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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13E-3
RULE 13E-3 TRANSACTION STATEMENT
(Pursuant to Section 13(e) of the Securities Exchange Act of 1934)
(Amendment No. 3)
HILITE INDUSTRIES, INC.
(Name of Issuer)
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HILITE INDUSTRIES, INC. SAMUEL M. BERRY
HILITE HOLDINGS, LLC CHRIS A. CURTO
HILITE MERGECO, INC. ARTHUR D. JOHNSON
JAMES E. LINEBERGER, JR. TRUST RONALD E. REINKE
GEOFFRY S. LINEBERGER TRUST DONALD M. MAHER
CHRISTOPHER LINEBERGER TRUST WILLIE VERCHER
THE BRADY FAMILY LIMITED PARTNERSHIP DR. KRISHNAMURTHY SUNDARARAJAN
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(Name of Person(s) Filing Statement)
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COMMON STOCK, PAR VALUE $0.01 PER SHARE 431353 10 1
(Title of Class of Securities) (CUSIP Number of Class of Securities)
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SAMUEL M. BERRY
PRESIDENT AND CHIEF OPERATING OFFICER
HILITE INDUSTRIES, INC.
1671 S. BROADWAY
CARROLLTON, TEXAS 75006
(972) 242-2116
(Name, Address and Telephone Number of Persons Authorized to Receive Notices
and Communications on Behalf of the Person(s) Filing Statement)
WITH COPIES TO:
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EDWARD R. MANDELL, ESQ. CHRISTOPHER M. KELLY, ESQ.
JORDAN A. HORVATH, ESQ. PATRICK J. LEDDY, ESQ.
PARKER CHAPIN FLATTAU & KLIMPL, LLP JONES, DAY, REAVIS & POGUE
1211 AVENUE OF THE AMERICAS 901 LAKESIDE AVENUE
NEW YORK, NEW YORK 10036 CLEVELAND, OHIO 44114
(212) 704-6000 (216) 586-3939
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This statement is filed in connection with (check the appropriate box):
a. [ ] The filing of solicitation materials or an information statement subject
to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the Securities
Exchange Act of 1934.
b. [ ] The filing of a registration statement under the Securities Act of 1933.
c. [X] A tender offer.
d. [ ] None of the above.
Check the following box if the soliciting materials or information statement
referred to in checking box (a) are preliminary copies: [ ]
CALCULATION OF FILING FEE
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TRANSACTION VALUATION* AMOUNT OF FILING FEE
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$71,537,850 $14,308
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* For purposes of calculating fee only. This transaction applies to an aggregate
of 5,020,200 shares of common stock of Hilite Industries, Inc. (the sum of (i)
4,900,000 outstanding shares of common stock and (ii) 120,200 outstanding
options to purchase shares of common stock of Hilite Industries, Inc.).
Except as otherwise noted, the per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11 is $14.25 per unit.
The proposed maximum aggregate value of transaction is $71,537,850.
[X] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
Amount Previously Paid: $14,308
Form or Registration No.: Schedule 13E-4
Filing Party: Hilite Industries, Inc.
Date Filed: May 3, 1999
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INTRODUCTION
This Amendment No. 3 to the Rule 13e-3 Transaction Statement (the
"Statement") on Schedule 13E-3 (the "Schedule 13E-3") is being filed by Hilite
Industries, Inc., a Delaware corporation (the "Company"), Hilite Holdings, LLC,
a Delaware limited liability company, Hilite Mergeco, Inc., a Delaware
corporation, the James E. Lineberger, Jr. Trust, the Geoffry S. Lineberger
Trust, the Christopher Lineberger Trust, The Brady Family Limited Partnership,
Samuel M. Berry, Chris A. Curto, Arthur D. Johnson, Ronald E. Reinke, Donald M.
Maher, Willie Vercher and Dr. Krishnamurthy Sundararajan, pursuant to Section
13(e) of the Securities Exchange Act of 1934, as amended, and Rule 13e-3
thereunder in connection with the tender offer by the Company for all the issued
and outstanding shares of its common stock, $0.01 par value per share (the
"Shares"), upon the terms and subject to the conditions set forth in the Offer
to Purchase dated May 3, 1999 (the "Offer to Purchase") and the related Letter
of Transmittal (which together constitute the "Offer"), copies of which were
attached to the Statement as Exhibits (d)(1) and (d)(2) hereto, respectively.
The Statement was initially filed with the Securities and Exchange Commission on
May 3, 1999; Amendment No. 1 to the Statement ("Amendment No. 1") was filed with
the Securities and Exchange Commission on May 20, 1999; and Amendment No. 2 to
the Statement was filed with the Securities and Exchange Commission on May 27,
1999.
Capitalized terms used but not defined herein have the meanings ascribed
to such terms in the Offer to Purchase and the Statement.
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ITEM 2. IDENTITY AND BACKGROUND.
This Statement is being filed by the Company, which is the issuer of the
class of equity securities which is the subject of the Rule 13e-3 transaction
and by Hilite Holdings, LLC, a Delaware limited liability company ("Buyer"),
Hilite Mergeco, Inc., a Delaware corporation ("Merger Subsidiary"), the James E.
Lineberger, Jr. Trust, the Geoffry S. Lineberger Trust, the Christopher
Lineberger Trust, The Brady Family Limited Partnership, Samuel M. Berry, Chris
A. Curto, Arthur D. Johnson, Ronald E. Reinke, Donald M. Maher, Willie Vercher
and Dr. Krishnamurthy Sundararajan (the "Continuing Stockholders"), all of whom
are or may be considered affiliates of the Company.
(a)-(d) and (g) The information set forth in the Offer to Purchase under
"THE TENDER OFFER -- Section 7. Certain Information Concerning the Company,"
"THE TENDER OFFER -- Section 15. Certain Information Concerning Buyer and Merger
Subsidiary" and "SCHEDULE I. Directors and Executive Officers of the Company" is
incorporated herein by reference.
Item 2(a)-(g) is being amended and supplemented by the following:
The following paragraph is hereby added after the second paragraph on
page 43 under "THE TENDER OFFER -- 15. Certain Information Concerning Buyer and
Merger Subsidiary" contained in the Offer to Purchase:
"Buyer was formed pursuant to an investment program among
Carreras, Kestner & Co., L.L.C., Carreras, Kestner Investors, L.L.C.,
Citicorp Venture Capital Corporation, Key Equity Capital
Corporation/Key Equity Partners 99 and Kelso & Company, L.P. Each
investor is a member of Buyer. Carreras, Kestner & Co., L.L.C., as the
manager of the investment program, was responsible for finding,
structuring, negotiating and causing Buyer to enter into the Merger
Agreement after receiving approval of the Transactions from an
investment board comprised of designees of the investors. The role of
the members of Buyer other than Carreras, Kestner & Co., L.L.C. in
connection with the Transactions has been, and will continue to be,
limited to funding their respective capital commitments with respect to
the equity portion of the financing."
The information set forth in the Offer to Purchase under "THE TENDER
OFFER -- Section 15. Certain Information Concerning Buyer and Merger Subsidiary"
is hereby amended as follows:
The section heading is hereby amended to "THE TENDER OFFER --
Section 15. Certain Information Concerning CK&Co., Buyer and Merger
Subsidiary".
The information set forth in the first paragraph on page 44
under "THE TENDER OFFER -- Section 15. Certain Information Concerning
CK&Co., Buyer and Merger Subsidiary" is hereby amended and restated as
follows:
"Neither CK&Co., Buyer nor Merger Subsidiary had any
relationship with the Company prior to the commencement of the
discussions that led to the execution of the Merger Agreement.
None of CK&Co., Buyer and Merger Subsidiary believe that it is
an "affiliate" of the Company within the meaning of Rule 13e-3
under the Exchange Act."
(e)-(f) Neither the Company, Buyer, Merger Subsidiary, the Continuing
Stockholders, nor any natural person listed in "SCHEDULE I. Directors and
Officers of the Company" or "THE TENDER OFFER -- Section 15. Certain Information
Concerning Buyer and Merger Subsidiary" of the Offer to Purchase during the past
five years, to its or his knowledge, (i) has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) other
than as set forth in "SCHEDULE I. Directors and Executive Officers of the
Company," was a party to a civil proceeding of a judicial or administrative body
of competent jurisdiction as a result of which any such person was or is subject
to a judgment, decree or final order enjoining further violations of, or
prohibiting activities subject to, federal or state securities laws or finding
any violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS.
(a) The information set forth in the Offer to Purchase under
"INTRODUCTION", "SPECIAL FACTORS -- Related Party Transactions" and "SPECIAL
FACTORS -- Background of the Transactions" is incorporated herein by reference.
