERMS AND CONDITIONS CONTAINED IN THE OFFER TO PURCHASE.
Enclosed for your information and for forwarding to your clients for whose
accounts you hold Shares registered in your name or in the name of your nominees
are copies of the following documents:
1. The Offer to Purchase dated March 10, 2000.
2. The Letter of Transmittal to tender Shares (for your use and for
the information of your clients).
3. The Notice of Guaranteed Delivery for Shares (to be used to accept
the Offer if certificates evidencing Shares ("Share Certificates") are not
immediately available or if such Share Certificates and all other required
documents cannot be delivered to American Stock Transfer & Trust Company
(the "Depositary") prior to the Expiration Date or if the procedures for
book-entry transfer cannot be completed on a timely basis).
4. A printed form of letter which may be sent to your clients for
whose accounts you hold Shares registered in your name or in the name of
your nominees, with space provided for obtaining such clients' instructions
with regard to the Offer.
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
6. A return envelope addressed to the Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, APRIL 6, 2000, UNLESS
THE OFFER IS EXTENDED.
<PAGE> 2
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of (i)
certificates evidencing Shares ("Share Certificates") or timely confirmation of
a book-entry transfer of such Shares into the Depositary's account at the
Book-Entry Transfer Facility (as defined in the section of the Offer to Purchase
captioned "The Tender Offer -- Acceptance For Payment And Payment For Shares")
pursuant to the procedures set forth in the section of the Offer to Purchase
captioned "The Tender Offer -- Procedures For Accepting The Offer And Tendering
Shares," (ii) the Letter of Transmittal (or a facsimile thereof), properly
completed and duly executed, with any required signature guarantees, or an
Agent's Message (as defined in the section of the Offer to Purchase captioned
"The Tender Offer -- Acceptance For Payment And Payment For Shares") in
connection with a book-entry transfer, and (iii) any other documents required by
the Letter of Transmittal.
If a stockholder desires to tender Shares pursuant to the Offer and such
stockholder's Share Certificates are not immediately available or such
stockholder cannot deliver the Share Certificates and all other required
documents to reach the Depositary prior to the Expiration Date, or such
stockholder cannot complete the procedure for delivery by book-entry transfer on
a timely basis, such Shares may nevertheless be tendered by following the
guaranteed delivery procedures specified in the section of the Offer to Purchase
captioned "The Tender Offer -- Procedures For Accepting The Offer And Tendering
Shares."
No fees or commissions will be paid to brokers, dealers or any other
persons (other than to the Dealer Managers and D.F. King & Co., Inc. (the
"Information Agent"), as described in the Offer to Purchase) for soliciting
tenders of Shares pursuant to the Offer. The Purchaser will, however, upon
request, reimburse you for customary mailing and handling expenses incurred by
you in forwarding any of the enclosed materials to your clients.
The Purchaser will pay or cause to be paid any transfer taxes payable on
the purchase of Shares by the Purchaser pursuant to the Offer, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
Questions and requests for assistance or for additional copies of the
enclosed materials may be directed to the Dealer Managers or the Information
Agent, at their respective addresses and telephone numbers set forth on the back
cover of the Offer to Purchase.
Very truly yours,
J.P. Morgan Securities Inc.
The Beacon Group Capital Services, LLC
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF THERMO ELECTRON CORPORATION OR ANY OF ITS
SUBSIDIARIES (INCLUDING WITHOUT LIMITATION THERMEDICS AND THE PURCHASER), THE
COMPANY, THE DEALER MANAGERS, THE DEPOSITARY OR THE INFORMATION AGENT, OR ANY
AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY
STATEMENT OR USE ANY DOCUMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE
OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
THERMEDICS DETECTION INC.
AT
$8.00 NET PER SHARE
BY
DETECTION ACQUISITION, INC.
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
THERMEDICS INC.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, APRIL 6, 2000, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
To Our Clients:
Enclosed for your consideration is an Offer to Purchase dated March 10,
2000 (the "Offer to Purchase") and the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer") relating to an offer by Detection Acquisition, Inc., a Delaware
corporation (the "Purchaser") and an indirect wholly-owned subsidiary of
Thermedics Inc., a Massachusetts corporation ("Thermedics"), to purchase all
outstanding shares of common stock, par value $0.10 per share (the "Shares"), of
Thermedics Detection Inc., a Massachusetts corporation (the "Company"), at a
purchase price of $8.00 per Share, net to the seller in cash, without interest
thereon, upon the terms and subject to the conditions set forth in the Offer.
We are the holder of record of Shares held by us for your account. A TENDER
OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO
YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR
INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR
ACCOUNT.
We request instructions as to whether you wish to have us tender on your
behalf any or all of the Shares held by us for your account, pursuant to the
terms and subject to the conditions set forth in the Offer.
Your attention is directed to the following:
- The tender price is $8.00 per Share, net to the seller in cash, without
interest thereon.
- The Offer and withdrawal rights will expire at 12:00 midnight, New York
City time, on Thursday, April 6, 2000, unless the Offer is extended.
- The Offer is made for all of the outstanding Shares.
- The Offer is conditioned upon, among other things described in the Offer
to Purchase, there being validly tendered and not withdrawn prior to the
expiration of the Offer that number of Shares which, together with Shares
owned by Thermo Electron Corporation and its subsidiaries, including
Thermedics, constitutes at least ninety percent (90%) of the outstanding
Shares on the Expiration Date (as defined in the section of the Offer to
Purchase captioned "The Tender Offer -- Terms Of The Offer; Expiration
Date"). The Offer is also subject to other important terms and conditions
contained in the Offer to Purchase.
<PAGE> 2
- Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the purchase of Shares by the Purchaser
pursuant to the Offer.
