<PAGE> 1
EXHIBIT (c)(2)
================================================================================
U.S. CAN CORPORATION
SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS
DISCUSSION MATERIALS
================================================================================
LAZARD JUNE 1, 2000
<PAGE> 2
U.S. CAN CORPORATION Table of Contents
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
I. EXECUTIVE SUMMARY............................................. 1
Overview...................................................... 1
Summary of Final Proposal..................................... 4
Financial Review.............................................. 6
II. MARKET PERSPECTIVES........................................... 7
Trading Statistics............................................ 7
Analyst Perspectives.......................................... 11
III. SITUATION ANALYSIS............................................ 13
Comparison of Proposals and Results........................... 13
Market Conditions............................................. 15
Transaction................................................... 17
IV. VALUATION..................................................... 18
Projections................................................... 18
Summary Balance Sheet......................................... 22
Summary Valuation............................................. 23
Analysis at Various Prices.................................... 24
Selected Packaging Transactions .............................. 26
Industrial Buyout Premia...................................... 30
Summary Discounted Cash Flow Analysis......................... 31
Summary LBO Analysis - Purchaser Perspective.................. 32
APPENDIX
A. EQUITY COMPARABLES............................................ 34
B. SELECTED INDUSTRIAL TRANSACTIONS.............................. 41
C. SELECTED LBO TRANSACTIONS..................................... 43
D. WEIGHTED AVERAGE COST OF CAPITAL ANALYSIS..................... 46
E. LBO SUMMARY ASSUMPTIONS....................................... 47
</TABLE>
<PAGE> 3
U.S. CAN CORPORATION I. Executive Summary
--------------------------------------------------------------------------------
OVERVIEW
o On March 22, 2000, a group led by Paul W. Jones, Chairman and Chief
Executive Officer of the U.S. Can Corporation ("U.S. Can" or the
"Company") and Berkshire Partners, a private equity firm, made a
proposal to the Company's board of directors calling for a
recapitalization of the Company in which public shareholders of the
Company would receive $21.00 in cash per outstanding share of common
stock ("Original Proposal")
- A public announcement was made on 3/22; the stock advanced
33.2% from $14.88 to $19.81
o The Board of Directors of U.S. Can appointed a special committee of
independent directors (the "Special Committee") to evaluate the offer
o The Special Committee engaged Skadden, Arps, Slate, Meagher & Flom LLP
("Skadden") as its legal advisor and Lazard Freres & Co. LLC ("Lazard")
as investment banker to the Special Committee
o Lazard conducted a financial review in connection with the situation
(see "Financial Review") and performed preliminary valuation analyses
of the Company, including:
- Review of historical stock price and trading history of U.S.
Can
- Comparative study of multiples at which selected public
comparable companies trade
- Comparative study of multiples and premia/discounts paid in
precedent acquisitions of packaging companies
- Comparative study of premia/discounts paid in selected
transactions
- Discounted cash flow analysis and the relevant weighted
average cost of capital and exit multiples
- Leveraged buyout analysis
- 1 -
<PAGE> 4
U.S. CAN CORPORATION I. EXECUTIVE SUMMARY
--------------------------------------------------------------------------------
OVERVIEW(CONT'D)
o In addition, at the request of the Special Committee to determine the
extent and level of any interest in U.S. Can, Lazard contacted 20
potential strategic buyers and 16 potential financial buyers.
<TABLE>
<CAPTION>
CONTACTED
------------------------------------------------------------------
POTENTIAL STRATEGIC BUYERS POTENTIAL FINANCIAL BUYERS RECEIVED PUBLIC INFORMATION SIGNED CONFIDENTIALITY
(20) (16) BOOK AGREEMENT
-------------------------------- ------------------------------ ----------------------------- -------------------------
<S> <C> <C> <C>
STRATEGIC (3)
Alusuisse/Alcan Bain Ball Silgan
Amcor Blackstone Group Impress
American National Can Carlyle Group Silgan
Ball Corp. Chase Capital Partners
BWAY Citigroup Venture FINANCIAL (7)
CCL Industries Code, Hennessy
Consolidated Container Cypress Group Blackstone Group
(Vestar Cap. Partners) DLJ Merchant Banking Carlyle Group
Daiwa Can Partners Cypress Group
Graham Packaging Doughty Hanson DLJ Merchant Banking
(Blackstone Group) Fremont Partners Partners
Greif JLL Doughty Hanson
Impress Metal Group KKR Texas Pacific
Ivex Packaging Madison Dearborn Vestar Capital Partners
Nampak Limited Texas Pacific
Pechiney Thomas H. Lee
Rexam/PLM Vestar Capital Partners
Schmalbach Lubeca
Showa Aluminum
Silgan
Southcorp Limited
Toyo Seikan Kaisha
</TABLE>
- 2 -
<PAGE> 5
U.S. CAN CORPORATION I. EXECUTIVE SUMMARY
--------------------------------------------------------------------------------
OVERVIEW(CONT'D)
o On April 25, 2000, Lazard met with the Special Committee to present a
status report on discussions with potential buyers and a preliminary
set of valuation materials
- Only one potential buyer, Silgan Holdings Inc. ("Silgan"),
signed a confidentiality agreement and indicated it would
submit a bid
o On May 1, Silgan submitted a $21 a share preliminary indication of
interest
o On May 4-5, Silgan visited the data room and on May 10, Silgan received
supplemental material at its request
- The data room contained a new set of financials reporting
lower first quarter actual results and lower projected second
quarter numbers than earlier projections provided by
management
o On May 11, Silgan cancelled a management presentation stating that its
$21 indication was no longer valid for the following reasons:
- The Company missing its first quarter projections (as per the
offering memorandum) and revised downward its second quarter
projections
- Less steel purchasing synergies than Silgan had anticipated
- Higher cost of debt than Silgan had anticipated
o On May 18, 2000, Silgan indicated it was no longer interested in
proceeding
o On May 23, 2000, the Special Committee received a formal bid from the
Buyer Group for $20 a share ("Final Proposal")
- The Buyer Group increased its equity commitment from $150MM to
$170MM
- 3 -
<PAGE> 6
U.S. CAN CORPORATION I. Executive Summary
--------------------------------------------------------------------------------
SUMMARY OF FINAL PROPOSAL
o The following summary describes the most recent information available
regarding the Final Proposal; an update, as appropriate, will be
provided to the Special Committee
o The Final Proposal is for up to 100% of the outstanding shares of
common stock of U.S. Can
- Management shares representing approximately 3% of shares
outstanding would be rolled over
o Purchaser will pay and cash out all vested and unvested options
outstanding
o Conditions to closing the proposed offer as of the draft dated 5/23/00
include the following:
- Approval by Company stockholders
- Receipt of solvency opinion
- Receipt of fairness opinion
- Any waiting period shall have expired, or approval shall have
been obtained, pursuant to any applicable U.S., EU or other
foreign antitrust or competition laws
- No injunctions
- Representations and warranties true and correct
- Company will have received debt financing proceeds described
in the Debt Commitment Letters
- Resignation letter from each director of the Company
- No material adverse changes in business since 12/31/99
- No material adverse changes in loan syndication market
- Bond tender premium not to exceed $19.5 million, or 8.24%
premium
- LTM EBITDA to exceed $105 million
- Lack of any additional adverse conditions discovered through
due diligence
- 4 -
<PAGE> 7
U.S. CAN CORPORATION I. Executive Summary
--------------------------------------------------------------------------------
SUMMARY OF FINAL PROPOSAL (CONT'D)
o No condition requiring consent of subordinated debenture holders or
public debt holders
o Shareholders are eligible to receive $20 cash per share as soon as the
Certificate of Merger is filed with Secretary of State of Delaware
o "No shop" clause, subject to certain limitations including fiduciary
duty
o Termination fee equal to $6 million(1), which is 2.2% of equity value
and 1.0% of transaction value(2)
----------
(1) Based on recent discussions and represents a change from draft dated
5/23/2000.
(2) Based on $277.8 million to purchase capital stock from Annex 1 of 5/23/00
Senior Subordinated Facility Commitment Letter and $349.9 million net debt
as of 4/2/00.
- 5 -
<PAGE> 8
U.S. CAN CORPORATION I. Executive Summary
--------------------------------------------------------------------------------
FINANCIAL REVIEW
o In connection with our consideration of each of the proposals, we
conducted a financial review of the Company
o We participated in discussions with U.S. Can's senior management
o We discussed the Original Proposal, including the associated financing,
with representatives from Berkshire, Salomon Smith Barney and Bank of
America
o We reviewed and analyzed publicly available financial information
o We reviewed and analyzed confidential information provided by
management to Lazard including:
- Customer and supplier contracts
- Management estimated results for the fiscal years 2000-2004 as
well as results for 1999 pro forma for the approximately $90
million total value May Verpackungen GmbH & Co., KG ("May")
acquisition
- Berkshire, Salomon Smith Barney and Bank of America
transaction assumptions for the Original and Final Proposals
o We reviewed other public information
- Wall Street research reports
- Certain agreements to which the Company is a party
- 6 -
<PAGE> 9
U.S. CAN CORPORATION II. MARKET PERSPECTIVES
--------------------------------------------------------------------------------
VOLUME TRADED AT VARIOUS SHARE PRICES
LAST 90 DAYS PRIOR TO MARCH OFFER
Traded volume over period represents 16.1% of total shares outstanding
<TABLE>
<CAPTION>
Weighted Average Price Per Share
--------------------------------
<S> <C>
30 Days $13.37
60 Days 13.90
90 Days 14.96
</TABLE>
<TABLE>
<CAPTION>
SHARES TRADED
700,000 600,000 500,000 400,000 300,000 200,000 100,000 0
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$12-$13 14.5%
$13-$14 26.5%
$14-$15 14.2%
$15-$16 18.7%
$16-$17 7.2%
$17-$18 6.2%
$18-$19 5.6%
$19-$20 7.1%
$20-$21
$21-$22
$22-$23
$23-$24
$24-$25
$25-$26
</TABLE>
LAST TWELVE MONTHS PRIOR TO MARCH OFFER
Traded volume over period represents 61.0% of total shares outstanding
<TABLE>
<CAPTION>
Weighted Average Price Per Share
--------------------------------
<S> <C>
180 Days $16.79
270 Days 19.51
360 Days 18.96
</TABLE>
<TABLE>
<CAPTION>
SHARES TRADED
1,200,000 1,000,000 800,000 600,000 400,000 200,000 0
<S> <C> <C> <C> <C> <C> <C> <C>
$12-$13 3.8%
$13-$14 7.9%
$14-$15 5.8%
$15-$16 6.2%
$16-$17 7.0%
$17-$18 10.5%
$18-$19 9.9%
$19-$20 9.7%
$20-$21 3.5%
$21-$22 3.3%
$22-$23 12.6%
$23-$24 12.7%
$24-$25 5.3%
$25-$26 1.7%
</TABLE>
N.B. The weighted average price of the 15MM shares traded prior to the original
March offer (1/1/98-3/21/00) was $17.82.
----------
Note: Based on 13.4 million primary shares outstanding. Volume is shown
through March 21, 2000 the last full trading day before announcement of
the transaction.
- 7 -
<PAGE> 10
U.S. CAN CORPORATION II. Market Perspectives
--------------------------------------------------------------------------------
VOLUME TRADED AT VARIOUS SHARE PRICES
SINCE MARCH 22, 2000
Traded volume over period represents 18.6% of total shares outstanding
<TABLE>
<CAPTION>
Weighted Average Price Per Share
--------------------------------
<S> <C>
Since March 22, 2000 $19.00
</TABLE>
<TABLE>
<CAPTION>
SHARES TRADED
1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$12-$13
$13-$14
$14-$15
$15-$16
$16-$17 6.0%
$17-$18 16.7%
$18-$19 18.8%
$19-$20 50.0%
$20-$21 8.5%
$21-$22
$22-$23
$23-$24
$24-$25
$25-$26
</TABLE>
----------
Note: Based on 13.4 million primary shares outstanding. Volume is shown
through May 31, 2000.
- 8 -
<PAGE> 11
U.S CAN CORPORATION II. Market Perspectives
--------------------------------------------------------------------------------
STOCK PRICE PERFORMANCE OVER LAST 5 YEARS
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------PERIOD HIGH
$25.63
(8/12/99)
5/18/95 11/18/95 5/20/96 11/20/96 5/23/97
<S> <C> <C> <C> <C> <C>
<CAPTION>
11/23/97 5/26/98 11/26/98 5/29/99 11/29/99 5/31/00
<S> <C> <C> <C> <C> <C> <C>
$10
$12
$14
8/1/96 3/21/00
Announces purchase Management
of certain European led LBO
aerosol can announced
businesses from
Crown, Cork & Seal
7/21/95
2Q 29% decrease in
earnings from 2Q '94
$16 2/20/97 7/10/98 11/9/98 12/22/99
4Q record net sales Announces corporate Announces the sale Announces
of $223.1 million, a reorganization into of its Metal acquisition of May
45% increase from 4Q individual business Services business to Verpackungen
'95 units BMAT, a subsidiary
of BWAY Corp. 4/27/00
Announces 1Q '00
$18 2/24/98 3/6/98 results. EBIT
Announce 4Q results. Names Paul W. Jones decline of 12.7%
Net sales of $160.4 as President and CEO from 1Q '99
million with a 15% effective April 1,
decrease from 4Q 1998
1996.
$20
$22
$24
$26
</TABLE>
Period low
$11.63
(10/30/95)
- 9 -
<PAGE> 12
U.S. CAN CORPORATION II. Market Perspectives
--------------------------------------------------------------------------------
FIVE YEAR RELATIVE STOCK PRICE PERFORMANCE TO MARCH 21
FIVE YEAR PRICE INDEX GRAPH
[GRAPH}
* Index is a non-weighted average of American National Can, Ball, BWAY, Crown
Cork & Seal, Owens-Illinois and Silgan.
FIVE YEAR TOTAL RETURN AND CAGR ANALYSIS
<TABLE>
<CAPTION>
TOTAL % RETURN
200% 150.0 100.0 50.0 0.0 -50.0 -100.0
<S> <C> <C> <C> <C> <C> <C> <C> <C>
S&P 400 25.4%
Owens-Illinois(1) 8.0%
Ball Corp. - 1.2%
BWAY - 3.9%
U.S. Can - 4.1%
American Nat'l Can(1) -54.6%
Silgan(1) -12.7%
Crown Cork & Seal -10.8%
</TABLE>
Note: Percentages on bar charts represent compound annual growth rates.
----------
(1) American National Can, BWAY and Silgan total returns and compound annual
growth rates are based on the closing prices from their first days of
trading on 7/29/99, 6/21/95 and 2/14/97, respectively, through 3/21/00.
- 10 -
<PAGE> 13
ANALYST PERSPECTIVES
<TABLE>
<CAPTION>
Price
----------------------
Fiscal Year EPS LT EPS Prior 12-
------------------ Growth At Mo. Price
Analyst Date Rating 2000 2001 Rate Report Target
------- ---------- ------ ----- ----- ------ ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Goldman, 05/01/2000 Buy $2.10 $2.38 20.0% $18.38 NA
Sachs
Deutsche 04/27/2000 Strong 2.10 2.45 12.0% $18.50 $ 20.00
Banc Alex. Buy (2/24/00)
Brown
</TABLE>
Selected Analyst Comments
--------------------------------------------------------------------------------
"We have reduced our 2000 EPS estimate slightly by $0.02 to reflect management's
belief that YOY comparisons in 2Q will be relatively flat. Aside from
distractions from the lithography press installation, we are encouraged by
current business indications. The May acquisition in late 1999 proceeds
smoothly, being neutral to 1Q '00 EPS, ahead of management expectations of a
slight drag. It is increasingly apparent that increased sales and marketing
effort remains a key priority at USC and the improvements in the custom &
specialty business exemplifies the renewed energy and focus. These initiatives,
along with the ramp-up of the faster six-color lithography presses, should
strengthen USC's operational capabilities and improve top-line performance." -
05/01/2000
"U.S. Can reported EPS in line with the Company's previous guidance of $0.41 for
1Q 2000. The Company expects that the May acquisition and lithography strategy
will favorably impact earnings going forward." - 4/27/2000
"We believe this announcement may start a process by which other bidders could
emerge based on the fact that the company has not retained a financial advisor
for the transaction at this time and does not yet have a negotiated merger
agreement. We feel that the offer made by management and Berkshire is more of a
response to valuations that are currently as low as they have ever been,
however, that being said, if another buyer does not come to the forefront, in
our view, the board will likely have to support management and the current
proposal. If other bidders do emerge, we believe that the company could fetch
$27-$28/share, which would represent an approximate 5.5x our estimated 2000 firm
value/EBITDA." - 3/22/2000
Note: Twelve month price targets for Deutsche Banc Alex. Brown, and CS First
Boston are from 2/24/2000 and 2/11/2000 reports, respectively.
