SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
SCHEDULE TO
(Rule 14d-100)
TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
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McWhorter Technologies, Inc.
(Name of Subject Company (Issuer))
Tartan, Inc.
a wholly owned subisidary of
Eastman Chemical Company
(Name of Filing Persons (Offerors))
Common Stock, par value $0.01 per share
(Title of Class of Securities)
582803102
(CUSIP Number of Class of Securities)
Theresa K. Lee
100 North Eastman Road
Kingsport, Tennessee 37662
Telephone: (423) 229-2000
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of Filing Persons)
---------------
with a copy to:
Michael P. Rogan, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
1440 New York Avenue, N.W.
Washington, D.C. 20005
Telephone: (202) 371-7000
[X] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[X] third-party tender offer subject to Rule 14d-1.
[ ] issuer tender offer subject to Rule 13e-4.
[ ] going-private transaction subject to Rule 13e-3.
[ ] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting of the
results of the tender offer: [ ]
<PAGE>
For Release After 8:00 a.m. (EDT)
Thursday, May 4, 2000
EASTMAN CHEMICAL COMPANY McWHORTER TECHNOLOGIES, INC.
Martha Lawson Louise Tonozzi-Fredrick
PHONE: (423) 229 6574 PHONE: (847) 551 3205
EMAIL: [email protected]
Eastman to acquire McWhorter Technologies, Inc.
KINGSPORT, Tenn. and Carpentersville, Ill.--May 4, 2000--Eastman Chemical
Company (NYSE:EMN) and McWhorter Technologies, Inc. (NYSE:MWT) today announced
that their boards of directors have approved a definitive merger agreement under
which Eastman will acquire the shares of McWhorter for approximately $200
million cash. Including debt, the transaction is valued at approximately $355
million.
Under the terms of the agreement, a wholly owned subsidiary of Eastman will
commence a tender offer to purchase all outstanding shares of McWhorter common
stock for $19.70 per share in cash. McWhorter's board of directors has
recommended that McWhorter stockholders tender their shares. Following
completion of the tender offer, Eastman intends to consummate a cash merger to
acquire any shares not previously tendered. McWhorter has approximately 10
million shares outstanding.
The transaction, which will be accounted for as a purchase, is expected to
increase Eastman's presence in the coatings, adhesives and specialty polymers
product lines to approximately US$1.4 billion in annual revenues.
"This transaction represents another significant step in Eastman's strategy of
pursuing growth opportunities for our specialty businesses, which offer faster
growth and payback on investments, provide lower cyclicality and capital
intensity and allow us to capitalize on our strengths," said Earnest W.
Deavenport, Jr., chairman and CEO.
Allan Rothwell, president of the Chemicals Group at Eastman, said that he and
his team are eager to complete the transaction and begin integrating the
McWhorter and Eastman businesses. "We have identified a number of synergies that
give us confidence that this acquisition will meet our financial and business
goals," Rothwell stated. "Our current projections and assumptions show this
acquisition will be accretive on a cash basis immediately and should turn
accretive on an earnings basis during 2001."
He noted that previous transactions, including the acquisition of Lawter
International in June of 1999, enhance the synergies of the McWhorter
acquisition.
-More-
<PAGE>
Eastman to acquire McWhorter Technologies, Inc.
Page Two
Jeff Nodland, McWhorter CEO, also expressed support for the merger. "This is a
good transaction that brings two complementary businesses together," he said.
"McWhorter and Eastman have had a similar focus on selling products to the
coatings industry. We expect that our customers will benefit from this
combination as we enhance the capabilities of both organizations to develop
better products and services for the industry," he said. "Since our corporate
cultures are similar, I expect that we will have an efficient integration of our
businesses," Nodland concluded.
The tender offer is conditioned, among other things, upon a minimum tender of
50.1 percent of the outstanding McWhorter shares on a fully diluted basis and
receipt of regulatory approvals. Chase Securities Inc. acted as the financial
advisor to Eastman in connection with this transaction. Lehman Brothers served
as financial advisor to McWhorter.
McWhorter is a leading manufacturer of specialty resins and colorants used in
the production of consumer and industrial coatings and reinforced fiberglass
plastics. Sales revenue for fiscal year ended October 31, 1999 was $444 million
and EBITDA before non-recurring items was $47.5 million. The company was formed
in 1994 when it was spun off from The Valspar Corporation and merged with the
former resin products division of Cargill. McWhorter employment at 14 global
sites is about 1,100. Its headquarters is located in Carpentersville, Ill.