- In all cases, payment for Shares tendered and accepted for payment
pursuant to the Offer will be made only after timely receipt by American
Stock Transfer & Trust Company (the "Depositary") of (i) certificates
evidencing Shares or timely confirmation of a book-entry transfer of such
Shares into the Depositary's account at the Book Entry Transfer Facility
(as defined in the section of the Offer to Purchase captioned "The Tender
Offer -- Acceptance For Payment And Payment For Shares") pursuant to the
procedures set forth in the section of the Offer to Purchase captioned
"The Tender Offer -- Procedures For Accepting The Offer And Tendering
Shares," (ii) the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, with any required signature
guarantees, or an Agent's Message (as defined in the section of the Offer
to Purchase captioned "The Tender Offer -- Acceptance For Payment And
Payment For Shares") in connection with a book-entry transfer and (iii)
any other documents required by the Letter of Transmittal.
The Offer is being made solely by the Offer to Purchase and the related
Letter of Transmittal and is being made to all holders of Shares. The Offer is
not being made to (nor will tenders be accepted from or on behalf of) holders of
Shares in any jurisdiction in which the making of the Offer or the acceptance
thereof would not be in compliance with the laws of such jurisdiction. In any
jurisdiction where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of the Purchaser by J.P. Morgan Securities Inc., The Beacon Group Capital
Services, LLC or one or more registered brokers or dealers licensed under the
laws of such jurisdiction.
If you wish to have us tender any or all of the Shares held by us for your
account, please instruct us by completing, executing and returning to us the
instruction form contained in this letter. If you authorize a tender of your
Shares, all such Shares will be tendered unless otherwise specified in such
instruction form. YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO
PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE
OFFER.
<PAGE> 3
------------------------
INSTRUCTIONS WITH RESPECT TO THE
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
THERMEDICS DETECTION INC.
The undersigned acknowledge(s) receipt of your letter enclosing the Offer
to Purchase dated March 10, 2000 (the "Offer to Purchase") and the related
Letter of Transmittal (which, together with any amendments or supplements
thereto, collectively constitute the "Offer") pursuant to an offer by Detection
Acquisition, Inc., a Delaware corporation and an indirect wholly-owned
subsidiary of Thermedics Inc., a Massachusetts corporation, to purchase all of
the outstanding shares of common stock, par value $0.10 per share (the
"Shares"), of Thermedics Detection Inc., a Massachusetts corporation.
This will instruct you to tender the number of Shares indicated below (or,
if no number is indicated below, all Shares) that are held by you for the
account of the undersigned, upon the terms and subject to the conditions set
forth in the Offer.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
------------------------------------------------
Number of Shares to be
Tendered(1):
------------------------------------------------
Dated: ______________________________, 2000
SIGN HERE > x
------------------------------------------------
Signature(s):
________________________________________________
Please type or print name(s):
________________________________________________
Address:
________________________________________________
Area Code and Telephone Number:
________________________________________________
Tax Identification or Social Security No:
- --------------------------------------------------------------------------------
</TABLE>
(1) Unless otherwise indicated, it will be assumed that all of the Shares held
by us for your account are to be tendered.
<PAGE> 1
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares. The Offer is being made solely by the Offer to Purchase dated
March 10, 2000 and the related Letter of Transmittal and is being made to all
holders of Shares. The Offer is not being made to (nor will tenders be accepted
from or on behalf of) holders of Shares in any jurisdiction in which the making
of the Offer or the acceptance thereof would not be in compliance with the laws
of such jurisdiction. In any jurisdiction where the securities, blue sky or
other laws require the Offer to be made by a licensed broker or dealer, the
Offer shall be deemed to be made on behalf of the Purchaser by J.P. Morgan
Securities Inc., The Beacon Group Capital Services, LLC or one or more
registered brokers or dealers licensed under the laws of such jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
THERMEDICS DETECTION INC.
AT
$8.00 NET PER SHARE
BY
DETECTION ACQUISITION, INC.
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
THERMEDICS INC.
Detection Acquisition, Inc., a Delaware corporation (the "Purchaser") and an
indirect wholly-owned subsidiary of Thermedics Inc., a Massachusetts
corporation ("Thermedics"), is offering to purchase all outstanding shares of
common stock, par value $0.10 per share (the "Shares"), of Thermedics Detection
Inc., a Massachusetts corporation (the "Company"), at a purchase price of $8.00
per Share, net to the seller in cash, without interest thereon, upon the terms
and subject to the conditions set forth in the Offer to Purchase dated March 10,
2000 (the "Offer to Purchase") and in the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer"). The Purchaser is a wholly-owned subsidiary of Corpak Inc. ("Corpak"),
a Massachusetts corporation and a wholly-owned subsidiary of Thermedics. Thermo
Electron Corporation, a Delaware corporation ("Thermo Electron"), owns a
majority of the outstanding shares of common stock of Thermedics.
-------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS
WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, APRIL 6, 2000, UNLESS THE
OFFER IS EXTENDED.
-------------------------------------------------------------------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY TENDERED
AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF SHARES
WHICH, TOGETHER WITH SHARES OWNED BY THERMO ELECTRON AND ITS SUBSIDIARIES,
INCLUDING THERMEDICS, CONSTITUTES AT LEAST NINETY PERCENT (90%) OF THE
OUTSTANDING SHARES OF THE COMPANY ON THE EXPIRATION DATE. THE OFFER IS ALSO
SUBJECT TO CERTAIN OTHER IMPORTANT TERMS AND CONDITIONS CONTAINED IN THE OFFER
TO PURCHASE.
