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EXHIBIT 10
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{**NEEDHAM Logo here**}
Needham & Company, Inc. 3000 Sand Hill Road, