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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Schedule 14D-9
(Amendment No. 1)
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934
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O'Sullivan Corporation
(Name of Subject Company)
O'Sullivan Corporation
(Name of Persons Filing Statement)
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Common Stock, par value $1.00 per share
(Title of Class of Securities)
688605104
(CUSIP Number of Class of Securities)
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John S. Campbell
President and Chief Executive Officer
O'Sullivan Corporation
1944 Valley Avenue
Winchester, Virginia 22601
(540) 667-6666
(Name, Address and Telephone Number of Persons Authorized
to Receive Notices and Communications on Behalf of the Person(s) Filing
Statement)
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Copy to:
Joseph C. Carter, III, Esq.
McGuire, Woods, Battle & Boothe LLP
One James Center
901 East Cary Street
Richmond, Virginia 23219
(804) 775-1000
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The purpose of this Amendment No. 1 (this "Amendment No. 1") to the
Solicitation/Recommendation Statement on Schedule 14D-9 dated June 8, 1999 of
O'Sullivan Corporation, a Virginia corporation (the "Company"), with respect to
the tender offer by TGC Acquisition Corporation, a Virginia corporation and a
wholly-owned subsidiary of The Geon Company, a Delaware corporation, to purchase
all of the outstanding shares of common stock, par value $1.00 per share, of the
Company, is to file a revised exhibit (e) and exhibit (f).
Item 9. Material to be Filed as Exhibits:
The following exhibits are filed herewith:
(e) Press Release dated June 2, 1999 with respect to the Merger Agreement
and Offer
(f) Opinion of Bowles Hollowell Conner, a Division of First Union Capital
Markets Corp. dated June 2, 1999
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Amendment No. 1 is true, complete
and correct.
O'SULLIVAN CORPORATON
By: /s/ John S. Campbell
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Name: John S. Campbell
Title: President and Chief Executive Officer
Dated: June 30, 1999
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Exhibit (e)
Wednesday June 2, 9:07 am Eastern Time
Company Press Release
SOURCE: The Geon Company
Geon Establishes New Growth Platform with Acquisition of O'Sullivan Corporation
CLEVELAND, and WINCHESTER, Va., June 2 /PRNewswire/ -- The Geon Company (NYSE:
GON - news) and O'Sullivan Corporation (Amex: OSL - news) jointly announced
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today an agreement by Geon to acquire O'Sullivan, a leading producer of
engineered polymer films for the automotive and industrial markets. The two
companies have signed a definitive merger agreement under which Geon will
commence a cash tender offer to acquire all of the outstanding shares of
O'Sullivan for $12.25 per share. The merger agreement has been unanimously
approved by the boards of directors of both companies. In addition, members of
the Bryant family who control more than 26 percent of the O'Sullivan shares have
committed themselves to tender their shares to Geon as contemplated by the
definitive agreement.
The tender offer of $12.25 in cash for each O'Sullivan share represents a total
transaction value of approximately $191 million. The objective of both companies
is to complete the acquisition of shares by Geon by the middle of July. The
tender offer is subject to normal regulatory review and satisfaction of
customary closing conditions, including the acquisition by Geon of at least 70
percent of the outstanding O'Sullivan stock. The tender offer is not conditioned
upon financing.
Geon plans to fund the purchase initially through existing lines of credit and
available cash. Geon expects this acquisition to be immediately accretive to
earnings by approximately $0.20 per share annually, before synergies and after
goodwill. O'Sullivan's cash balance of approximately $30 million will be used to
reduce the cost of the transaction.
O'Sullivan, with 1998 sales totaling $163 million, has developed particular
strength in vinyl film products and is recognized as the technology and quality
leader in the markets it serves.
"Our strategy is to become the leader in the value-added polymer services and
technology industry," said Thomas A. Waltermire, Geon president and chief
executive officer. "Acquiring O'Sullivan marks a milestone in positioning Geon
as a key player in the engineered film market and establishes a new growth
platform for us. The combination will create earnings leverage through raw
material, operating, and sales and marketing synergies."
Geon projects revenues in excess of $1 billion in 1999, before acquisitions, and
is committed to doubling its size during the next two years through a
combination of organic growth and acquisition.
"We have made it quite clear that we intend to create a multi-billion-dollar,
closely linked network of performance polymer businesses," Waltermire said.