<PAGE> 2
The Offer is the first step in Thermedics' plan to take the Company private. The
purpose of the Offer is to acquire the minority interest in the Company as part
of an overall reorganization of Thermo Electron. If the Offer is completed,
Thermo Electron, Corpak and the Purchaser together will own at least 90% of the
Shares. Promptly following the closing of the Offer, Corpak and Thermo Electron
plan to contribute their Shares to the Purchaser. Thermo Electron and Corpak
would then cause the Company to merge with and into the Purchaser in a so-called
"short-form" merger between the Company and the Purchaser (the "Merger").
Stockholders of the Company who do not tender their Shares in the Offer will not
be entitled to vote on the Merger. The consideration per Share in the Merger
(other than with respect to Shares held by stockholders, if any, who are
entitled to and perfect their appraisal rights under Massachusetts law) would be
the same as the Offer price of $8.00.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not properly
withdrawn if, as and when the Purchaser gives oral or written notice to American
Stock Transfer & Trust Company (the "Depositary") of the Purchaser's acceptance
for payment of such Shares pursuant to the Offer. Upon the terms and subject to
the conditions of the Offer, payment for Shares so accepted for payment pursuant
to the Offer will be made by deposit of the aggregate purchase price therefor
with the Depositary, which will act as agent for tendering stockholders for the
purpose of receiving payment from the Purchaser and transmitting such payment to
stockholders whose Shares have been accepted for payment. UNDER NO CIRCUMSTANCES
WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE PAID, REGARDLESS OF ANY
EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT. In all cases,
payment for Shares tendered and accepted for payment pursuant to the Offer will
be made only after timely receipt by the Depositary of (i) certificates
evidencing Shares ("Share Certificates") or timely confirmation of a book-entry
transfer of such Shares into the Depositary's account at the Book-Entry Transfer
Facility (as defined in the section of the Offer to Purchase captioned "The
Tender Offer -- Acceptance For Payment And Payment For Shares") pursuant to the
procedures set forth in the section of the Offer to Purchase captioned "The
Tender Offer -- Acceptance For Payment And Payment For Shares," (ii) the Letter
of Transmittal (or a facsimile thereof), properly completed and duly executed,
with any required signature guarantees, or an Agent's Message (as defined in the
section of the Offer to Purchase captioned "The Tender Offer -- Acceptance For
Payment And Payment For Shares") in connection with a book-entry transfer and
(iii) any other documents required by the Letter of Transmittal.
The term "Expiration Date" means 12:00 midnight, New York City time, on
Thursday, April 6, 2000, unless and until the Purchaser, in its sole discretion,
shall have extended the period during which the Offer is open, in which event
the term "Expiration Date" shall mean the latest time and date at which the
Offer, as so extended by the Purchaser, shall expire.
Subject to the applicable rules and regulations of the Securities and Exchange
Commission, the Purchaser expressly reserves the right, in its sole discretion,
at any time and from time to time, to extend the period during which the Offer
is open for any reason, including the failure to satisfy any of the conditions
specified in the section of the Offer to Purchase captioned "The Tender Offer --
Certain Conditions Of The Offer," and thereby delay acceptance for payment of,
or payment for, any Shares, by giving oral or written notice of such extension
to the Depositary. Any such extension will be followed as promptly as
practicable by a public announcement thereof, such announcement to be made no
later than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date. During any such extension, all Shares
previously tendered and not properly withdrawn will remain subject to the Offer,
subject to the right of a tendering stockholder to withdraw such stockholder's
Shares.
Except as otherwise provided in the section of the Offer to Purchase captioned
"The Tender Offer -- Withdrawal Rights," tenders of Shares made pursuant to the
Offer are irrevocable. Shares tendered pursuant to the Offer may be withdrawn at
any time prior to the Expiration Date and, unless previously accepted for
payment by the Purchaser pursuant to the Offer, may also be withdrawn at any
time after May 8, 2000. In order for a withdrawal to be effective, a written,
telegraphic or facsimile transmission notice of withdrawal must be timely
received by the Depositary at one of its addresses set forth on the back cover
of the Offer to Purchase. Any such notice of withdrawal must specify the name of
the person who tendered the Shares to be withdrawn, the number of Shares to be
withdrawn and the name of the registered holder of the Shares to be withdrawn,
if different from that of the person who tendered such Shares. If Share
Certificates to be withdrawn have been delivered or otherwise identified to the
Depositary, then, prior to the physical release of such Share Certificates, the
tendering stockholder must also submit the serial numbers shown on such Share
Certificates to the Depositary, and the signatures on the notice of withdrawal
must be guaranteed by an Eligible Institution (as defined in the section of the
Offer to Purchase captioned "The Tender Offer -- Procedures For Accepting The
Offer And Tendering Shares"), unless such Shares have been tendered for the
account of an Eligible Institution. If Shares have been tendered pursuant to the
procedures for book-entry transfer, as set forth in the section of the Offer to
<PAGE> 3
Purchase captioned "The Tender Offer -- Procedures For Accepting The Offer And
Tendering Shares," any notice of withdrawal must specify the name and number of
the account at the Book-Entry Transfer Facility to be credited with the
withdrawn Shares and must otherwise comply with the procedures of the Book-Entry
Transfer Facility. Withdrawals may not be revoked, and any Shares properly
withdrawn will thereafter be deemed not to have been validly tendered for
purposes of the Offer. However, withdrawn Shares may be retendered at any time
prior to the Expiration Date by following the procedures described in the
section of the Offer to Purchase captioned "The Tender Offer -- Procedures For
Accepting The Offer And Tendering Shares." All questions as to the form and
validity (including the time of receipt) of any notice of withdrawal will be
determined by the Purchaser, in its sole discretion, whose determination will be
final and binding.
The information required to be disclosed by Rule 14d-6(d)(1) and Rule
13e-3(e)(i) of the General Rules and Regulations under the Securities Exchange
Act of 1934, as amended, is contained in the Offer to Purchase and is
incorporated herein by reference.
The Company has provided the Purchaser with the Company's stockholder list and
security position listings for the purpose of disseminating the Offer to holders
of Shares. The Offer to Purchase, the related Letter of Transmittal and, if
required, other relevant material will be mailed to record holders of Shares
whose names appear on the Company's stockholder list and will be furnished to
brokers, dealers, commercial banks, trust companies and similar persons whose
names, or the names of whose nominees, appear on the Company's stockholder list
or, if applicable, who are listed as participants in a clearing agency's
security position listing for subsequent transmittal to beneficial owners of
Shares.
The receipt of cash for Shares pursuant to the Offer will be a taxable
transaction for U.S. federal income tax purposes.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
Tendering stockholders of record who tender Shares directly will not be
obligated to pay brokerage fees or commissions or, except as set forth in
Instruction 6 of the Letter of Transmittal, stock transfer taxes on the purchase
of Shares by the Purchaser pursuant to the Offer. Stockholders who hold their
Shares through a bank or a broker should check with such institution as to
whether it charges any service fees. The Purchaser will pay the expenses of the
Depositary, D.F. King & Co., Inc., who is acting as the information agent (the
"Information Agent"), and J.P. Morgan Securities Inc. and The Beacon Group
Capital Services, LLC, who are acting as dealer managers (collectively, the
"Dealer Managers"), in connection with the Offer.
Questions and requests for assistance or for additional copies of the Offer to
Purchase, the Letter of Transmittal and all other tender offer materials may be
directed to the Information Agent or the Dealer Managers as set forth below, and
copies will be furnished promptly at the Purchaser's expense. No fees or
commissions will be paid to brokers, dealers or any other persons (other than
the Dealer Managers and the Information Agent) for soliciting tenders of Shares
pursuant to the Offer.
The Information Agent for the Offer is:
D.F. King & Co., Inc.
77 Water Street, 20th Floor
New York, NY 10005
Bankers and Brokers Call Collect: (212) 269-5550
All Others Call Toll Free: (800) 290-6433
The Dealer Managers for the Offer are:
J.P. Morgan Securities Inc.
60 Wall Street
New York, NY 10260
(877) 869-0656
The Beacon Group Capital Services, LLC
399 Park Avenue
<PAGE> 4
New York, NY 10022
(212) 339-9100
March 10, 2000
<PAGE> 1
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the number to
give the Payer.
<TABLE>
<C> <S> <C>
- ------------------------------------------------------------
GIVE THE
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY
NUMBER OF--
- ------------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals (joint The actual owner of
account) the account or, if
combined funds, the
first individual on
the account(1)
3. Husband and wife (joint account) The actual owner of
the account or, if
joint funds, the
first individual on
the account(1)
4. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if
the minor is the
only contributor,
the minor(1)
6. Account in the name of guardian or The ward, minor or
committee for a designated ward, incompetent
minor or incompetent person person(3)
7. (a) The usual revocable savings The grantor-
trust account (grantor is also trustee(1)
trustee)
(b) So-called trust account that The actual owner(1)
is not a legal or valid trust
under State law
8. Sole proprietorship account The owner(4)
- ------------------------------------------------------------
- ------------------------------------------------------------
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF--
- ------------------------------------------------------------
9. A valid trust, estate or pension The legal entity
trust (Do not furnish the
identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated
in the account
title.)(5)
10. Corporate account The corporation
11. Religious, charitable or The organization
educational organization account
12. Partnership account held in the The partnership
name of the business
13. Association, club or other tax- The organization
exempt organization
14. A broker or registered nominee The broker or
nominee
15. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a State or
local government, school district,
or prison) that receives
agricultural program payments
- ------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer Identification Number (for
businesses and all other entities), at the local office of the Social Security
Administration or the Internal Revenue Service and apply for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following (Section references are to the Internal Revenue Code):
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), or an individual
retirement plan, or a custodial account under section 403(b)(7).
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency, or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S. or
possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
- An entity registered at all times under the Investment Company Act of 1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals.
NOTE: You may be subject to backup withholding if this interest is $600 or
more and is paid in the course of the payer's trade or business and you have not
provided your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to nonresident aliens.
- Payments on tax-free government bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Exempt payees described above should file the Substitute Form W-9 to avoid
possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH
YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM,
SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER.
Certain payments other than interest, dividends, and patronage dividends that
are not subject to information reporting are also not subject to backup
withholding. For details, see sections 6041, 6041A(a), 6042, 6044, 6045, 6049,
6050A and 6050N, and the regulations under those sections.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to the IRS. The IRS uses the numbers for
identification purposes and to help verify the accuracy of tax returns. Payers
must be given the numbers whether or not recipients are required to file a tax
return. Payers must generally withhold 31% of taxable interest, dividend, and
certain other payments to a payee who does not furnish a taxpayer identification
number to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to
include any portion of an includible payment for interest, dividends or
patronage dividends in gross income, such failure is strong evidence of
negligence. If negligence is shown, you will be subject to a penalty of 20% on
any portion of an underpayment attributable to that failure.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE> 1
THERMEDICS COMMENCES CASH TENDER OFFER FOR THERMEDICS DETECTION
WOBURN, Mass., March 10, 2000 - Thermedics Inc. (ASE-TMD), a Thermo Electron
company, announced today that it has commenced its previously announced cash
tender offer of $8.00 per share for all outstanding shares of its Thermedics
Detection Inc. subsidiary. The offer and withdrawal rights will expire at
midnight on Thursday, April 6, 2000, unless the offer is extended. The tender
offer is part of a major reorganization plan under which Thermedics' parent
company, Thermo Electron Corporation (NYSE-TMO), will spin in, spin off, and
sell various businesses to focus solely on its core measurement and detection
instruments business.
