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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE TO
TENDER OFFER STATEMENT
(UNDER SECTION 14(D)(1) OR 13(E)(1) OF THE
SECURITIES EXCHANGE ACT OF 1934)
(AMENDMENT NO. 1)
MOTORVAC TECHNOLOGIES, INC.
(Name of Subject Company (Issuer) and Filing Person (Offeror))
COMMON STOCK, $0.01 PAR VALUE PER SHARE
(Title of Class of Securities)
620105 10 6
(CUSIP Number of Class of Securities)
LEE W. MELODY
MOTORVAC TECHNOLOGIES, INC.
1431 S. VILLAGE WAY
SANTA ANA, CALIFORNIA 92705
(714) 558-4822
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of Filing Person)
COPY TO:
BARRY D. FALK
JEFFERS, SHAFF & FALK, LLP
18881 VON KARMAN AVENUE, SUITE 1400
IRVINE, CALIFORNIA 92612
(949) 660-7700
CALCULATION OF FILING FEE
Transaction Valuation* Amount of Filing Fee
$5,642,582 $1,129
* Determined pursuant to Rule 0-11(b)(1).
Assumes the purchase of 1,612,166 shares at $3.50 per share.
[X] Check the box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount previously paid: $1,129. Filing Party: MOTORVAC TECHNOLOGIES, INC.
Form or Registration No: TO. Date Filed: August 3, 2000.
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
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Check the appropriate boxes below to designate any transactions to which the
statement relates:
[ ] third-party tender offer subject to Rule 14d-1.
[X] issuer tender offer subject to Rule 13e-4.
[X] 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 results of
the tender offer: [ ]
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This Amendment No. 1 (this "Amendment") amends and supplements the
Tender Offer Statement on Schedule TO-I originally filed by MotorVac
Technologies, Inc., a Delaware corporation (the "Company"), to purchase up to
1,612,166 shares (or such lesser number of shares that are properly tendered) of
its common stock, $0.01 par value per share, at a purchase price of $3.50 per
share, net to the seller in cash, without interest, upon the terms and subject
to the conditions set forth in the Offer to Purchase dated August 3, 2000 (the
"Offer to Purchase") and in the related Letter of Transmittal (which together
with any amendments or supplements thereto, collectively constitute the
"Offer"), copies of which are attached as Exhibits (a) (1) (i) and (a) (1) (ii)
to the Schedule TO-I.
Items 1, 2, 4, 5, 10 and 12 of the Schedule TO-I and Items 7, 8 and 9
of the Schedule TO-I as required by Schedule 13e-3 are hereby amended by
including the following information in the Offer to Purchase, which is hereby
expressly incorporated by reference herein:
ITEM 1. SUMMARY TERM SHEET
The third and fourth sentences of the second paragraph in the Offer to
Purchase under the caption "SUMMARY TERM SHEET - WHAT IS THE PURPOSE OF THE
OFFER?" at page i of the Offer to Purchase are amended to read as follows:
"NASDAQ delisted our stock from the SmallCap Market on August
18, 2000 as a result of our filing to deregister our stock under the
Exchange Act. Our stock is no longer publicly traded and may only be
listed on the "pink sheets", which are an over-the-counter quotation
system."
The first sentence of the third paragraph in the Offer to Purchase
under the caption "SUMMARY TERM SHEET - WHAT IS THE PURPOSE OF THE OFFER?" at
page i of the Offer to Purchase is amended to read as follows:
"We are making this offer because we believe that our
stockholders should have an opportunity to realize a fair cash price
prior to completion of the Company's deregistration under the Exchange
Act, and in light of the Company's delisting from the Nasdaq SmallCap
Market, when public information about the Company and price quotations
for the Company's stock will become less readily available."
The second to last sentence of the first paragraph in the Offer to
Purchase under the caption "SUMMARY TERM SHEET - WHAT DOES YOUR BOARD OF
DIRECTORS THINK OF THE OFFER?" at page iv of the Offer to Purchase is amended to
read as follows:
"Our Board of Directors carefully considered the opinion and
has unanimously determined that the offer and the offer price are fair
to all of our stockholders, including those that are unaffiliated with
the Company."