(b) The information set forth in the Offer to Purchase under
"INTRODUCTION", "SPECIAL FACTORS -- Background of the Transactions" and "SPECIAL
FACTORS -- Interests of Certain Persons in the Transactions" is incorporated
herein by reference.
Item 3(a)-(b) is hereby amended and restated by replacing the word
"proposals" with the word "presentations" in each place that it appears in the
first paragraph on page 4 under "SPECIAL FACTORS -- Background of the
Transaction" contained in the Offer to Purchase.
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ITEM 4. TERMS OF THE TRANSACTION.
(a) The information set forth in the Offer to Purchase under
"INTRODUCTION," "SPECIAL FACTORS -- Background of the Transactions," "SPECIAL
FACTORS -- Purposes and Reasons of the Company for the Transactions," "SPECIAL
FACTORS -- Rights of the Stockholders in the Transactions", "SPECIAL FACTORS --
Plans for the Company after the Transactions; Certain Effects of the
Transactions," "SPECIAL FACTORS -- The Merger Agreement and the Stockholders
Agreement," "THE TENDER OFFER -- Section 1. Terms of the Offer; Expiration
Date," "THE TENDER OFFER -- Section 2. Acceptance for Payment and Payment for
Shares," "THE TENDER OFFER -- Section 3. Procedures for Accepting the Offer and
Tendering Shares," "THE TENDER OFFER -- Section 4. Withdrawal Rights," "THE
TENDER OFFER -- Section 10. Financing of the Transactions," "THE TENDER
OFFER -- Section 11. Effect of the Transactions on the Market for the Shares;
Exchange Act Registration," "THE TENDER OFFER -- Section 12. Certain Conditions
to the Offer," "THE TENDER OFFER -- Section 13. Certain Legal Matters and
Regulatory Approvals" and "THE TENDER OFFER -- Section 17. Miscellaneous" is
incorporated herein by reference.
Item 4(a) is hereby amended and supplemented by the following:
The following two paragraphs are hereby added as the final two paragraphs
under "SPECIAL FACTORS--Purposes and Reasons of the Company for the
Transactions" contained in the Offer to Purchase:
"The structure of the Transactions was the result of extensive
negotiations between Buyer and the Company. In connection with such
negotiations, Buyer indicated its desire to structure the Transactions to
qualify for recapitalization accounting. In order to induce Buyer to
proceed with the Transactions and to provide the Company's stockholders
with the benefits of Buyer's offer for the Company, the Company ultimately
agreed to proceed based on Buyer's proposed structure.
The Board of Directors decided to pursue the Transactions at this
time because of (i) the anticipated impact of certain trends affecting the
Company and its business, including automotive supplier consolidation and
the increasing importance of size and global presence for continuous
growth, (ii) the perceived undervaluation of the Shares in the market, and
(iii) the lack of liquidity for the Shares and the determination that a
private sale of the Company would likely provide substantially greater
value to the Company's stockholders than could be obtained through the
public market.
The parties acknowledge that the condition to the Offer set forth in clause
(iv) of "THE TENDER OFFER -- Section 12. Certain Conditions to the Offer" of the
Offer to Purchase will be satisfied or waived by the Company, Buyer and Merger
Subsidiary on or before the Expiration Date.
The parties acknowledge that the condition to the Offer set forth in clause
(vii) of "THE TENDER OFFER -- Section 12. Certain Conditions to the Offer" of
the Offer to Purchase has been waived by the Company, Buyer and Merger
Subsidiary.
(b) The information set forth in the Offer to Purchase under
"INTRODUCTION," "SPECIAL FACTORS -- Background of the Transactions," "SPECIAL
FACTORS -- Purposes and Reasons of Buyer and the Continuing Stockholders for
the Transactions," "SPECIAL FACTORS -- Interests of Certain Persons in the
Transactions" and "SPECIAL FACTORS -- The Merger Agreement and the Stockholders
Agreement" is incorporated herein by reference.
Item 4(a)-(b) is hereby amended and restated to incorporate by reference
the amendment to Item 3(a)-(b) set forth above.
ITEM 5. PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE.
