<PAGE> 1
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
SCHEDULE 13E-3
RULE 13E-3 TRANSACTION STATEMENT
(PURSUANT TO SECTION 13(E) OF THE SECURITIES EXCHANGE ACT OF 1934)
LIFE TECHNOLOGIES, INC.
(NAME OF THE ISSUER)
DEXTER CORPORATION
DEXTER ACQUISITION DELAWARE, INC.
(NAME OF THE PERSONS FILING STATEMENT)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
532177201
(CUSIP NUMBER OF CLASS OF SECURITIES)
---------------
BRUCE H. BEATT, ESQ.
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
DEXTER CORPORATION
ONE ELM STREET
WINDSOR LOCKS, CT 06096
(860) 292-7675
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE
NOTICES AND COMMUNICATIONS ON BEHALF OF PERSONS FILING STATEMENT)
---------------
COPY TO:
JERE R. THOMSON, ESQ.
JONES, DAY, REAVIS & POGUE
599 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022
(212) 326-3939
This statement is filed in connection with (check the appropriate box):
[_](a)The filing of solicitation materials or an information statement subject
to Regulation 14A, Regulation 14C, or Rule 13e-3(c) under the Securities
Exchange Act of 1934.
[_](b)The filing of a registration statement under the Securities Act of 1933.
[X](c)A tender offer.
[_](d)None of the above.
Check the following box if the soliciting materials or information
statement referred to in checking box (a) are preliminary copies. [_]
CALCULATION OF FILING FEE:
================================================================================
Transaction Valuation* Amount of Filing Fee**
- --------------------------------------------------------------------------------
$461,528,232 $92,306
<PAGE> 2
* For purposes of calculating the fee only. The amount assumes the purchase
of 12,473,736 shares of Common Stock, par value $.01 per share, of Life
Technologies, Inc. at $37.00 net in cash per share, which represents all
outstanding shares at August 3, 1998 not owned by the persons filing this
statement and shares issuable pursuant to options that are presently
exercisable.
** The amount of the filing fee calculated in accordance with Regulation
240.0-11 of the Securities Exchange Act of 1934 equals 1/50th of 1% of the
value of the shares to be purchased.
[X] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid: $92,306 Filing Parties: Dexter Corporation and
Dexter Acquisition
Delaware, Inc.
Form or Registration No.: Schedule 14D-1 Date Filed: November 2, 1998
- --------------------------------------------------------------------------------
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<PAGE> 3
INTRODUCTION
This Rule 13E-3 Transaction Statement (the "Schedule 13E-3") relates to
a tender offer by Dexter Acquisition Delaware, Inc., a Delaware corporation
("Purchaser") and a wholly-owned subsidiary of Dexter Corporation, a Connecticut
corporation ("Parent"), to purchase all outstanding shares of Common Stock, par
value $.01 per share (the "Shares"), of Life Technologies, Inc., a Delaware
corporation (the "Company"), not currently owned by Purchaser or Parent, for a
purchase price of $37.00 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 November 2, 1998 (the "Offer to Purchase") and in the related
Letter of Transmittal (the "Letter of Transmittal" and, together with the Offer
to Purchase, the "Offer"), copies of which are filed as Exhibits (a)(1) and
(a)(2) respectively to the Tender Offer Statement on Schedule 14D-1 (the
"Schedule 14D-1") filed by Purchaser and Parent with the Securities and Exchange
Commission on the date hereof. This Schedule 13E-3 is being filed by Purchaser
and Parent.
The following cross-reference sheet is being supplied pursuant to
General Instruction F to Schedule 13E-3 and shows the location in the Schedule
14D-1 of the information required to be included in response to the items of
this Schedule 13E-3. The information set forth in the Schedule 14D-1, including
all exhibits thereto, is hereby expressly incorporated herein by reference and
the responses to each item of this Schedule 13E-3 are qualified in their
entirety by reference to the information contained in the Schedule 14D-1 and the
exhibits thereto. All cross references in this Schedule 13E-3, other than cross
references to the Schedule 14D-1, are to the Offer to Purchase.
The information contained in this Schedule 13E-3 concerning the
Company, including, without limitation, information concerning the Company's
capital structure and historical financial statements, directors and executive
officers, was obtained from representatives of the Company and the Company's
publicly available filings with the Securities and Exchange Commission. Neither
Purchaser nor Parent takes any responsibility for the accuracy of such
information.
<PAGE> 4
CROSS-REFERENCE SHEET TO
SCHEDULE 14D-1
<TABLE>
<CAPTION>
LOCATION OF ITEM(S)
ITEM AND CAPTION OF SCHEDULE 13E-3 IN SCHEDULE 14D-1
- ---------------------------------- -----------------
<S> <C>
1. ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION.
(a)-(c)................................................... 1(a)-(c)
(d)-(f) .................................................. *
2. IDENTITY AND BACKGROUND.
(a)-(g)................................................... 2
3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS.
(a)....................................................... 3
(b)....................................................... *
4. TERMS OF THE TRANSACTION.
(a)-(b)................................................... *
5. PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE.
(a)-(e)................................................... 5(a)-(e)
(f)....................................................... 5(g)
(g)....................................................... *
6. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)....................................................... 4(a)
(b) ...................................................... *
(c) ...................................................... 4(b)
(d) ...................................................... 4(c)
7. PURPOSE(S), ALTERNATIVES, REASONS AND EFFECTS.
(a)....................................................... 5
(b)-(d) .................................................. *
8. FAIRNESS OF THE TRANSACTION.
(a)-(f)................................................... *
9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS.
(a)-(c)................................................... *
10. INTEREST IN SECURITIES OF THE ISSUER.
(a)-(b)................................................... 6
11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO
THE ISSUER'S SECURITIES................................... 7
12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSONS
WITH REGARD TO THE TRANSACTION.
(a)-(b)................................................... *
13. OTHER PROVISIONS OF THE TRANSACTION.
(a)-(c)................................................... *
14. FINANCIAL INFORMATION.
(a)....................................................... *
(b)....................................................... *
15. PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED.
(a)....................................................... *
(b) ...................................................... 8
16. ADDITIONAL INFORMATION.................................... 10(f)
separately included
17. MATERIAL TO BE FILED AS EXHIBITS.......................... herewith
</TABLE>
- --------
* The item is not required by Schedule 14D-1 of the Securities Exchange Act
of 1934, as amended.
<PAGE> 5
ITEM 1. ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION.
(a)-(c) The answers to Items 1(a)-(c) of the Schedule 14D-1 are
incorporated herein by reference. Information concerning the approximate number
of holders of record of the Shares is set forth in the section entitled
"INTRODUCTION" of the Offer to Purchase and is incorporated herein by reference.
(d) The information set forth in the section entitled "THE TENDER
OFFER--Price Range of the Shares; Dividends" of the Offer to Purchase is
incorporated herein by reference.
(e) Not applicable.
(f) The information set forth in the section entitled "SPECIAL
FACTORS--Background of the Offer" of the Offer to Purchase is incorporated
herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(g) The answers to Item 2 of the Schedule 14D-1 are incorporated
herein by reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS.
(a)-(b) The information set forth in the sections entitled
"INTRODUCTION," "SPECIAL FACTORS--Background of the Offer" and "THE TENDER
OFFER--Certain Transactions Between Parent and the Company" and "--Interests of
Certain Persons in the Offer" of the Offer to Purchase is incorporated herein by
reference.
ITEM 4. TERMS OF THE TRANSACTION.
(a) The information set forth in the sections entitled "INTRODUCTION"
and "THE TENDER OFFER--Terms of the Offer," "--Acceptance for Payment and
Payment for Shares," "--Procedure for Tendering Shares," "--Withdrawal Rights,"
"--Certain Conditions of the Offer" and "--Certain Regulatory and Legal Matters"
of the Offer to Purchase is incorporated herein by reference.
(b) Not applicable.
ITEM 5. PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE.
(a)-(g) The answers to Item 5 of the Schedule 14D-1 are incorporated
herein by reference.
ITEM 6. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The answer to Item 4(a) of the Schedule 14D-1 is incorporated
herein by reference.
(b) The information set forth in the sections entitled "THE TENDER
OFFER--Source and Amount of Funds" and "--Fees and Expenses" of the Offer to
Purchase is incorporated herein by reference.
(c) The information set forth in the sections entitled "THE TENDER
OFFER--Source and Amount of Funds" of the Offer to Purchase is incorporated
herein by reference.
(d) Not applicable.
<PAGE> 6
ITEM 7. PURPOSE(S), ALTERNATIVES, REASONS AND EFFECTS.
(a) The answer to Item 5 of the Schedule 14D-1 is incorporated herein
by reference.
(b)-(d) The information set forth in the sections entitled
"INTRODUCTION," "SPECIAL FACTORS--Background of the Offer," "--Purpose and
Structure of the Offer; Plans for the Company after the Offer," "--Fairness of
the Offer" and "--Certain United States Federal Income Tax Consequences" and
"THE TENDER OFFER--Certain Effects of the Transaction" and "--Certain
Information Concerning the Company" of the Offer to Purchase is incorporated
herein by reference.
ITEM 8. FAIRNESS OF THE TRANSACTION.
(a)-(b) The information set forth in the sections entitled
"INTRODUCTION" and "SPECIAL FACTORS--Fairness of the Offer" and "--Analysis of
Financial Advisor to Parent" of the Offer to Purchase is incorporated herein by
reference.
(c)-(e) The information set forth in the sections entitled
"INTRODUCTION," "SPECIAL FACTORS--Background of the Offer," "--Purpose and
Structure of the Offer; Plans for the Company after the Offer," "--Fairness of
the Offer" and "--Analysis of Financial Advisor to Parent" and "THE TENDER
OFFER--Terms of the Offer" of the Offer to Purchase is incorporated herein by
reference.
(f) Not applicable.
ITEM 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS.
(a)-(c) The information set forth in the sections entitled
"INTRODUCTION," "SPECIAL FACTORS--Background of the Offer," "--Fairness of the
Offer" and "--Analysis of Financial Advisor to Parent" and "THE TENDER
OFFER--Certain Information Concerning the Company" of the Offer to Purchase is
incorporated herein by reference.
ITEM 10. INTEREST IN SECURITIES OF THE ISSUER.
(a)-(b) The answer to Item 6 of the Schedule 14D-1 is incorporated
herein by reference.
ITEM 11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO THE ISSUER'S
SECURITIES.
The answer to Item 7 of the Schedule 14D-1 is incorporated herein by
reference.
ITEM 12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSONS WITH REGARD TO
THE TRANSACTION.
(a)-(b) The information set forth in "THE TENDER OFFER--Interest of
Certain Persons in the Offer" of the Offer to Purchase is incorporated herein
by reference.
ITEM 13. OTHER PROVISIONS OF THE TRANSACTION.
(a) The information set forth in "SPECIAL FACTORS--Appraisal Rights" of
the Offer to Purchase and in Annex A to the Offer to Purchase is incorporated
herein by reference.
(b)-(c) Not applicable.
ITEM 14. FINANCIAL INFORMATION.
<PAGE> 7
(a) The information set forth in the section entitled "THE TENDER
OFFER--Certain Information Concerning the Company" of the Offer to Purchase
incorporated herein by reference.
(b) Not applicable.
ITEM 15. PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED.
(a) The information set forth in the sections entitled "INTRODUCTION"
and "SPECIAL FACTORS--Background of the Offer" and "--Purpose and Structure of
the Offer; Plans for the Company after the Offer" of the Offer to Purchase is
incorporated herein by reference.
(b) The answer to Item 8 of the Schedule 14D-1 is incorporated herein
by reference.
ITEM 16. ADDITIONAL INFORMATION.
The answer to Item 10(f) of the Schedule 14D-1 is incorporated herein
by reference.
ITEM 17. MATERIAL TO BE FILED AS EXHIBITS.
(a) Commitment Letter and Term Sheet of The First National Bank of
Chicago, dated July 6, 1998, and amendments thereto, dated October 14, 1998,
October 20, 1998 and October 30, 1998 (previously filed as Exhibit (b) to
Schedule 14D-1 and incorporated herein by reference).
(b) Presentation of Merrill Lynch, Pierce, Fenner & Smith Incorporated
to the Board of Directors of Dexter Corporation, dated October 23, 1998.
(c) Not applicable.
(d)(1) Offer to Purchase (previously filed as Exhibit (a)(1) to the
Schedule 14D-1 and incorporated herein by reference).
(d)(2) Letter of Transmittal (previously filed as Exhibit (a)(2) to the
Schedule 14D-1 and incorporated herein by reference).
(d)(3) Notice of Guaranteed Delivery (previously filed as Exhibit
(a)(3) to the Schedule 14D-1 and incorporated herein by reference).
(d)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees (previously filed as Exhibit (a)(4) to the Schedule 14D-1 and
incorporated herein by reference).
(d)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees (previously filed as Exhibit (a)(5) to the
Schedule 14D-1 and incorporated herein by reference).
(d)(6) Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9 (previously filed as Exhibit (a)(6) to the Schedule 14D-1
and incorporated herein by reference).
(d)(7) Text of Press Release issued by Parent, dated November 2, 1998
(previously filed as Exhibit (a)(7) to the Schedule 14D-1 and incorporated
herein by reference).
(d)(8) Summary Advertisement, dated November 2, 1998 (previously filed
as Exhibit (a)(8) to the Schedule 14D-1 and incorporated herein by reference).
<PAGE> 8
(e) Appraisal Rights of Dissenting Stockholders Under Delaware Law
(included as Annex A to the Offer to Purchase and incorporated herein by
reference).
(f) Not applicable.
<PAGE> 9
SIGNATURE
AFTER DUE INQUIRY AND TO THE BEST OF MY KNOWLEDGE AND BELIEF, I CERTIFY THAT
THE INFORMATION SET FORTH IN THIS STATEMENT IS TRUE, COMPLETE AND CORRECT.
Dated: November 2, 1998 DEXTER ACQUISITION DELAWARE, INC.
By: /s/ Kathleen Burdett
___________________________________
Name: Kathleen Burdett
Title: Treasurer
DEXTER CORPORATION
By: /s/ Bruce H. Beatt
___________________________________
Name: Bruce H. Beatt
Title: Vice President, General
Counsel and Secretary
<PAGE> 10
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------------------
(a) Commitment Letter and Term Sheet of The First National Bank of
Chicago, dated July 6, 1998, and amendments thereto, dated October 14, 1998,
October 20, 1998 and October 30, 1998 (previously filed as Exhibit (b) to
Schedule 14D-1 and incorporated herein by reference).
(b) Presentation of Merrill Lynch, Pierce, Fenner & Smith Incorporated
to the Board of Directors of Dexter Corporation, dated October 23, 1998.
(c) Not applicable.
(d)(1) Offer to Purchase (previously filed as Exhibit (a)(1) to the
Schedule 14D-1 and incorporated herein by reference).
(d)(2) Letter of Transmittal (previously filed as Exhibit (a)(2) to the
Schedule 14D-1 and incorporated herein by reference).
(d)(3) Notice of Guaranteed Delivery (previously filed as Exhibit
(a)(3) to the Schedule 14D-1 and incorporated herein by reference).
(d)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees (previously filed as Exhibit (a)(4) to the Schedule 14D-1 and
incorporated herein by reference).
(d)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees (previously filed as Exhibit (a)(5) to the
Schedule 14D-1 and incorporated herein by reference).
(d)(6) Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9 (previously filed as Exhibit (a)(6) to the Schedule 14D-1
and incorporated herein by reference).
(d)(7) Text of Press Release issued by Parent, dated November 2, 1998
(previously filed as Exhibit (a)(7) to the Schedule 14D-1 and incorporated
herein by reference).
(d)(8) Summary Advertisement, dated November 2, 1998 (previously
filed as Exhibit (a)(8) to the Schedule 14D-1 and incorporated herein by
reference).
(e) Appraisal Rights of Dissenting Stockholders Under Delaware Law
(included as Annex A to the Offer to Purchase and incorporated herein by
reference).
(f) Not applicable.
<PAGE> 1
Exhibit (b)
Presentation to The Board of Directors of Husky
Regarding Project Terrapin
October 23, 1998
<PAGE> 2
PROJECT TERRAPIN
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Transaction Overview
<TABLE>
<S> <C>
TRANSACTION: Acquisition of minority interest in Terrapin
ORIGINAL AND REAFFIRMED OFFER PRICE PER SHARE: $37.00
PREMIUM TO MARKET:(1) 19.4%
ADJUSTED PREMIUM TO MARKET:(2) 32.6%
TOTAL OFFER VALUE FOR MINORITY INTEREST:(3) $455.4 million
CONSIDERATION: Cash
ACCOUNTING TREATMENT: Purchase Accounting
</TABLE>
- -----------------------------------
(1) Terrapin's share price was $31.00 immediately prior to the announcement on
July 7, 1998.
(2) Terrapin's adjusted share price was calculated as $31 multiplied by (1-
average percentage decrease for Terrapin comparables from 7/8/98 to
10/21/98) which equals $27.90. Average decrease for Terrapin comparables
equal to 10%.
(3) Assumes purchase of 11.4 million shares of Terrapin not currently owned by
Husky and the in-the-money spread on all outstanding options as per
Terapin's 10-K dated December 31, 1997.
[MERRILL LYNCH LOGO]
<PAGE> 3
PROJECT TERRAPIN
- --------------------------------------------------------------------------------
Overview of Process Since Offer
JULY 7 Husky publicly announced proposal to acquire the 48%
of Terrapin it does not already own for $37.00 per
share in cash
JULY 7 Terrapin establishes Special Committee of independent
directors to review Husky's offer
JULY 27 Special Committee retains Wachtell Lipton and Goldman
Sachs as advisors
JULY 27 - SEPTEMBER 13 Goldman Sachs conducts due diligence with Terrapin
management and meets with Special Committee
SEPTEMBER 14 Husky management and Special Committee discuss next
steps leading to meeting between financial advisors
SEPTEMBER 17 Goldman Sachs shares preliminary valuation views and
methodology with Merrill Lynch in initial meeting
between financial advisors
OCTOBER 1 Husky management, Merrill Lynch and Jones Day conduct
due diligence on Terrapin pipeline in Rockville.
Attendees include Terrapin management, Special
Committee Chairman, Goldman Sachs and Wachtell Lipton
OCTOBER 8 Husky management, Merrill Lynch and Jones Day conduct
due diligence on Terrapin base projections. Attendees
include Terrapin management, Special Committee
Chairman, Goldman Sachs and Wachtell Lipton
OCTOBER 14 Husky telephonic board meeting
OCTOBER 15 Merrill Lynch meets with Goldman Sachs to share due
diligence conclusions, reaffirm $37.00 per share
offer and ask for a response by October 19
OCTOBER 20 Goldman Sachs indicates that the Special Committee
has asked for additional analysis and that timing of
a response to Husky is uncertain
[MERRILL LYNCH LOGO]
<PAGE> 4
PROJECT TERRAPIN
- --------------------------------------------------------------------------------
Comparative Stock Price Performance - 7/7/98 to Present (1)
<TABLE>
<CAPTION>
COMPOSITE OF
TERRAPIN
DATE TERRAPIN COMPARABLES(2) S&P 500
---- -------- -------------- -------
<S> <C> <C> <C>
7/7/98 100.0% 100.0% 100.0%
7/8/98 124.2 99.8 101.0
7/9/98 124.2 99.0 100.3
7/10/98 124.2 98.9 100.8
7/13/98 125.2 99.1 100.9
7/14/98 124.2 99.5 102.0
7/15/98 124.2 99.8 101.7
7/16/98 124.0 102.3 102.5
7/17/98 123.0 101.9 102.8
7/20/98 123.4 101.2 102.5
7/21/98 123.0 100.9 100.9
7/22/98 123.0 100.4 100.8
7/23/98 122.8 98.7 98.7
7/24/98 122.6 97.6 98.8
7/27/98 122.0 96.8 99.4
7/28/98 121.8 96.0 97.9
7/29/98 122.2 96.4 97.4
7/30/98 121.8 96.9 99.0
7/31/98 122.0 95.7 97.1
8/3/98 122.6 93.7 96.3
8/4/98 120.2 92.6 92.8
8/5/98 125.0 91.9 93.7
8/6/98 121.8 93.6 94.4
8/7/98 122.4 96.2 94.3
8/10/98 122.8 96.1 93.8
8/11/98 120.2 93.7 92.6
8/12/98 119.8 95.0 93.9
8/13/98 120.2 95.2 93.1
8/14/98 119.4 95.0 92.0
8/17/98 119.4 95.7 93.9
8/18/98 119.1 97.1 95.4
8/19/98 118.5 96.2 95.1
8/20/98 117.7 96.1 94.5
8/21/98 117.7 94.7 93.6
8/24/98 118.6 95.5 94.2
</TABLE>
- --------------
(1) Source: One Source Information Services, Inc.
(2) Includes: Beckman Coulter, Bio Rad Labs, C.R. Bard, Cambrex, Dionex,
Millipore, Nycomed Amersham, Perkin Elmer, Sigma Aldrich, Techne, Thermo
BioAnalysis, VWR Scientific Products and Waters.