"O'Sullivan is an excellent fit with Geon's recently acquired Burlington, New
Jersey, calendered film business. The two businesses, which serve complementary
markets, together will rank as the North American leader in value-added,
flexible vinyl films. Combining O'Sullivan's strengths in film technology with
Geon's strengths in polymer compounding and operations will create a stronger
company with enhanced value and growth opportunities."
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The agreement by O'Sullivan Corporation to enter into the transaction with Geon
is the culmination of a detailed process, started by O'Sullivan's board of
directors in August 1998, to explore the full range of strategic alternatives to
enhance shareholder value. An independent financial advisor provided
O'Sullivan's board with a fairness opinion in conjunction with the transaction.
"O'Sullivan's board believes that the transaction is in the best interest of its
stockholders, as it provides them with an attractive value and immediate
liquidity for their shares, while positioning our company with a strong base for
future growth," said J. Shep Campbell, O'Sullivan president and chief executive
officer. "Geon has been one of our most valued raw material suppliers over the
years. Its technology has enabled us to provide our customers world-class
products for their markets. Combining Geon's and O'Sullivan's technical and
operating strengths will create unique opportunities that will benefit our
customers."
Headquartered in Winchester, Virginia, O'Sullivan has approximately 940
employees and four manufacturing sites, located in Lebanon, Pennsylvania; Newton
Upper Falls, Massachusetts; Winchester; and Yerington, Nevada.
O'Sullivan has averaged 9.3 percent operating income to sales in the three-year
period from 1996 through 1998. The company had sales of $163.2 million and net
income of $11.6 million in 1998. Last month, O'Sullivan reported first quarter
net sales of $42.9 million and net income of $3.1 million.
Calendering, the heart of O'Sullivan's business, is the process for creating
thin-gauge films. O'Sullivan uses the calendering process in conjunction with
painting and laminating to provide premium-quality sheeting that covers
dashboards and door panels on many of today's best-selling passenger cars, light
trucks, sport utility vehicles and minivans. O'Sullivan ranks as North America's
leading supplier to the automotive industry of single-ply vinyl sheeting for
vacuum-formed instrument panels. Customers include Ford, Chrysler, General
Motors, Honda, Toyota, Mazda and Saturn.
In the industrial and consumer segments, O'Sullivan serves a wide range of
markets including stationery/office products, home furnishings, geomembrane,
medical bags and pouches, pool liners, vinyl flooring and many others.
The Geon Company is a leading North American-based polymer services and
technology company with operations in vinyl compounds, specialty vinyl resins
and formulations and other value-added products and services. Headquartered in
Avon Lake, Ohio, The Geon Company and its subsidiaries employ nearly 2,000
people and have 19 manufacturing plants in the United States, Canada, England
and Australia, and joint ventures in the United States, Canada, England,
Australia and Singapore. Information on the Company's products and services, as
well as news releases, EDGAR filings, Form 10-K, 10-Q, etc. is available on
the Internet at http://www.geon.com.
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Forward-looking Statements
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This press release contains statements relating to Geon and O'Sullivan and their
industry that are not historical facts but are "forward-looking statements" that
are subject to certain risks and uncertainties. There are many important factors
that could cause actual results to differ materially from those in the
forward-looking statements. Many of these important factors are outside the
control of Geon and O'Sullivan. Changes in market conditions, including
competitive factors, and changes in government regulations could cause actual
results to differ materially from the expectations of Geon and O'Sullivan. No
assurance can be provided as to any future financial results. Among the
potentially negative factors that could cause actual results to differ
materially from those in the forward-looking statements are (a) unanticipated
costs or difficulties and delays related to completion of the proposed
transaction, and (b) inability to complete the proposed transaction.
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Exhibit (f)
[LETTERHEAD OF BOWLES HOLLOWELL CONNER APPEARS HERE]
June 2, 1999
Board of Directors
O'Sullivan Corporation
1944 Valley Avenue
Winchester, Virginia 22601
Dear Members of the Board:
You have requested our opinion as to the fairness, from a financial point
of view, to the stockholders of O'Sullivan Corporation ("O'Sullivan"), of the
consideration to be received by such stockholders pursuant to the terms of the
Agreement and Plan of Merger, dated as of June 2, 1999 (the "Agreement"), among
O'Sullivan, The Geon Company ("Geon"), and TGC Acquisition Company, a
wholly-owned subsidiary of Geon. Pursuant to the Agreement, the stockholders of
O'Sullivan will receive $12.25 net in cash for each share of O'Sullivan Common
Stock, par value $1.00 per share. For purposes of this opinion, the
"Transaction" means the proposed acquisition of 100% of the outstanding shares
of O'Sullivan by Geon, the terms of which are more fully set forth in the
Agreement.