(a)-(g) The information set forth in the Offer to Purchase under
"INTRODUCTION," "SPECIAL FACTORS -- Background of the Transactions," "SPECIAL
FACTORS -- Purposes and Reasons of the Company for the Transactions," "SPECIAL
FACTORS -- Purposes and Reasons of Buyer and the Continuing Stockholders for the
Transactions," "SPECIAL FACTORS -- Plans for the Company after the Transactions;
Certain Effects of the Transactions," "SPECIAL FACTORS -- The Merger Agreement
and the Stockholders Agreement" and "THE TENDER OFFER -- Section 11. Effects of
the Transactions on the Market for the Shares; Exchange Act Registration" is
incorporated herein by reference.
Item 5(a)-(g) is hereby amended and supplemented to incorporate by
reference the amendments to Item 3(a)-(b) and Item 4(a) set forth above.
ITEM 7. PURPOSE(S), ALTERNATIVES, REASONS AND EFFECTS.
(a) The information set forth in the Offer to Purchase under
"INTRODUCTION," "SPECIAL FACTORS -- Background of the Transactions," "SPECIAL
FACTORS -- Purposes and Reasons of the Company for the Transactions," "SPECIAL
FACTORS -- Purposes and Reasons of Buyer and the Continuing Stockholders for the
Transactions" and "SPECIAL FACTORS -- Plans for the Company After the
Transactions; Certain Effects of the Transactions" is incorporated herein by
reference.
(b) The information set forth in the Offer to Purchase under "SPECIAL
FACTORS -- Background of the Transactions" and "SPECIAL FACTORS --
Recommendation of the Disinterested Directors and the Board; Fairness of the
Transactions" is incorporated herein by reference.
(c) The information set forth in the Offer to Purchase under
"INTRODUCTION," "SPECIAL FACTORS -- Background of the Transactions," "SPECIAL
FACTORS -- Purposes and Reasons of the Company for the Transactions," "SPECIAL
FACTORS -- Purposes and Reasons of Buyer and the
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Continuing Stockholders for the Transactions," "SPECIAL FACTORS -- Position of
Buyer Regarding Fairness of the Transactions," and "SPECIAL FACTORS -- Plans for
the Company after the Transactions; Certain Effects of the Transactions," is
incorporated herein by reference.
(d) The information set forth in the Offer to Purchase under
"INTRODUCTION," "SPECIAL FACTORS -- Plans for the Company after the
Transactions; Certain Effects of the Transactions," "SPECIAL FACTORS -- Rights
of the Stockholders in the Transactions," "SPECIAL FACTORS -- The Merger
Agreement and the Stockholders Agreement" "SPECIAL FACTORS -- Transactions and
Arrangements Concerning the Shares," "THE TENDER OFFER -- Section 5. Certain
U.S. Federal Income Tax Consequences," "THE TENDER OFFER -- Section 10.
Financing of the Transactions" and "THE TENDER OFFER -- Section 11. Effect of
the Transactions on the Market for Shares; Exchange Act Registration" is
incorporated herein by reference.
Item 7(a) and (c) are hereby amended and restated to incorporate by
reference the amendments to Item 3(a)-(b)set forth above, and amended and
supplemented to incorporate by reference the amendments to Item 4(a) set forth
above.
Item 7(b) is hereby amended and supplemented by the following:
The following two paragraphs added by Amendment No. 1 after the first
full paragraph on page 8 of the Offer to Purchase under "SPECIAL FACTORS --
Recommendation of the Disinterested Directors and the Board; Fairness of the
Transactions" are hereby amended and restated to read in their entirety as
follows:
"The Board and the Disinterested Directors determined that it
was not necessary to appoint a committee of independent directors or an
unaffiliated representative to act solely on behalf of the unaffiliated
stockholders of the Company for the purpose of negotiating the terms of
the Merger Agreement. In making such determination, the Board and the
Disinterested Directors carefully considered the fact that proposals to
acquire the Company were solicited on behalf of the Company prior to
any consideration of whether any stockholders would retain an equity
interest in the Surviving Corporation, and noted that the Disinterested
Directors are not employed by the Company and will have no financial
interest in the Company following consummation of the Merger. The
Disinterested Directors were given an opportunity to separately meet
with Bowles Hollowell and legal counsel and evaluate the fairness of
the Transactions to unaffiliated stockholders. Thereafter, all of the
Directors, including the Disinterested Directors, voted to approve the
Transactions. All of the Directors, including the Disinterested
Directors, and each of the Continuing Stockholders, Buyer and Merger
Subsidiary, believe that the Transactions are and were approved in a
manner that was procedurally fair to unaffiliated stockholders.