The first paragraph in the Offer to Purchase under the caption "SUMMARY
TERM SHEET - WHAT IS THE RECENT MARKET PRICE OF MY SHARES?" at page iv of the
Offer to Purchase is amended to read as follows:
"Our shares were quoted on the NASDAQ SmallCap Market under
the symbol "MVAC."
The last paragraph in the Offer to Purchase under the caption "SUMMARY
TERM SHEET - WHAT IS THE RECENT MARKET PRICE OF MY SHARES?" at page iv of the
Offer to Purchase is amended to read as follows:
"After we filed our certification for deregistration with the
Commission, NASDAQ took steps to delist us from the NASDAQ SmallCap
Market. Our stock was delisted on August 18, 2000 as a result of our
filing to deregister our stock under the federal securities laws. As a
result, you may find it more difficult to obtain an accurate quotation
for your shares."
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ITEM 2. SUBJECT COMPANY INFORMATION
The second to last paragraph of the cover page of the Offer to Purchase
is amended to read as follows:
"The Shares were listed and traded on the NASDAQ SmallCap
Market under the symbol "MVAC." On August 2, 2000, the last full
trading day before announcement of the Offer, the last reported sale
price of the Shares was $2.81 per Share. The Company's shares were
delisted by NASDAQ on August 18, 2000, which will make it more
difficult to obtain price quotations for the Shares."
The second paragraph of the section of the Offer to Purchase entitled
"THE OFFER - 7. PRICE RANGE OF SHARES; DIVIDENDS" on page 21 of the Offer to
Purchase is amended to read as follows:
"As of the close of business on August 2, 2000, the last full
trading day before the commencement of the Offer, the closing sales
price of the Shares as reported on the NASDAQ SmallCap Market was $2.81
per Share. As explained in "Special Factors - Section 3. Purpose of the
Offer; Certain Effects of the Offer; Plans of the Company After the
Offer," the Shares were delisted from the NASDAQ SmallCap Market on
August 18, 2000 as a result of the Company having filed to deregister
its stock under the federal securities laws. As a result, it may be
more difficult to obtain accurate market quotations for the Shares."
ITEM 4. TERMS OF THE TRANSACTION
The last paragraph of the section of the Offer to Purchase entitled
"INTRODUCTION" at pages 1-2 of the Offer to Purchase is amended to read as
follows:
"The Shares were listed and traded on the NASDAQ SmallCap
Market under the symbol "MVAC." On August 2, 2000, the last full
trading day prior to announcement of the Offer, the closing per Share
sales price as reported by NASDAQ was $2.81 per Share. As explained in
"Special Factors - Section 3. Purpose of the Offer; Certain Effects of
the Offer; Plans of the Company After the Offer," the Shares will be
deregistered under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") 90 days after the Company filed the appropriate
certification to the Securities and Exchange Commission (the
"Commission"). Upon the filing of such certification, the Company has
no further obligation pursuant to the federal securities laws to file
financial information and as a result, it may become more difficult to
obtain information about the Company. In addition, the Shares were
delisted from the NASDAQ SmallCap Market on August 18, 2000 as a result
of the Company's having filed a certification with the Commission to
deregister the Shares. As a result, it may be more difficult to obtain
accurate market quotations for the Shares."
The introductory paragraph of the section of the Offer to Purchase
entitled "THE OFFER - 5. CERTAIN CONDITIONS OF THE OFFER" at pages 18-19 of the
Offer to Purchase is amended to read as follows:
"Notwithstanding any other provisions of the Offer, the
Company will not be required to accept for payment, purchase or pay for
any Shares tendered, and may terminate or amend the Offer or may
postpone (subject to the requirements of the Exchange Act for prompt
payment for or return of Shares) the acceptance for payment of, or the
purchase of and payment for Shares tendered, if at any time on or after
August 3, 2000, any of the following events shall have occurred (or
shall have been determined by the Company in its sole and reasonable
judgment to have occurred) regardless of the circumstances giving rise
thereto (including any action or omission to act by the Company) and,
in the sole and reasonable judgment of the Company, such event or
events make it undesirable or inadvisable to proceed with the Offer or
with such acceptance for payment or payment:"
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Subsection (a) of the section of the Offer to Purchase entitled "THE
OFFER - 5. CERTAIN CONDITIONS OF THE OFFER" at page 19 of the Offer to Purchase
is amended to read as follows:
"(a) there shall have been threatened, instituted or pending
any action or proceeding by any government or governmental, regulatory
or administrative agency or authority or tribunal or any other person,
domestic or foreign, or before any court, authority, agency or tribunal
that (i) challenges or seeks to challenge the acquisition of Shares
pursuant to the Offer or otherwise in any manner relates to or affects
the Offer or (ii) in the sole and reasonable judgment of the Company,
could materially and adversely affect the business, condition
(financial or other), income, operations or prospects of the Company,
or otherwise materially impair in any way the contemplated future
conduct of the business of the Company or materially impair the
contemplated benefits of the Offer to the Company;"
Subsection (b) of the section of the Offer to Purchase entitled "THE
OFFER - 5. CERTAIN CONDITIONS OF THE OFFER" at page 19 of the Offer to Purchase
is amended to read as follows:
"(b) there shall have been any action threatened, pending or
taken, or approval withheld, withdrawn or abrogated or any statute,
rule, regulation, judgment, order or injunction threatened, proposed,
sought, promulgated, enacted, entered, amended, enforced or deemed to
be applicable to the Offer or the Company, by any legislative body,
court, authority, agency or tribunal which, in the Company's sole and
reasonable judgment, would or might directly or indirectly (i) make the
acceptance for payment of, or payment for, some or all of the Shares
illegal or otherwise restrict or prohibit consummation of the Offer,
(ii) delay or restrict the ability of the Company, or render the
Company unable, to accept for payment or pay for some or all of the
Shares, (iii) impose or seek to impose limitations on the ability of
the Company to acquire or hold or to exercise full rights of ownership
of the Shares, (iv) materially impair the contemplated benefits of the
Offer to the Company or (v) materially affect the business, condition
(financial or other), income, operations or prospects of the Company,
or otherwise materially impair in any way the contemplated future
conduct of the business of the Company;"
Subsection (c) of the section of the Offer to Purchase entitled "THE
OFFER - 5. CERTAIN CONDITIONS OF THE OFFER" at page 19 of the Offer to Purchase
is amended to read as follows:
"(c) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on any national
securities exchange or in the over-the-counter market, (ii) any
significant decline in the market price of the Shares or in the general
level of market prices of equity securities in the United States or
abroad, (iii) any change in the general political, market, economic or
financial condition in the United States or abroad that could have a
material adverse effect on the Company's business, condition (financial
or other), income, operations, prospects or ability to obtain financing
generally or the trading in the Shares, (iv) the declaration of a
banking moratorium or any suspension of payments in respect of banks in
the United States or any limitation on, or any event which, in the
Company's sole and reasonable judgment, might affect, the extension of
credit by lending institutions in the United States, (v) the
commencement of a war, armed hostilities or other international or
national crisis directly or indirectly involving the United States or
(vi) in the case of any of the foregoing existing at the time of the
commencement of the Offer, in the Company's sole and reasonable
judgment, a material acceleration or worsening thereof;"
Subsection (e) of the section of the Offer to Purchase entitled "THE
OFFER - 5. CERTAIN CONDITIONS OF THE OFFER" at page 19 of the Offer to Purchase
is amended to read as follows:
"(e) there shall have occurred any event or events that have
resulted, or may in the sole and reasonable judgment of the Company
result, in an actual or threatened change in the business, condition
(financial or other), assets, income, operations, stock ownership or
prospects of the Company, taken as a whole which does or may materially
impair the contemplated benefits of the Offer; or"
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Subsection (f) of the section of the Offer to Purchase entitled "THE
OFFER - 5. CERTAIN CONDITIONS OF THE OFFER" at page 20 of the Offer to Purchase
is amended to read as follows:
"(f) the Company shall not have received adequate financing
pursuant to the terms of the commitment from Comerica Bank."