In arriving at our opinion, we have, among other things:
. Reviewed the Agreement, including the financial terms of the
Transaction;
. Reviewed certain historical business, financial, and other information
regarding O'Sullivan that was publicly available or furnished to us by
members of O'Sullivan management;
. Reviewed certain financial forecasts and other data provided to us by
members of O'Sullivan management relating to its business;
. Conducted discussions with members of O'Sullivan management with
respect to its business, financial, and other information, including
its business prospects and financial forecasts, and the effects of the
Transaction;
. Reviewed the current and historical market prices of O'Sullivan Common
Stock;
. Compared the financial position and operating results of O'Sullivan
with those of publicly traded companies we deemed relevant;
. Compared the financial terms of the Transaction with certain of the
financial terms of other similar transactions we deemed relevant; and
. Conducted such other financial studies, analyses, and investigations
as we deemed appropriate.
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Board of Directors
O'Sullivan Corporation
June 2, 1999
Page 2
In connection with our review, we have relied upon the accuracy and
completeness of the foregoing financial and other information, and we have not
assumed any responsibility for any independent verification of such
information. With respect to O'Sullivan's financial projections, we have
assumed that they have been reasonably prepared and reflect the best currently
available estimates and judgements of O'Sulllivan's management as to the
expected future financial performance of O'Sullivan. We have discussed
O'Sullivan's financial projections with management of O'Sullivan, but we assume
no responsibility for and express no view as to O'Sullivan's financial
projections or the assumptions upon which they are based. In arriving at our
opinion, we have not conducted any physical inspection of the properties or
facilities of O'Sullivan and have not made or been provided with any evaluations
or appraisals of the assets or liabilities of O'Sullivan.
In rendering our opinion, we have assumed that the Transaction will be
consummated on the terms described in the Agreement that we reviewed, without
any waiver of any material terms or conditions. Our opinion is necessarily based
on economic, market, financial, and other conditions and the information made
available to us as of the date hereof. Although subsequent developments may
affect this opinion, we do not have any obligation to update, revise, or
reaffirm this opinion. Our opinion does not address the relative merits of the
Transaction and the other business strategies considered by O'Sullivan's Board
of Directors, nor does it address the Board of Directors' decision to proceed
with the Transaction.
Bowles Hollowell Conner is a division of First Union Capital Markets Corp.,
an investment banking firm and an affiliate of First Union Corporation. We have
been engaged to render financial advisory services to O'Sullivan in connection
with the Transaction and will receive a fee for such services which include the
delivery of this opinion. In the ordinary course of our business, we and our
affiliates may actively trade or hold the securities of O'Sullivan for our own
account or for the account of our customers and, accordingly, may at any time
hold a long or short position in such securities. We or our affiliates have in
the past provided investment banking and financial advisory services to
O'Sullivan unrelated to the proposed Transaction, for which services we have
received compensation.
Our advisory services and the opinion expressed herein are provided for the
benefit of the Board of Directors of O'Sullivan, and such opinion does not
constitute a recommendation as to how any stockholder of O'Sullivan should
respond to the offer by Geon or vote on the proposed Agreement. This opinion may
not be summarized, excerpted from or otherwise publicly referred to without
prior written consent, except that this opinion may be reproduced in full or
summarized in any proxy or information statement mailed or provided to the
stockholders of O'Sullivan or in any other filing made under the federal
securities laws. It is understood that Bowles Hollowell Conner hereby consents
to the use of this opinion as an exhibit to Schedule 14D-9 of O'Sullivan
relating to the Transaction.
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Board of Directors
O'Sullivan Corporation
June 2, 1999
Page 3
Based upon and subject to the foregoing, our experience as investment
bankers, our work as described above and other factors we deemed relevant, we
are of the opinion that, as of the date hereof, the consideration to be received
by the stockholders of O'Sullivan in the Transaction is fair, from a financial
point of view.
Sincerely,
BOWLES HOLLOWELL CONNER
/s/ Brian P. McDonagh
Brian P. McDonagh
Managing Director