[MERRILL LYNCH LOGO]
<PAGE> 5
PROJECT TERRAPIN
- --------------------------------------------------------------------------------
Comparative Stock Price Performance - 7/7/98 to Present (1) (Continued)
<TABLE>
<CAPTION>
COMPOSITE OF
TERRAPIN
DATE TERRAPIN COMPARABLES(2) S&P 500
---- -------- -------------- -------
<S> <C> <C> <C>
8/25/98 116.9% 94.8% 94.6%
8/26/98 112.5 93.4 93.9
8/27/98 109.7 91.1 90.3
8/28/98 107.3 89.7 88.9
8/31/98 106.9 84.2 82.9
9/1/98 109.7 86.9 86.1
9/2/98 111.5 88.6 85.8
9/3/98 110.1 87.5 85.1
9/4/98 110.9 86.8 84.3
9/8/98 114.5 88.9 88.6
9/9/98 113.7 86.9 87.1
9/10/98 112.9 85.5 84.9
9/11/98 110.5 87.8 87.4
9/14/98 109.7 87.1 89.2
9/15/98 111.7 87.5 89.9
9/16/98 112.9 89.0 90.5
9/17/98 115.3 87.1 88.2
9/18/98 117.5 88.5 88.3
9/21/98 116.9 88.4 88.7
9/22/98 115.3 89.5 89.2
9/23/98 115.3 91.3 92.3
9/24/98 112.9 89.1 90.3
9/25/98 112.7 88.3 90.5
9/28/98 112.9 87.9 90.8
9/29/98 106.5 88.0 90.8
9/30/98 107.7 87.3 88.1
10/1/98 107.1 85.1 85.4
10/2/98 108.5 85.3 86.8
10/5/98 107.3 83.9 85.6
10/6/98 106.9 83.4 85.3
10/7/98 100.8 81.6 84.1
10/8/98 98.4 80.3 83.1
10/9/98 104.8 81.9 85.3
10/12/98 104.8 83.0 86.4
10/13/98 108.1 83.0 86.2
10/14/98 106.5 84.1 87.1
10/15/98 108.1 85.9 90.7
10/16/98 108.3 87.8 91.5
10/19/98 106.5 89.4 92.0
10/20/98 106.5 90.8 92.1
10/21/98 108.9 90.0 92.7
Change in
Percentage +8.9% -10.0% -7.3%
</TABLE>
- --------------
(1) Source: One Source Information Services, Inc.
(2) Includes: Beckman Coulter, Bio Rad Labs, C.R. Bard, Cambrex, Dionex,
Millipore, Nycomed Amersham, Perkin Elmer, Sigma Aldrich, Techne, Thermo
BioAnalysis, VWR Scientific Products and Waters.
[MERRILL LYNCH LOGO]
<PAGE> 6
PROJECT TERRAPIN
- --------------------------------------------------------------------------------
Terrapin Stock Price Performance - 7/7/98 to Present(1)
<TABLE>
<CAPTION>
TERRAPIN TERRAPIN S&P 500
DATE TRADING VOLUME STOCK PRICE STOCK PRICE
---- -------------- ----------- -----------
<S> <C> <C> <C>
7/7/98 28800.0 31.0 1154.6
7/8/98 2651800.0 38.5 1166.3
7/9/98 392700.0 38.5 1158.5
7/10/98 179900.0 38.5 1164.3
7/13/98 20100.0 38.8 1165.1
7/14/98 114900.0 38.5 1177.5
7/15/98 20200.0 38.5 1174.8
7/16/98 116300.0 38.4 1184.0
7/17/98 169500.0 38.1 1186.7
7/20/98 39900.0 38.2 1184.1
7/21/98 23600.0 38.1 1165.0
7/22/98 132700.0 38.1 1164.0
7/23/98 88200.0 38.0 1139.7
7/24/98 29800.0 38.0 1140.8
7/27/98 25700.0 37.8 1147.2
7/28/98 8200.0 37.7 1130.2
7/29/98 19800.0 37.8 1125.1
7/30/98 3100.0 37.7 1142.9
7/31/98 27400.0 37.8 1120.6
8/3/98 25300.0 38.0 1112.4
8/4/98 57500.0 37.2 1072.1
8/5/98 47800.0 38.7 1081.4
8/6/98 56900.0 37.7 1089.6
8/7/98 37700.0 37.9 1089.4
8/10/98 194300.0 38.0 1083.1
8/11/98 82900.0 37.2 1069.0
8/12/98 2900.0 37.1 1084.2
8/13/98 63200.0 37.2 1074.9
8/14/98 51400.0 37.0 1062.7
8/17/98 49400.0 37.0 1083.6
8/18/98 110600.0 36.9 1101.1
8/19/98 39100.0 36.7 1098.0
8/20/98 6900.0 36.5 1091.6
8/21/98 3800.0 36.5 1081.2
8/24/98 2400.0 36.7 1088.1
8/25/98 85200.0 36.2 1092.8
8/26/98 27400.0 34.8 1084.1
8/27/98 35800.0 34.0 1042.5
</TABLE>
- --------------
(1) Source: One Source Information Services, Inc.
[MERRILL LYNCH LOGO]
<PAGE> 7
PROJECT TERRAPIN
- --------------------------------------------------------------------------------
Terrapin Stock Price Performance - 7/7/98 to Present(1) (Continued)
<TABLE>
<CAPTION>
TERRAPIN TERRAPIN S&P 500
DATE TRADING VOLUME STOCK PRICE STOCK PRICE
---- -------------- ----------- -----------
<S> <C> <C> <C>
8/28/98 64000.0 33.2 1027.0
8/31/98 153600.0 33.1 957.2
9/1/98 244100.0 34.0 994.2
9/2/98 1900.0 34.5 990.4
9/3/98 71400.0 34.1 982.2
9/4/98 6300.0 34.3 973.8
9/8/98 12400.0 35.5 1023.4
9/9/98 11800.0 35.2 1006.1
9/10/98 67200.0 35.0 980.1
9/11/98 31300.0 34.2 1009.0
9/14/98 191200.0 34.0 1029.7
9/15/98 5800.0 34.6 1037.6
9/16/98 20300.0 35.0 1045.5
9/17/98 1000.0 35.7 1018.8
9/18/98 21900.0 36.4 1020.0
9/21/98 4600.0 36.2 1023.8
9/22/98 5500.0 35.7 1029.6
9/23/98 24900.0 35.7 1066.0
9/24/98 9500.0 35.0 1042.7
9/25/98 112400.0 34.9 1044.7
9/28/98 7600.0 35.0 1048.6
9/29/98 81500.0 33.0 1049.0
9/30/98 478800.0 33.3 1017.0
10/1/98 216300.0 33.1 986.3
10/2/98 13700.0 33.6 1002.5
10/5/98 7800.0 33.2 988.5
10/6/98 27800.0 33.1 984.5
10/7/98 130300.0 31.2 970.6
10/8/98 108000.0 30.5 959.4
10/9/98 89300.0 32.5 984.3
10/12/98 7300.0 32.5 997.7
10/13/98 6300.0 33.5 994.8
10/14/98 86700.0 33.0 1005.5
10/15/98 43800.0 33.5 1047.5
10/16/98 16100.0 33.5 1056.4
10/19/98 28700.0 33.0 1062.3
10/20/98 7000.0 33.0 1063.9
10/21/98 3000.0 33.7 1069.9
</TABLE>
- -------------
(1) Source: One Source Information Services, Inc.