In connection with its deliberations, the Board did not
consider, and did not request that Bowles Hollowell evaluate the
Company's liquidation value. The Board did not view the Company's
liquidation value to be a relevant measure of valuation, given that the
Offer Price significantly exceeded the book value per Share of the
Company, and it was the Board's view that the Company is more valuable
as a going concern than its net book value per Share. However, there
can be no assurance that the liquidation value would not produce a
higher valuation of the Company than its value as a going concern."
In addition, clause (i) in the subsection entitled Recommendation of
Disinterested Directors and the Board under "SPECIAL FACTORS -- Recommendation
of the Disinterested Directors and the Board; Fairness of the Transactions"
contained in the Offer to Purchase is hereby amended and restated to read in its
entirety as follows:
"(i) determined that the Offer and the Merger are fair to,
and in the best interests of, the stockholders of the
Company, whether affiliated or unaffiliated,"
Item 7(a), (c) and (d) are hereby amended and supplemented by the
following:
The following paragraph is hereby added as the final paragraph under
"SPECIAL FACTORS - Plans for the Company after the Transactions; Certain Effects
of the Transactions" contained in the Offer to Purchase:
"Additionally, the stockholders (other than the Continuing
Stockholders with respect to the retained Shares) will receive a
premium for their Shares above the all-time high trading price of the
stock, based upon historical share price data."
ITEM 8. FAIRNESS OF THE TRANSACTION.
(a)-(e) The information set forth in the Offer to Purchase under
"INTRODUCTION," "SPECIAL FACTORS -- Background of the Transactions," "SPECIAL
FACTORS -- Recommendation of the Disinterested Directors and the Board; Fairness
of the Transactions," "SPECIAL FACTORS -- Opinion of Bowles Hollowell," "SPECIAL
FACTORS -- Position of Buyer Regarding Fairness of the Transactions," "SCHEDULE
II. Opinion of Bowles Hollowell" and "SPECIAL FACTORS -- Rights of the
Stockholders in the Transactions" is incorporated herein by reference.
Item 8(a)-(e) is hereby amended and supplemented by the following:
The last sentence of the subsection entitled Analysis of Selected
Public Company Trading and Financial Information under "SPECIAL FACTORS --
Opinion of Bowles Hollowell" contained in the Offer to Purchase is hereby
amended and restated to read in its entirety as follows:
"This analysis indicated multiples for the Selected Companies
of latest 12 months and estimated calendar 1999 EPS of 8.3x to 17.6x
(with a median of 13.5x) and 7.2x to 11.5x (with a median of 8.9x),
respectively, and latest 12 months revenues, EBIT and EBITDA of 0.6x to
1.7x (with a median of 0.9x), 8.2x to 12.2x (with a median of 10.0x)
and 4.7x to 8.6x (with a median of 6.3x), respectively. Implied
multiples for the Company based on the Offer Price of latest 12 months
and estimated calendar 1999 EPS of 13.8x (based on latest 12 months
EPS), 13.4x (based on calendar 1999 EPS estimates as reported by First
Call), respectively, and latest 12 months revenues, EBIT and EBITDA of
1.0x, 9.7x and 6.8x, respectively, compare favorably with the preceding
multiples for the Selected Companies. Although the implied multiple of
EBIT is slightly below the median EBIT multiple of the Selected
Companies, the implied multiple is well within the range of multiples
for the Selected Companies. Furthermore, Bowles Hollowell believes that
implied multiples of the Company based on the Offer Price compare
favorably with the multiples of the Selected Companies given the
relatively small size of the Company (market capitalization of $53.1
million) compared to the Selected Companies (market capitalization
ranging from $55.2 million to $7.8 billion, with a median of $651.1
million). Bowles Hollowell believes its analysis of the Selected
Companies supports its conclusion as to the fairness of the Offer Price
from a financial point of view."