- 11 -
<PAGE> 14
U.S. CAN CORPORATION II. MARKET PERSPECTIVES
--------------------------------------------------------------------------------
ANALYST PERSPECTIVES (CON'T)
<TABLE>
<CAPTION>
Price
-------------------------
Fiscal Year EPS LT EPS Prior 12-
------------------- Growth At Mo. Price
Analyst Date Rating 2000 2001 Rate Report Target
------- ---- ------ ---- ---- ------ ------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CS First 03/23/2000 Buy 2.10 -- 16.0% $ 19.81 $ 30.00
Boston & (2/11/00)
3/24/2000
Bear, 03/22/2000 Neutral 2.10 2.55 10.0% $ 19.75 NA
Stearns
</TABLE>
<TABLE>
<S> <C> <C> <C>
Average Set of FY Estimates $2.10 $2.46 12.7%
IBES FY Estimates 2.10 2.46 7.8%
---- ---- ---
Management's Projections 2.10 2.45
---- ----
</TABLE>
Selected Analyst Comments
--------------------------------------------------------------------------------
"This could be the first of several LBO's or in-market takeovers of packaging
companies, as management's finally take advantage of low stock prices. Our
valuation work leads us to look for LBO bids around 6.0x EBITDA for most
packaging companies." - 3/24/2000
"U.S. Can has received a proposal from its management along with Berkshire
Partners which would in effect take the company private at a value of $21 per
share. U.S. Can now becomes something for the arbitrage community to ponder and
as such we are removing our Attractive investment rating and moving to the more
nebulous Neutral rating." - 3/22/2000
Note: Twelve month price targets for Deutsche Banc Alex. Brown and CS First
Boston are from 2/24/2000 and 2/11/2000 reports, respectively.
- 12 -
<PAGE> 15
U.S. CAN CORPORATION III. SITUATION ANALYSIS
--------------------------------------------------------------------------------
COMPARISON OF PROPOSALS
($ IN MILLIONS, EXCEPT PER SHARE)
<TABLE>
<CAPTION>
ORIGINAL CURRENT % CHANGE
-------- ------- --------
<S> <C> <C> <C>
Share Price $ 21.00 $ 20.00 (4.8%)
Equity Value 293.3 278.1 (5.2%)
Total Value $ 643.2 $ 628.0 (2.4%)
MULTIPLES
-----------------------------------------------------
Revenue
2001E 0.73x 0.71x
2000E 0.74 0.73
LTM as of 4/2/00 0.76 0.74
EBITDA
2001E 5.0x 4.8x
2000E 5.3 5.1
LTM as of 4/2/00 5.9 5.7
EBITDA-CapEx
2001E 7.2x 7.1x
2000E 7.9 7.7
LTM as of 4/2/00 9.4 9.2
EBIT
2001E 7.3x 7.1x
2000E 7.7 7.5
LTM as of 4/2/00 8.6 8.4
Net Income
2001E 8.6x 8.2x
2000E 10.0 9.5
LTM as of 4/2/00 12.2 11.6
</TABLE>
Note: Based on 13.4MM primary shares outstanding, 0.1MM restricted shares
outstanding and option table provided by management, and $349.9MM net
debt as of 4/2/00.
- 13 -
<PAGE> 16
U.S. CAN CORPORATION III. Situation Analysis
--------------------------------------------------------------------------------
PACKAGING INDUSTRY COMPARISON OF RESULTS FOR THE QUARTER ENDED MARCH 2000
($ IN MILLIONS, EXCEPT PER SHARE)
<TABLE>
<CAPTION>
EBITDA E.P.S.
-------------------------- ---------------------------------------------------------
IBES
Median
Quarter Quarter Quarter Quarter Estimate at
Ended Ended Ended Ended 03/31/2000 % Change
March March March March for Q Ended vs. Prior % Change
1999 2000 % Change 1999 2000 March 2000 Year's Q vs. IBES
------- ------ -------- -------- ------ ------------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
USC PF for May $ 29.7 $ 26.5 -10.6% $ 0.47 $ 0.41 $ 0.42 -12.7% -1.5%
USC as Reported 25.5 26.5 4.1% 0.41 0.41 0.42 0.0% -1.5%
Am. Ntl. Can 63.6 68.0 6.9% 0.24 0.20 0.17 -15.3% 17.6%
CCK 285.0 262.0 -8.1% 0.20 0.17 0.16 -16.4% 6.0%
BWAY 13.6 12.2 -10.0% 0.35 0.18 0.20 -48.6% -10.0%
Ball 94.3 99.5 5.5% 0.47 0.61 0.57 31.5% 7.9%
Owens-Illinois 324.0 306.4 -5.4% 0.41 0.36 0.36 -11.0% 0.6%
Silgan(1) 51.5 51.8 0.7% 0.30 0.29 0.30 -2.3% -2.2%
</TABLE>
Note:
(1) The first quarter of 2000 includes $0.7m of start-up costs relating to a
neutral, independent e-commerce joint venture, Packtion, with Morgan Stanley
Dean Witter Private Equity and Diamond Technology Partners. Excluding these
costs, EPS would have been $0.31.
- 14 -
<PAGE> 17
U.S. CAN CORPORATION III. SITUATION ANALYSIS
--------------------------------------------------------------------------------
HIGH YIELD FINANCING CONDITIONS
($ IN MILLIONS)
<TABLE>
<CAPTION>
03/21/2000 05/22/2000 05/31/2000
-------------------- -------------------------------------------- -----------------------------------------
Absolute % Absolute %
Price Spread Price Spread Change Change Price Spread Change Change
(%) (bps) (%) (bps) vs. 3/21/00 vs. 3/21/00 (%) (bps) vs. 3/21/00 vs. 3/21/00
------ ------ ----- ------ ----------- ----------- ----- ------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DEBT MARKETS
6-Month LIBOR 6.41 -- 7.03 -- 0.63 9.8% 7.11 -- 0.70 10.9%
10-Year Treasury 6.14 -- 6.42 -- 0.28 4.6% 6.27 -- 0.13 2.2%
BOND YIELDS
B2/B(1) 10.41 4.27 11.43 5.01 1.02 9.8% 11.78 5.51 1.37 13.2%
</TABLE>
HIGH YIELD FUND FLOWS/ISSUANCES(2)
($MILLIONS)
<TABLE>
<CAPTION>
Prior 4 Weeks: 03/21/2000 05/22/2000 05/31/2000(4)
----------------- ---------------------------------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-Inflows/(Outflows) $ (344.0) - $ (227.0) - $ 117.0 NM NA - NA -
-Issuances $5,432.0 - $1,799.0 - $(3,633.0) (66.9)% NA - NA -
Annualized Default Rates(3) 3.30% - 4.36% - - 32.1% NA - NA -
</TABLE>
Notes:
(1) Source: Bloomberg
(2) Source: Deutsche Bank Global Markets Research April 7, 20 and May 19,
2000.
(3) 3/21/2000 annualized default rates are as of April 17, 2000.
(4) Most recent data is unavailable.
- 15 -
<PAGE> 18
U.S. CAN CORPORATION III. SITUATION ANALYSIS
--------------------------------------------------------------------------------
EQUITY MARKET STATISTICS
($ IN MILLIONS, EXCEPT PER SHARE)
<TABLE>
<CAPTION>
05/22/2000 05/31/2000
------------------------ -------------------------
Price Absolute % Price Absolute %
----------------------- Change Change ---------- Change Change
03/21/2000 05/22/2000 vs. 3/21/00 vs. 3/21/00 05/31/2000 vs. 3/21/00 vs. 3/21/00
---------- ---------- ----------- ----------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
EQUITY MARKETS
Dow Jones 30 Industrial Average $ 10,907.3 $ 10,542.6 $ (364.8) (3.3%) $ 10,522.3 $ (385.0) (3.5%)
Nasdaq Composite 4,711.7 3,364.2 (1,347.5) (28.6%) 3,400.9 (1,310.78) (27.8%)
Russell 2000 552.8 471.7 (81.1) (14.7%) 476.2 (76.61) (13.9%)
S&P Industrials 1,880.8 1,724.5 (156.3) (8.3%) 1,746.7 (134.03) (7.1%)
COMPARABLE COMPANIES
Ball Corp $ 31.94 $ 31.63 $ (0.31) (1.0%) $ 29.69 $ (2.25) (7.0%)
BWAY Corp 7.88 6.63 (1.25) (15.9%) 7.19 (0.69) (8.7%)
Crown, Cork & Seal 16.88 17.75 0.88 5.2% 17.13 0.25 1.5%
Owens-Illinois 18.88 12.56 (6.31) (33.4%) 11.25 (7.63) (40.4%)
Silgan Holdings 12.19 10.50 (1.69) (13.8%) 9.38 (2.81) (23.1%)
05/22/2000 05/31/2000
Mean (11.8%) (15.6%)
Median (13.8%) (8.7%)
</TABLE>
- 16 -
<PAGE> 19
U.S. CAN CORPORATION III. SITUATION ANALYSIS
--------------------------------------------------------------------------------
U.S. CAN TRANSACTION
($ IN MILLIONS, EXCEPT PER SHARE)
<TABLE>
<CAPTION>
3/22/2000 5/22/2000 % Change
------------------------ ------------------------ --------
PF LTM EBITDA (1) $114.0 $109.4 (4.0)%
Pro Forma Capital Structure (2): % of % of
Amount Rates Total Amount Rates Total
------ ------ ------ ------ ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Available Cash $ 10.0 1.5%
Assumed Debt 31.5 5.9% 4.7%
Senior Debt (and Revolver) $342.3 9.4% 49.4% 318.2 10.1% 47.0% (7.0)%
Subordinated Debt 200.0 13.0% 28.9% 150.0 13.5% 22.2% (25.0)%
Equity 150.0 21.7% 167.4 24.7% 11.6%
------ ----- ------ -----
$692.3 100.0% $677.1 100.0% (2.2)%
Pro Forma 2000 Interest Expense (full year)
Bank Debt (includes revolver) $ 31.1 $ 32.8 5.5%
Subordinated Debt 26.0 20.3 (21.9)%
------ ------ =====
Total $ 57.1 $ 53.1
====== ======
PF LTM EBITDA / PF 2000 Interest Expense 2.0x 2.1x 3.2%
Total Debt / PF LTM EBITDA 4.8 4.6
Senior Debt / PF LTM EBITDA 3.0 3.2
Subordinated Debt / PF LTM EBITDA 1.8 1.4
Internal Rate of Return to Equity at 5.5x EBITDA Exit Multiple 20.7% 21.3% 2.9%
(Old deal @$21 and new deal @$20)
</TABLE>
Notes:
(1) LTM EBITDA for the Original Proposal is from the period ended 12/31/99 and
for the Final Proposal is for the period ended 4/2/00. LTM EBITDA has decreased
as a result of a decline in the first quarter's results as well as some S-X pro
forma adjustments.
(2) Both financing models assume 3% rolled equity from Management, 11%
Management options, $359.3 million of total debt as of 12/31/99, 0.1 million
restricted shares and detailed options table provided by management.
- 17 -
<PAGE> 20
U.S. CAN CORPORATION IV. VALUATION
--------------------------------------------------------------------------------
2000 ACTUAL RESULTS AND PROJECTIONS
o The Company had a disappointing first quarter relative to its expectations
o Failure to pass on an anticipated steel price increase to customers in
North America
o Problems getting personnel up to speed with a new printing press in
one of its facilities
o EBIT was 7% lower than expected by management
o A lower tax rate than expected contributed to the Company achieving
the Street's EPS estimates
o The Street appears confident that the Company can hit its $2.10 EPS
projection for 2000, with only Goldman, Sachs lowering 2000E EPS from $2.12
to $2.10 with no changes in 2001E EPS
o General softness caused the Company to revise their 2Q projections
o EBIT and net income are projected to be 12-13% worse than plan due to
a continuation of problems experienced in the first quarter
o Management has affirmed to the Special Committee its ability to meet its
original 2000 projections
o Consequently, in order for U.S. Can to meet its operating income
projections for the year, EBIT for the second six months must be 10%
greater than management's original projections, representing a 33% increase
from the prior year
- 18 -
<PAGE> 21
U.S. CAN CORPORATION IV. VALUATION
--------------------------------------------------------------------------------
ANALYSIS OF 2000 PROJECTIONS
<TABLE>
<CAPTION>
1Q 2000
------------------------------------
($MM) ORIGINAL BETTER/
ACTUAL FORECAST WORSE
-------- -------- --------
<S> <C> <C> <C>
Revenue $ 207.7 $ 207.7 (0.0)%
Cost of Sales(2) 178.2 176.7 (0.9)%
-------- --------
Gross Profit 29.5 31.1 (5.1)%
SG&A 11.3 11.5 1.9%
-------- --------
EBIT 18.2 19.6 (7.0)%
Other Expense 1.1 1.5 27.1%
Interest Expense 8.0 8.6 6.4%
-------- --------
EBT 9.1 9.5 (4.4)%
Income Taxes 3.5 4.2 16.9%
-------- --------
Net Income 5.6 5.3 5.4%
======== ========
Diluted Shares 13.6 13.8
Diluted EPS $ 0.41 $ 0.39 6.8%
MARGINS
Gross Profit 14.2% 14.9%
EBIT 8.8% 9.4%
Tax Rate 38.2% 44.0%
Net Income 2.7% 2.6%
</TABLE>
<TABLE>
<CAPTION>
2Q 2000
------------------------------------
($MM) ORIGINAL BETTER/
REVISED FORECAST WORSE
-------- -------- --------
<S> <C> <C> <C>
Revenue $ 217.1 $ 223.3 (2.8)%
Cost of Sales(2) 185.9 188.9 1.6%
-------- --------
Gross Profit 31.2 34.4 (9.3)%
SG&A 11.0 11.3 2.7%
-------- --------
EBIT 20.2 23.1 (12.6)%
Other Expense 1.1 1.5 26.7%
Interest Expense 7.8 8.5 8.2%
-------- --------
EBT 11.3 13.1 (13.7)%
Income Taxes 4.4 5.3 16.2%
-------- --------
Net Income 6.9 7.9 (12.1)%
======== ========
Diluted Shares 13.8 13.8
Diluted EPS $ 0.50 $ 0.57 (12.1)%
MARGINS
Gross Profit 14.4% 15.4%
EBIT 9.3% 10.3%
Tax Rate 38.9% 40.1%
Net Income 3.2% 3.5%
</TABLE>
<TABLE>
<CAPTION>
2H 2000
--------------------------------------
ORIGINAL
($MM) REQUIRED(1) FORECAST BETTER/
6 MOS. 6 MOS. WORSE
---------- -------- --------
<S> <C> <C> <C>
Revenue $ 439.7 $ 433.5 1.4%
Cost of Sales(2) 367.6 366.3 (0.4)%
-------- --------
Gross Profit 72.1 67.2 7.3%
SG&A 22.7 22.2 (2.1)%
-------- --------
EBIT 49.5 45.0 9.9%
Other Expense 3.9 3.0 (29.4)%
Interest Expense 18.2 17.0 (7.1)%
-------- --------
EBT 27.4 25.0 9.5%
Income Taxes 10.9 9.3 (16.9)%
-------- --------
Net Income 16.5 15.7 5.2%
======== ========
Diluted Shares 13.7 13.8
Diluted EPS $ 1.20 $ 1.14 5.9%
MARGINS
Gross Profit 16.4% 15.5%
EBIT 11.2% 10.4%
Tax Rate 39.7% 37.2%
Net Income 3.8% 3.6%
</TABLE>
<TABLE>
<CAPTION>
1Q
------------------------------------
1Q 2000
($MM) PF BETTER/
1Q 2000 1Q 1999 WORSE
-------- -------- --------
<S> <C> <C> <C>
Revenue $ 207.7 $ 218.7 (5.0)%
Cost of Sales(2) 178.2 188.5 5.5%
-------- --------
Gross Profit 29.5 30.1 (2.3)%
SG&A 11.3 9.3 (21.1)%
-------- --------
EBIT 18.2 20.8 (12.7)%
Other Expense 1.1 1.1 8.0%
Interest Expense 8.0 9.4 15.2%
-------- --------
EBT 9.1 10.3 (10.9)%
Income Taxes 3.5 3.4 (3.7)%
-------- --------
Net Income 5.6 6.9 (18.1)%
======== ========
Diluted Shares 13.6 13.4
Diluted EPS $ 0.41 $ 0.51 (19.4)%
MARGINS
Gross Profit 14.2% 13.8%
EBIT 8.8% 9.5%
Tax Rate 38.2% 32.8%
Net Income 2.7% 3.1%
</TABLE>
<TABLE>
<CAPTION>
2Q
------------------------------------
2Q 2000
($MM) PF BETTER/
2Q 2000 2Q 1999 WORSE
-------- -------- --------
<S> <C> <C> <C>
Revenue $ 217.1 $ 221.2 (1.9)%
Cost of Sales(2) 185.9 188.8 1.5%
-------- --------
Gross Profit 31.2 32.5 (3.9)%
SG&A 11.0 12.0 8.1%
-------- --------
EBIT 20.2 20.5 (1.4)%
Other Expense 1.1 1.0 (14.5)%
Interest Expense 7.8 8.8 11.0%
-------- --------
EBT 11.3 10.8 5.0%
Income Taxes 4.4 4.8 7.5%
-------- --------
Net Income 6.9 6.0 14.8%
======== ========
Diluted Shares 13.8 13.5
Diluted EPS $ 0.50 $ 0.44 12.3%
MARGINS
Gross Profit 14.4% 14.7%
EBIT 9.3% 9.3%
Tax Rate 38.9% 44.2%
Net Income 3.2% 2.7%
</TABLE>
<TABLE>
<CAPTION>
2H
--------------------------------------
2H 2000
($MM) REQUIRED(1) PF BETTER/
6 MOS. 2H 1999 WORSE
---------- -------- --------
<S> <C> <C> <C>
Revenue $ 439.7 $ 420.9 4.5%
Cost of Sales(2) 367.6 361.7 (1.6)%
-------- --------
Gross Profit 72.1 59.1 22.0%
SG&A 22.7 21.8 (4.0)%
-------- --------
EBIT 49.5 37.3 32.5%
Other Expense 3.9 2.2 (75.4)%
Interest Expense 18.2 17.4 (4.5)%
-------- --------
EBT 27.4 17.7 54.7%
Income Taxes 10.9 6.5 (67.9)%
-------- --------
Net Income 16.5 11.2 47.1%
======== ========
Diluted Shares 13.7 13.7(3)
Diluted EPS $ 1.20 $ 0.82 47.2%
MARGINS
Gross Profit 16.4% 14.0%
EBIT 11.2% 8.9%
Tax Rate 39.7% 36.6%
Net Income 3.8% 2.7%
</TABLE>
Notes:
(1) Required results to achieve original full year projections.
(2) Midpoint of weighted average shares and equivalent shares outstanding from
third and fourth quarters of 1999.
(3) Net income excludes extraordinary loss from early extinguishment of debt.
- 19 -
<PAGE> 22
U.S. CAN CORPORATION IV. Valuation
--------------------------------------------------------------------------------
2001-2004 PROJECTIONS
o Moderate annual top-line growth of 1.6-1.8%
o Assumes no market share increase/decrease
o Appears reasonable compared to its 1996-1999 CAGR of 2.6%
o Gross margins (excluding D&A) improve from 19.4% in 2000 to 20.3% in 2004
o Represents a significant improvement from its four year historical
high of 18.6% in 1996
o 4% CAGR for both EBIT and EBITDA between 2000-2004 compared to 1.1% and
4.5% CAGRs, respectively, for 1996-1999 actual results*
o Essentially flat SG&A expenditures contribute to growth
o Resulting profit margins of 15.4% and 10.6% for EBITDA and EBIT,
respectively, represent premiums to historical 1996-1999 highs* of
14.3% and 9.4%, respectively
o Capital expenditures expected to remain flat at $40 million
o Depreciation and amortization increase to capital expenditure levels by
2004
o Excess cash flow estimated to reduce net borrowings from $295MM at 12/31/00
to $99MM at 12/31/04, resulting in a reduction of net interest expense from
$34MM in 2000 to $26MM in 2004
o Cash tax rates increase from 17% in 2000 to 30% thereafter largely due to
the loss of alternative minimum tax credits
o EPS grows at 10.4% CAGR from 2000-2004 compared to 8.8% CAGR from
1996-1999*
*Excludes restructuring and discontinued operations
- 20 -
<PAGE> 23
U.S. CAN CORPORATION IV. Valuation
--------------------------------------------------------------------------------
PROJECTIONS SUMMARY
($ in millions, except per share)
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------------------------------------------------
Historical(1)
------------------------------------------------------------------------------------
1996A 1997A 1998A(3) 1999A 1999 PF(4) LTM PF(4)(5)
-------- -------- -------- -------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Sales $ 660.6 $ 755.7 $ 710.2 $ 714.1 $ 860.8 $ 849.8
% Growth -- 14.4% (6.0)% 0.5% NM NM
Gross Margins(6) 18.6% 16.5% 17.2% 18.4% 18.1% 18.2%
EBITDA 94.5 91.6 89.7 97.5 112.6 109.4
% Growth -- (3.1)% (2.1)% 8.7% NM NM
% Margin 14.3% 12.1% 12.6% 13.7% 13.1% 12.9%
EBIT(7) 58.7 54.9 57.6 67.0 77.2 74.6
% Growth -- (6.5)% 5.0% 16.2% NM NM
% Margin 8.9% 7.3% 8.1% 9.4% 9.0% 8.8%
EPS 1.28 0.69 1.04 1.65 1.78 1.72
% Growth -- (46.1)% 50.7% 58.7% NM NM
Capital Expenditures 48.6 54.0 22.8 30.5 35.5 NA
% of Sales 7.4% 7.1% 3.2% 4.3% 4.1% NA
Depreciation and
Amortization 35.8 36.7 32.1 30.5 35.4 34.8
<CAPTION>
Year Ended December 31,
----------------------------------------------------------------
Projected(2) CAGR
---------------------------------------------------------------- -----------------------
2000E 2001E 2002E 2003E 2004E '96-'99A PF'99-04E
-------- -------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Sales $ 864.5 $ 880.1 $ 896.3 $ 910.3 $ 924.5 2.6% 1.4%
% Growth 0.4% 1.8% 1.8% 1.6% 1.6%
Gross Margins(6) 19.4% 19.8% 20.2% 20.4% 20.3%
EBITDA 122.4 129.7 136.5 140.5 142.7 1.1% 4.9%
% Growth 8.7% 6.0% 5.2% 2.9% 1.6%
% Margin 14.2% 14.7% 15.2% 15.4% 15.4%
EBIT(7) 83.4 88.6 93.1 95.7 97.6 4.5% 4.8%
% Growth 8.0% 6.2% 5.1% 2.8% 2.0%
% Margin 9.6% 10.1% 10.4% 10.5% 10.6%
EPS 2.10 2.45 2.73 2.94 3.12 8.8% 11.9%
% Growth 18.0% 16.7% 11.4% 7.7% 6.1%
Capital Expenditures 42.0 40.0 40.0 40.0 40.0
% of Sales 4.9% 4.5% 4.5% 4.4% 4.3%
Depreciation and
Amortization 39.0 41.1 43.4 44.8 45.1
</TABLE>
Notes:
(1) Historical results exclude $35.9 million and $70.0 million in non-recurring
restructuring charges for 1998 and 1997 respectively.
(2) Projections are from Management.
(3) The Company lost one of its major customers in late 1997 that accounted for
$29.9 million of sales in 1997.
(4) Pro forma for the acquisition of May.
(5) Latest twelve months for the period ended April 2, 2000.
(6) Excludes depreciation and amortization.
(7) Assumes income statement line item "other expenses" in 1999 10-K refers to
goodwill amortization, which is included in determining EBIT.
- 21 -
<PAGE> 24
U.S. CAN CORPORATION IV. Valuation
--------------------------------------------------------------------------------
SUMMARY BALANCE SHEET
($ in millions)
<TABLE>
<CAPTION>
AS OF
APRIL 2, 2000
-------------
<S> <C>
ASSETS
Current Assets
Cash & Cash Equivalents $ 12.2
Accounts Receivable 103.8
Inventories 115.3
Prepaid Expenses and Other Current Assets 20.8
Prepaid Income Taxes 16.1
------------
TOTAL CURRENT ASSETS $ 268.3
Net Property, Plant and Equipment 295.3
Intangible Assets, Net 72.7
Other Assets 20.9
------------
TOTAL ASSETS $ 657.2
============
LIABILITIES
Current Liabilities
Current Maturities of LT Debt $ 49.9
Accounts Payable 100.9
Other Current Liabilities 69.9
------------
TOTAL CURRENT LIABILITIES $ 220.8
Senior Debt 75.5
Subordinated Debt 236.6
Deferred Income Taxes and Other LT Liabilities 54.0
------------
TOTAL LIABILITIES $ 586.9
STOCKHOLDER'S EQUITY 70.3
------------
TOTAL LIABILITIES & STOCKHOLDER'S EQUITY $ 657.2
============
</TABLE>
<TABLE>
<S> <C>
Net Debt $ 349.9
Total Debt 362.1
Net Debt/Net Book Capitalization 83.3%
Net Debt/Net Market Capitalization 55.7%
</TABLE>
Note: Net debt / market capitalization ratio is based on $20 per share
Management bid and 13.9 million diluted shares.
- 22 -
<PAGE> 25
U.S. CAN CORPORATION IV. Valuation
--------------------------------------------------------------------------------
SUMMARY VALUATION
<TABLE>
<CAPTION>
VALUATION METHODOLOGIES RANGE OF SHARE PRICES
----------------------- -------------------------
LOW HIGH
---------- ----------
<S> <C> <C>
Comparable Companies(1) $ 15.11 $ 15.96
Packaging Transaction Multiples(2) 23.17 24.51
Rexam/Amer Nat'l Can(3) 20.16 20.68
Industrial Premiums Paid(4) 19.94 21.11
DCF Analysis(5) 15.93 28.38
LBO Valuation(6) 18.00 22.00
</TABLE>
<TABLE>
<S> <C> <C>
MEAN $ 18.72 $ 22.11
MEDIAN 18.97 21.56
HIGH 23.17 28.38
LOW 15.11 15.96
</TABLE>
Notes:
(1) Represents the range of median and mean implied share values attained from
applying the appropriate median multiples from selected companies. The high
and low values were $21.55 and $4.25, respectively. See page 25.
(2) Represents the range of median and mean implied share values attained from
applying the appropriate median LTM multiples from selected transactions.
The high and low values were $40.84 and $8.01, respectively. See pages
26-28.
(3) Represents the range of median and mean implied share values attained from
applying the appropriate median multiples to Rexam's bid for American
National Can. The high and low values were $30.00 and $5.36, respectively.
See page 29.
(4) Range of implied share values, assuming the median 1-day, 1-week and 4-week
premiums and the percentage of 52-week and all-time high prices for
industrial transactions between $250-$1,000 million from January 1, 1999 to
May 22, 2000. The high and low values were $27.19 and $18.53, respectively.
See pages 30 and 41-42.
(5) Assumes EBITDA exit multiples of 4.5x to 6.0x and discount rates of 11.0%
to 13.0%. See page 31.
(6) Assumes IRR of approximately 20% to 30% based on 4.5x to 6.0x EBITDA exit
multiples in Year 5. See page 32.
- 23 -
<PAGE> 26
U.S. CAN CORPORATION IV. Valuation
--------------------------------------------------------------------------------
ANALYSIS AT VARIOUS PRICES
($ in millions, except share prices)
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Stock Price $ 14.88 $ 18.00 $ 19.00 $ 20.00 $ 21.00 $ 22.00
Premium to 3/21/2000 Stock Price 0.0% 21.0% 27.7% 34.5% 41.2% 47.9%
Diluted Shares Outstanding in Millions(7) 13.50 13.77 13.84 13.91 13.97 14.02
Market Value of Equity(1) $ 200.8 $ 247.8 $ 263.0 $ 278.1 $ 293.3 $ 308.5
Net Debt (as of 4/2/00) 349.9 349.9 349.9 349.9 349.9 349.9
Total Value $ 550.7 $ 597.7 $ 612.9 $ 628.0 $ 643.2 $ 658.4
</TABLE>
<TABLE>
<CAPTION>
U.S. Can
Total Value/ Results Implied U.S. Can Multiples
------------ -------- --------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
LTM Pro Forma Sales(2) $ 849.8 0.65x 0.70x 0.72x 0.74x 0.76x 0.77x
2000E Sales(3) 864.5 0.64 0.69 0.71 0.73 0.74 0.76
2001E Sales(3) 880.1 0.63 0.68 0.70 0.71 0.73 0.75
LTM Pro Forma EBITDA(2) 109.4 5.0x 5.5x 5.6x 5.7x 5.9x 6.0x
2000E EBITDA(3) 122.4 4.5 4.9 5.0 5.1 5.3 5.4
2001E EBITDA(3) 129.7 4.2 4.6 4.7 4.8 5.0 5.1
LTM Pro Forma EBITDA - Cap Ex(2)(5) 68.5 8.0x 8.7x 8.9x 9.2x 9.4x 9.6x
2000E EBITDA - Cap Ex(3)(5) 81.5 6.8 7.3 7.5 7.7 7.9 8.1
2001E EBITDA - Cap Ex(3)(5) 88.8 6.2 6.7 6.9 7.1 7.2 7.4
LTM Pro Forma EBIT(2) 74.6 7.4x 8.0x 8.2x 8.4x 8.6x 8.8x
2000E EBIT(3) 83.4 6.6 7.2 7.3 7.5 7.7 7.9
2001E EBIT(3) 88.6 6.2 6.7 6.9 7.1 7.3 7.4
Price per share /
LTM Pro Forma E.P.S.(2)(4) $ 1.72 8.6x 10.4x 11.0x 11.6x 12.2x 12.8x
2000E E.P.S.(3) 2.10 7.1 8.6 9.0 9.5 10.0 10.5
2001E E.P.S.(3) 2.45 6.1 7.3 7.8 8.2 8.6 9.0
LQ Book Value $ 70.3 2.86x 3.53x 3.74x 3.96x 4.17x 4.39x
<CAPTION>
Selected Comparable Companies
---------------------------------------------------------------------------------------
Crown,
Amer. Nat'l Cork & Owens- Group
Total Value/ Can(6) Ball BWAY Seal Illinois Silgan Median
------------ ----------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
LTM Pro Forma Sales(2) 0.74x 0.62x 0.48x 1.00x 1.46x 0.62x 0.68x
2000E Sales(3) 0.70 0.60 N/A 1.01 1.42 0.60 0.70
2001E Sales(3) 0.68 0.58 N/A 0.99 1.37 0.59 0.68
LTM Pro Forma EBITDA(2) 4.9x 5.0x 5.9x 5.8x 6.6x 4.7x 5.4x
2000E EBITDA(3) 4.3 4.7 N/A 5.7 5.4 4.6 4.7
2001E EBITDA(3) 4.1 4.4 N/A 5.6 5.2 4.4 4.4
LTM Pro Forma EBITDA - Cap Ex(2)(5) 6.1x 6.3x N/M 8.6x 12.1x 6.9x 6.9x
2000E EBITDA - Cap Ex(3)(5) 5.3 5.9 N/A 8.5 8.6 6.6 6.6
2001E EBITDA - Cap Ex(3)(5) 4.9 5.4 N/A 8.3 8.1 6.3 6.3
LTM Pro Forma EBIT(2) 7.4x 7.8x 11.3x 9.6x 9.8x 7.2x 8.7x
2000E EBIT(3) 6.3 7.3 N/A 9.3 8.5 6.9 7.3
2001E EBIT(3) 5.7 6.7 N/A 8.3 8.1 6.5 6.7
Price per share /
LTM Pro Forma E.P.S.(2)(4) 6.4x 9.0x N/M 8.3x 6.7x 3.7x 6.7x
2000E E.P.S.(3) 5.9 8.1 9.2x 8.0 6.2 3.6 7.1
2001E E.P.S.(3) 5.1 7.2 7.1 7.4 5.4 3.3 6.2
LQ Book Value 0.66x 1.37x 0.84x 0.79x 1.10x NM 0.84x
</TABLE>
Notes:
(1) Purchase price excludes closing costs and fees.
(2) Pro forma for May acquisition as if it had occurred on the first day of the
period.
(3) Management estimates.
(4) Excludes $1.3 million net after-tax loss from early extinguishment of debt.
(5) Capital expenditures are based on the average capital expenditures of the
last three years, including $5 million annually for May, per Management
estimates.
(6) Based on share price at 3/6/00, 20 trading days prior to the 4/3/00
announced $18.00 purchase offer by Rexam PLC.
(7) Based on 13.4 million shares outstanding as of 4/30/00, 0.1 million
restricted shares and detailed options table provided by Management.
- 24 -
<PAGE> 27
U.S. CAN CORPORATION IV. VALUATION
--------------------------------------------------------------------------------
IMPLIED VALUATION OF COMPARABLE COMPANIES
($ IN MILLION, EXCEPT PER SHARE)
<TABLE>
<CAPTION>
Implied
Median U.S. Can Equity Value
Multiples Result Per Share(1)
---------- ---------- ------------
<S> <C> <C> <C>
Revenue
2001E 0.68x $ 880.1 $ 18.12
2000E 0.70 864.5 18.26
LTM 0.68 849.8(2) 16.44
EBITDA
2001E 4.4x $ 129.7 $ 15.81
2000E 4.7 122.4 16.11
LTM 5.4 109.4(2) 17.22
EBITDA-CapEx
2001E 6.3x $ 88.8 $ 14.79
2000E 6.6 81.5 13.47
LTM 6.9 68.5(2) 8.71
EBIT
2001E 6.7x $ 88.6 $ 17.36
2000E 7.3 83.4 18.40
LTM 8.7 74.6(2) 21.55
Net Income
2001E 6.2x $ 33.9 $ 15.14
2000E 7.1 29.1 14.84
LTM 6.7 23.5(2) 11.29
Book Equity
LQ 0.84x $ 70.3 $ 4.25
</TABLE>
<TABLE>
<S> <C>
Mean $ 15.11
Median $ 15.96
High $ 21.55
Low $ 4.25
</TABLE>
Notes:
(1) Based on median multiple and assumes $349.9 million in net debt and 13.9
million diluted shares outstanding.