[MERRILL LYNCH LOGO]
<PAGE> 8
PROJECT TERRAPIN
- --------------------------------------------------------------------------------
Terrapin Trading Volume Analysis, 7/7/98 to Present (1)
(Shares in thousands)
<TABLE>
<CAPTION>
TOTAL VOLUME TRADED IN THIS RANGE
--------------------------------------------------------
% OF TOTAL
VOLUME
CLOSING STOCK PRICE SHARES TRADED TRADED
------------------- ------------- ------
<S> <C> <C>
$30.50-$31.50 267 3.56%
$31.50-$32.50 0 0.00%
$32.50-$33.50 1,249 16.66%
$33.50-$34.50 663 8.85%
$34.50-$35.50 264 3.52%
$35.50-$36.50 156 2.07%
$36.50-$37.50 470 6.27%
$37.50-$38.50 998 13.32%
$38.50-$39.50 3,427 45.73%
--------------------------------------------------------
</TABLE>
- --------------
(1) Source: One Source Information Services, Inc; Total volume based on daily
closing price of Terrapin.
[MERRILL LYNCH LOGO]
<PAGE> 9
PROJECT TERRAPIN
- --------------------------------------------------------------------------------
Terrapin Trading Volume Analysis, 7/7/98 to Present (1) (Continued)
(Shares in thousands)
<TABLE>
<CAPTION>
TOTAL VOLUME TRADED AT OR BELOW THIS RANGE
-----------------------------------------------------
CUMMULATIVE % OF TOTAL
AT OR BELOW SHARES VOLUME
CLOSING STOCK PRICE TRADED TRADED
------------------- ------ ------
<S> <C> <C>
31.50 267 3.56%
32.50 267 3.56%
33.50 1,516 20.23%
34.50 2,179 29.07%
35.50 2,443 32.60%
36.50 2,598 34.67%
37.50 3,068 40.94%
38.50 4,067 54.27%
39.50 7,494 100.00%
-----------------------------------------------------
</TABLE>
- --------------
(1) Source: One Source Information Services, Inc; Total volume based on daily
closing price of Terrapin.
[MERRILL LYNCH LOGO]
<PAGE> 10
PROJECT TERRAPIN
- --------------------------------------------------------------------------------
Transaction Rationale
- - Terrapin continues to represent a unique acquisition opportunity for Husky
- Intimate knowledge of businesses and prospects reduces risk
- Terrapin has been an attractive investment
- Good working relationship with management
- - Terrapin possesses many attributes of a successful acquisition candidate
- Strong market shares in core products
- Solid historical track record of delivering plan results
- Good management team
- - In addition, Husky continues to believe in Terrapin's long term plan
- 9.5% revenue growth
- 15.0% profit growth
- - Additionally, a Terrapin acquisition has strong strategic rationale
- Provides catalyst to "transform" Husky into a higher growth, specialty
business
- Allows Husky to focus on three, wholly-owned core businesses
- Combined with the sale of packaging coatings, sends a clear signal of
Husky's focus in growth businesses
- - As a result, Husky management continues to support the transaction at
$37.00 per Terrapin share
[MERRILL LYNCH LOGO]
<PAGE> 11
PROJECT TERRAPIN
- --------------------------------------------------------------------------------
Key Assumptions to Financial Projections
- - Husky received financial projections from the financial advisor to the
Special Committee which were based on Terrapin's 1998 Profit Plan and an
extrapolation of such plan for the years 1999 to 2002 (the "Terrapin
Projections")
- - The Terrapin Projections are based on the following key assumptions
- 9.5% annual revenue growth
- Stable gross margins
- Constant R&D expenditures of 6.0% of total sales
- Leveraging of SG&A improves EBIT margins from 16.5% in 1998 to 19.2%
in 2002
- - Husky management also reviewed the R&D pipeline which was developed for the
first time in connection with the Special Committee's preliminary response
to Husky's offer and was characterized as incremental to the Terrapin
Projections
- - Husky management disagrees with several key underlying assumptions to the
R&D pipeline including market penetration, margin assumptions and
probability assessments as well as the characterization that such results
would be incremental to the Terrapin Projections
- - Based on this review, Husky management believes that the Terrapin
Projections reflect the best assessment of Terrapin's business prospects
- Participation in market growth
- Minor market share gains
- Commercialization of new products
[MERRILL LYNCH LOGO]
<PAGE> 12
PROJECT TERRAPIN
- -------------------------------------------------------------------------------
Historical & Projected Financial Results
(U.S. dollars in millions, except per share data)
<TABLE>
<CAPTION>
HISTORICAL (1) ESTIMATED (2) PROJECTED (2) 1998-2002
------------------------ ----------------------- -------------------- ---------------------------
1997 1998E 2002 4 YR CAGR
------------------------ ----------------------- -------------------- ---------------------------
<S> <C> <C> <C> <C>
NET SALES $331.0 $361.4 $519.5 9.5%
% Growth 7.0% 9.2% 9.5%
EBITDA $63.7 $74.0 $117.8 12.3%
% Margin 19.2% 20.5% 22.7%
EBIT $50.9 $59.7 $99.8 13.7%
% Margin 15.4% 16.5% 19.2%
NET INCOME $32.2 $38.1 $65.0 14.3%
% Margin 9.7% 10.5% 12.5%
EPS (DILUTED) $1.35 $1.55 $2.65 14.3%
% Growth 16.9% 15.2% 14.0%
</TABLE>
- ----------
(1) As per Terrapin's 10K dated 12/31/97; excludes extraordinary and
non-recurring items.
(2) Projections reflect the Terrapin Projections provided by the financial
advisor to the Special Committee.
[MERRILL LYNCH LOGO]
<PAGE> 13
PROJECT TERRAPIN
- -------------------------------------------------------------------------------
Selected Comparable Publicly Traded Companies to Terrapin (1)
<TABLE>
<CAPTION>
1999 PE TO 5-YR GROWTH
----------------------
<S> <C>
C.R. Bard 1.74x
Sigma-Aldrich 1.39
Perkin Elmer 1.28
Waters 1.21
Dionex 1.12
Cambrex 1.05
Techne 0.90
VWR Scientific Products 0.77
Beckman Coulter 0.75
Millipore 0.73
Bio Rad Labs 0.65
Thermo BioAnalysis 0.31
OFFER VALUE (3) 1.39x
MEAN 0.99
MEDIAN 0.97
</TABLE>
- ------------------
(1) Share price and earnings projections (calendarized and based upon First
Call estimates) are as of 10/21/98.
(2) Enterprise value is market value of equity plus long-term debt, short-term
debt, market value of preferred stock and minority interest, less cash and
cash equivalents.
(3) Represents offer multiple at an offer price of $37.00 per Terrapin share
based upon 24.6 million fully diluted shares and net debt of $22.8 million.
[MERRILL LYNCH LOGO]
<PAGE> 14
PROJECT TERRAPIN
- -------------------------------------------------------------------------------
Selected Comparable Publicly Traded Companies to Terrapin (1) (Continued)
<TABLE>
<CAPTION>
ENTERPRISE VALUE AS A MULTIPLE
OF 1998E EBIT(2)
----------------------------------
<S> <C>
Perkin Elmer 18.8x
Waters 18.1
Millipore 18.0
C.R. Bard 17.1
Beckman Coulter 16.9
Dionex 12.7
Nycomed Amersham 12.6
Sigma-Aldrich 11.8
VWR Scientific Products 11.5
Cambrex 11.4
Bio Rad Labs 9.8
Thermo BioAnalysis 5.0
OFFER VALUE (3) 14.8x
MEAN 12.7
MEDIAN 11.7
</TABLE>
- --------------------
(1) Share price and earnings projections (calendarized and based upon First
Call estimates) are as of 10/21/98.
(2) Enterprise value is market value of equity plus long-term debt, short-term
debt, market value of preferred stock and minority interest, less cash and
cash equivalents.
(3) Represents offer multiple at an offer price of $37.00 per Terrapin share
based upon 24.6 million fully diluted shares and net debt of $22.8 million.
[MERRILL LYNCH LOGO]
<PAGE> 15
PROJECT TERRAPIN
- ------------------------------------------------------------------------------
Selected Comparable Publicly Traded Companies to Terrapin (1) (Continued)
<TABLE>
<CAPTION>
ENTERPRISE VALUE AS A MULTIPLE
OF 1998E EBITDA
------------------------------
<S> <C>
Waters 15.6x
Perkin Elmer 15.0
C.R. Bard 12.6
Dionex 11.8
Millipore 11.6
Sigma-Aldrich 9.9
Nycomed Amersham 9.7
Beckman Coulter 9.4
VWR Scientific Products 9.1
Cambrex 7.3
Bio Rad Labs 6.3
Thermo BioAnalysis 3.8
OFFER VALUE (3) 12.0x
MEAN 10.2
MEDIAN 9.8
</TABLE>
- --------------------
(1) Share price and earnings projections (calendarized and based upon First
Call estimates) are as of 10/21/98.
(2) Enterprise value is market value of equity plus long-term debt, short-term
debt, market value of preferred stock and minority interest, less cash and
cash equivalents.
(3) Represents offer multiple at an offer price of $37.00 per Terrapin share
based upon 24.6 million fully diluted shares and net debt of $22.8 million.
[MERRILL LYNCH LOGO]
<PAGE> 16
PROJECT TERRAPIN
- --------------------------------------------------------------------------------
Analysis of Change of Control Acquisitions (1) - Transaction Value to LTM EBITDA
<TABLE>
<CAPTION>
LIFE SCIENCES INDUSTRY
- --------------------------------------------------------------------------------
TRANSACTION
DATE OF VALUE TO LTM
ANNOUNCEMENT TARGET ACQUIRER EBITDA
------------ ------ -------- ------
<S> <C> <C> <C>
11/18/96 Amicom Millipore 23.1x
9/28/92 HemoCue IMCERA Group 21.5
9/2/97 Coulter Beckman 19.8
3/8/96 Synectics Med. Medtronic 13.0
10/6/92 App. Biosys. Perkin-Elmer 11.6
7/1/97 Nycomed Amersham 10.8
8/25/97 BioWhittaker Cambrex 9.3
1/21/97 Life Sci. Int. Thermo Instr. 8.9
OFFER VALUE (2) 13.0x
MEAN 14.7
MEDIAN 12.3
</TABLE>
- ------------------
(1) Transactions represent acquisition of control which may not be directly
comparable to the acquisition of a minority stake.
(2) Represents offer multiple at an offer price of $37.00 per Terrapin share
based upon 24.6 million fully diluted shares and net debt of $22.8 million.
[MERRILL LYNCH LOGO]
<PAGE> 17
PROJECT TERRAPIN
- --------------------------------------------------------------------------------
Analysis of Change of Control Acquisitions (1) - Transaction Value to LTM EBITDA
(Continued)
<TABLE>
<CAPTION>
Chemical Industry
- --------------------------------------------------------------------------------
TRANSACTION
DATE OF VALUE TO LTM
ANNOUNCEMENT TARGET ACQUIRER EBITDA
------------ ------ -------- ------
<S> <C> <C> <C>
1/20/98 Allied Colloids Ciba Specialty 14.4x
10/28/96 Loctite Henkel 13.2
2/25/97 Petrolite Baker Hughes 12.3
5/7/97 Unilever Imperial Chem. Ind. 10.4
Specialty Chem.
11/22/96 Thompson Sherwin 10.3
Minwax Williams
11/19/96 CPS Chem. Allied 10.1
Colloids
OFFER VALUE (2) 13.0x
MEAN 11.8
MEDIAN 11.3
</TABLE>
- ------------------
(1) Transactions represent acquisition of control which may not be directly
comparable to the acquisition of a minority stake.
(2) Represents offer multiple at an offer price of $37.00 per Terrapin share
based upon 24.6 million fully diluted shares and net debt of $22.8 million.