The last three sentences of the subsection entitled Analysis of
Selected Merger and Acquisition Transactions under "SPECIAL FACTORS -- Opinion
of Bowles Hollowell" contained in the Offer to Purchase are hereby amended and
restated to read in their entirety as follows:
"Implied multiples for the Company based on the Offer Price of
latest 12 months EPS revenues, EBIT, and EBITDA of 13.8x, 1.0x, 9.7x,
and 6.8x, respectively, compare favorably with the preceding multiples
for the Selected Merger and Acquisition Transactions. Bowles Hollowell
also compared the premiums paid in the Selected Merger and Acquisition
Transactions with the premium payable in the Transactions. The premiums
paid in the Selected Merger and Acquisition Transactions, based on the
target company's closing stock price 30 days prior to public
announcement of such transaction, were 5.3% to 78.1% (with a median of
40.5%). The premium payable in the Offer and the Merger, based on the
closing stock price of the Shares 30 days prior to the Board meeting
held on April 22, 1999 to evaluate the proposed Transactions, was
39.0%. Although the implied multiples of latest 12 months EPS and EBIT
and the premium payable are slightly below the median comparable
multiples of premium paid of the Selected Merger and Acquisition
Transactions, the implied multiples and premium payable are well within
the range of multiples and premiums paid of the Selected Merger and
Acquisition Transactions. Furthermore, Bowles Hollowell believes the
implied multiples and premium payable compare favorably to the Selected
Merger and Acquisition Transactions multiples and premiums paid given
the Company's small size (enterprise value of $69.1 million) compared
to the Selected Merger and Acquisition Transactions (enterprise value
ranging from $17.5 million to $6.6 billion, with a median of $110.0
million). Bowles Hollowell believes its analysis of Selected Merger and
Acquisition Transactions supports its conclusion as to the fairness of
the Offer Price from a financial point of view."
In addition, Item 8(a)-(e) is hereby amended and supplemented to
incorporate by reference the amendments to Item 7(b) set forth above, and Item
8(a)-(f) is hereby amended and restated to incorporate by reference the
amendments to Item 3(a)-(b) set forth above.
(f) The information set forth in the Offer to Purchase under "SPECIAL
FACTORS -- Background of the Transactions" is incorporated herein by reference.
ITEM 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS.
(a)-(c) The information set forth in the Offer to Purchase under
"INTRODUCTION," "SPECIAL FACTORS -- Background of the Transactions," "SPECIAL
FACTORS -- Recommendation of the Disinterested Directors and the Board; Fairness
of the Transactions," "SPECIAL FACTORS -- Opinion of Bowles Hollowell," and
"SCHEDULE II -- Opinion of Bowles Hollowell" is incorporated herein by
reference.
Item 9(a)-(c) is hereby amended and restated to incorporate by
reference the amendments to Item 3(a)-(b) set forth above and amended and
supplemented to incorporate by reference the amendments to Items 7(b) and
8(a)-(e) set forth above.
ITEM 10. INTEREST IN SECURITIES OF THE ISSUER.
(a) The information set forth in the Offer to Purchase under "INTRODUCTION"
and "SPECIAL FACTORS -- Beneficial Ownership of Common Stock" is incorporated
herein by reference.
Item 10(a) is hereby amended and restated as follows:
The information set forth in the Offer to Purchase under
"INTRODUCTION" and "SPECIAL FACTORS -- Beneficial Ownership of Common
Stock" is incorporated herein by reference. Pursuant to the
Stockholders Agreement, dated as of April 26, 1999, among Buyer, Merger
Subsidiary and certain stockholders of the Company listed on Schedule A
to that agreement (the "Continuing Stockholders"), Buyer and Merger
Subsidiary may be construed as being the beneficial owners of 3,802,650
Shares. Such Shares constitute 75.7% of the outstanding Shares. Buyer
and Merger Subsidiary filed statements on Schedule 13D relating to such
beneficial ownership on May 7,1999 and Buyer, Merger Subsidiary and the
Continuing Stockholders filed an amendment to the statement on Schedule
13D relating to such beneficial ownership on May 20, 1999. CK&Co. does
not beneficially own any Shares of the Company.
(b) The information set forth in the Offer to Purchase under "SPECIAL
FACTORS -- The Merger Agreement and the Stockholders Agreement" and "SPECIAL
FACTORS -- Transactions and Arrangements Concerning the Shares" is incorporated
herein by reference.
ITEM 12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSONS
WITH REGARD TO THE TRANSACTION.