(2) Pro forma for year ended April 2, 2000 as per management figures.
- 25 -
<PAGE> 28
U.S. CAN CORPORATION IV. VALUATION
--------------------------------------------------------------------------------
SELECTED PACKAGING TRANSACTIONS
($ IN MILLION, EXCEPT PER SHARE)
<TABLE>
<CAPTION>
ENTERPRISE VALUE AS
A MULTIPLE OF:
-------------------
ANN. DATE PRICE / EPS REVENUES
CLOSE DATE BUYER/ EQUITY TOTAL PRICE/ ------------------- -------------------
LTM TARGET VALUE VALUE BOOK LTM LFY+1 LTM LFY+1
---------- ---------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
04/03/2000 Rexam PLC $ 993.5 $2,092.9 1.06x 10.0x 9.4x 0.90x 0.85x
NA American National Can
03/31/2000
12/22/1999 U.S. Can Corporation
12/30/1999 May Verpackungen(2) 63.8 90.0 NA 11.1 9.1 0.61 0.60
12/31/1999
11/30/1998 Rexam PLC 632.3 1,001.9 1.54 10.5 14.6 0.89 0.87
02/02/1999 PLM AB
09/30/1998
04/09/1998 Drum Holdings SA NA 164.1 NA NA NA 0.77 NA
05/08/1998 Blagden Packaging(Blagden)
12/31/1997
03/02/1998 Owens-Illinois, Inc. NA 3,600.0 NA NA NA 2.58 NA
04/30/1998 BTR Packaging
12/31/1997
01/14/1998 Suiza Food Corporation 150.9 336.2 2.09 16.9 NA 0.62 NA
06/01/1998 Continental Can Co Inc
09/30/1997
12/16/1997 Ball Corporation NA 746.0 NA NA NA 0.63 NA
08/10/1998 Domestic Beverage Can Unit
12/31/1997 (Reynolds Metals Co.)
11/19/1996 Doughty Hanson 1,218.9 1,218.9 NA NA NA 0.89 NA
05/28/1997 Metal packaging interests
12/31/1995 (Pechiney SA / VIAG AG)
08/02/1996 U.S. Can Corp. 15.0 20.6 NA 5.0 NA 0.70 NA
08/02/1996 CPI Plastics Inc.
06/30/1996
<CAPTION>
ENTERPRISE VALUE AS A MULTIPLE OF:
----------------------------------------------------------------
ANN. DATE EBITDA EBITDA-CAPEX(1) EBIT
CLOSE DATE BUYER/ ------------------- ------------------- -------------------- 1 MO.
LTM TARGET LTM LFY+1 LTM LFY+1 LTM LFY+1 PREMIUM
---------- ---------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
04/03/2000 Rexam PLC 5.9x 5.3x 7.3x 6.5x 8.8x 7.6x 65.5%
NA American National Can
03/31/2000
12/22/1999 U.S. Can Corporation
12/30/1999 May Verpackungen(2) 6.7 6.4 10.7 9.9 9.5 8.8 NA
12/31/1999
11/30/1998 Rexam PLC 6.1 6.3 15.3 16.5 12.2 13.6 53.2
02/02/1999 PLM AB
09/30/1998
04/09/1998 Drum Holdings SA NA NA NA NA NA NA NA
05/08/1998 Blagden Packaging(Blagden)
12/31/1997
03/02/1998 Owens-Illinois, Inc. 7.7 NA 13.2 NA 14.4 NA NA
04/30/1998 BTR Packaging
12/31/1997
01/14/1998 Suiza Food Corporation 6.7 NA 18.6 NA 10.7 NA 83.7
06/01/1998 Continental Can Co Inc
09/30/1997
12/16/1997 Ball Corporation 7.1 NA NA NA 14.7 NA NM
08/10/1998 Domestic Beverage Can Unit
12/31/1997 (Reynolds Metals Co.)
11/19/1996 Doughty Hanson NA NA NA NA NA NA NM
05/28/1997 Metal packaging interests
12/31/1995 (Pechiney SA / VIAG AG)
08/02/1996 U.S. Can Corp. 4.2 NA 5.1 NA 5.7 NA NM
08/02/1996 CPI Plastics Inc.
06/30/1996
</TABLE>
Notes:
(1) Normalized capital expenditures based on average of last three fiscal
years. U.S. Can figure is pro forma for an incremental $5 million annually
for May, per Management estimates.
(2) May estimates based on Tin financials and exclude purchasing synergies and
increased goodwill amortization, interest and other expense associated with
Tin purchase. Assumes capital expenditures of $5 million per management
estimates.
- 26 -
<PAGE> 29
U.S. CAN CORPORATION IV. Valuation
--------------------------------------------------------------------------------
SELECTED PACKAGING TRANSACTIONS
($ IN MILLION, EXCEPT PER SHARE)
<TABLE>
<CAPTION>
ENTERPRISE VALUE AS
A MULTIPLE OF:
-------------------
ANN. DATE PRICE/ EPS REVENUES
CLOSE DATE BUYER/ EQUITY TOTAL PRICE/ ------------------- -------------------
LTM TARGET VALUE VALUE BOOK LTM LFY+1 LTM LFY+1
---------- ---------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
08/01/1996 U.S. Can Corp. $ 51.8 $ 57.6 NA 18.2x NA 0.48x NA
09/11/1996 European Aerosol Can
06/30/1996 (Crown Cork & Seal)
06/02/1995 Silgan Corporation 336.3 337.4 NA NM NA 0.58 NA
09/26/1995 Food metal and specialty
12/31/1995 business (Amer. Nat'l Can
Company)
05/22/1995 Crown Cork & Seal Company 3,703.0 4,759.9 1.59 20.0 NA 0.98 NA
02/15/1996 CarnaudMetalBox SA
06/30/1995
01/27/1994 Crown Cork & Seal Co. NA 62.0 NA NA NA 0.47 NA
06/27/1994 Tri Valley Growers Cont
12/31/1993 (Tri Valley Growers Inc)
12/02/1992 Ball Corporation 88.30 249.90 1.61 NM NA 0.73 NA
03/19/1993 Heekin Can, Inc.
09/06/1992
Mean: 1.58x 13.1x 11.0x 0.84x 0.77x
Median: 1.59 11.1 9.4 0.72 0.85
High: 2.09 20.0 14.6 2.58 0.87
Low: 1.06 5.0 9.1 0.47 0.60
03/22/2000 Management Buyout Group $ 278.1 $ 628.0 3.96x 11.6x 9.5x 0.74x 0.73x
NA U.S. Can
04/02/2000
<CAPTION>
ENTERPRISE VALUE AS A MULTIPLE OF:
----------------------------------------------------------------
ANN. DATE EBITDA EBITDA-CAPEX(1) EBIT
CLOSE DATE BUYER/ ------------------- ------------------- -------------------- 1 MO.
LTM TARGET LTM LFY+1 LTM LFY+1 LTM LFY+1 PREMIUM
---------- ---------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
08/01/1996 U.S. Can Corp. 4.5x NA NA NA 8.3x NA NM
09/11/1996 European Aerosol Can
06/30/1996 (Crown Cork & Seal)
06/02/1995 Silgan Corporation NM NA NA NA NM NA NM
09/26/1995 Food metal and specialty
12/31/1995 business (Amer. Nat'l Can
Company)
05/22/1995 Crown Cork & Seal Company 6.9 NA 13.6 NA 11.1 NA 40.9%
02/15/1996 CarnaudMetalBox SA
06/30/1995
01/27/1994 Crown Cork & Seal Co. NA NA NA NA NA NA NM
06/27/1994 Tri Valley Growers Cont
12/31/1993 (Tri Valley Growers Inc)
12/02/1992 Ball Corporation 8.9 NA 19.0 NA 16.4 NA 54.3
03/19/1993 Heekin Can, Inc.
09/06/1992
Mean: 6.5x 6.0x 12.9x 11.0x 11.2x 10.0x 59.5%
Median: 6.7 6.3 13.4 9.9 10.9 8.8 54.3
High: 8.9 6.4 19.0 16.5 16.4 13.6 83.7
Low: 4.2 5.3 5.1 6.5 5.7 7.6 40.9
03/22/2000 Management Buyout Group 5.7x 5.1x 9.2x 7.7x 8.4x 7.5x 54.6%
NA U.S. Can
04/02/2000
</TABLE>
Note:
(1) Normalized capital expenditures based on average of last three fiscal
years. U.S. Can figure is pro forma for an incremental $5 million annually
for May, per Management estimates.
- 27 -
<PAGE> 30
U.S. CAN CORPORATION IV. Valuation
--------------------------------------------------------------------------------
IMPLIED VALUATION OF SELECTED PACKAGING TRANSACTIONS
($ IN MILLION, EXCEPT PER SHARE)
<TABLE>
<CAPTION>
Median U.S. Can Implied
LTM PF LTM Equity Value
Multiples Result(1) Per Share(2)
------------ ------------ ------------
<S> <C> <C> <C>
Revenue 0.72x $ 849.8 $ 18.54
EBITDA 6.7 109.4 27.57
EBITDA-CapEx 13.4 68.5 40.84
EBIT 10.9 74.6 33.32
Net Income 11.1 23.5 18.76
Book Equity 1.59 70.3 8.01
</TABLE>
<TABLE>
<S> <C>
Mean $ 24.51
Median 23.17
High 40.84
Low 8.01
</TABLE>
Notes:
(1) Pro forma for year ended April 2, 2000 as per management figures.
(2) Based on median multiple and assumes $349.9 million in net debt and 13.9
million diluted shares outstanding.
- 28 -
<PAGE> 31
U.S. CAN CORPORATION IV. Valuation
--------------------------------------------------------------------------------
REXAM BID FOR AMERICAN NATIONAL CAN
($ in millions, except per share data)
<TABLE>
<CAPTION>
Implied
Rexam Bid U.S. Can Equity Value
Multiples Result Per Share(1)
------------ ------------ ------------
<S> <C> <C> <C>
Revenue
2001E 0.83x $ 880.1 $ 27.57
2000E 0.85 864.5 27.73
LTM 0.90 849.8(2) 30.00
EBITDA
2001E 4.9x $ 129.7 $ 20.89
2000E 5.3 122.4 21.37
LTM 5.9 109.4(2) 21.01
EBITDA-Cap Ex
2001E 5.9x $ 88.8 $ 12.78
2000E 6.5 81.5 12.67
LTM 7.3 68.5(2) 11.02
EBIT
2001E 6.9x $ 88.6 $ 18.96
2000E 7.6 83.4 20.68
LTM 8.8 74.6(2) 21.90
Net Income
2001E 8.3x $ 33.9 $ 20.19
2000E 9.4 29.1 19.72
LTM 10.0 23.5(2) 16.93
Book Equity
LQ 1.1x $ 70.3 $ 5.36
Premiums
1-Day 37.1% $ 14.88 $ 20.40
1-Week 41.9% 13.25 18.80
1-Month 65.5% 12.94 21.41
% 52 Week High 105.5% 25.63 27.03
% All-Time High 105.5% 25.63 27.03
</TABLE>
<TABLE>
<S> <C>
Median $ 20.68
Mean 20.16
High 30.00
Low 5.36
</TABLE>
Notes:
(1) Assumes $349.9 million in net debt and 13.9 million diluted shares
outstanding.
(2) Pro forma for year ended April 2, 2000 as per management figures.
- 29 -
<PAGE> 32
U.S. CAN CORPORATION IV. Valuation
--------------------------------------------------------------------------------
INDUSTRIAL BUYOUT PREMIA(1)
($ in millions, except per share data)
<TABLE>
<CAPTION>
ACQUISITION PRICE RANGE
U.S. CAN -------------------------------------
PRICE LOW MEDIAN HIGH
-------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
ACTUAL RESULTS ACQUISITION PRICE AS
One Day Prior $ 14.88 % Premium to One Day Prior (3.6)% 29.6% 85.1%
One Week Prior 13.25 % Premium to One Week Prior (6.3)% 39.8% 104.0%
Four Weeks Prior 12.94 % Premium to Four Weeks Prior (5.5)% 54.2% 152.6%
52-Week High 25.63 % of 52-week High 45.5% 106.1% 142.6%
All-Time High 25.63 % of All-Time High 19.7% 80.5% 140.0%
<CAPTION>
IMPLIED PRICE BUYER
U.S. CAN ---------------------------------- GROUP
PRICE LOW MEDIAN HIGH PREMIUM
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
ACTUAL RESULTS ACQUISITION PRICE AS
One Day Prior $ 14.88 % Premium to One Day Prior $ 14.34 $ 19.27 $ 27.53 34.5%
One Week Prior 13.25 % Premium to One Week Prior $ 12.42 $ 18.53 $ 27.03 50.9%
Four Weeks Prior 12.94 % Premium to Four Weeks Prior $ 12.22 $ 19.94 $ 32.68 54.6%
52-Week High 25.63 % of 52-week High $ 11.67 $ 27.19 $ 36.55 78.0%
All-Time High 25.63 % of All-Time High $ 5.06 $ 20.63 $ 35.86 78.0%
Mean $ 11.14 $ 21.11 $ 31.93
Median 12.22 19.94 32.68
High 14.34 27.19 36.55
Low 5.06 18.53 27.03
</TABLE>
Note: (1) Based on SDC industrial domestic transactions of $250 - $1,000 million
in size from January 1, 1999 to May 22, 2000.
- 30 -
<PAGE> 33
U.S. CAN CORPORATION IV. Valuation
--------------------------------------------------------------------------------
SUMMARY DISCOUNTED CASH FLOW ANALYSIS(1)
($ in millions, except per share)
<TABLE>
<CAPTION>
INCOME STATEMENT 2000 2001 2002 2003 2004
---------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
EBITDA $ 122.4 $ 129.7 $ 136.5 $ 140.5 $ 142.7
% of sales 14.2% 14.7% 15.2% 15.4% 15.4%
EBIT 83.4 88.6 93.1 95.7 97.6
% of sales 9.6% 10.1% 10.4% 10.5% 10.6%
Cash Taxes 15.6 27.9 29.3 30.1 30.6
Cash tax rate(2) 17.7% 30.0% 30.0% 30.0% 30.0%
Unlevered Net Income $ 67.8 $ 60.7 $ 63.8 $ 65.6 $ 67.0
CASH FLOW ITEMS
Depreciation $ 34.5 $ 36.6 $ 38.9 $ 40.3 $ 40.6
Goodwill Amortization 4.5 4.5 4.5 4.5 4.5
Change in Working Capital 8.2 (5.4) (1.1) (6.5) (1.2)
Cash Restructuring(6) (9.5) (3.5) -- -- --
Change in Other Assets/Liabilities (net) 4.1 4.9 2.6 1.6 0.9
Capital Expenditures (42.0) (40.0) (40.0) (40.0) (40.0)
-------- -------- -------- -------- --------
Unlevered Free Cash Flow $ 67.6 $ 57.8 $ 68.7 $ 65.5 $ 71.8
</TABLE>
<TABLE>
<CAPTION>
Discount Rates
------------------------------------------------------------
11.0% 11.5% 12.0% 12.5% 13.0%
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PV of Unlevered Free Cash Flow(3) $ 222.9 $ 220.1 $ 217.4 $ 214.7 $ 212.1
PV of Terminal Value at 2004 EBITDA Exit Multiple
4.5x $ 391.2 $ 382.9 $ 374.8 $ 367.0 $ 359.3
5.0 434.6 425.4 416.5 407.8 399.3
5.5 478.1 468.0 458.1 448.6 439.2
6.0 521.5 510.5 499.8 489.3 479.1
Net Debt(4) $ 349.9 $ 349.9 $ 349.9 $ 349.9 $ 349.9
Equity Value per Share at 2004 EBITDA Exit Multiple(5)
4.5x $ 19.00 $ 18.20 $ 17.43 $ 16.67 $ 15.93
5.0 22.13 21.26 20.42 19.60 18.80
5.5 25.25 24.32 23.42 22.54 21.67
6.0 28.38 27.38 26.41 25.47 24.55
</TABLE>
Notes:
(1) Based on management projections to 2004, discounted to April 2, 2000.
(2) Based on management's expected cash tax rate.
(3) Value as of April 2, 2000 assuming cash flows occur at end of year.
(4) Net debt as of April 2, 2000.