The last paragraph of the section of the Offer to Purchase entitled
"THE OFFER - 5. CERTAIN CONDITIONS OF THE OFFER" at page 20 of the Offer to
Purchase is amended to read as follows:
"Any of the foregoing conditions may be waived by the Company,
in whole or in part, at any time and from time to time in its sole and
reasonable discretion. The failure by the Company to exercise any of
the foregoing rights shall not be deemed a waiver of any such right and
each such right shall be deemed an ongoing right which may be asserted
at any time and from time to time before the expiration of the Offer.
However, all conditions, other than those involving the receipt of
necessary government approvals, must be satisfied or waived before the
expiration of the Offer. Any determination by the Company concerning
the events described above will be final and binding on all parties."
ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
The last sentence of the second paragraph of the section of the Offer
to Purchase entitled "SPECIAL FACTORS - 1. BACKGROUND" at page 2 of the Offer to
Purchase is amended to read as follows:
"During the last five months of 1999, the Company explored two
inquiries in this regard, one of which is discussed below and one of
which did not progress beyond the provision of materials by the Company
in response to a due diligence request."
The last sentence of the third paragraph of the section of the Offer to
Purchase entitled "SPECIAL FACTORS - 1. BACKGROUND" at page 2 of the Offer to
Purchase is deleted and replaced with the following:
"In February 2000, at a meeting with principals of the Company
and the Other Interested Party, the Other Interested Party extended an
offer to the Company which was comprised of three elements: (a) cash at
$3.50 per share; (b) one share of the Other Interested Party's common
stock for each share of the Company's common stock valued at $1.00 per
share; and (c) an earnout formula at $1.75 per share. After careful
consideration by the Board, the Company informed the Other Interested
Party that the offer was not acceptable and the Company decided not to
pursue any further discussions with the Other Interested Party. The
primary reason that the Board considered the offer to be unacceptable
was that the consideration in addition to the cash portion was
considered of uncertain value and highly contingent on future
performance. In addition, the cash offer represented a discount from
the average per share closing price of the stock for the 30 days prior
to the date of the meeting. Furthermore, the cash offer was subject to
the arrangement by the Other Interested Party of financing, which the
Board decided was not an acceptable condition due to the Board's doubt
regarding the Other Interested Party's ability to secure such
financing."
The last two sentences of the fifth paragraph of the section of the
Offer to Purchase entitled "SPECIAL FACTORS - 1. BACKGROUND" at page 2 of the
Offer to Purchase are deleted and replaced with the following:
"The Board received only one expression of interest from an
investment banker as a result of these inquiries which indicated a
qualified value range for the Company in the vicinity of
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$15 million, but no specific buyer was identified. The Board determined
that this valuation was too low given the trading price of the
Company's stock at the time and because the Board believed that the
Company's prospects for increased profitability with the passage of
time were greater than such valuation indicated. Therefore, the Board
determined that the only realistic remaining alternative in the near
term with respect to enhancing stockholder value was to pursue the
course of going private."
The sixth paragraph of the section of the Offer to Purchase entitled
"SPECIAL FACTORS - 1. BACKGROUND" at page 2 of the Offer to Purchase is amended
by inserting the following sentences after the second sentence:
"These alternatives included selling the Company or taking the
Company private. During the discussion led by Andover at the meeting,
the Board reiterated its decision not to sell the Company based on the
fact that it had not received any offers that it considered viable. The
discussion subsequently focused on deregistration of the Company's
common stock under the Exchange Act, as well as the concurrent creation
of an opportunity for stockholders to sell their stock if they wished
to cash out before the Company effected such deregistration, including
the availability of financing to fund the Company's purchase of stock
that might be tendered."