[MERRILL LYNCH LOGO]
<PAGE> 18
PROJECT TERRAPIN
- --------------------------------------------------------------------------------
Analysis of Discounted Cash Flow
- - Merrill Lynch performed a discounted cash flow analysis of the Terrapin
Projections provided by the financial advisor to the Special Committee
- - Husky management believes the Terrapin Projections reflect the best
assessment of Terrapin's business prospects
- - The discounted cash flow ("DCF") valuation consisted of two components
- Present value of cash flows from the years 1999 to 2002
- Present value of a terminal value based on the growth into perpetuity
of the cash flow in the terminal year 2002 (adjusted for reduced long
term growth) at a range of 4% to 6%
- - Cash flows and terminal value were discounted back to December 31, 1998 at
a discount rate of 11%
- - Based on the foregoing assumptions and methodology, the Terrapin
Projections yielded a value range per Terrapin share of $30 - $40
[MERRILL LYNCH LOGO]
<PAGE> 19
PROJECT TERRAPIN
- --------------------------------------------------------------------------------
Analysis of Premium Paid for Comparable Acquisitions of Minority Interests(1)
(U.S. dollars in millions)
<TABLE>
<CAPTION>
OWNERSHIP PREMIUM PAID
DATE BEFORE OFFER (PRIOR TO ANNOUNCEMENT)
ANNOUNCED TARGET NAME ACQUIRER NAME TRANSACTION VALUE 1 DAY 1 WEEK
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
6/29/98 (2) Waste Management International Waste Management Inc. 80.0% $431.4 39.4% 33.7%
5/29/98 (2) Meridian Technologies Investor Group 58.9% 103.1 22.2% 37.5%
5/26/98 (2) CIPE France SA Tyco International Ltd. 63.0% 413.5 0.4% 1.4%
5/25/98 (2) Prime Resources Group Inc Homestake Mining Co. 50.6% 306.0 57.5% 52.4%
5/21/98 (2) PolyGram NV Universal Studios Inc. 75.0% 2,547.0 2.7% 0.5%
4/30/98 (2) Mycogen Corp. Dow AgroSciences 68.6% 322.0 41.8% 40.0%
4/16/98 (2) NCR Japan Ltd. NCR Corp. 70.0% 304.0 26.5% 36.4%
4/7/98 (2) Starckjohann Oy Trelleborg AB 54.0% 101.5 0.8% 3.3%
3/17/98 (2) BET Holdings Inc. Investor Group 56.0% 462.3 4.0% 14.3%
3/6/98 Credit General Kredietbank NV 75.0% 141.1 4.2% 8.6%
11/28/97 Vendome Luxury Group PLC Richemont 77.3% 1,729.0 25.8% 43.3%
9/18/97 Guaranty National Corp. Orion Capital Corp. 77.3% 117.2 10.8% 23.9%
6/26/97 Rhone-Poulenc Rorer Inc. Rhone-Poulenc SA 60.8% 4,831.6 22.1% 22.8%
6/2/97 Acordia Inc.(Anthem Inc.) Anthem Inc. 60.8% 193.2 12.7% 11.5%
5/14/97 Enron Global Power & Pipelines Enron Corp. 50.6% 428.0 11.8% 13.7%
2/20/97 NHP Inc.(Apartment Investment) Apartment Investment & Mgmt Co. 53.4% 114.5 28.2% 25.2%
1/21/97 Mafco Consolidated Grp(Mafco) Mafco Holdings Inc. 85.0% 116.8 60.4% 60.4%
1/13/97 Zurich Reinsurance Centre Zurich Versicherungs GmbH 66.0% 319.0 28.5% 30.0%
12/17/96 Allmerica Property & Casualty Allmerica Financial Corp. 59.3% 816.9 15.8% 12.8%
9/20/96 Lloyds Abbey Life PLC Lloyds TSB Group PLC 62.6% 2,590.0 7.3% 9.0%
8/26/96 Bankers Life Holding(Conseco) Conseco Inc. 88.4% 120.8 14.9% 10.5%
5/27/96 SyStemix Inc.(Novartis AG) Novartis AG 67.8% 107.6 4.7% 69.6%
8/25/95 GEICO Corp. Berkshire Hathaway 52.6% 2,349.2 25.6% 23.1%
7/20/95 BTR Nylex Ltd. BTR PLC 62.6% 3,290.0 36.9% 26.8%
5/19/95 Bic Corp.(BIC SA) BIC SA 79.0% 212.6 13.3% 12.5%
4/20/95 Rothams International PLC Cie Financiere Richemont AG 61.0% 2,600.0 28.1% 25.8%
4/7/95 LIN Broadcasting Corp. McCaw Cellular Communications 52.0% 3,209.4 6.9% 6.7%
4/5/95 Club Med Inc. Club Mediterranee SA 67.0% 153.4 41.4% 39.9%
------------------------------------------------------------------------------
MAXIMUM 88.4% 60.4% 69.6%
MEAN 65.5% 21.2% 24.8%
MEDIAN 62.8% 18.9% 23.5%
MINIMUM 50.6% 0.4% 0.5%
- ------------------------------------------------------------------------------------------------------------------------------------
7/7/98 TERRAPIN HUSKY 52.6% $455.4 19.4% 17.9%
7/7/98 (3) TERRAPIN (ADJUSTED) HUSKY 52.6% $455.4 32.6% 31.0%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) Source: Securities Data Company.
(2) Pending transaction.
(3) Terrapin's adjusted share price was calculated at $31 * (1 - average
percentage decrease for Terrapin comparables from 7/8/98 to 10/21/98) which
equals $27.90. Average decrease for Terrapin comparables equal to 10%.
[MERRILL LYNCH LOGO]
<PAGE> 20
GOLDMAN SACHS VALUATION AND
HUSKY REBUTTAL
<PAGE> 21
PROJECT TERRAPIN
- -------------------------------------------------------------------------------
Valuation Methodology Used by Financial Advisor to Special Committee
- - Goldman Sachs presented preliminary "negotiating" views on value to Merrill
Lynch
- - The presentation was not characterized as a full range of valuation
methodologies or as reflecting the complete analysis shared with the
Special Committee
- - Goldman Sachs valued two discreet sets of cash flows
- Base strategic plan ($41 to $49 per Terrapin share)
- "Incremental" pipeline ($10 to $13 per Terrapin share)
<TABLE>
<CAPTION>
BASE BUSINESS PIPELINE
------------- -------
<S> <C> <C>
FORECAST: - Significant revenue growth with - Significant "incremental"
mature products and carve-out pipeline revenue and profits
of pipeline revenue and profits - Ability to commercialize
- No reduction due to global technology on a large scale
macroeconomic crises without proven track record
- Significant market penetration
- Projected market share gains at attractive gross margins
with minimal impact on pricing - Minor competitor response
- Limited, if any, technological
obsolescence
- Shift in R&D focus away from
core businesses
- High probability of success
weightings
EXIT MULTIPLES: - Exit multiple range of 14x to - Exit multiple range of 17x to
16x EBIT 18x EBIT
- Implied perpetuity growth rate - Implied perpetuity growth rate
of 6% to 7% on stable core lab of 21% to 26% on a discreet set
products business at an 11% of products
discount rate
</TABLE>
[MERRILL LYNCH LOGO]
<PAGE> 22
PROJECT TERRAPIN
- -------------------------------------------------------------------------------
Terrapin Management Projections
(U.S. dollars in millions, except per share data)
<TABLE>
<CAPTION>
PROJECTED(1) 1998-2002
TERRAPIN BASE 1998E 1999 2000 2001 2002 4 YR CAGR
- ------------- ------ ------- ------- ------ ------ ----------
<S> <C> <C> <C> <C> <C> <C>
REVENUES $361.4 $395.7 $433.3 $474.4 $519.5 9.5%
% Growth -- 9.5% 9.5% 9.5% 9.5%
EBIT $59.7 $67.6 $76.8 $87.5 $99.8 13.7%
% Margin 16.5% 17.1% 17.7% 18.4% 19.2%
TERRAPIN PIPELINE
- -----------------
RISK ADJUSTED REVENUES $1.6 $25.2 $64.6 $116.2 $164.6 217.2%
% Growth -- 1448.2% 156.6% 80.1% 41.6%
EBIT $0.5 $3.8 $12.5 $27.7 $46.7 208.5%
% Margin 31.7% 15.0% 19.4% 23.9% 28.4%
BASE + PIPELINE
- ---------------
NET SALES $363.0 $420.9 $497.9 $590.7 $684.0 17.2%
% Growth -- 15.9% 18.3% 18.6% 15.8%
EBIT $60.2 $71.4 $89.3 $115.2 $146.5 24.9%
% Margin 16.6% 17.0% 17.9% 19.5% 21.4%
</TABLE>
- --------------------
(1) Projections provided by financial advisor to the Special Committee.