(5) Assumes 13.9 million fully diluted shares outstanding based on stock price
of $20.00 per share.
(6) Cash restructuring charge of $9.5 million in 2000 is for the period from
April 3 - December 31, 2000.
- 31 -
<PAGE> 34
U.S. CAN CORPORATION IV. Valuation
--------------------------------------------------------------------------------
LBO FROM PURCHASER PERSPECTIVE
($ in millions, except per share)
DEAL SUMMARY(1)
<TABLE>
<CAPTION>
PURCHASE PRICE: USES OF CASH:
<S> <C> <C> <C>
Total Equity(2) $ 278.1
Price Per Share $ 20.00 Total Debt 359.3
Shares Outstanding 13.9 Closing Costs(3) 39.7
-------- --------
Implied Equity Value $ 278.1 $ 677.1
% of Equity Rolled-over 3.0% SOURCES OF CASH:
Cost to Purchase Equity $ 269.8 Excess Cash $ 10.0
% Management Options 11.0% Assumed Debt 31.5
New Senior Debt 318.2
Subordinated Debt 150.0
Rolled Equity 8.3
New Equity 159.1
--------
$ 677.1
</TABLE>
PRIVATE EQUITY IRR ASSUMING EXIT AT END OF 2004
<TABLE>
<CAPTION>
Purchase Price Per Share
--------------------------------------------------------------------------------------------
$ 18.00 $ 19.00 $ 20.00 $ 21.00 $ 22.00 $ 23.00 $ 24.00
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
EBITDA 4.5x 17.3% 14.9% 12.8% 10.9% 9.2% 7.6% 6.1%
Exit 5.0 22.1% 19.6% 17.4% 15.4% 13.6% 11.9% 10.4%
Multiple 5.5 26.2% 23.6% 21.3% 19.3% 17.4% 15.7% 14.1%
6.0 29.8% 27.2% 24.8% 22.7% 20.8% 19.0% 17.4%
</TABLE>
PRO FORMA CREDIT STATISTICS:
<TABLE>
<CAPTION>
Fiscal Year Ended December 31
PF LTM ----------------------------------------------------------------
as of 4/2/00 2000 2001 2002 2003 2004
------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
EBIT / Total Interest Expense 1.4x 1.1x 1.7x 1.9x 2.1x 2.4x
EBITDA / Total Interest Expense 2.1 2.3 2.6 2.9 3.3 3.6
Total Debt / EBITDA 4.6 3.8 3.4 2.9 2.6 2.2
Percent of Senior Debt Repaid NM 11.2% 18.1% 28.8% 39.3% 52.4%
Total Debt Paydown NM 7.8% 12.7% 20.2% 27.5% 36.7%
</TABLE>
Notes:
(1) Assumes transaction takes place on January 1, 2000, with Tranche A and B at
LIBOR + 300 and 350 basis points, respectively, and senior subordinated
debt at 13.5%.
(2) Based on 13.4 million shares outstanding as of 4/30/00, 0.1 million
restricted shares and detailed options table provided by Management.
(3) Assumes total debt as of 12/31/00 of $359.3 million.
(4) Based on Pac Packaging Proposal and includes $20.5 million of transaction
costs and $19.2 million bond tender premium.
- 32 -
<PAGE> 35
================================================================================
APPENDIX
================================================================================
- 33 -
<PAGE> 36
U.S. CAN CORPORATION APPENDIX A
--------------------------------------------------------------------------------
EQUITY COMPARABLES
($ IN MILLIONS, EXCEPT PER SHARE)
TRADING STATISTICS OF RIGID METAL & GLASS COMPANIES
<TABLE>
<CAPTION>
STOCK PRICE
---------------------------
CHANGE
FROM EQUITY TOTAL PRICE/
COMPANY 5/31/00 52-WK HIGH VALUE VALUE BOOK
------------------------ ------- ----------- --------- --------- ------
<S> <C> <C> <C> <C> <C> <C>
US Can Corp (2/08/00)(1) $ 14.19 (46.2)% $ 191.5 $ 541.4 2.73x
US Can (Deal)(1) 20.00 (24.2)% 278.1 628.0 3.96
American Nat'l Can (2/18/00)(1) $ 11.25 (34.8)% $ 618.8 $ 1,718.1 0.66x
Ball(1) 29.69 (43.4)% 918.7 2,222.5 1.37
BWAY(1) 7.19 (51.5)% 66.8 223.9 0.84
Crown Cork & Seal(1) 17.13 (50.2)% 2,193.8 7,540.8 0.79
Owens-Illinois(1) 11.25 (66.4)% 2,104.7 8,109.9 1.10
Silgan(1) 9.38 (64.8)% 168.5 1,156.9 NM
Median (50.8)% 0.84x
VALUATION Mean (51.8)% 0.95
MULTIPLES High (34.8)% 1.37
Low (66.4)% 0.66
</TABLE>
<TABLE>
<CAPTION>
PRICE / EPS I/B/E/S PEG
-------------- LT --------------
COMPANY LTM 2000 E GROWTH LTM 2000 E
------------------------- ----- ------ ------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
US Can Corp (2/08/00)(1) 8.0x 6.6x 16.0% 0.50x 0.41x
US Can (Deal)(1) 11.6 9.5 16.0% 0.72 0.60
American Nat'l Can (2/18/00)(1) 6.4x 5.9x 10.0% 0.64x 0.59x
Ball(1) 9.0 8.1 12.0% 0.75 0.68
BWAY(1) N/M 9.2 7.0% N/M 1.32
Crown Cork & Seal(1) 8.3 8.0 10.0% 0.83 0.80
Owens-Illinois(1) 6.7 6.2 11.0% 0.61 0.56
Silgan(1) 3.7 3.6 12.0% 0.31 0.30
Median 6.7x 7.1x 10.5% 0.64x 0.63x
VALUATION Mean 6.8 6.8 10.3% 0.63 0.71
MULTIPLES High 9.0 9.2 12.0% 0.83 1.32
Low 3.7 3.6 7.0% 0.31 0.30
</TABLE>
<TABLE>
<CAPTION>
ENTERPRISE VALUE AS A MULTIPLE OF:
------------------------------------------------------------------------------------
REVENUES EBITDA EBITDA-CAPEX EBIT
------------------ --------------- ---------------- -----------------
COMPANY LTM 2000 E LTM 2000 E LTM 2000 E LTM 2000 E
------------------------- ----- ------ ---- ------ ----- ------ ----- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
US Can Corp (2/08/00)(1) 0.64x 0.63x 4.9x 4.4x 7.9x 6.6x 7.3x 6.5x
US Can (Deal)(1) 0.74 0.73 5.7 5.1 9.2 7.7 8.4 7.5
American Nat'l Can (2/18/00)(1) 0.74x 0.70x 4.9x 4.3x 6.1x 5.3x 7.4x 6.3x
Ball(1) 0.62 0.60 5.0 4.7 6.3 5.9 7.8 7.3
BWAY(1) 0.48 N/A 5.9 N/A N/M N/A 11.3 N/A
Crown Cork & Seal(1) 1.00 1.01 5.8 5.7 8.6 8.5 9.6 9.3
Owens-Illinois(1) 1.46 1.42 6.6 5.4 12.1 8.6 9.8 8.5
Silgan(1) 0.62 0.60 4.7 4.6 6.9 6.6 7.2 6.9
Median 0.68x 0.70x 5.4x 4.7x 6.9x 6.6x 8.7x 7.3x
VALUATION Mean 0.82 0.86 5.5 4.9 8.0 7.0 8.8 7.7
MULTIPLES High 1.46 1.42 6.6 5.7 12.1 8.6 11.3 9.3
Low 0.48 0.60 4.7 4.3 6.1 5.3 7.2 6.3
</TABLE>
Note: American National Can (which received an offer from Rexam to purchase the
Company at $18.00 per share) is included at its price 30 trading days prior to
its buy-out announcement.
Also note: Normalized capital expenditures based on average of last three fiscal
years. U.S. Can figure is pro forma for an incremental $5 million annually for
May, per Management estimates.
(1) See attached footnotes on pages 37-40.
- 34 -
<PAGE> 37
U.S. CAN CORPORATION APPENDIX A
--------------------------------------------------------------------------------
EQUITY COMPARABLES(CONT'D)
($ in millions, except per share)
OPERATING STATISTICS OF RIGID METAL & GLASS COMPANIES
<TABLE>
<CAPTION>
SALES GROSS PROFIT EBITDA
----------------- ----------------- ------------------
COMPANY LTM 4-YR. CAGR LTM 4-YR. CAGR LTM 4-YR. CAGR
------- ----------------- ----------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
American Nat'l Can(1) $2,318.5 (2.6)% $ 482.4 13.2% $ 351.7 26.3%
Ball(1) 3,581.5 17.9% 604.5 32.1% 446.9 35.5%
BWAY(1) 467.0 18.2% 56.6 10.5% 37.7 10.5%
Crown Cork & Seal(1) 7,578.0 (2.5)% 1,643.0 1.5% 1,301.0 3.0%
Owens-Illinois(1) 5,561.5 12.8% 1,219.0 14.4% 1,237.3 16.5%
Silgan(1) 1,868.7 9.7% 236.2 8.6% 246.8 9.6%
Median $2,950.0 11.3% $ 543.4 11.9% $ 399.3 13.5%
VALUATION Mean 3,562.5 8.9% 707.0 13.4% 603.6 16.9%
MULTIPLES High 7,578.0 18.2% 1,643.0 32.1% 1,301.0 35.5%
Low 467.0 (2.6)% 56.6 1.5% 37.7 3.0%
US Can(1) $ 849.8 9.2% $ 154.3 7.9% $ 109.4 5.0%
<CAPTION>
EBITDA-CAPEX EBIT EPS
----------------- ----------------- -------------------
COMPANY LTM 4-YR. CAGR LTM 4-YR. CAGR LTM 4-YR. CAGR
------- ----------------- ----------------- ------------------
<S> <C> <C> <C> <C> <C>
American Nat'l Can(1) $ 279.9 39.8% $ 233.6 57.8% $ 1.74 N/M
Ball(1) 350.6 62.1% 285.1 49.2% 3.30 42.0%
BWAY(1) 7.7 94.0% 19.8 1.8% 0.21 (21.2)%
Crown Cork & Seal(1) 873.7 4.5% 784.0 3.9% 2.06 (4.2)%
Owens-Illinois(1) 672.2 44.3% 831.7 14.0% 1.69 3.7%
Silgan(1) 168.2 15.6% 160.0 9.2% 2.51 19.0%
Median $ 315.3 42.1% $ 259.4 11.6% $ 1.9 3.7%
VALUATION Mean 392.1 43.4% 385.7 22.6% 1.9 7.9%
MULTIPLES High 873.7 94.0% 831.7 57.8% 3.3 42.0%
Low 7.7 4.5% 19.8 1.8% 0.2 (21.2)%
US Can(1) $ 68.5 2.0% $ 74.6 8.5% $ 1.72 10.9%
</TABLE>
<TABLE>
<CAPTION>
GROSS MARGIN EBITDA MARGIN EBITDA-CAPEX MARGIN
------------------ ------------------ -------------------
COMPANY LTM 4-YR. AVG. LTM 4-YR. AVG. LTM 4-YR. AVG.
------- ------------------ ------------------ -------------------
<S> <C> <C> <C> <C> <C> <C>
American Nat'l Can(1) 20.8% 17.3% 15.2% 11.2% 12.1% 8.2%
Ball(1) 16.9% 14.9% 12.5% 10.5% 9.8% 6.9%
BWAY(1) 12.1% 15.2% 8.1% 10.3% 1.7% 2.3%
Crown Cork & Seal(1) 21.7% 20.8% 17.2% 16.2% 11.5% 10.9%
Owens-Illinois(1) 21.9% 22.0% 22.2% 22.0% 12.1% 10.1%
Silgan(1) 12.6% 13.1% 13.2% 13.5% 9.0% 8.6%
Median 18.8% 16.3% 14.2% 12.3% 10.7% 8.4%
VALUATION Mean 17.7% 17.2% 14.7% 13.9% 9.4% 7.8%
MULTIPLES High 21.9% 22.0% 22.2% 22.0% 12.1% 10.9%
Low 12.1% 13.1% 8.1% 10.3% 1.7% 2.3%
US Can(1) 18.2 18.0% 12.9% 13.4% 8.1% 9.0%
<CAPTION>
EBIT MARGIN NET INCOME
------------------ -------------------
COMPANY LTM 4-YR. AVG. LTM 4-YR. AVG.
------- ------------------ -------------------
<S> <C> <C> <C> <C>
American Nat'l Can(1) 10.1% 6.3% 4.1% 1.7%
Ball(1) 8.0% 5.8% 3.0% 2.3%
BWAY(1) 4.2% 7.0% 0.4% 2.4%
Crown Cork & Seal(1) 10.3% 9.8% 3.3% 3.6%
Owens-Illinois(1) 15.0% 15.5% 4.6% 5.2%
Silgan(1) 8.6% 9.0% 2.4% 2.8%
Median 9.3% 8.0% 3.1% 2.6%
VALUATION Mean 9.4% 8.9% 3.0% 3.0%
MULTIPLES High 15.0% 15.5% 4.6% 5.2%
Low 4.2% 5.8% 0.4% 1.7%
US Can(1) 8.8% 8.5% 2.8% 2.1%
</TABLE>
Note: Normalized capital expenditures based on average of last three fiscal
years. U.S. Can figure is pro forma for an incremental $5 million annually for
May, per Management estimates.
(1) See attached footnotes on pages 37-40.
-35-
<PAGE> 38
U.S. CAN CORPORATION APPENDIX A
--------------------------------------------------------------------------------
EQUITY COMPARABLES (CONT'D)
($ in millions, except per share)
OPERATING STATISTICS OF RIGID METAL & GLASS COMPANIES
<TABLE>
<CAPTION>
D&A/GROSS PP&E CAPEX/GROSS PP&E ROA ROE
-------------------- ------------------- ------------------- -------------------
COMPANY LFY 4-YR. AVG. LFY 4-YR. AVG. LFY 4-YR. AVG. LFY 4-YR. AVG.
------- -------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
American Nat'l Can(1) 8.5% 8.6% 5.1% 5.1% 6.3% 4.9% 7.5% 6.2%
Ball(1) 8.5% 8.3% 5.0% 6.4% 10.0% 7.3% 16.2% 10.7%
BWAY(1) 7.3% 8.9% 16.8% 22.4% 7.6% 9.6% 7.1% 11.5%
Crown Cork & Seal(1) 9.2% 10.0% 7.6% 8.2% 6.7% 7.1% 9.9% 11.3%
Owens-Illinois(1) 7.4% 7.3% 10.3% 13.6% 7.8% 9.6% 10.5% 20.4%
Silgan(1) 8.0% 8.2% 7.3% 9.1% 13.3% 13.9% N/M N/M
Median 8.2% 8.4% 7.4% 8.6% 7.7% 8.4% 9.9% 11.3%
VALUATION Mean 8.2% 8.5% 8.7% 10.8% 8.6% 8.7% 10.3% 12.0%
MULTIPLES High 9.2% 10.0% 16.8% 22.4% 13.3% 13.9% 16.2% 20.4%
Low 7.3% 7.3% 5.0% 5.1% 6.3% 4.9% 7.1% 6.2%
US Can(1) 6.1% 7.5% 7.8% 6.8% 11.8% 10.4% 39.5% 23.2%
</TABLE>
CREDIT STATISTICS OF RIGID METAL & GLASS COMPANIES
<TABLE>
<CAPTION>
SENIOR SUBORDINATED NET DEBT/ NET DEBT/
DEBT RATINGS DEBT RATINGS --------------- -------------------- SHARE-
-------------- -------------- BOOK MARKET NET BOOK NET MARKET HOLDER'S TOTAL
COMPANY MOODY'S S&P MOODY'S S&P EQUITY EQUITY CAP. CAP. EQUITY ASSETS
------- -------------- -------------- --------------- -------------------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
American Nat'l Can (2/18/00)(1) NR NR NR NR 116.6% 176.5% 53.6% 63.8% $ 937.1 $ 3,156.4
Ball(1) Ba3 BB B1 BB- 182.6% 139.8% 64.0% 58.3% 703.5 2,826.1
BWAY(1) B1 BB- B2 B 197.7% 235.2% 66.4% 70.2% 79.5 361.4
Crown Cork & Seal(1) Baa2 BBB Baa3 BBB- 182.0% 230.6% 62.3% 69.8% 2,779.0 11,482.0
Owens-Illinois(1) Ba1 BB+ Ba3 BB 246.1% 276.6% 69.5% 73.4% 2,364.9 10,791.0
Silgan(1) Ba3 BB- B1 B NM 586.4% 104.6% 85.4% (43.5) 1,260.0
Median 182.6% 232.9% 65.2% 70.0% $ 820.3 $ 2,991.2
VALUATION Mean 185.0% 274.2% 70.1% 70.2% 1,136.7 4,979.5
MULTIPLES High 246.1% 586.4% 104.6% 85.4% 2,779.0 11,482.0
Low 116.6% 139.8% 53.6% 58.3% (43.5) 361.4
US Can Corp (2/08/00)(1) Ba3 BB- B2 B 497.9% 182.7% 83.3% 64.6% $ 70.3 $ 657.2
</TABLE>
<TABLE>
<CAPTION>
EBITDA-
NET DEBT/ EBITDA/ EBIT/ CAPEX/
COMPANY EBITDA INTEREST INTEREST INTEREST
------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
American Nat'l Can (2/18/00)(1) 3.1x 6.7x 4.5x 5.4x
Ball(1) 2.9 4.2 2.6 3.3
BWAY(1) 4.2 2.6 1.3 0.5
Crown Cork & Seal(1) 3.9 3.8 2.3 2.6
Owens-Illinois(1) 4.7 3.1 2.1 1.7
Silgan(1) 4.0 2.9 1.9 2.0
Median 3.9x 3.5x 2.2x 2.3x
VALUATION Mean 3.8 3.9 2.5 2.6
MULTIPLES High 4.7 6.7 4.5 5.4
Low 2.9 2.6 1.3 0.5
US Can Corp (2/08/00)(1) 3.2x 3.2x 2.2x 2.0x
</TABLE>
Note: Normalized capital expenditures based on average of last three fiscal
years. U.S. Can figure is pro forma for an incremental $5 million annually for
May, per Management estimates.
(1) See attached footnotes on pages 37-40.
-36-
<PAGE> 39
U.S. CAN CORPORATION Appendix A
--------------------------------------------------------------------------------
FOOTNOTES TO EQUITY COMPARABLES
AMERICAN NATIONAL CAN GROUP
o Projections based on 2/23/00 Deutsche Banc Alex. Brown estimates.
o D&A is included in SG&A and excluded from gross profit.
o Results for the quarter ended March 31, 2000 exclude $127.0m pre-tax and
after tax charge for goodwill impairment writedown based on the $18.00
share offer from Rexam. First quarter 2000 results also exclude $0.4m
pre-tax and $0.2m after tax (assuming 40% tax rate) for a restructuring
charge and a writedown of property and equipment.
o Results for the quarter ended March 31, 1999 exclude $1.1m of income, net
of tax, from discontinued operations, and a $5.0m gain ($3.0m net of tax,
assuming 40% tax rate) on the sale of the Company's 50% interest in a
recycling joint venture.
o Results exclude $5.8m pre-tax charge ($3.5m net of tax, assuming 40% tax
rate), $2.4m pre-tax gain ($1.5m net of tax, assuming 40% tax rate), $10.9m
pre-tax charge ($6.6m net of tax, assuming 40% tax rate) and $158.7m
pre-tax charge ($95.2m net of tax, assuming 40% tax rate) in 1999, 1998 and
1997, respectively, for restructuring charges and writedowns of property
and equipment.
o Results exclude $4.6m, $0.5m and $2.4m of net income from discontinued
operations in 1999, 1998 and 1997, respectively and $60.8 net loss from
discontinued operations in 1996.
o 1998 results exclude $2.6m net charge for cumulative effect of accounting
change.
BALL CORP.
o Projections based on Lehman Brothers 3/22/00 research estimates.
o D&A is included in SG&A and excluded from gross profit.
o Net loss of $0.5m relating to loss of $2.8m from sale of Hong Kong plant
and gain of $2.3m relating to cash collections on receivables was
normalized against cost of goods sold in 1998.
o 1998 EBIT excludes a one-time pre-tax charge of $73.9m relating to
headquarters relocation costs.
o 1996 EBIT excludes a one-time pre-tax charge of $21m consisting of a $6m
write down of assets in conjunction with sale of U.S. Aerosol container
manufacturing business and $14.9m to write down assets in conjunction with
sale of metal food container business.
o Diluted shares outstanding accounts for ESOP preferred shares as equity. As
such, the preferred dividend is added back to earnings and a cash
contribution is re-deducted in lieu of preferred dividend to determine
diluted EPS.
o 1998 diluted earnings for EPS purposes deduct $2.1m ESOP cash contribution
from earnings in lieu of preferred dividend. Pre-tax charge of $17.7m
relating to relocation charges incurred in 1998 was tax-effected at 38.9%.
After-tax value of $10.8m was added to earnings. Pre-tax charge of $56.2m
relating to moving expenses was tax-effected at 44.1%. After-tax value of
$31.4m was added to net earnings. $0.5m pre-tax charge was tax effected at
40% because no after-tax value was disclosed.
o 1998 earnings do not reflect after-tax extraordinary charges of $12.1m and
$3.3m relating to extraordinary loss from early extinguishment of debt and
cumulative effect of accounting change for start-up costs, respectively.
o 1997 net earnings exclude $11.7m pre-tax gain relating to sale of equity
interest in Datum, a pre-tax charge of $3m to close a small PET container
manufacturing facility and $0.3m pre-tax write-down. These transactions
were tax-effected at 44.4%. A net after-tax gain of $5m was normalized and
deducted from net earnings for EPS purposes. A $2.1m deduction representing
the ESOP cash contribution made in lieu of ESOP preferred dividend was also
deducted from earnings.
o 1996 earnings exclude $3.3m pre-tax loss relating to sale of aerosol
business, pre-tax charge of $14.9m relating to sale of metal beverage
business and $2.8m relating to employee termination costs. The after-tax
effect of the 1996 transactions was a loss of $24.7m was excluded from net
earnings.
o Total Equity reflects inclusion of ESOP preferred as equity only when the
security is dilutive. For 1996-1999, ESOP securities were dilutive.
-37-
<PAGE> 40
U.S. CAN CORPORATION Appendix A
--------------------------------------------------------------------------------
FOOTNOTES TO EQUITY COMPARABLES (CONT'D)
BWAY CORP.
o No research was available for BWAY. Forward projections were not available.
o D&A is included in SG&A and excluded from gross profit.
o 1998 EBIT excludes $11.5m pre-tax charge relating to the closure of 3
plants, the elimination of an internal transportation department and the
write-off of equipment at several operating locations. Extraordinary
charges were tax-effected at 40% because no after-tax value was disclosed.
o 1998 and 1997 EBIT excludes extraordinary gains of $1.9m ($1.1m after tax,
assuming 40% tax rate) and $5.8m ($2.3m after tax, assuming 40% tax rate),
respectively, relating to a curtailment of post-retirement benefits.
o 1996 EBIT excludes a pre-tax charge of $12.9m ($7.7m after tax, assuming
40% tax rate) relating to the write down of assets to be disposed. 1996
results also exclude $2.5m extraordinary loss resulting from extinguishment
of debt, net of tax benefit.
o 1995 EBIT excludes a pre-tax charge of $3.2m ($1.9m after tax, assuming 40%
tax rate) relating to AB leasing fees and expenses and an AB leasing
termination expense.
o 1998 results exclude $1.2m after tax cumulative effect of change in
accounting for system development costs.
o First quarter 2000 results exclude $5.9m pre-tax ($3.5m after tax, assuming
40% tax rate) restructuring and impairment charge, and $0.4m pre-tax ($0.2m
after tax, assuming 40% tax rate) of additional depreciation related to the
shortened lives of certain computer systems.
CROWN, CORK & SEAL CO.
o Projections based on Morgan Stanley 4/18/00 research estimates.
o D&A is included in SG&A and excluded from gross profit.
o Gross PP&E includes value of book value of Land and Improvements and
Construction in Progress.
o Results exclude gains on asset sales of $18m and $38m pre-tax ($11m and
$23m after tax, assuming a 40% tax rate), respectively, for 1999 and 1997.
o Results exclude $156m, $304m, $67m, $40m and $103m pre-tax ($-5m, $127m,
$43m, 32m and $67m after tax), respectively, for 1999, 1998, 1997, 1996 and
1995 provisions for restructuring charges.
o 1997 results exclude $8m net of tax cumulative effect of accounting change
for adoption of EITF 97-13.
o 1997 net earnings exclude $11.7m pre-tax gain relating to sale of equity
interest in Datum, a pre-tax charge of $3m to close a small PET container
manufacturing facility and $0.3m pre-tax write-down. These transactions
were tax-effected at 44.4%. A net after-tax gain of $5m was normalized and
deducted from net earnings. A $2.1m deduction representing the ESOP cash
contribution made in lieu of ESOP preferred dividend was also deducted from
earnings.
o 1996 earnings exclude $3.3m pre-tax loss relating to sale of aerosol
business, pre-tax charge of $14.9m relating to sale of metal beverage
business and $2.8m relating to employee termination costs. The after-tax
effect of the 1996 transactions was a loss of $24.7m was excluded from net
earnings.
o Total Equity reflects inclusion of ESOP preferred as equity only when the
security is dilutive. For 1996-1999, ESOP securities were dilutive.
-38-
<PAGE> 41
U.S. CAN CORPORATION Appendix A
--------------------------------------------------------------------------------
FOOTNOTES TO EQUITY COMPARABLES (CONT'D)
OWENS-ILLINOIS INC.
o Projections based on Morgan Stanley 4/25/00 research estimates.
o D&A is included in SG&A and excluded from gross profit.
o Results exclude net extraordinary charges of $0.8m, $14.1m and $104.5m from
early extinguishment of debt in 1999, 1998 and 1997, respectively.
o 1999 results exclude $40.8m pre-tax ($23.6m after tax) gain on sale of U.S.
glass container plant and a mold manufacturing facility in Colombia and
exclude $20.8m ($14.0m after-tax) charge for restructuring costs and
write-offs of certain assets in Europe and Latin America.
o 1998 results exclude $250.0m pre-tax ($154.4m after tax) adjustment of
reserve for estimated future asbestos-related costs, $72.6m pre-tax ($47.4m
after tax) charge for plant closing and restructuring costs at certain
international affiliates, $5.7m pre-tax ($3.5m after tax) loss on sale of
discontinued operation by equity investee, $0.9m pre-tax ($0.6m after tax)
charge for settlement of environmental litigation and reduction of
previously established reserves, $18.5m pre-tax ($11.4m after tax) gain on
sale of license agreement and $15.1m adjustment of net deferred income tax
liabilities as a result of a reduction in Italy's statutory income tax
rate.
o 1997 results exclude $16.3m pre-tax ($16.3m after tax) gain on the sale of
the Company's remaining 49% interest in Kimble Glass and charges of $14.1m
pre-tax ($8.7m after tax) for the estimated cost of guaranteed lease
obligations of a previously divested business.
SILGAN HOLDINGS
o Projections based on Deutsche Bank 2/3/00 research estimates.
o Diluted shares outstanding assume a weighted average strike price of $2.50
for the 527,268 options with exercise prices ranging from $0.56 to $4.43.
o The first quarter of 2000 includes $0.7m of start-up costs relating to a
neutral, independent e-commerce joint venture, Packtion, with Morgan
Stanley Dean Witter Private Equity and Diamond Technology Partners.
o 1999 EBIT excludes pre-tax charges of $36.1m relating to rationalization
charges in conjunction with the Company's decision to close two
manufacturing facilities of the metal food containers business.
o D&A is included in SG&A and excluded from gross profit.
o 1997 EBIT and net income exclude pre-tax charge of $22.5m ($13.5m after
tax, assuming 40% tax rate) relating to IPO expenses.
o 1997 earnings reflect deduction of $3.2m preferred dividend payment and are
net of $16.4m of post-tax deduction relating to early extinguishment of
debt.
o 1996 earnings do not include $2.2m post-tax charge relating to early
extinguishment of debt.
-39-
<PAGE> 42
U.S. CAN CORPORATION APPENDIX A
--------------------------------------------------------------------------------
FOOTNOTES TO EQUITY COMPARABLES (CONT'D)
U.S. CAN CORPORATION
o D&A is included in SG&A and excluded from gross profit.
o Assumes line item "Other Expenses" is goodwill amortization and is included
in determining EBIT.
o U.S. Can projections based on Management Projections. Projected
depreciation and amortization include $4.5m of annual goodwill amortization
from "Amort Def Fin/Goodwill" line item.
o 1999 and LTM results are pro forma for May Verpackungen GmbH & Co., KG
acquisition and exclude $1.3m net loss from early extinguishment of debt.
o 1998 results exclude $35.9m pre-tax and $21.5m after tax (assuming a 40%
tax rate) for plant closings, implementation of a national lithography
strategy, and incremental provision for the anticipated loss on the sale of
the Orlando Machine Engineering Center and a reassessment of 1997 special
charges. 1998 results also exclude $8.5m net loss on sale of the Company's
commercial metal services business.
o 1997 results exclude $63.0m pre-tax and $27.8m after tax (assuming a 40%
tax rate) for plant closings and overhead cost reductions associated with
the loss of a major aerosol customer ($35.0 pre-tax), the loss on the
closure of its Metal Pail operation in North Brunswick, NJ ($13.3m pre-tax)
and personnel reductions and the reduction of asset values associated with
equipment used in the businesses the Company had exited or was in the
process of exiting ($14.7m pre-tax). 1997 results also exclude $1.1m of net
income from discontinued operations and $3.2 of net loss on the sale of
discontinued businesses.
o 1996 results exclude $0.4m of net income from discontinued operations and
$5.3m of net loss from the early extinguishment of debt.
-40-
<PAGE> 43
U.S. CAN CORPORATION APPENDIX B
--------------------------------------------------------------------------------
SELECTED INDUSTRIAL TRANSACTIONS (1)
($ in millions)
<TABLE>
<CAPTION>
Value of Premium % % %
Transaction Transaction Paid Prior to Announcement All-Time 52-Week
Date Acquiror Name Target Name ($ mil) 1-Day 1-Week 1-Month High High
----------- ------------- ----------- ----------- ----- ------ ------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
05/04/00 Danaher Corp Kollmorgen Corp 358.6 42.64% 70.37% 84.93% 63.4% 142.6%
05/04/00 Eastman Chemical Co McWhorter Technologies Inc 352.8 41.98 38.86 77.08 69.7 107.9
04/12/00 Unilever NV Ben & Jerry's Homemade Inc 339.7 81.67 103.98 73.53 124.8 124.8
03/22/00 Investor Group US Can Corp 628.0 34.45 50.94 54.59 78.0 78.0
03/23/00 Bausch & Lomb Inc Wesley Jessen(Bain Capital) 703.7 42.92 42.20 35.43 88.3 88.9
03/19/00 Thor Industries Inc Coachmen Industries Inc 280.1 31.51 48.45 59.12 60.0 75.8
03/17/00 Wesley Jessen(Bain Capital) Ocular Sciences Inc 426.5 10.50 5.26 4.49 51.5 51.7
03/06/00 Hain Food Group Inc Celestial Seasonings Inc 386.7 15.36 57.52 63.00 115.4 115.4
03/06/00 Elan Corp PLC Liposome Co Inc 721.7 29.70 24.74 (1.42) 54.3 55.3
03/06/00 Comverse Technology Inc Loronix Information Systems 268.9 39.95 48.21 62.62 140.0 140.0
02/29/00 Veeco Instruments Inc CVC Inc 441.9 10.19 19.45 87.97 108.3 108.3
02/17/00 International Paper Co Shorewood Packaging Corp 878.3 57.01 69.70 59.24 102.4 105.3
02/16/00 Healtheon/WebMD Inc OnHealth Network Co 274.5 30.11 34.75 86.96 43.6 62.9
02/14/00 ChoicePoint Inc DBT Online 408.6 17.16 21.42 (1.50) 52.3 52.3
01/26/00 BroadVision Inc Interleaf Inc 777.2 39.97 42.50 55.78 77.9 119.1
01/18/00 Stone Acquisition Corp Dayton Superior Corp 322.3 47.95 54.29 68.75 115.8 115.8
01/17/00 Parker-Hannifin Corp Commercial Intertech Corp 465.0 20.30 34.45 64.10 42.0 50.3
01/12/00 Sage Group PLC Best Software Inc 446.3 16.91 30.23 35.92 116.9 116.9
12/28/99 Investor Group Jostens Inc 951.5 37.88 42.25 37.42 65.6 93.1
12/20/99 Conexant Systems Inc Maker Communications Inc 846.7 34.17 44.17 83.81 89.2 89.2
12/09/99 Investor Group Gleason Corp 320.5 27.78 26.90 30.96 65.7 110.5
12/01/99 Informix Corp Ardent Software Inc 909.2 46.67 51.35 80.65 131.1 131.1
12/01/99 King Pharmaceuticals Inc Medco Research Inc 378.7 27.70 20.62 38.07 107.1 120.4
11/22/99 Weyerhaeuser Co TJ International Inc 690.3 27.27 32.68 59.24 124.0 126.8
11/18/99 Baxter International Inc North American Vaccine Inc 495.6 25.21 14.55 (5.54) 22.6 56.7
11/17/99 Kimberly-Clark Corp Safeskin Corp 882.1 27.97 44.99 66.57 28.4 50.6
11/09/99 Cisco Systems Inc Aironet Wireless Communication 678.0 10.92 8.11 92.38 99.7 99.7
11/05/99 Investcorp Synthetic Industries Inc 530.7 13.55 16.81 20.00 110.0 110.5
11/04/99 Cementos Portland SA Giant Cement Holding Inc 277.0 50.76 71.03 37.02 100.4 124.0
10/26/99 Shorewood Packaging Corp Chesapeake Corp 862.4 40.97 42.22 29.56 98.2 103.7
10/26/99 Fox Paine & Co LLC Watkins-Johnson Co 319.0 30.04 29.02 24.62 73.1 117.5
10/25/99 Bamboo.com Inc Interactive Pictures Corp 368.5 2.87 1.12 (3.28) 87.7 87.7
10/21/99 Wind River Systems Inc Integrated Systems Inc 491.2 85.10 74.64 68.00 46.8 109.2
10/14/99 Millennium Pharmaceuticals Inc LeukoSite Inc 577.3 60.32 91.32 52.65 120.1 120.1
10/11/99 PeopleSoft Inc Vantive Corp 425.6 59.22 67.41 51.79 33.7 97.3
10/10/99 Warnaco Group Inc Authentic Fitness Corp 605.3 18.43 17.60 24.18 72.0 112.1
10/01/99 Kellogg Co Worthington Foods Inc 307.5 66.96 101.05 88.24 112.0 112.0
09/28/99 La-Z-Boy Inc LADD Furniture Inc 294.4 18.00 20.23 20.23 32.2 103.4
</TABLE>
Note: (1) Selected Industrial deals between $250 million and $1 billion from
January 1999 to May 22, 2000.