The sixth paragraph of the section of the Offer to Purchase entitled
"SPECIAL FACTORS - 1. BACKGROUND" at page 2 of the Offer to Purchase is amended
by inserting the following sentences before the last sentence:
"The Company's management, acting on the advice it received
from its financial advisors, and relying upon its knowledge of the
business, financial condition and prospects of the Company, estimated
that a purchase price of $3.50 per share would represent an appropriate
starting point for FMV's analysis of the fairness of the consideration
to be paid for stock tendered by stockholders in response to a tender
offer by the Company. In addition, the Company's management determined
that such price represented a significant premium over the recent
trading price of the stock. The Company's management communicated its
reasoning to FMV and requested that FMV consider the fairness of a
purchase price of $3.50 for the Company's stock."
The last paragraph of the section of the Offer to Purchase entitled
"SPECIAL FACTORS - 1. BACKGROUND" at page 3 of the Offer to Purchase is amended
by deleting the first two sentences and replacing them with the following:
"At the Board's meeting on July 27, 2000, Andover provided an
update regarding the status of the proposed tender offer and of the
financing proposals that were available to support it. FMV made a
presentation regarding its written opinion with respect to the fairness
of the price to be offered to stockholders who participate in the
tender offer and provided a detailed explanation of the methodologies
it used in order to perform its analyses and to reach its conclusions.
After extensive discussion and careful consideration of the proposed
tender offer, the financing and the fairness opinion, the Board
unanimously adopted the analyses and conclusions presented by FMV in
its opinion, and decided to proceed with the Offer at a price of $3.50
and to effect the deregistration of the Company's common stock under
the Exchange Act. The Board believed that the expeditious pursuit of
this course of action would maximize the potential for enhancing
stockholder value, by providing liquidity and a premium for
stockholders who decided to tender their stock, and by creating a
greater long-term potential for increased value for stockholders who
decided not to tender their stock, as a result of the elimination of
further expenses associated with being a public company. Therefore, the
Board instructed the Company's legal and financial advisors to prepare
the necessary forms for filing with the Commission as soon as
possible."
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The last paragraph of the section of the Offer to Purchase entitled
"SPECIAL FACTORS - 1. BACKGROUND" at page 3 of the Offer to Purchase is amended
by adding the following sentence at the end of the paragraph:
"This opinion did not differ in any material respects from
FMV's preliminary opinion."
The first two sentences of the second paragraph of the section of the
Offer to Purchase entitled "SPECIAL FACTORS - 7. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT" at page 12 of the Offer to Purchase are
amended to read as follows:
"The Company signed a Shareholders' Agreement on July 31, 2000
with Erin Mills International Investment Corporation (its majority
stockholder) ("Erin Mills") and its continuing directors and executive
officers (together with Erin Mills, the "Stockholders"), which will
become effective 90 days after the date of execution. The Agreement
provides that the Company shall have a right of first refusal with
respect to shares of Company stock proposed to be sold by any of the
Stockholders and if the Company does not exercise such right, the other
Stockholders shall be given the right to purchase such shares."
ITEM 7 (of Schedule 13e-3). PURPOSES, ALTERNATIVES, REASONS AND EFFECTS.
The third paragraph of the section of the Offer to Purchase entitled
"SPECIAL FACTORS - 3. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER; PLANS
OF THE COMPANY AFTER THE OFFER" at page 4 of the Offer to Purchase is amended by
deleting the fourth sentence and replacing it with the following:
"The Company was delisted by NASDAQ on August 18, 2000 as a
result of filing the certification with the Commission to deregister
its shares."