(a)-(b) The information set forth in the Offer to Purchase under
"INTRODUCTION," "SPECIAL FACTORS -- Background of the Transactions," "SPECIAL
FACTORS -- Recommendation of the Disinterested Directors and The Board; Fairness
of the Transactions," "SPECIAL FACTORS -- Purposes and Reasons of Buyers and
Continuing Stockholders for the Transactions," "SPECIAL FACTORS -- Interests of
Certain Persons in the Transactions," "SPECIAL FACTORS -- Transactions and
Arrangements
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Concerning the Shares" "SPECIAL FACTORS -- The Merger Agreement and the
Stockholders Agreement" and "SPECIAL FACTORS -- Beneficial Ownership of Common
Stock" is incorporated herein by reference.
Item 12(a)-(b) is hereby amended and restated to incorporate by reference
the amendments to Item 3(a)-(b) set forth above and amended and supplemented to
incorporate by reference the amendments to Item 7(b) set forth above.
ITEM 14. FINANCIAL INFORMATION.
(a) The information set forth in the Offer to Purchase under "THE TENDER
OFFER -- Section 7. Certain Information Concerning the Company", "THE TENDER
OFFER -- Section 8. Recent Developments," and "THE TENDER OFFER -- Section 9.
Summary Historical Financial Information" is incorporated herein by reference.
In addition, the Company's audited financial statements and related notes as of
June 30, 1997 and June 30, 1998 and for the three years ended June 30, 1998, and
the Company's unaudited Balance Sheet as of March 31, 1999 and June 30, 1998,
the Statement of Operations for the Three and Nine-Month periods ended March 31,
1999 and 1998 and Statement of Cash Flows for the Nine-Month periods ended March
31, 1999 and 1998 are attached to the Offer to Purchase as Schedules IV and V
thereto, respectively.
Item 14(a) is hereby amended and supplemented by the following:
The first sentence under "THE TENDER OFFER" -- Section 9. Summary
Historical financial Information" contained in the Offer to Purchase is hereby
amended and restated to read in its entirety as follows:
"The following table sets forth selected consolidated financial data
with respect to the Company for each of the five years as of and for the
years ended June 30, 1998 and should be read in conjunction with the
audited financial statements (including the related notes thereto) included
as Schedule IV to the Offer to Purchase."
Furthermore, the following information regarding book value per Share is
hereby added after the last sentence under "THE TENDER OFFER -- Section
9. Summary Historical Financial Information" contained in the Offer to
Purchase:
"Shareholders' equity per share was $6.14 at March 31, 1999, compared to
$5.34 per share at June 30, 1998."
(b) The information set forth in the Offer to Purchase under "SPECIAL
FACTORS -- Cautionary Statements Concerning Forward-Looking Statements and
Company Financial Projections" is incorporated herein by reference.
Item 14(b) is hereby amended and supplemented by the following:
The following sentence is hereby deleted from the first paragraph under
"SPECIAL FACTORS - Cautionary Statements Concerning Forward-Looking Statements
and Company Financial Projections" contained in the Offer to Purchase:
"Neither the Company nor any other party assumes any responsibility for
the accuracy or validity of the Projections."
In addition, certain projections set forth under "SPECIAL FACTORS -
Cautionary Statements Concerning Forward-Looking Statements and
Company Financial Projections" contained in the Offer to Purchase have been
revised. Specifically, the following paragraph is hereby added to the end of
"SPECIAL FACTORS- Cautionary Statements concerning Forward-Looking Statements
and Company Financial Projections" contained in the Offer to Purchase:
"The above described projections were calculated based on the
following assumptions:
(i) The Company's sales department estimated monthly quantity
estimates for fiscal year 1999 and quarterly quantity for
fiscal years 2000 and 2001. The part number sales estimates
were based upon an annual build rate of 15 million unit U.S.
automotive production. Based on that information, the
existing standard cost in the Company's system was applied to
the related part numbers to calculate the standard gross
margin. For new programs that did not have a standard cost in
the Company's system, an estimated cost was determined based
upon bid estimates.
(ii) Material, labor and overhead variances were estimated on a
divisional basis based upon past experience and other known
factors. Gross margin was then computed based upon these
results. The gross margin percentages were reviewed for
consistency and reasonableness.
(iii) Detailed selling, general and administrative expenses were
estimated based upon historical experience and other known
factors.
(iv) Interest was calculated on estimated loan balances using
scheduled interest rates with no fluctuations expected in
rates in the future.
(v) Taxes were applied on a straight 37.5% of the company's
profit with respect to the Company's Dallas, Texas operations
and 38% at the Company's subsidiary, North American Spring &
Stamping, Inc., consistent with past practices."