The complete terms and conditions of the offer are set forth in the offer to
purchase, letter of transmittal, and other related materials being filed today
with the Securities and Exchange Commission (SEC). Copies of the offer and
transmittal letter are being distributed to Thermedics Detection shareholders.
The goal of the tender offer is to bring Thermedics' and Thermo Electron's
combined equity ownership in Thermedics Detection to at least 90 percent. If
Thermedics and Thermo Electron achieve this 90-percent-ownership level,
Thermedics Detection would then be spun into Thermedics through a "short-form"
merger at the same cash price as the tender offer. Thermedics expects to
complete the spin-in of Thermedics Detection in the second quarter of 2000.
The tender offer and proposed subsequent short-form merger require SEC clearance
of necessary filings. The short-form merger would not require Thermedics
Detection board or shareholder approval.
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.
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, and the
company's spinout and acquisition strategies.
<PAGE> 1
Investor Contact: 781-622-1111
Media Contact: 781-622-1252
THERMO ELECTRON ANNOUNCES PROGRESS ON COMPANY REORGANIZATION
WALTHAM, Mass., March 6, 2000 - One month following its announcement of an
ambitious plan to simplify the company and focus solely on its core measurement
and detection instruments business, Thermo Electron Corporation (NYSE-TMO)
announced today that it has initiated the first steps required to take three of
its subsidiaries private.
On Friday, the company's Thermo Instrument Systems Inc. (ASE-THI)
subsidiary filed with the Securities and Exchange Commission (SEC) the materials
necessary to take its Thermo Optek Corporation and ThermoQuest Corporation
businesses private through short-form mergers. The SEC must complete its review
of these materials before the mergers can be finalized. Thermo Electron expects
these mergers to be completed in the second quarter of 2000.
In addition, the company announced that its Thermedics Inc. (ASE-TMD)
subsidiary has commenced its previously announced cash tender offer of $15.50
per share for any and all outstanding shares of its Thermo Sentron Inc.
business. The offer and withdrawal rights will expire at midnight on Thursday,
March 30, 2000, unless the offer is extended.
The goal of the tender offer is to bring Thermedics' and Thermo Electron's
combined equity ownership in Thermo Sentron to at least 90 percent. If
Thermedics and Thermo Electron achieve this 90-percent-ownership level, Thermo
Sentron would then be spun into Thermedics through a "short-form" merger at the
same cash price as the tender offer. Thermedics expects to complete the spin-in
of Thermo Sentron in the second quarter of 2000. The tender offer for Thermo
Sentron and proposed subsequent short-form merger require SEC clearance of
necessary filings. The short-form merger would not require Thermo Sentron board
or shareholder approval.
Thermo Electron is pursuing an aggressive timetable to complete its
reorganization plan and expects to commence tender offers for Metrika Systems,
ONIX Systems, Thermo BioAnalysis, and Thermedics Detection over the next two
weeks.
Thermo Electron Corporation is a leading provider of analytical and
monitoring instruments used in a broad range of applications, from life sciences
research to telecommunications to food and beverage production. In addition,
Thermo Electron serves the healthcare market through a family of medical
products, and is a major producer of paper recycling systems and provides
water-clarification and fiber-recovery products and services. As announced on
January 31, 2000, the company has initiated a major reorganization that would
transform it into one publicly traded entity focused on its core measurement and
detection instruments business. The company's medical products and paper
recycling businesses will be spun off as dividends to Thermo Electron
shareholders. More information is available on the Internet at
http://www.thermo.com.
OTHER IMPORTANT INFORMATION:
The tender offers described in this announcement for the outstanding shares
of Thermedics Detection, Metrika Systems, ONIX Systems and Thermo BioAnalysis
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
<PAGE> 2
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:
* Tender Offer Statements (except for exhibits)
* Offers to Purchase
* Letters of Transmittal
* Notices of Guaranteed Delivery
You can call us at (781) 622-1111 or write to us at:
Investor Relations Department
Thermo Electron Corporation
81 Wyman Street, P.O. Box 9046
Waltham, MA 02454-9046
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:
the company's spinout and acquisition strategies, competition, international
operations, technological change, possible changes in governmental regulations,
capital spending and government funding policies, and dependence on intellectual
property rights.
# # #
<PAGE> 1
March 1, 2000
Thermedics Inc.
470 Wildwood Street
Woburn, MA 01888
Attn: John Keiser
Dear Jack:
Reference is made to Thermedics Inc.'s proposed acquisitions of the
minority interest investment in each of its majority owned subsidiaries, Thermo
Sentron Inc. and Thermedics Detection Inc. In connection with those
transactions, Thermo Electron Corporation intends to loan Thermedics up to
$20,000,000 for the acquisition of such interests in each of Thermo Sentron and
Thermedics Detection. This loan will be available at an interest rate equal to
the 30-day Dealer Commercial Paper Rate plus 150 basis points, set at the
beginning of each month, provided such rate shall be reduced to the Dealer
Commercial Paper Rate plus 50 basis points to the extent of any funds invested
by Thermedics' majority owned subsidiaries in Thermo Electron's cash management
arrangement. Interest will be due and payable on a monthly basis and the loan
will be payable in full on September 1, 2000. If these terms are acceptable to
you, please sign the letter as indicated below to evidence your acceptance of
the terms.
Sincerely,
THERMO ELECTRON CORPORATION
/s/Theo Melas-Kyriazi
Theo Melas-Kyriazi
Vice President and Chief Financial Officer
ACCEPTED AND AGREED TO:
THERMEDICS INC.