The fourth paragraph of the section of the Offer to Purchase entitled
"SPECIAL FACTORS - 3. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER; PLANS
OF THE COMPANY AFTER THE OFFER" at page 4 of the Offer to Purchase is amended to
read as follows:
"Stockholders, both affiliated and unaffiliated, who determine
not to accept the Offer will increase their proportionate interest in
the Company, thus enabling them to share in the Company's profits to a
greater extent, subject to the Company's right to issue additional
shares and other equity securities in the future. Such stockholders
will benefit from the reduced costs that the Company will experience
due to the elimination of its obligation to respond to reporting and
other requirements under the federal securities laws. However, such
stockholders may find it more difficult to obtain accurate price
quotations for their shares and to dispose of their shares in a less
liquid market. Furthermore, less information about the Company will be
available to stockholders since the Company will no longer be subject
to the requirements of the federal securities laws regarding the filing
of financial information and other information regarding significant
developments in the Company."
The first sentence of the seventh paragraph of the section of the Offer
to Purchase entitled "SPECIAL FACTORS - 3. PURPOSE OF THE OFFER; CERTAIN EFFECTS
OF THE OFFER; PLANS OF THE COMPANY AFTER THE OFFER" at page 4 of the Offer to
Purchase is amended to read as follows:
"Grant Ferrier, one of the directors of the Company, has
tendered his resignation, effective as of August 31, 2000, in order to
devote more time to the company of which he is the president and chief
executive officer, Environmental Business International, Inc."
The second to last sentence of the first paragraph of the section of
the Offer to Purchase entitled "THE OFFER - 10. EFFECTS OF THE OFFER ON THE
MARKET FOR SHARES; TERMINATION OF REGISTRATION UNDER THE EXCHANGE ACT" at page
26 of the Offer to Purchase is amended to read as follows:
"On August 18, 2000, NASDAQ delisted the Company's shares from
the SmallCap Market."
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ITEM 8 (of Schedule 13e-3). FAIRNESS OF THE TRANSACTION.
The first sentence of the introductory paragraph of the section of the
Offer to Purchase entitled "SPECIAL FACTORS - 4. FAIRNESS OF THE OFFER" at page
5 of the Offer to Purchase is amended to read as follows:
"The Board believes the Offer is fair to all holders of
Shares, including unaffiliated holders, and the Board has unanimously
approved the transaction."
Paragraph (2) of the section of the Offer to Purchase entitled "SPECIAL
FACTORS - 4. FAIRNESS OF THE OFFER" at page 5 of the Offer to Purchase is
amended by changing the heading to read as follows:
"Current and Historical Market Prices and Premiums."
The section of the Offer to Purchase entitled "SPECIAL FACTORS - 4.
FAIRNESS OF THE OFFER" is amended by deleting the last paragraph of that section
at page 6 of the Offer to Purchase and inserting the following paragraphs:
"(7) Net Book Value. The Board did not consider the net book
value of the Company, because the Board believed that such value was an
inaccurate measure of the Company's true value since such value only
reflects accounting history expressed in nominal dollars and not the
potential of a going concern.
(8) Going Concern Value. The Board considered the going
concern value of the Company as part of its consideration of the
analyses performed by FMV in preparing its preliminary opinion and as
presented by FMV in its presentation to the Board. FMV's analyses with
respect to the going concern value of the Company were based on the
following methodologies: public company comparables, transaction
comparables, discounted cash flow and stock price performance. See
"SPECIAL FACTORS - 5. FAIRNESS OPINION."
(9) Liquidation Value. The Board did not consider the
liquidation value of the Company, because the Board believed that such
value was an inaccurate measure of the Company's true value since the
Company is a going concern.
(10) Purchase Price Paid in Previous Purchases of its Stock.
The Board did not specifically consider the purchase prices paid by the
Company in previous purchases of the Company's stock as such prices
were equivalent to the market prices of the stock at the time such
stock was repurchased; rather, the Board considered current and
historical market prices of the Company's stock on a general basis as
noted in subsection (2) above.
(11) Offers Received by the Company. The Board considered the
fact that it had not received any offers for purchase of the Company
that it considered viable. See "SPECIAL FACTORS - 1. BACKGROUND."