Headquartered in Kingsport, Tenn., Eastman manufactures and markets plastics,
chemicals and fibers. The company employs 15,000 people in more than 30
countries and had 1999 sales of US$4.6 billion.
Additional information is available at http://www.eastman.com.
# # #
<PAGE>
FORWARD-LOOKING STATEMENTS
This release contains forward-looking statements within the definition of the
Securities Act of 1933 and the Securities Exchange Act of 1934. Although the
companies believe that these statements are based on reasonable assumptions,
they can give no assurance that their goals will be achieved. The words
"estimates," "believes," "expects," "anticipates," "plans," and "intends,"
variations of such words, and similar expressions are intended to identify
forward-looking statements that involve risk and uncertainty. These statements
are necessarily based upon various assumptions involving judgements with respect
to the future including, among others, the ability to achieve synergies and
revenue enhancements; national, international, regional and local economic,
competitive and regulatory conditions and developments; technological
developments; and other uncertainties, all of which are difficult to predict and
many of which are beyond the control of the companies. Accordingly, while the
companies believe that the assumptions are reasonable, there can be no assurance
that they will approximate actual experience, or that the expectations will be
realized. Other risk factors are detailed from time to time in the two
companies' SEC reports.
Tender Offer Documents
At the time the tender offer is commenced, Eastman will file a tender offer
statement (including an offer to purchase, a related letter of transmittal and
other offer documents) with the Securities and Exchange Commission (SEC), and
McWhorter will file a solicitation/recommendation statement with the SEC.
Investors and security holders are strongly advised to read both the tender
offer statement and the solicitation/recommendation statement regarding the
tender offer, when they become available, because they will contain important
information. The offer to purchase, the related letter of transmittal and
certain other offer documents, as well as the solicitation/recommendation
statement, will be made available to all stockholders of McWhorter at no expense
to them. In addition, investors and security holders may obtain a free copy of
these statements (when available) and other documents filed by Eastman and
McWhorter at the SEC's website at www.sec.gov.
<PAGE>
Letter to McWhorter employees from Eastman CEO
Date:May 4, 2000
To: All Employees of McWhorter Technologies, Inc.
From: Earnest Deavenport, Chairman and Chief Executive Officer,
Eastman Chemical Company
I'm very excited about today's announcement that we are beginning the steps to
join McWhorter Technologies with Eastman Chemical Company.
You and your colleagues should be very proud of the fact that you have helped
make McWhorter a leading manufacturer of specialty resins and colorants.
Combining your business with Eastman's coatings, adhesives and specialty
polymers business offers both companies new opportunities.
I know you and your families probably have a lot of questions about Eastman.
Eastman Chemical Company was formed in 1920 as part of Eastman Kodak Company.
Over the decades to follow, the chemical division grew, expanding its line of
products and customer base so that when we were spun off from Kodak in 1994,
more than 90 percent of our business was with customers other than Kodak. Today,
Eastman is a global producer of chemicals, plastics and fibers that our
customers use in many end-use products. Eastman is the world leader in polyester
plastics for packaging, a major supplier of cellulose acetate tow and basic
chemicals, and a leading supplier of coatings raw materials, fine chemicals, and
many specialty chemicals and plastics.
I'm proud of Eastman for a lot of reasons. We provide quality and value to our
customers. We have 80 years of successful history. We are the only major
chemical company to win the prestigious Malcolm Baldrige National Quality Award.
We were named one of the "best managed companies" in the U.S. by IndustryWeek
magazine for three years in a row. We've been recognized numerous times for our
commitment to protecting the health and safety of our employees, the communities
in which we operate, and our environment.
I invite you to visit our website at www.eastman.com, view a copy of our
corporate video, or read some of our literature. For your information, attached
to this letter are a copy of the news release and some questions and answers.
As you can imagine, the process our companies have begun has legal steps that
must be done correctly. However, as we move throughout this process, I--and
other members of Eastman management--look forward to the opportunity to meet as
many of you in person as possible. Until then, if you would like more
information about Eastman, ask your management or Human Resources contact, or
visit our Internet site at www.eastman.com.
All of us at Eastman enthusiastically look forward to teaming with the people of
McWhorter to achieve our exciting new potential.
[Signature: Earnie Deavenport]
<PAGE>
Eastman to Acquire McWhorter Technologies
Questions and Answers for McWhorter Employees in the U.S.
What exactly is happening?
The boards of directors of Eastman Chemical Company and McWhorter Technologies,
Inc. have agreed to a "definitive merger agreement" under which Eastman will
acquire the shares of McWhorter for $19.70 per share. Including debt, the
transaction is valued at approximately $355 million.