Source: Securities Data Corp. and FactSet Data Systems.
- 41 -
<PAGE> 44
U.S. CAN CORPORATION APPENDIX B
--------------------------------------------------------------------------------
SELECTED INDUSTRIAL TRANSACTIONS (CONT'D) (1)
($ in millions)
<TABLE>
<CAPTION>
Value of Premium % % %
Transaction Transaction Paid Prior Announcement All-Time 52-Week
Date Acquiror Name Target Name ($ mil) 1-Day 1-Week 1-Month High High
----------- ------------- ----------- ----------- ----- ------ ------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
09/20/99 Cie de Saint-Gobain SA Furon Co Inc 616.0 56.32% 50.00% 60.00% 100.5% 131.6%
08/31/99 Tyco International Ltd AFC Cable Systems Inc 595.6 24.65 24.21 13.83 108.3 108.3
08/30/99 Guidant Corp CardioThoracic Systems Inc 315.9 2.97 0.65 12.23 76.8 97.5
08/27/99 Medtronic Inc Xomed Surgical Products Inc 815.6 28.49 38.08 44.53 119.7 119.7
08/24/99 Willis Stein & Partners LP Aavid Thermal Technologies Inc 264.1 29.11 23.26 28.71 69.4 104.1
08/24/99 Nortel Networks Corp Periphonics Corp 398.5 15.76 34.78 35.95 86.6 115.8
08/23/99 Sun Microsystems Inc Forte Software Inc 545.1 31.03 64.24 61.27 27.3 131.1
08/23/99 Textron Inc Omniquip International Inc 474.5 60.00 95.35 152.63 80.0 132.3
08/13/99 Hochtief AG(RWE AG) Turner Corp 394.8 13.09 6.02 34.71 102.5 102.5
08/09/99 GE Medical Systems OEC Medical Systems Inc 500.0 7.06 10.56 42.93 105.7 105.7
08/05/99 Corning Consumer Prod. Ekco Group Inc 304.6 55.56 51.35 55.56 50.5 84.8
07/27/99 IBM Corp Mylex Corp 260.5 20.00 17.79 108.70 44.7 95.0
07/27/99 Cooper Tire & Rubber Co Standard Products Co 800.6 46.00 54.91 35.81 95.1 126.7
07/26/99 Biovail Corp International Fuisz Technologies Ltd 257.7 23.08 45.46 96.49 22.9 45.5
07/26/99 Shire Pharmaceuticals Roberts Pharmaceutical Corp 998.8 19.91 28.94 55.73 66.3 112.1
07/13/99 Excite At Home iMall Inc 460.3 6.17 18.82 61.29 19.7 83.1
07/12/99 RHI AG Global Industrial Technologies 498.2 4.00 6.12 9.47 52.5 86.7
07/12/99 IBM Corp Sequent Computer Systems Inc 808.9 7.46 32.11 41.87 53.5 101.4
07/08/99 Abbott Laboratories Perclose Inc 670.5 12.50 9.37 22.73 106.5 106.5
07/06/99 Berisford PLC Scotsman Industries Inc 710.3 1.15 48.73 57.61 101.1 101.1
06/24/99 Kelso & Co Citation Corp 307.4 18.26 14.29 26.51 72.3 82.9
06/24/99 Carrier Corp(United Tech) International Comfort Products 495.2 9.30 11.91 33.33 52.2 95.9
06/22/99 Newbridge Networks Corp Stanford Telecommunications 469.1 29.44 44.85 61.99 108.6 129.4
06/21/99 National Service Industries Holophane 434.7 35.98 31.91 35.68 131.9 131.9
06/14/99 Investor Group Maxxim Medical Inc 386.9 30.82 38.21 71.19 87.4 87.4
06/08/99 Meggitt PLC Whittaker Corp 357.3 3.94 4.43 13.13 107.1 103.9
06/01/99 Intel Corp Dialogic Corp 817.3 31.84 40.80 53.71 73.8 116.7
05/18/99 Investor Group O'Sullivan Industries Holdings 279.6 (3.60) (6.29) 7.20 69.4 88.2
05/18/99 AMSTED Industries Inc Varlen Corp 784.8 61.93 50.00 68.42 136.4 137.7
05/17/99 S1 Corp Edify Corp 353.5 14.83 20.13 146.48 33.1 114.8
05/17/99 Precision Castparts Corp Wyman-Gordon Co 828.8 50.94 56.86 87.14 53.7 94.7
05/13/99 Emerson Electric Co Daniel Industries Inc 429.2 8.63 19.72 31.78 83.7 98.8
05/06/99 Litton Industries Inc Avondale Industries Inc 523.8 46.98 46.98 38.60 120.8 120.8
04/29/99 Pentair Inc Essef Corp 352.1 (1.46) 8.40 22.39 65.2 90.7
04/28/99 TI Group PLC Walbro Corp 630.3 62.44 102.53 122.22 52.3 141.6
04/27/99 Eastman Chemical Co Lawter International Inc 408.6 38.03 61.98 76.58 81.0 105.4
04/22/99 Danaher Corp Hach Co 337.6 77.27 81.59 61.85 137.9 132.9
04/21/99 Healtheon Corp MedE America Inc 390.5 36.72 44.49 113.54 136.3 136.3
03/23/99 ServiceMaster Co American Residential Services 283.8 31.43 70.37 67.27 20.2 49.2
02/03/99 Investor Group St John Knits Inc 513.8 42.86 44.14 50.00 55.9 62.8
01/19/99 Dura Automotive Systems Excel Industries Inc 482.1 25.39 41.01 55.11 102.7 115.7
01/14/99 Investor Group Winsloew Furniture Inc 274.8 37.62 44.42 35.61 119.8 119.8
Median 29.57% 39.83% 54.15% 80.50% 106.11%
Mean 30.95 39.36 52.24 81.44 102.95
High 85.10 103.98 152.63 139.95 142.64
Low (3.60) (6.29) (5.54) 19.74 45.53
</TABLE>
Note: (1) Selected Industrial deals between $250 million and $1 billion from
January 1999 to May 22, 2000.
Source: Securities Data Corp. and FactSet Data Systems.
- 42 -
<PAGE> 45
U.S. CAN CORPORATION APPENDIX C
--------------------------------------------------------------------------------
SELECTED LBO TRANSACTIONS(1)
($ IN MILLIONS)
<TABLE>
<CAPTION>
PREMIUM % PAID
DATE DATE ACQUIROR TARGET TRANSACTION PRIOR TO ANNOUNCEMENT % OF
ANNOUNCED EFFECTIVE NAME NAME VALUE 1 DAY 1 WEEK 4 WEEKS 52-WEEK HIGH
--------- --------- -------- ------ ----------- ----- ------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
05/17/00 Pending Investor Group Petco Animal Supplies $ 589.4 49.8% 70.0% 87.2% 119.7%
05/15/00 Pending GTCR Golder Rauner LLC Coinmach Laundry Corp 186.0 78.1 78.1 65.2 104.6
05/12/00 Pending Inhoco 2038 Ltd Allied Textile Co. PLC 150.8 45.1 49.7 49.7 102.2
05/10/00 Pending Farborough Ltd Hogg Robinson PLC 355.0 17.5 17.5 21.3 95.0
04/24/00 Pending Investor Group MPW Industrial Services 122.4 48.8 60.0 16.4 72.7
04/14/00 Pending Chartwell Investments II LLC PlayCore Inc 106.0 49.6 44.3 29.3 117.4
04/12/00 Pending Investor Group Res-Care Inc 389.7 32.6 24.8 11.5 64.3
04/10/00 Pending Industri Kapital AB Perstorp AB 1,047.4 32.1 40.0 59.1 126.3
03/31/00 Pending Leonard Green & Partners LP Veterinary Centers of America 372.1 12.2 9.6 36.4 98.4
03/23/00 Pending Investor Group US Can Corp 288.6 6.0 37.7 61.5 82.0
03/06/00 Pending VS&A Partners Data Transmission Network 467.1 16.0 16.6 52.6 85.5
02/28/00 Pending Investor Group Neff Corp 190.5 9.9 34.6 25.2 48.9
02/24/00 Pending Investor Group Westaff Inc 159.2 21.2 29.0 35.6 101.9
03/24/00 Pending Investor Group WestPoint Stevens Inc 2,562.2 31.3 33.8 32.3 59.3
02/14/00 Pending Europe Auto Distribution Ltd Finelist Group plc 253.4 42.2 16.0 49.4 95.7
02/11/00 Pending Wengen Acquisition plc Wassall plc 1,007.9 42.6 53.3 47.1 110.8
02/10/00 Pending Capricorn Investors LP TCBY Enterprises Inc 139.1 68.4 57.4 60.0 80.7
01/31/00 Pending Investor Group Jason Inc 237.5 57.9 48.8 73.9 102.3
01/18/00 Pending Stone Acquisition Corp Dayton Superior Corp 322.3 47.9 54.3 68.8 115.9
12/31/99 02/23/00 Financiere d'Olmes Michel Thierry SA 162.2 6.5 15.4 25.0 100.0
12/28/99 Pending Investor Group Jostens Inc 951.5 37.9 42.3 37.4 93.2
12/21/99 Pending Investor Group Micro Warehouse Inc 679.9 24.6 51.2 47.6 41.9
12/17/99 Pending Finalrealm United Biscuits(Holdings)PLC 2,023.6 41.0 48.0 32.8 101.9
12/14/99 03/14/00 Investor Group Transportation Technologies 221.3 38.7 57.1 57.1 108.9
12/09/99 03/29/00 Investor Group Gleason Corp 320.5 27.8 26.9 31.0 99.6
12/03/99 01/24/00 Sonarsend PLC(Sandsenor Ltd) Sanderson Group PLC 183.2 18.1 20.3 22.2 94.3
11/23/99 11/23/99 TFB Fenster-Beteiligungs GmbH Weru AG(Caradon PLC) 126.5 23.8 25.6 40.5 69.7
11/22/99 02/02/00 GR Acquisition Corp Garden Ridge Corp 144.4 58.6 65.8 70.4 100.5
11/22/99 12/22/99 HLF Insurance Holdings Ltd Lambert Fenchurch Group PLC 212.2 66.7 81.3 82.4 112.8
11/17/99 03/24/00 Edlaw PLC(Troyess PLC) Wardle Storeys PLC 184.2 38.0 38.7 40.0 106.9
11/10/99 Pending Investor Group Avado Brands Inc 182.0 75.8 38.1 56.3 47.1
11/08/99 Pending Nordkem AS Dyno ASA 656.0 30.4 44.6 39.2 110.2
10/22/99 Pending Investor Group InterDent Inc 198.7 19.7 15.2 22.6 105.6
10/06/99 12/15/99 Stormgrange Ltd Norcros PLC 283.2 60.9 70.2 74.6 107.3
09/15/99 11/03/99 Kohlberg Kravis Roberts & Co Alliance Imaging Inc 821.6 129.2 142.4 140.4 177.4
09/08/99 12/24/99 Edgemead Ltd(Hesmond Ltd) Clondalkin Group PLC 407.8 48.1 57.1 43.3 100.3
</TABLE>
Note: (1) Represents selected Leveraged Buyout transactions greater than $100
million since 12/1/1994.
Source: Securities Data Corp. and FactSet Data Systems.
- 43 -
<PAGE> 46
U.S. CAN CORPORATION APPENDIX C
--------------------------------------------------------------------------------
SELECTED LBO TRANSACTIONS (CONT'D) (1)
($ in millions)
<TABLE>
<CAPTION>
PREMIUM % PAID
PRIOR TO ANNOUNCEMENT
DATE DATE ACQUIROR TARGET TRANSACTION ---------------------- % OF
ANNOUNCED EFFECTIVE NAME NAME VALUE 1 DAY 1 WEEK 4 WEEKS 52-WEEK HIGH
--------- --------- -------- ------ ----------- ----- ------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
09/01/99 Pending Investor Group GP Strategies Corp $ 149.7 66.4% 66.4% 84.1% 68.4%
08/25/99 10/14/99 Perdix Investments Ltd Wyko Group PLC 146.4 59.3 64.3 39.5 106.2
08/10/99 10/18/99 Eldon Thule Intressenter AB Eldon AB 231.4 24.1 25.0 29.5 120.8
07/22/99 03/10/00 Investor Group White Cap Industries Inc 185.4 49.2 45.1 55.3 86.8
07/16/99 09/29/99 Carat Secre PLC CrestaCare PLC 110.4 42.3 42.3 37.0 104.2
07/12/99 12/17/99 HIG Capital LLC Happy Kids Inc 119.6 9.5 28.7 (18.6) 79.3
06/29/99 09/17/99 Denitz Media Ltd Adscene Group PLC 119.6 63.9 70.2 75.3 108.9
06/14/99 11/12/99 Investor Group Maxxim Medical Inc 387.7 30.8 38.2 62.5 87.2
05/27/99 09/01/99 Carlyle Group LP Empi Inc 165.3 27.3 27.7 16.8 98.4
05/25/99 Pending Investor Group TNP Enterprises Inc 1,023.5 25.9 33.6 37.5 126.1
05/21/99 08/20/99 G2 Estates Ltd(Van Buren) Greycoat PLC 453.7 94.8 94.8 102.3 103.0
05/18/99 11/30/99 Investor Group O'Sullivan Industries Holdings 267.7 (3.6) (6.3) 7.2 102.1
05/14/99 07/28/99 Investor Group Hillsdown Holdings PLC 863.2 69.9 81.5 92.2 125.0
05/05/99 08/17/99 CROSS Holding KTM Sportmotorcycle AG(KTM) 100.1 5.6 12.0 20.9 81.1
04/30/99 07/13/99 Dotterel Ltd Cala PLC 152.0 86.0 89.6 107.3 108.4
04/27/99 06/21/99 Procuritas AB BPA AB 228.9 25.0 22.4 34.5 117.6
04/14/99 10/17/99 Aptco LLC Berkshire Realty Co Inc 1,122.8 25.6 29.8 27.3 98.8
04/05/99 11/22/99 Investor Group Sunstone Hotel Investors Inc 875.4 41.9 43.1 40.7 57.3
04/01/99 Pending Acertec Ltd(Acertec Invest) Hall Engineering (Holdings) 146.2 58.9 119.4 112.5 66.1
03/22/99 05/07/99 Canterbury Healthcare Ltd Westminster Health Care 336.2 68.1 63.7 63.7 76.2
03/03/99 06/16/99 Harrock PLC Wainhomes PLC 142.5 21.7 21.2 19.1 101.1
03/03/99 07/07/99 Welsh Carson Anderson & Stowe Concentra Managed Care Inc 1,164.3 41.9 56.2 58.1 48.7
02/08/99 03/08/99 Suber Acquisition Ltd Rebus Group PLC 274.7 32.4 45.0 63.2 114.1
02/03/99 07/07/99 Investor Group St John Knits Inc 513.8 42.9 44.1 50.0 61.5
01/20/99 Pending Investor Group Integrated Circuit Systems Inc 269.1 14.9 14.9 33.3 49.6
01/14/99 03/22/99 Investor Group Winsloew Furniture Inc 274.8 37.6 44.4 35.6 119.8
01/08/99 03/11/99 Thistlehaven PLC Hozelock Group PLC 139.8 44.9 51.2 65.5 94.2
12/21/98 03/05/99 Rhesus Ltd Ushers of Trowbridge Group PLC 186.5 14.9 14.3 18.5 85.8
08/06/98 09/18/98 New Sutton PLC Concentric PLC 142.9 48.8 48.8 37.3 102.2
07/22/98 09/25/98 Trinity Acquisition PLC Willis Corroon Group PLC 1,397.3 12.0 49.3 30.7 111.1
07/07/98 09/21/98 Investor Group Republic Engineered Steels 417.8 56.8 68.1 45.0 164.8
06/19/98 Pending Investor Group XTRA Corp 966.5 41.1 29.5 17.1 98.5
05/29/98 10/20/98 Innovative Communication Co Emerging Communications Inc 112.3 46.4 42.6 54.7 115.2
</TABLE>
Note: (1) Represents selected Leveraged Buyout transactions greater than $100
million since 12/1/1994.