In arriving at its determination that the Offer is fair to
holders of Shares, including those that are unaffiliated, the Board
gave great weight to the fairness opinion prepared by FMV and
specifically adopted the analyses and conclusions presented in that
opinion. The Board also gave significant weight to the market price of
the Company's stock, particularly with respect to recent trends in such
price, and the fact that the Offer would provide stockholders with the
opportunity to sell their stock at a significant premium over recent
prices, if such stockholders desired to liquidate their holdings at the
present time. The Board gave significant weight to the fact that it had
received a financing commitment for the Offer which it considered to be
adequate and affordable and that would enable it to finance the maximum
amount of stock that might be tendered by
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stockholders other than Non-Tendering Stockholders. The Board also gave
significant weight to the lack of viable alternatives for enhancing
stockholder value. The Board gave no weight to factors such as net book
value and liquidation value because the Board believes that such values
do not represent an accurate valuation of the Company. On the basis of
the Board's evaluation, the Board concluded that the Purchase Price of
$3.50 is substantively fair to holders of Shares, including those that
are not affiliated with the Company.
A majority of the directors who are not employees of the
Company have not retained an unaffiliated representative to act solely
on behalf of unaffiliated stockholders for the purposes of negotiating
the terms of the Offer. The Board believes that it was not necessary to
retain such a representative as the Offer is noncoercive in nature and
stockholders are not required to sell their stock. Furthermore, FMV, as
an independent appraiser of the Purchase Price, concluded that the
Purchase Price was fair to tendering stockholders. The Offer was
approved unanimously by the Board of Directors, which includes 5
nonemployee directors. There is no stockholder vote required in
connection with the Offer. There are no appraisal rights available to
holders of Shares in connection with the Offer. Based on the
abovementioned factors, the Board determined that the Offer was fair on
a procedural basis."
ITEM 9 (of Schedule 13e-3). REPORTS, OPINIONS, APPRAISALS AND NEGOTIATIONS
The introductory paragraph of the section of the Offer to Purchase
entitled "SPECIAL FACTORS - 5. FAIRNESS OPINION" at page 6 of the Offer to
Purchase is amended by inserting the following sentence at the end of the
paragraph.
"The final written opinion did not differ in any material
respects from the preliminary written opinion."
The section of the Offer to Purchase entitled "SPECIAL FACTORS - 5.
FAIRNESS OPINION. COMPARISON TO SELECTED PUBLICLY TRADED COMPANIES" at pages
7-8 of the Offer to Purchase is amended by inserting the following paragraph
after the seven publicly traded companies enumerated in the first paragraph.
"These companies were selected for comparison to the Company
with respect to its financial and operating information. FMV's search
for these publicly traded companies included a review of research and
data available from a variety of public sources including: Standard &
Poor's Corporation, Moody's Investor Services, Disclosure
Incorporated's "Compact D" CD/ROM, and Dow Jones News Retrieval
Service, each of which contains relevant financial and operating
information on actively traded public companies. Each selected publicly
traded company (Champion Parts, Inc., Edelbrock Corporation, Hastings
Manufacturing Company, Snap-On Incorporated, Standard Motor Products,
Inc., U.S. Automotive Manufacturing, Inc., and Universal Automotive
Industries) met the following criteria:
1. The company had to be engaged in lines of business that are
exposed to similar economic and business trends as the Company.
More specifically, each company had to manufacture and/or provide
products to the automotive aftermarket and service industry.
2. The company had to be classified under similar Standard
Industrial Classification ("SIC") codes as the Company. These SIC
codes include 3589 (service industry machinery), 359x (industrial
machinery, not elsewhere classified), and 3714 (motor vehicle
parts and accessories).
3. The company's common stock had to be outstanding in the hands of
the public.
4. The trading market of the company had to be relatively active in
order to obtain true investor sentiment.
5. The company's financial information had to be available to the
public.