John T. Keiser
/s/John T. Keiser
President and CEO
<PAGE> 1
January 29, 2000
Board of Directors
Thermo Electron Corporation
81 Wyman Street
Post Office Box 9046
Waltham, MA 02454-0946
Attention: Dr. Richard Syron
Chairman and Chief Executive Officer
Board of Directors
Thermedics Inc.
470 Wildwood Street
Woburn, MA 01888
Attention: Mr. John Keiser
President and Chief Executive Officer
Ladies and Gentlemen:
J.P. Morgan Securities Inc. ("J.P. Morgan") and The Beacon Group Capital
Services, LLC (collectively "we", "us" and "our") understand that Thermedics
Inc. ("Thermedics"), a subsidiary of Thermo Electron Corporation ("Thermo
Electron"), proposes to acquire all of the outstanding common stock, par value
$.10 per share, (the "Shares") of Thermedics Detection Inc. (the "Company") not
currently held by Thermo Electron or its subsidiaries from the holders thereof
at a purchase price of $8.00 per Share, net to the seller in cash (the
"Consideration"), pursuant to (i) an offer (the "Offer") by Detection
Acquisition, Inc. (the "Purchaser"), an indirect wholly-owned subsidiary of
Thermedics, to purchase all of the outstanding Shares and (ii) the subsequent
merger (the "Merger") of the Purchaser with and into the Company. You have
requested our joint opinion as to the fairness, from a financial point of view,
to Thermedics and to Thermo Electron of the Consideration proposed to be paid
pursuant to the Offer and the Merger.
In arriving at our opinion, we have reviewed (i) certain publicly available
information concerning the business of the Company and of certain other
companies engaged in businesses deemed to be comparable to those of the Company;
(ii) the reported market prices of the securities of certain other companies
deemed by us to be comparable to the Company; (iii) publicly available terms of
certain transactions involving companies deemed by us to be comparable to the
Company and the consideration paid for such companies; (iv)
<PAGE> 2
-2-
current and historical market prices of the Shares; (v) the audited financial
statements of Thermedics, Thermo Electron and the Company for the fiscal year
ended January 2, 1999 and the unaudited financial statements of Thermedics,
Thermo Electron and the Company for the period ended October 2, 1999; (vi)
certain agreements with respect to outstanding indebtedness or obligations of
Thermedics, Thermo Electron and the Company; (vii) the terms of other business
combinations that we deemed relevant; and (viii) projections for the period from
October 3, 1999 through January 1, 2000 and for fiscal 2000 prepared by the
Company in November 1999 (the "2000 Projections").
In addition, we have held discussions with certain members of the managements of
Thermedics and Thermo Electron with respect to certain aspects of the Offer and
the Merger, the past and current business operations of the Company, the
financial condition and future prospects and operations of the Company and
certain other matters we believed necessary or appropriate to our inquiry. We
did not hold any discussions with the management of the Company. We have
reviewed such other financial studies and analyses and considered such other
information as we deemed appropriate for the purposes of this opinion. However,
the 2000 Projections were the only information prepared by the Company which we
reviewed.
In giving our opinion, we have relied upon and assumed, without independent
verification, the accuracy and completeness of all information that was publicly
available or was furnished to, or discussed with, us, by Thermedics, Thermo
Electron or the Company or was otherwise reviewed by us, and we have not assumed
any responsibility or liability therefor. We have also assumed that there have
been no material changes in the Company's financial condition, results of
operations, business or prospects since the date of the most recent financial
statements made available to us. We have not conducted, and we have not assumed
any responsibility for conducting, any valuation, appraisal or physical
inspection of any assets or liabilities (contingent or otherwise), nor have any
such valuations or appraisals been provided to us. In relying on the financial
analyses, projections and estimates provided to, or discussed with, us, we have
assumed that they have been reasonably prepared based on assumptions reflecting
the best currently available estimates and judgments by management as to the
expected future financial performance of the Company. We have relied as to all
legal matters relevant to rendering our opinion upon the advice of counsel.
Our opinion is necessarily based on economic, market and other conditions as in
effect on, and the information made available to us as of, the date hereof. It
should be understood that subsequent developments may affect the conclusions in
this opinion and that we do not have any obligation to update, revise or
reaffirm this opinion.
We have acted as financial advisors to Thermedics and Thermo Electron with
respect to the proposed Offer and Merger and will receive a fee from Thermo
Electron for our services. We have also acted as financial advisors to Thermo
Electron for the purpose of advising Thermo Electron in connection with its
strategic alternatives, including the proposed reorganization of Thermo Electron
and its subsidiaries. As part of the proposed reorganization of Thermo Electron,
it is contemplated that Thermo Electron will acquire the
<PAGE> 3
-3-
publicly-held minority interest in Thermedics. We will receive separate fees for
services with respect to other elements of Thermo Electron's reorganization,
including acting as financial advisors to Thermo Electron in connection with the
acquisition of the publicly-held minority interest in Thermedics. These other
fees include a minimum retainer for each of us and additional compensation if
some or all of the other elements of Thermo Electron's reorganization are
completed. In the ordinary course of their businesses, J.P. Morgan and its
affiliates may actively trade the debt and equity securities of Thermedics,
Thermo Electron or the Company and their affiliates for their own account or for
the accounts of customers and, accordingly, they may at any time hold long or
short positions in such securities.
On the basis of and subject to the foregoing, it is our opinion as of the date
hereof that the Consideration to be paid pursuant to the Offer and the Merger is
fair, from a financial point of view, to Thermedics and to Thermo Electron.