Source: Securities Data Corp. and FactSet Data Systems.
- 44 -
<PAGE> 47
U.S. CAN CORPORATION APPENDIX C
--------------------------------------------------------------------------------
SELECTED LBO TRANSACTIONS (CONT'D) (1)
($ in millions)
<TABLE>
<CAPTION>
PREMIUM % PAID
PRIOR TO ANNOUNCEMENT
DATE DATE ACQUIROR TARGET TRANSACTION ---------------------- % OF
ANNOUNCED EFFECTIVE NAME NAME VALUE 1 DAY 1 WEEK 4 WEEKS 52-WEEK HIGH
--------- --------- --------- ------ ----------- ----- ------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
05/14/98 09/16/98 Stoneworth Investment Ltd Fitzwilton PLC $ 192.5 37.0% 33.3% 33.3% 91.8%
05/12/98 08/15/98 Soda Ash Investments PLC Brunner Mond Holdings PLC 236.2 23.8 32.4 45.0 102.2
04/21/98 08/25/98 Investor Group PCA International Inc 232.5 23.3 17.8 20.5 101.0
03/24/98 08/17/98 DLJ Merchant Bkg Partners II Insilco Corp 425.3 4.7 11.1 12.9 104.7
03/16/98 10/30/98 FPK LLC Norwood Promotional Products 107.8 19.1 19.1 23.6 101.0
03/13/98 07/31/98 Investor Group MedCath Inc 227.8 15.2 10.9 34.5 94.5
03/01/98 Pending Pamodzi Investment Holdings FoodCorp Ltd 365.8 15.8 15.8 39.8 91.7
02/17/98 08/17/98 HB Acquisition Corp Bell Sports Corp 165.7 13.9 13.1 8.6 94.0
02/11/98 06/10/98 Sombrero Acquisition Corp MTL Inc 250.1 37.9 38.5 56.1 136.1
12/22/97 01/13/98 Fenchurch Place PLC Betterware PLC 194.6 25.0 22.2 25.0 97.9
12/22/97 05/21/98 Investor Group Dynatech Corp 762.9 29.9 37.2 29.9 87.6
12/15/97 01/23/98 Newmall PLC Wellman PLC 119.3 23.5 25.0 35.1 125.0
10/17/97 02/27/98 Investor Group ATC Group Services Inc 150.0 0.0 (8.1) 10.3 91.9
09/05/97 Pending Investor Group DavCo Restaurants Inc 133.6 49.5 49.5 53.8 144.1
08/11/97 12/19/97 Confetti Acquisition Inc Amscan Holdings Inc 334.9 36.1 37.5 46.7 115.8
08/07/97 01/21/98 Investor Group Fisher Scientific Intl Inc 950.6 (5.2) (0.4) 5.5 101.6
07/10/97 11/18/97 Investor Group Kinetic Concepts Inc 776.7 6.9 7.7 9.2 105.2
06/27/97 07/22/97 Erycinus CE Heath PLC 156.9 63.4 63.4 58.9 108.7
01/23/97 03/12/97 Steel Casting Investments PLC William Cook PLC 129.5 76.7 76.3 78.2 111.8
11/12/96 06/12/97 Investor Group Leslie's Poolmart 112.8 26.1 31.8 31.8 74.4
08/02/96 10/03/96 Investor Group Toronto Sun Publishing(Rogers) 293.9 (0.6) (0.9) (0.9) 92.8
06/11/96 07/23/96 Forstmann Little & Co Community Health Systems Inc 1,080.0 20.2 19.9 18.9 117.9
06/06/96 10/01/96 Investor Group AT&T Capital Corp(AT&T Corp) 2,128.6 37.4 38.5 42.3 102.3
04/25/96 10/01/96 Investor Group Sterling Chemicals Inc 798.4 29.7 47.7 47.7 92.3
12/19/95 02/21/96 Maine Investments Skellerup Group Ltd 254.2 18.4 17.8 21.9 104.7
05/09/95 03/27/96 RIC Holdings Inc Riverwood International Corp 2,436.2 1.8 0.6 17.4 104.9
03/30/95 04/21/95 Commerz Asset Management(UK) Jupiter Tyndall Group PLC 272.3 6.3 9.1 13.8 104.5
12/01/94 03/02/95 Chiefco Vivat Holdings PLC 103.3 71.1 66.7 62.5 151.2
MEAN $ 446.2 35.9% 39.9% 43.1% 99.0%
MEDIAN 250.1 32.4 38.2 39.2 101.6
HIGH 2,562.2 129.2 142.4 140.4 177.4
LOW 100.1 (5.2) (8.1) (18.6) 41.9
</TABLE>
Note: (1) Represents selected Leveraged Buyout transactions greater than $100
million since 12/1/1994.
Source: Securities Data Corp. and FactSet Data Systems.
- 45 -
<PAGE> 48
U.S. CAN CORPORATION APPENDIX D
--------------------------------------------------------------------------------
WEIGHTED AVERAGE COST OF CAPITAL ANALYSIS
($ IN MILLIONS, EXCEPT PER SHARE)
<TABLE>
<CAPTION>
NET DEBT/
LEVERED UNLEVERED MKT. CAP. NET MARKET EQUITY
TICKER COMPANY BETA(a) BETA(b) RATIO DEBT(c) VALUE
------ ------- ------- --------- --------- ------- -------------
<S> <C> <C> <C> <C> <C> <C>
BLL Ball 0.95 0.51 58.3% $ 1,285 $ 919
BY BWAY 0.70 0.28 70.2% 157.1 $ 67
CCK Crown Cork & Seal 1.00 0.41 69.8% 5,059.0 $ 2,194
OI Owens-Illinois 1.15 0.42 73.4% 5,820.8 $ 2,105
SLGN Silgan 0.40 0.02 96.7% 4,944.2 $ 169
CAN American National Can NA NA 52.4% 1,092.3 994(i)
GPK ACX Tech. NA NA 89.2% 824 99
CSAR Caraustar 0.75 0.47 48.7% 407 428
GCR Gaylord 1.35 0.36 81.4% 966 221
IP International Paper 0.85 0.66 31.2% 7,375 16,252
RKT Rock-Tenn 0.60 0.30 61.2% 526 333
SSCC Smurfit-Stone 0.95 0.48 60.9% 4,861 3,122
SON Sonoco 0.95 0.76 28.2% 865 2,201
TIN Temple-Inland 0.90 0.68 34.3% 1,360 2,605
AEPI AEP Industries 0.70 0.28 71.0% 303 124
ATR AptarGroup 1.15 0.99 20.5% 252 975
BMS Bemis 0.95 0.84 17.2% 380 1,835
SEE Sealed Air 1.00 0.93 11.4% 825 6,393
PTV Pactiv NA NA 52.5% 1,669 1,510
IXX Ivex NA NA 69.6% 464 203
MEDIAN 0.95 0.48 59.6% $ 915 $ 984
MEAN 0.90 0.53 54.9% 1,972 2,137
USC U.S. Can 0.55 0.31 55.7% 350 278(i)
</TABLE>
<TABLE>
<S> <C>
Assumptions
Marginal Tax Rate 38.0%
Risk Free Rate of Return(d) 6.52%
Equity Risk Premium(e) 8.00%
Size premium (j) 2.60%
</TABLE>
<TABLE>
<CAPTION>
PRE-TAX/AFTER-TAX COST OF DEBT
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
10.00% 10.50% 11.00% 11.50% 12.00% 12.50% 13.00%
6.20% 6.51% 6.82% 7.13% 7.44% 7.75% 8.06%
</TABLE>
<TABLE>
<CAPTION>
DEBT/ DEBT/ UNLEVERED LEVERING LEVERED COST OF
CAP. EQUITY BETA FACTOR(f) BETA EQUITY(g)
----- ------ --------- --------- ------- ---------
<S> <C> <C> <C> <C> <C>
20.0% 25.0% 0.53 1.16 0.61 14.0%
30.0% 42.9% 0.53 1.27 0.67 14.4%
40.0% 66.7% 0.53 1.41 0.74 15.1%
50.0% 100.0% 0.53 1.62 0.85 15.9%
60.0% 150.0% 0.53 1.93 1.02 17.2%
</TABLE>
<TABLE>
<CAPTION>
WEIGHTED AVERAGE COST OF CAPITAL(H)
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
12.4% 12.5% 12.5% 12.6% 12.7% 12.7% 12.8%
12.0% 12.1% 12.2% 12.3% 12.3% 12.4% 12.5%
11.5% 11.6% 11.8% 11.9% 12.0% 12.1% 12.3%
11.1% 11.2% 11.4% 11.5% 11.7% 11.8% 12.0%
10.6% 10.8% 11.0% 11.2% 11.4% 11.5% 11.7%
</TABLE>
(a) Levered beta as reported in ValueLine.
(b) Unlevered Beta = Levered Beta/[1+(1-Tax Rate)(Debt/Equity)]
(c) Net debt includes Short-Term Debt + Long-Term Debt - Cash.
(d) Risk Free Rate is 5-Year Treasury Bond Yield as of May 31, 2000.
(e) Represents the long-horizon expected equity risk premium based on simple
differences of historical geometric mean returns from 1926-1996 (SBBI 1999
Yearbook).
(f) Levering Factor = [1 + (1-Tax Rate)(Debt/Equity)]
(g) Cost of Equity = (Risk Free Rate of Return)+(Levered Beta)(Equity Risk
Premium)
(h) Weighted Average Cost of Capital = (After-Tax Cost of Debt)(Debt/Cap.)+(Cost
of Equity)(Equity/Cap.)
(i) Based on offer price.
(j) Source: SBBI 1999 Yearbook.
- 46 -
<PAGE> 49
U.S. CAN CORPORATION APPENDIX E
--------------------------------------------------------------------------------
SUMMARY OF ASSUMPTIONS
<TABLE>
<S> <C> <C>
ASSUMPTIONS
Price Paid Per Share to Common Owners: $ 20.00
Pre-Recap FD Common Shares Outstanding: 13.91
-------
Cost to Purchase 100% of the Common: $ 278.1
% of Common Shares Rolled 3.0%
Cost to Purchase Common Shares: $ 269.8
Market Value of Rolled Equity 8.3
New Equity Contributed 159.1
-------
Total Equity Post-Recap $ 167.4
Percentage Ownership of Rolled-over Equity (2) 5.0%
Percentage Ownership of New Equity (2) 95.0%
Goodwill (Relative to Common Stock): $ 0.0
Implied Total Value (including closing costs) $ 661.4
-------
</TABLE>
<TABLE>
<CAPTION>
T.V. MULTIPLES LTM PF 2000
------ ----
<S> <C> <C>
EBIT 8.9 11.0
EBITDA 6.0 5.4
</TABLE>
<TABLE>
<S> <C>
CLOSING CASH FLOW
Closing Costs (1) $ 39.7
Company debt as of 12/31/99 359.3
Retire In Money Options --
Existing Equity Rolled 8.3
Common Stock Purchased 269.8
------
TOTAL USES $677.1
Excess Cash $ 10.0
Senior Debt and Assumed Debt 349.7
Subordinated Debt 150.0
Existing Equity Rolled 8.3
New Equity 159.1
------
TOTAL SOURCES $677.1
Closing Costs % of Equity Value: 14.3%
Cash Req'd for Continuing Operations: 5.7
</TABLE>
<TABLE>
<CAPTION>
CAPITALIZATION Pre-Recap Post-Recap % Total
--------- ---------- -------
<S> <C> <C> <C>
Preexisting Debt N/A $ 31.5 4.7%
Tranche A Term Loan/Revolver N/A 168.2 25.2%
Tranche B Term Loan N/A 150.0 22.5%
------ ------ -----
Total Senior Debt 122.7 349.7 52.4%
Subordinated Debt 236.6 150.0 22.5%
------ ------ -----
Total Debt 359.3 499.7 74.9%
Stockholders Equity 70.3 167.4 25.1%
------ ------ -----
Total Capitalization $429.6 $667.1 100.0%
</TABLE>
DEBT
CAPACITY
<TABLE>
<CAPTION>
PF LTM 2000
------ ----
<S> <C> <C>
Senior Debt/EBITDA 3.2 2.5
Sub. Debt/EBITDA 1.4 1.2
Total Debt/EBITDA 4.6 3.8
</TABLE>
<TABLE>
<CAPTION>
Historical
----------------------
1997 1998 1999 2000 2001 2002 2003 2004
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales Growth -6.0% 0.5% 21.1% 1.8% 1.8% 1.6% 1.6%
COGS as a % of Sales 88.1% 87.0% 85.6% 84.6% 84.4% 84.1% 84.1% 84.1%
Gross Profit as a % of Sales 11.9% 13.0% 14.4% 15.4% 15.6% 15.9% 15.9% 15.9%
SG&A (excluding D&A) as a % of Sales 4.4% 4.6% 4.7% 5.2% 5.1% 5.0% 4.9% 4.9%
Operating Income as a % of Sales 7.3% 8.1% 9.4% 7.0% 9.6% 9.9% 10.1% 10.1%
Depreciation and Amortization (000's) 34.7 30.3 28.8 34.5 36.6 38.9 40.3 40.6
Amortization of Intangibles (000's) 2.0 1.8 1.7 4.5 4.5 4.5 4.5 4.5
Add'l LBO Related Goodwill (000's) 0 0 0 0 0
Closing Cost Amortization (000's) 23.3 4.1 4.1 4.1 4.1
Sale of Assets 12.1 0.0 0.0 0.0 0.0
Capital Expenditures (000's) 54.0 22.8 30.5 42.0 40.0 40.0 40.0 40.0
Cash Required for Restructuring 6.9 10.7 3.5 0.0 0.0 0.0
Intangibles and Acquisitions (000's) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Days Receivables 35.3 34.9 39.2 39.0 39.4 39.4 40.5 41.6
Inventory Turns 6.1 6.0 5.8 6.6 6.8 6.6 6.6 6.6
Other Current Assets as a % of Sales 5.3% 5.6% 5.2% 3.8% 3.4% 3.4% 3.3% 3.3%
Other Assets as a % of Sales 2.5% 2.8% 2.9% 2.3% 2.1% 1.8% 1.7% 1.6%
Days Payable 31.6 32.3 46.1 50.3 49.0 49.0 49.1 49.1
Accrued Liabilities as a % of Sales 6.6% 7.4% 7.6% 6.2% 6.2% 6.2% 6.2% 6.2%
Deferred Income Taxes as a % of Sales 2.4% 1.7% 1.1% 1.2% 1.2% 1.2% 1.2% 1.2%
Other Liabilities as a % of Sales 4.3% 4.6% 5.0% 4.6% 4.8% 4.9% 5.0% 4.9%
Effective Cash Tax Rate 17.7% 30.0% 30.0% 30.0% 30.0%
Coupon on Preferred Stock 0.0% 0.0% 0.0% 0.0% 0.0%
Preferred Dividends 0 0 0 0 0
Interest Rate on Cash Balance 4.5% 4.5% 4.5% 4.5% 4.5%
Interest Rate on Preexisting Debt 5.9% 5.9% 5.9% 5.9% 5.9%
Commitment Fee on Unused Revolver 0.5% 0.5% 0.5% 0.5% 0.5%
Interest Rate on Tranche A Term Loan and Revolver 9.86% 9.86% 9.86% 9.86% 9.86%
Interest Rate on Tranche B Term Loan 10.36% 10.36% 10.36% 10.36% 10.36%
Interest Rate on Subordinated Debt 13.5% 13.5% 13.5% 13.5% 13.5% 13.5%
LBO Sub Debt Repayment Schedule (000's) 0 0 0 0 0 0
% of Equity Given to Sub Debt Holder in Warrants 0.0%
% of Equity Given to Management in Options 11.0%
Transaction Costs 19.2
Bond Tender Premium 20.5
</TABLE>
(1) Based on Pac Packaging Proposal and includes $20.5 million of transaction
costs and $19.2 million bond tender premium.
(2) Fully diluted ownership calculated at assumed transaction close at 1/1/00.
Partner ownership calculated using conversion price of $20.00 per share.
(3) Assumes LIBOR + 300 for revolver and Term A. Assumes LIBOR + 350 for Term B.
- 47 -