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In addition, Champion Parts, Inc. was selected because it
manufactures and sells automotive parts, primarily replacement fuel
system components, to the automotive aftermarket and is exposed to
similar overall economic and business trends as the Company. Edelbrock
Corporation was selected because it manufactures and sells automotive
parts, primarily specialty aftermarket parts, to the automotive
aftermarket and is exposed to similar overall economic and business
trends as the Company. Hastings Manufacturing Company was selected
because it manufactures and sells automotive parts, primarily piston
rings, and accessories to the automotive aftermarket and is exposed to
similar overall economic and business trends as the Company. Snap-On
Incorporated was selected because it is a major customer of the Company
that is exposed to similar overall economic and business trends as the
Company and is a developer, manufacturer, and marketer of automotive
products and accessories to the automotive aftermarket. Standard Motor
Products, Inc. was selected because it manufactures and sells
automotive parts and accessories to the automotive aftermarket industry
and is exposed to similar overall economic and business trends as the
Company. U.S. Automotive Manufacturing, Inc. was selected because it
manufactures and sells automotive parts, primarily friction products,
to the automotive aftermarket and is exposed to similar overall
economic and business trends as the Company. Universal Automotive
Industries, Inc. was selected because it manufactures and sells
automotive parts, primarily brake products, to the automotive
aftermarket and is exposed to similar overall economic and business
trends as the Company."
The section of the Offer to Purchase entitled "SPECIAL FACTORS -
5. FAIRNESS OPINION" is amended by inserting the following after the first
paragraph of the section entitled "Special Factors" at page 9 of the Offer to
Purchase:
"FMV considered the going concern value of the Company by
employing analyses based on the following valuation methodologies:
public company comparables, transaction comparables, discounted cash
flow, and stock price performance. The results of each analysis are
discussed in the preceding paragraphs of this Section 5.
In addition to the valuation methodologies employed by FMV in
valuing the Company in conjunction with rendering its fairness opinion,
FMV considered but did not give weight to the following valuation
methodologies: net book value and liquidation value. The net book value
methodology only reflects accounting history expressed in nominal
dollars and not the potential of a going concern. Since the Company is
a going concern, FMV did not give weight to the net book value method
in valuing the Company. The liquidation value methodology is generally
applicable only to businesses about to be liquidated. Since the Company
has no intention of liquidating in the near future and any liquidation
of the Company would be unlikely to result in a value higher than the
going concern value of the Company, FMV did not give weight to the
liquidation value methodology in valuing the Company.
FMV also considered but did not give weight to the purchase
price paid in previous purchases of the Company's stock other than as
part of its overall consideration of the current and historical trading
prices of the Company's stock. FMV did not give weight to the offers
received by the Company since the Company did not consider these to be
viable offers.
ITEM 10. SOURCE AND AMOUNTS OF FUNDS OR OTHER CONSIDERATION
The first two sentences of the sixth paragraph of the section of the
Offer to Purchase entitled "THE OFFER - 9. SOURCE AND AMOUNT OF FUNDS" at page
26 of the Offer to Purchase are amended to read as follows:
"The Company and Comerica have fully executed the loan
documents which are based on the terms provided in the Letter. The
funds will be disbursed after the expiration of the tender offer when
the exact amount of funds required will be determinable."
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<PAGE> 12
ITEM 12. EXHIBITS.
Item 12 is hereby amended and supplemented by adding the following
after Exhibit (d) thereof:
(b)(1) Revolving Credit and Term Loan and Security Agreement by and
between the Company and Comerica Bank - California, dated September 12, 2000.
(d)(1) Amendment No. 1 to the Shareholders' Agreement, dated September
12, 2000.
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
MotorVac Technologies, Inc.
By: /s/ David Nelson
Name: David Nelson
Title: Chief Financial Officer
Dated: September 13, 2000
Exhibit Description
------- -----------
(b)(1) Revolving Credit and Term Loan and Security
Agreement by and between the Company and
Comerica Bank - California, dated
September 12, 2000.
(d)(1) Amendment No. 1 to the Shareholders'
Agreement, dated September 12, 2000.
10