[MERRILL LYNCH LOGO]
<PAGE> 23
PROJECT TERRAPIN
- --------------------------------------------------------------------------------
Valuation of Base Business by the Financial Advisor to Special Committee
- - The Goldman Sachs valuation was based only on discounted cash flows and was
not portrayed as complete or as reflecting the complete analysis shared
with the Special Committee
- - Husky believes the valuation is very aggressive
- Aggressive projections of base business due to separate valuation of
pipeline and no consideration of current macroeconomics events
- Aggressive exit multiples
- Husky believes that the proper methodology for terminal values is to
utilize perpetuity growth rates
<TABLE>
<CAPTION>
GOLDMAN SACHS
BASE BUSINESS VALUATION HUSKY REBUTTAL
----------------------- --------------
<S> <C> <C>
FORECAST: - Essentially Terrapin's 1998-2000 strategic - Terrapin's 1998-2000 strategic plan
plan extrapolated to 2002 (9.5% revenue sensitized for the following reasons:
growth, constant gross margins); strategic Revenue Growth Reductions
plan based on detailed 1998 profit plan and - carve-out of key pipeline revenues
extrapolated for 1999 and 2000 based on - continued pricing pressure
historical growth rates - focus redirected away from core business
- global market growth reduction (short
term)
EXIT MULTIPLES: - 14x to 16x EBIT - Implies 9x to 13x EBIT
Based on "comparable" companies trading Consistent with similar "lab product"
multiples some of which possess companies trading multiples
significantly higher growth prospects and
margins
PERPETUITY GROWTH: - Implied perpetuity growth rate of 6% to 7% at - Perpetuity growth rate of 4% to 6%
an 11% discount rate
DISCOUNT RATE: - 10% to 12% - 10% to 12%
Based on inherent stability of base business Based on WACC of comparable companies and
characteristics of the business
</TABLE>
[MERRILL LYNCH LOGO]
<PAGE> 24
PROJECT TERRAPIN
- --------------------------------------------------------------------------------
Hypothetical Sensitivity Analysis - Base Business
<TABLE>
<CAPTION>
VALUATION
PERPETUITY DIFFERENTIAL
EBIT MULTIPLES GROWTH RATES PER SHARE (1)
-------------- ------------ -------------
<S> <C> <C> <C>
GOLDMAN SACHS' IMPLIED VALUATION
PER TERRAPIN SHARE 14x - 16x 6% - 7% --
SENSITIVITY TO TERMINAL VALUATION (2) 9x -13x 4% - 6% $(14) - $(9)
INCREMENTAL SENSITIVITY TO PROJECTIONS (3) 9x - 13x 4% - 6% $(1) - $(1)
-------------
TOTAL VALUATION DIFFERENTIAL PER TERRAPIN SHARE $(15) - $(10)
============
</TABLE>
- ---------------------------------------
(1) Based on an 11% discount rate.
(2) Valuation differential per Terrapin share due to a change in the prescribed
terminal valuation methodology.
(3) Valuation differential per Terrapin share due to a 1.0 percentage point
decrease in annual revenue growth over the projection period.
[MERRILL LYNCH LOGO]
<PAGE> 25
PROJECT TERRAPIN
- --------------------------------------------------------------------------------
Valuation of Pipeline by the Financial Advisor to Special Committee
- - The Goldman Sachs valuation was based only on discounted cash flows and was
not portrayed as complete or as reflecting the complete analysis shared
with the Special Committee
- - Husky believes the valuation is very aggressive
- Aggressive forecast due to high probability rates
- Lack of historical precedent for commercializing new products on a
large scale
- Aggressive exit multiples
- Husky believes that the proper methodology on terminal values is to
utilize perpetuity growth rates
<TABLE>
<CAPTION>
GOLDMAN SACHS
PIPELINE FORECAST VALUATION HUSKY REBUTTAL
--------------------------- ---------------
<S> <C> <C>
FORECAST: -
- Probability adjusted pipeline forecast - Goldman Sachs pipeline forecast taken as
developed with Terrapin management given with adjustments made to
probability weightings
PROBABILITY
ASSESSMENT: - Ranges of 40% to 90% with weighted average - Sensitized on average by approximately 30
probability of 73% (1) percentage points; weighted average
probability of 43% (1)
EXIT MULTIPLES: - 17x to 18x EBIT - Perpetuity growth rates on the discreet
(Implied perpetual growth rate of 21% to 26%) pipeline of 6% to 8% to reflect market
saturation, new competition and risk
of technical obsolescence
DISCOUNT RATE: - 25% to 30% - 25% to 30%
</TABLE>
- ---------------------------------------
(1) Weighted average based on 2002 revenue contribution.
[MERRILL LYNCH LOGO]
<PAGE> 26
PROJECT TERRAPIN
- -------------------------------------------------------------------------------
Hypothetical Sensitivity Analysis - Pipeline (1)
<TABLE>
<CAPTION>
PERPETUITY VALUATION DIFFERENTIAL
GROWTH RATES PER SHARE (1)
------------ -------------
<S> <C> <C>
GOLDMAN SACHS' IMPLIED VALUATION
PER TERRAPIN SHARE 21% - 26% (2) --
SENSITIVITY TO TERMINAL VALUATION (3) 6% - 8% $(10) - $(11)
INCREMENTAL SENSITIVITY TO PROBABILITY WEIGHTINGS (4) 6% - 8% $(1) - $(2)
------------
TOTAL VALUATION DIFFERENTIAL PER TERRAPIN SHARE $(11) - $(13)
============
CUMULATIVE VALUATION DIFFERENTIAL FOR
------------
BASE BUSINESS & PIPELINE PER TERRAPIN SHARE $(26) - $(23)
============
</TABLE>
- ---------------------------------------
(1) Based on 25%-30% discount rates.
(2) Implied perpetuity growth rates based on 17x-18x EBIT exit multiple.
(3) Valuation differential per Terrapin share due to a change in the prescribed
terminal value methodology.
(4) Valuation differential per Terrapin share due to a 30 percentage point
decrease in probability weighting.
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<PAGE> 27
PROJECT TERRAPIN
- --------------------------------------------------------------------------------
Hypothetical Sensitivity Analysis - Base & R&D Pipeline Projections
<TABLE>
<CAPTION>
LOW HIGH
--- ----
<S> <C> <C>
GOLDMAN SACHS' IMPLIED AGGREGATE VALUATION $ 55 - $ 63
PER TERRAPIN SHARE (1)(2)
SENSITIVITY TO BASE BUSINESS (3) $(15) - $(10)
SENSITIVITY TO PIPELINE (4) $(11) - $(13)
---- ----
TOTAL SENSITIVITY VALUATION PER TERRAPIN SHARE $ 29 - $ 40
==== ====
</TABLE>
- ---------------------------------------
(1) Valution combines discounted cash flow of both the Base Business and R & D
Pipeline as presented by Goldman Sachs.
(2) Goldman Sachs valution adjusted to December 31, 1999 and utilizing an 11%
discount rate for the Base Business.
(3) Reflects sensitivity for change in terminal value methodologies and revenue
growth rates for the Base Business (see page A-4).
(4) Reflects sensitivity for change in terminal value methodologies and
probability assessments for the R & D Pipeline (see page A-6).
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