This letter is provided to the Boards of Directors of Thermedics and Thermo
Electron in connection with and for the purposes of their evaluation of the
Offer and the Merger. This opinion does not constitute a recommendation to any
stockholder of the Company as to whether such stockholder should tender its
Shares in the Offer. This opinion may not be disclosed, referred to, or
communicated (in whole or in part) to any third party for any purpose whatsoever
except with our prior written consent in each instance. We hereby consent to the
filing of this opinion as an exhibit to the Tender Offer Statement on Schedule
TO to be filed by Thermedics, Thermo Electron and certain of their subsidiaries
and to the provision of this opinion to persons who request it as contemplated
by the Schedule TO.
Very truly yours,
J.P. MORGAN SECURITIES INC.
/s/ J.P. Morgan Securities Inc.
THE BEACON GROUP CAPITAL SERVICES, LLC
/s/ The Beacon Group Capital Services, LLC
<PAGE> 1
[LOGO] Thermo Electron
---------------------------------------------------
<PAGE> 2
THE NEW THERMO ELECTRON
- ---------------------------------------------------------------------------
> Vision
> Focus
> Clarity
> Growth
1 [LOGO] Thermo Electron
<PAGE> 3
SHAREHOLDER VALUE
- ---------------------------------------------------------------------------
Medical > Dividend
Products
Existing
New > Stock > Thermo Electron
Thermo Shareholders
Thermo
Fibertek > Dividend
2 [LOGO] Thermo Electron
<PAGE> 4
OUR GOAL
- ---------------------------------------------------------------------------
To channel all our resources -
financial,
human,
technological -
to become the preeminent
instrument company in the world.
3 [LOGO] Thermo Electron
<PAGE> 5
WHY INSTRUMENTS?
- ---------------------------------------------------------------------------
> Critical mass
> Strong market presence
> Experienced management
> Strong cash flow
> Broad technology platform
4 [LOGO] Thermo Electron
<PAGE> 6
THE PLAN
- ---------------------------------------------------------------------------
> Sell businesses totaling $1.2 billion in revenues
> Spin off equity of Thermo Fibertek and new Medical Products company
> Spin in instrument companies
5 [LOGO] Thermo Electron
<PAGE> 7
MAJOR DIVESTITURES
- ---------------------------------------------------------------------------
> Thermo Cardiosystems
> Trex Medical
> Thermo TerraTech
> Thermo Coleman
> Peek
6 [LOGO] Thermo Electron
<PAGE> 8
PLAN PROCEEDS
- ---------------------------------------------------------------------------
Proceeds from Divestitures $ 1.0 BILLION
Cost of Spin Ins $(0.4 BILLION)
-------------
Net Increase in Cash $ 0.6 BILLION
Invest all proceeds in
new instrument company
7 [LOGO] Thermo Electron
<PAGE> 9
SPIN OFFS
- ---------------------------------------------------------------------------
> Market leadership
> Experienced management
> Independent market identities
> Balanced product mix
> Strong growth prospects
8 [LOGO] Thermo Electron
<PAGE> 10
MEDICAL PRODUCTS
- ---------------------------------------------------------------------------
Thermo Biomedical
Thermedics Medical
1999E Revenues: $335 million
9 [LOGO] Thermo Electron
<PAGE> 11
MEDICAL PRODUCTS
- ---------------------------------------------------------------------------
[Collage of photos representing the various businesses within the new Medical
Products company, including neurodiagnostic testing, respiratory care, infant,
audiology products, wireless patient monitoring, and medical polymers.]
10 [LOGO] Thermo Electron
<PAGE> 12
THERMO FIBERTEK
- ---------------------------------------------------------------------------
Thermo Fibertek
Thermo Fibergen
1999E Revenues: $225 million
11 [LOGO] Thermo Electron
<PAGE> 13
THERMO FIBERTEK
- ---------------------------------------------------------------------------
[Collage of photos representing the various businesses within the new Thermo
Fibertek company, including papermaking and recycling equipment,
water-management systems, waste-recovery, and fiber-based consumer products and
composites.]
12 [LOGO] Thermo Electron
<PAGE> 14
THERMO ECOTEK
- ---------------------------------------------------------------------------
> Non-core asset
> Maximize value
> Goal: spin off in 1-2 years
13 [LOGO] Thermo Electron
<PAGE> 15
- ---------------------------------------------------------------------------
Thermo Electron will be
a completely focused
instrument company in 2001
14 [LOGO] Thermo Electron
<PAGE> 16
THERMO INSTRUMENT REVENUES
- ---------------------------------------------------------------------------
(in millions)
[Bar chart (without actual revenue numbers) showing increasing revenues from the
Thermo Instrument business from 1986 to 1999 estimate, indicating in 1998 actual
revenues of $1.66 billion.]
15 [LOGO] Thermo Electron
<PAGE> 17
THERMO INSTRUMENT EBITDA
- ---------------------------------------------------------------------------
(in thousands)
[Bar chart (without actual EBITDA numbers) showing increasing EBITDA for the
Thermo Instrument business from 1986 to 1999 estimate, indicating in 1998 actual
EBITDA of $294 million.]
16 [LOGO] Thermo Electron
<PAGE> 18
THERMO INSTRUMENT STOCK PRICE
- ---------------------------------------------------------------------------
(adjusted for splits)
[Line graph generally illustrating range of Thermo Instrument stock price
(without providing specific stock prices) from 1986 to present ranging from
approximately $2.00 per share to approximately $36.00 per share during the time
period shown.]
17 [LOGO] Thermo Electron
<PAGE> 19
GROWTH PLAN 2000
- ---------------------------------------------------------------------------
> Manage according to market served
> New incentives for managers
> Divest of slow-growth units
> Continue strategic acquisitions
> Initiate e-commerce
18 [LOGO] Thermo Electron
<PAGE> 20
OLD ORGANIZATION
- ---------------------------------------------------------------------------
[Graphic of partial depiction of old organizational chart of Thermo Instrument
Systems.]
