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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
ISSUER TENDER OFFER STATEMENT
(Pursuant to Section 13(e) of the Securities Exchange Act of 1934)
(Amendment No. 1)
ENVIRITE CORPORATION
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(Name of Issuer)
ENVIRITE CORPORATION
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(Name of Person(s) Filing Statement)
Common Stock, Par Value $1.00 Per Share
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(Title of Class Securities)
Common Stock - None
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(CUSIP Number of Class of Securities)
On Behalf of Envirite Corporation
Gil C. Tily, Esquire
Dechert Price & Rhoads
Princeton Pike Corporate Center
P.O. Box 5218
Princeton, NJ 08543
(609) 520-3224
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(Name, Address and Telephone Number of Persons Authorized to Receive Notices and
Communications on Behalf of Person(s) Filing Statement)
Calculation of Filing Fee
Transaction Amount of Filing Fee
Valuation*
$9,500,000 $1,900
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*Based upon the aggregate maximum amount of cash to be paid to shareholders
pursuant to the offer.
[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: $1,900
Form or Registration No.: Schedule 13E-4, File No. 5-44603
Filing Party: Envirite Corporation
Date Filed: December 26, 1995
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The information set forth below in this Amendment No. 1
("Amendment") hereby amends and supplements the Issuer Tender Offer Statement
on Schedule 13E-4 filed with the Securities and Exchange Commission on
December 26, 1995 by Envirite Corporation, a Pennsylvania corporation (the
"Company"), with respect to the Company's offer to purchase up to $9,500,000
of its outstanding shares of common stock, par value $1.00 per share (the
"Shares") upon the terms and subject to the conditions set forth in (i) the
Supplement dated January 31, 1996 (the "Supplement"), a copy of which is being
filed as Exhibit (d)(5) hereto, (ii) the original Offer to Purchase sent to
shareholders (the "Offer to Purchase"), a copy of which was filed as Exhibit
(d)(1) to the Schedule 13E-4, and (iii) the related Letter of Transmittal
("Letter of Transmittal"), a copy of which was filed as Exhibit (d)(2) to the
Schedule 13E-4. The Offer to Purchase as modified and supplemented by the
Supplement, together with the Letter of Transmittal, constitute the "Offer".
ITEM 1. SECURITY AND ISSUER.
(b) Reference is hereby made to the information set forth in the Supplement,
which is incorporated herein by reference.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) Reference is hereby made to the information set forth in the Supplement,
which is incorporated herein by reference.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
(a)-(j) Reference is hereby made to the information set forth in the
Supplement, which is incorporated herein by reference.
ITEM 8. ADDITIONAL INFORMATION.
(e) Reference is hereby made to the Supplement, which is incorporated herein
by reference.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
(a)(3) -- Supplement dated January 31, 1996
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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.
ENVIRITE CORPORATION
By:/s/ Geoffrey Stengel, Jr.
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Geoffrey Stengel, Jr.
President
Dated: February 1, 1996
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE*
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(a)(3) -- Supplement 4
*Page references are to sequentially numbered copy.
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ENVIRITE CORPORATION
Supplement Dated January 31, 1996 to
Offer to Purchase Outstanding
Shares of Common Stock
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THE EXPIRATION DATE FOR THE OFFER AND WITHDRAWAL RIGHTS
HAS BEEN EXTENDED UNTIL 12:00 MIDNIGHT, PHILADELPHIA
TIME, ON FRIDAY, FEBRUARY 16, 1996, UNLESS
THE OFFER IS FURTHER EXTENDED (THE "EXPIRATION DATE")
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Dear Envirite Shareholder:
This letter modifies and supplements the Company's Offer to Purchase
up to $9,500,000 of its outstanding shares of Common Stock, par value $1.00 per
share (the "Shares") that was previously mailed to shareholders in December 1995
(the "Offer"). Capitalized terms used and not defined in this Supplement have
the meanings set forth in the Offer. This Supplement should be read together
with the Offer, Letter of Transmittal and related documents previously delivered
to shareholders.
Terms of the Offer; Proration
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The Company has calculated and determined that the final Purchase
Price to be paid to holders of the Company's Shares shall be fixed at $8.33 per
Share. The Company has also calculated and determined that the total number of
Shares that may be purchased by the Company in the Offer shall be 1,140,000
Shares.
The terms of the Offer have been further modified to eliminate the
requirement that shareholders owning beneficially 250 or fewer Shares must
tender 100% of their Shares if they wish to have any of their Shares purchased
in the Offer. Such beneficial owners are free to tender any or all of their
Shares in the Offer, and may exercise their right to withdraw any Shares which
have been tendered until the Expiration Date.
The Company has extended the Expiration Date of the Offer until 12:00
midnight, Philadelphia time, on February 16, 1996. Accordingly, the Offer will
remain open until such Expiration Date giving shareholders additional time to
determine whether to tender any untendered Shares or to exercise such holder's
right to withdraw previously tendered Shares, all in accordance with the terms
of the Offer (as supplemented and modified hereby).
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The Company may further extend the Expiration Date at any time and
from time to time in accordance with the terms of the Offer.
Withdrawal Rights
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Shares tendered pursuant to the Offer may be withdrawn at any time
prior to the revised Expiration Date of February 16, 1996 and, unless
theretofore accepted for payment by the Company, may also be withdrawn after
February 22, 1996.
Special Dividend
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The Company expects that the special cash dividend to be paid to
holders of Shares outstanding after completion of the Offer will be
approximately $2.65 per Share.
Supplemental Information Regarding Purchase Price and Purpose of the Offer
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The Offer is being made as part of an overall plan by the Company to
distribute $19 million to shareholders in a way designed to meet the needs and
desires of the greatest number of shareholders. Shareholders have generally not
been able to sell any Shares in the past because the Company is essentially
privately owned and there has been no market for its outstanding Shares. Over
the years many shareholders, especially those holding fewer Shares, have
expressed their desire to sell some or all of the Shares back to the Company and
this Offer permits shareholders to sell some or potentially all of their Shares.
The overall plan of distribution also enables shareholders to receive
a special, one-time cash dividend on any Shares they do not sell back to the
Company. The Company believes that many shareholders may want to continue as
shareholders of the Company to some extent and that the dividend will be of
great interest and value to them. The special dividend is also a means of
benefitting those shareholders who may wish to sell all of their Shares but are
unable to do so because the Offer is over subscribed.
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The Board carefully evaluated the Offer and the cash dividend in
accordance with the standards of the applicable business corporation law, and in
the exercise of its business judgment authorized the combined transactions on
the terms and conditions described in the disclosure materials accompanying the
Offer.
The calculation of the Purchase Price per Share for the Offer is based
upon a valuation methodology commonly used for publicly-owned Environmental
Services Companies comparable to the Company. The Board compared the Company
with five publicly-owned Environmental Services Companies (Clean Harbors,
EnviroSource, Horsehead Resource Development, Philip Environmental and Republic
Environmental) and the data shows that the outstanding shares of these five
companies were trading at an average multiple of five times Earnings Before
Interest, Taxes, Depreciation and Amortization ("EBITDA"). Accordingly, the
equity market value for each of these public companies was, on average, five
times the sum of their EBITDA for the most recent twelve month period. The
Company's most recent twelve month EBITDA was calculated at $4,695,000 and this
number was multiplied by a factor of 4.5 to arrive at an enterprise market value
for the Company of $21,127,500. The factor of 4.5 represents the average EBITDA
multiple of five times reduced by a 10% discount for the extra risk inherent in
an illiquid security. This discount was considered to be appropriate by the
Board for a transaction of this kind based upon its experience and business
judgment after considering the factors referred to in the disclosure materials.
The Enterprise Market Value of $21,127,500 was then (1) reduced by $8
million for the Company's outstanding convertible subordinated debentures and
(2) increased by the $22,500,000 of cash on hand, which together produced an
equity market value of $35,627,500. Then, the $35,627,500 was divided by a
total of 4,117,934 Shares outstanding to get $8.65 as the value per share for
common shareholders assuming none of the Convertible Debentures are converted or
stock options exercised. The maximum number of Shares that could be outstanding
if all Debentures and options are exchanged for shares, is 5,534,934. In that
case, the equity market value for the Company would be the sum of (1) the above
enterprise value of $21,127,500 plus (2) the $22,500,000 of cash on hand, plus
(3) $717,000 of cash on hand resulting from the exercise of the stock options,
which equals an enterprise value of $44,344,500. This enterprise value, when
divided by the 5,534,934 shares then outstanding, results in a per share value
of $8.01, the other end of the initial price range. The Company has calculated
and determined
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the final Purchase Price and exact number of Shares that can be purchased by the
Company in the Offer using 4,503,184 Shares as the number of Shares outstanding
for purposes of the valuation methodology described above. The Company believes
that this is a reasonable number to use based upon its recent experience
regarding the conversion of Debentures and the exercise of Stock Options.
Alex. Brown & Sons ("ABS") did not determine the purchase price or
provide a fairness opinion in connection with the Offer (or the cash dividend),
nor did ABS make any presentation to the Board with respect to the Offer (or the
cash dividend). The only service provided by ABS to the Board was to review the
valuation methodology and confirm that the valuation method used by the Board in
connection with the Offer is widely used and generally recognized by the
financial community as a fair and reasonable basis for determining values of
Environmental Services Companies comparable to the Company.
The Offer was approved unanimously by the Company's eight Board
members, six of whom are nonemployees. The Board of Directors did not retain an
"unaffiliated representative" for the purpose of determining the final Purchase
Price or the fairness of the Offer because the Board believes that the cost and
expense associated with hiring such a representative outweighed the benefit, if
any, of having an outside firm prepare a report for such purpose given the
overall voluntary character of the transaction as a distribution to
shareholders.
In making its determination that the Offer is fair to shareholders,
the Board considered (a) the current lack of liquidity for the Shares and the
fact that there has never been any trading market for the Shares since the
inception of the Company, (b) the desire expressed by shareholders from time to
time to have an opportunity to sell their shares, (c) the fact that the
valuation methodology used to determine the Purchase Price is widely used and
generally recognized by the financial community as a fair and reasonable basis
for determining a value for the Company's Shares, and (d) that by splitting the
$19 million available for distribution between the Offer and the special
dividend, the Company could meet the needs and desires of the greatest number of
shareholders. The Board also considered the Company's overall performance and
prospects for growth and was also aware that the final Purchase Price exceeded
substantially the net book value and liquidation value of the Company, however
no calculation of the exact liquidation value was prepared. The Board did not
find it practicable to, and did
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not, quantify or otherwise ascribe any relative weights to the factors it
considered. Neither the Company nor the Board received any report, opinion or
appraisal from any third party stating or setting forth the value of the Company
or the Shares or that the Purchase Price is fair to shareholders.
Except as stated herein or in the materials previously mailed to
shareholders, the Board did not explicitly consider having a majority of the
unaffiliated shareholders approve the transaction because it did not believe
such approval would be meaningful where all shareholders are given the same
opportunity to participate in the Offer.
Requests for Assistance
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Questions and requests for assistance or for additional copies of the
Offer to Purchase and the Letter of Transmittal may be directed to the Company
at the address or numbers set forth below:
Attention: Geoffrey Stengel,Jr. or Robert E. Croner
Envirite Corporation
Suite 250
620 West Germantown Pike
Plymouth Meeting, PA 19462
Toll free telephone (voice mail): (800) 816-1747
Telephone: (610) 828-8655 (Ext. 221 or 208)
Fax: (610) 828-8892
Internet: [email protected]
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