Under the terms of the merger agreement, Eastman will be commencing a tender
offer for all of the shares of McWhorter stock. McWhorter's board of directors
has recommended that McWhorter stockholders tender their shares of the company's
common stock in the tender offer. McWhorter has about 10 million shares
outstanding.
Following completion of the tender offer, Eastman intends to consummate a cash
merger to acquire any shares not previously tendered. At the completion of the
transaction, McWhorter will be a wholly-owned subsidiary of Eastman Chemical
Company.
Who is Eastman?
Headquartered in Kingsport, Tenn., Eastman Chemical Company manufactures and
markets chemicals, fibers and plastics. Eastman is a leader in e-commerce within
the chemical industry and has a strong coatings materials business that
complements McWhorter's products. Eastman employs about 15,000 people in more
than 30 countries. 1999 sales were US$4.59 billion.
Why is Eastman interested in purchasing McWhorter?
Combining the technology, quality management and product lines of the two
companies means that we'll be even better prepared to meet the needs of our
customers. The transaction also enhances our market connect for waterborne
technologies. It is another in a series of acquisitions intended to build
Eastman's presence in emulsion polymers. Previous acquisitions in this series
included ABCO Industries, Ernst Jager, Fabrik Chemischer Rohstoffe GmbH & Co.,
Lawter International, Inc., Chemicke Zavody Sokolov, and Rhodia's American
textile chemicals business.
How are McWhorter employees affected by this transaction?
McWhorter will become a wholly owned subsidiary of Eastman. Employees will
continue to be employed by McWhorter. Employees will participate in the
compensation, benefits, and career development plans of McWhorter.
<PAGE>
Will pay or benefits (pension, vacation, insurance, etc.) change for McWhorter
employees?
McWhorter employees will participate in the compensation, benefits and career
development plans of McWhorter. These plans will continue to be administered by
McWhorter. As always, these plans are subject to change at the discretion of the
company.
What will happen to my McWhorter stock either in the ESOP, the 401K or privately
owned?
We expect McWhorter shares that are held in the ESOP and 401K plans will be
tendered into Eastman's tender offer or converted into cash in the subsequent
merger. We believe the resulting 401K funds will be re-invested within the 401K
plan. We believe the resulting ESOP funds will remain in a tax qualified plan,
but specific details will need to be determined. More details will be
communicated on that process before employees are required to make decisions on
the investments of those resulting funds. Employees who have privately held
shares of McWhorter will be able to tender these shares in the tender offer and
will receive separate information regarding the tender offer when that
information becomes available.
What happens to McWhorter's bonus plan?
While the intent is to maintain the current plan for the present time, the
specific measures, particularly the measure involving earnings per share, will
have to be reviewed in light of the changes resulting from the acquisition.
Will jobs be eliminated as a result of this transaction?
Managing an efficient transition of the businesses will require input from
several functional areas. Our plan is to form functional business teams with
membership from both Eastman and McWhorter. One objective of these teams will be
to identify areas of duplication. Based on the work of these teams, a
determination will be made concerning the need for possible redeployments or
limited numbers of separations.
How does this transaction impact my job?
We very much expect to see "business as usual" with no major interruptions to
normal work processes. It is critical for all employees at Eastman and McWhorter
to continue to focus on the same high quality of work as they did prior to the
announcement. The ongoing contributions of employees from both organizations are
critical for the success of the business.
Will managers who are now responsible for McWhorter continue to manage those
plants or will Eastman managers be assigned to those operations?
We anticipate no significant management changes at McWhorter.
Will any employees have to relocate as a result of the transaction?
There may be some employees who will be asked to relocate as a result of a
change in responsibilities.
<PAGE>
How will the McWhorter organization fit in Eastman's structure?
We expect that McWhorter will become part of Eastman's Coatings, Adhesives and
Specialty Polymers Business.
When do you expect to close the transaction?
We expect to commence the tender offer within 10 business days and the tender
offer will remain open at least 20 business days. We expect to close the
transaction as soon as possible after we obtain all required regulatory
approvals; we estimate this could happen by end of July.
Tender Offer Documents
At the time the tender offer is commenced, Eastman will file a tender offer
statement (including an offer to purchase, a related letter of transmittal and
other offer documents) with the Securities and Exchange Commission (SEC), and
McWhorter will file a solicitation/recommendation statement with the SEC.
Investors and security holders are strongly advised to read both the tender
offer statement and the solicitation/recommendation statement regarding the
tender offer, when they become available, because they will contain important
information. The offer to purchase, the related letter of transmittal and
certain other offer documents, as well as the solicitation/recommendation
statement, will be made available to all stockholders of McWhorter at no expense
to them. In addition, investors and security holders may obtain a free copy of
these statements (when available) and other documents filed by Eastman and
McWhorter at the SEC's website at www.sec.gov.
<PAGE>
Eastman to Acquire McWhorter Technologies
Questions and Answers for McWhorter Employees in Europe
What exactly is happening?
The boards of directors of Eastman Chemical Company and McWhorter Technologies,
Inc. have agreed to a "definitive merger agreement" under which Eastman will
acquire the shares of McWhorter for $19.70 per share. Including debt, the
transaction is valued at approximately $355 million.
Under the terms of the merger agreement, Eastman will be commencing a tender
offer for all of the shares of McWhorter stock. McWhorter's board of directors
has recommended that McWhorter stockholders tender their shares of the company's
common stock in the tender offer. McWhorter has about 10 million shares
outstanding.
Following completion of the tender offer, Eastman intends to consummate a cash
merger to acquire any shares not previously tendered. At the completion of the
transaction, McWhorter will be a wholly-owned subsidiary of Eastman Chemical
Company.
Who is Eastman?
Headquartered in Kingsport, Tenn., Eastman Chemical Company manufactures and
markets chemicals, fibers and plastics. Eastman is a leader in e-commerce within
the chemical industry and has a strong coatings materials business that
complements McWhorter's products. Eastman employs about 15,000 people in more
than 30 countries. 1999 sales were US$4.59 billion.
Why is Eastman interested in purchasing McWhorter?
Combining the technology, quality management and product lines of the two
companies means that we'll be even better prepared to meet the needs of our
customers. The transaction also enhances our market connect for waterborne
technologies. It is another in a series of acquisitions intended to build
Eastman's presence in emulsion polymers. Previous acquisitions in this series
included ABCO Industries, Ernst Jager, Fabrik Chemischer Rohstoffe GmbH & Co.,
Lawter International, Inc., Chemicke Zavody Sokolov, and Rhodia's American
textile chemicals business.
How are McWhorter employees affected by this transaction?
McWhorter will become a wholly owned subsidiary of Eastman. Employees will be
employed by McWhorter. Employees will participate in the compensation, benefits,
and career development plans of McWhorter.
Will pay or benefits (pension. vacation, insurance, etc.) change for McWhorter
employees?
McWhorter employees will participate in the compensation, benefits and career
development plans of McWhorter. These plans will continue to be administered by
McWhorter. As always, these plans are subject to change at the discretion of the
company.
<PAGE>
What will happen to my privately owned McWhorter stock?
Employees who have privately held shares of McWhorter will be able to tender
these shares in the tender offer and will receive separate information regarding
the tender offer when that information becomes available.
What happens to McWhorter's bonus plan?
While the intent is to maintain the current plan for the present time, the
specific measures, particularly the measure involving earnings per share, will
have to be reviewed in light of the changes resulting from the acquisition.
How does this transaction impact my job?
We very much expect to see "business as usual" with no major interruptions to
normal work processes. It is critical for all employees at Eastman and McWhorter
to continue to focus on the same high quality of work as they did prior to the
announcement. The ongoing contributions of employees from both organizations are
critical for the success of the business. Our plan is to form functional
business teams with membership from both Eastman and McWhorter to manage an
efficient transition of the business. A main objective of these teams will be to
support the development of an organization to effectively meet the needs of our
customers.
How will the McWhorter organization fit in Eastman's structure?
We expect that McWhorter will become part of Eastman's Coatings, Adhesives and
Specialty Polymers Business.
When do you expect to close the transaction?
We expect to commence the tender offer within 10 business days and the tender
offer will remain open at least 20 business days. We expect to close the
transaction as soon as possible after we obtain all required regulatory
approvals; we estimate this could happen by end of July.
Tender Offer Documents
At the time the tender offer is commenced, Eastman will file a tender offer
statement (including an offer to purchase, a related letter of transmittal and
other offer documents) with the Securities and Exchange Commission (SEC), and
McWhorter Technologies, Inc. will file a solicitation/recommendation statement
with the SEC. Investors and security holders are strongly advised to read both
the tender offer statement and the solicitation/recommendation statement
regarding the tender offer, when they become available, because they will
contain important information. The offer to purchase, the related letter of
transmittal and certain other offer documents, as well as the
solicitation/recommendation statement, will be made available to all
stockholders of McWhorter Technologies, Inc., at no expense to them. In
addition, investors and security holders may obtain a free copy of these
statements (when available) and other documents filed by Eastman and McWhorter
Technologies, Inc. at the SEC's website at www.sec.gov.