19 [LOGO] Thermo Electron
<PAGE> 21
NEW ORGANIZATION
- ---------------------------------------------------------------------------
1999E Revenues: $2.3 billion
Life Measurement
Sciences Photonics and Control
1999E Revenues 1999E Revenues 1999E Revenues
$800 million $800 million $700 million
20 [LOGO] Thermo Electron
<PAGE> 22
LIFE SCIENCES - GOALS
- ---------------------------------------------------------------------------
> Internal revenue growth >10%
> R&D commitment 8-10%
> Technology acquisitions
> Maintain 16% ROS
21 [LOGO] Thermo Electron
<PAGE> 23
PHOTONICS - GOALS
- ---------------------------------------------------------------------------
> Internal revenue growth 7-8%
> R&D commitment
- Telecom >10%
- Balance 7%
> Instrument acquisitions
> Maintain strong cash flow
> Improve ROS to 13%
22 [LOGO] Thermo Electron
<PAGE> 24
MEASUREMENT AND CONTROL - GOALS
- ---------------------------------------------------------------------------
> Internal revenue growth 4-5%
> R&D commitment 4-5%
> Double ROS to 10%
> Focus on cash flow
> Divestitures
23 [LOGO] Thermo Electron
<PAGE> 25
NEW INCENTIVES FOR MANAGERS
- ---------------------------------------------------------------------------
> New bonus plan
- Growth
- Cash
- Combination
> Increase cash compensation
> Continue options in parent
24 [LOGO] Thermo Electron
<PAGE> 26
DIVEST SLOW-GROWTH UNITS
- ---------------------------------------------------------------------------
> Detailed review of measurement and control sector
> Sale of
- Gould
- NIS
- Pharos Marine
25 [LOGO] Thermo Electron
<PAGE> 27
RECENT ACQUISITIONS
- ---------------------------------------------------------------------------
Spectra Physics AB Feb. 1999 BioStar Nov. 1998
- ----------------------------- -----------------------------
Laser-based instruments Point-of-Care Diagnostics
-----------------------------
Purchase Price $351M
Current Market Value
SPLI $450-500M
Other $350M Interactiva Oct. 1999
FLIR $ 70M -----------------------------
- ----------------------------- Biochips - e-commerce
Total Value $870-920M -----------------------------
26 [LOGO] Thermo Electron
<PAGE> 28
EBUSINESS - WWW.INFORMATION2.NET
- ---------------------------------------------------------------------------
Competitive Advantages
> Leverage knowledge assets
> Breadth of "touch points"
> Mining: metals to genomes
> One-to-one marketing
27 [LOGO] Thermo Electron
<PAGE> 29
WELL-POSITIONED VS. COMPETITORS
- ---------------------------------------------------------------------------
[Segmented bar chart showing how Thermo Instrument and its competitors compare
in terms of the industries they serve.]
Source McKinsey & Co.
Thermo Instrument Life Sciences 40%
Communications 9%
Environmental 17%
Industrial 34%
Agilent Life Sciences 7%
Communications 50%
Environmental 5%
Non Instrument 38%
Waters Life Sciences 60%
Environmental 40%
Varian Life Sciences 35%
Environmental 35%
Non Instrument 30%
Perkin Elmer Life Sciences 22%
Environmental 13%
Industrial 26%
Non Instrument 39%
28 [LOGO] Thermo Electron
<PAGE> 30
VALUATION
- ---------------------------------------------------------------------------
EV/EBITDA
[Bar chart showing how Thermo Instrument has been valued by industry analysts in
terms of EV/EBITDA compared to its competitors based on trailing 12 months
EBITDA.]
Source: Industry Analysts
Chart reflects ratio of EV (Enterprise Value)/EBITDA as follows:
THI 8.0
Agilent 24.0
Waters 19.3
Varian 20.2
Perkin Elmer 12.0
Mean 18.9
29 [LOGO] Thermo Electron
<PAGE> 31
INSTRUMENTS PROVIDE KNOWLEDGE
- ---------------------------------------------------------------------------
You cannot
improve and control
unless you can measure
and detect
30 [LOGO] Thermo Electron
<PAGE> 32
OLD STRUCTURE
- ---------------------------------------------------------------------------
[Graphic showing the old corporate structure of Thermo Electron indicating
Thermo Electron subsidiaries with minority investors as follows:]
Thermo Electron
Thermo Instrument
Thermo Quest
ONIX Systems
Thermo Spectra
Thermo Optek
Thermo BioAnalysis
Metrika Systems
Thermo Vision
Thermo Coleman
Thermo Information Solutions
Thermo Biomedical
Thermo Ecotek
Thermo Trilogy
Thermedics
Thermo Sentron
Thermedics Detection
Thermo Cardiosystems
Thermo Voltek
Thermo Trex
Trex Medical
Trex Communications
ThermoLase
Thermo Fibertek
Thermo Fibergen
Thermo Power
Thermolyte
Thermo Terra Tech
The Randers Group
Thermo EuroTech
Thermo Retec
31 [LOGO] Thermo Electron
<PAGE> 33
NEW STRUCTURE
- ---------------------------------------------------------------------------
The term Thermo Electron superimposed over image of man looking through a
telescope, representing new Thermo corporate structure.
32 [LOGO] Thermo Electron
<PAGE> 34
THE NEW THERMO ELECTRON
- ---------------------------------------------------------------------------
> Market focus
> Simple structure
> Tightly managed
> Dedicated resources
33 [LOGO] Thermo Electron