ITEM 17. MATERIAL TO BE FILED AS EXHIBITS.
7
<PAGE> 7
(d)(10) Press Release issued by the Company on May 28, 1999.
SCHEDULE V TO THE OFFER TO PURCHASE.
The following footnote is hereby added after the Consolidated Statements of Cash
Flows as a footnote to Schedule V of the Offer to Purchase:
"1. The interim consolidated financial statements of the Company at
March 31, 1999 and for the three and nine-month period ended March 31,
1999, are unaudited, but include all adjustments (consisting of normal
recurring adjustments) which the Company considers necessary for a
fair presentation. The unaudited consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information. Accordingly, they do
not include all of the information and footnotes, and are not
necessarily indicative of the results that may be expected for the
fiscal year ending June 30, 1999."
8
<PAGE> 8
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
May 28, 1999
HILITE INDUSTRIES, INC.
/s/ SAMUEL M. BERRY
------------------------------------
By: Samuel M. Berry
President and Chief Operating
Officer
HILITE HOLDINGS, LLC
/s/ JOSEPH W. CARRERAS
------------------------------------
By: Joseph W. Carreras
President
HILITE MERGECO, INC.
/s/ JOSEPH W. CARRERAS
------------------------------------
By: Joseph W. Carreras
President
JAMES E. LINEBERGER, JR. TRUST
/s/ JAMES E. LINEBERGER, JR.
------------------------------------
By: James E. Lineberger, Jr.
Trustee
GEOFFRY S. LINEBERGER TRUST
/s/ JAMES E. LINEBERGER, JR.
------------------------------------
By: James E. Lineberger, Jr.
Trustee
CHRISTOPHER LINEBERGER TRUST
/s/ JAMES E. LINEBERGER, JR.
------------------------------------
By: James E. Lineberger, Jr.
Trustee
9
<PAGE> 9
THE BRADY FAMILY LIMITED
PARTNERSHIP
/s/ DANIEL W. BRADY
------------------------------------
By: Daniel W. Brady
General Partner
/s/ SAMUEL M. BERRY
------------------------------------
Samuel M. Berry
/s/ CHRIS A. CURTO
------------------------------------
Chris A. Curto
/s/ ARTHUR D. JOHNSON
------------------------------------
Arthur D. Johnson
/s/ RONALD E. REINKE
------------------------------------
Ronald E. Reinke
/s/ DONALD M. MAHER
------------------------------------
Donald M. Maher
/s/ WILLIE VERCHER
------------------------------------
Willie Vercher
/s/ DR. KRISHNAMURTHY
SUNDARARAJAN
------------------------------------
Dr. Krishnamurthy Sundararajan
10
<PAGE> 10
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
(d)(10) Press Release issued by the Company on May 28, 1999.
</TABLE>
11
<PAGE> 1
Exhibit (d)(10)
FOR IMMEDIATE RELEASE
CONTACT: Daniel W. Brady, Chief Executive Officer
Telephone Number: (972) 466-0475
HILITE INDUSTRIES EXTENDS TENDER OFFER
CARROLLTON, TEXAS, May 28, 1999 -- Hilite Industries, Inc. (NASDAQ:HILI) today
announced it has extended the expiration of its previously announced tender
offer until 9:00 a.m. New York City time on June 1, 1999. As of 3:00 p.m. New
York City time, today, 4,519,327 shares of Hilite common stock had been validly
tendered into the offer, which represents approximately 92% of all outstanding
common shares of Hilite.
Hilite Industries, Inc. designs, manufactures and sells a
diversified line of highly engineered components and assemblies for the
automotive industry including brake proportioning valves, electromagnetic
clutches, machined components such as mounting brackets and pulleys, and
specialty components and assemblies such as stampings, specialty springs and
automated assemblies. The Company's customers include all three domestic
automotive companies: Ford Motor Company, General Motors Corporation and Daimler
Chrysler Corporation as well as other original equipment manufacturers such as
Navistar International Transportation Corporation and non-automotive companies
such as Motorola, Inc. The Company also sells products to first-tier suppliers
of the automotive industry including Borg-Warner Corporation, Bosch Braking
Systems Corporation, Denso of Los Angeles, Inc. and ITT Automotive of North
America, Inc.
For further information call Investor Relations at (972)
466-0475 or access Hilite Industries, Inc.'s website at www.hilite-ind.com.
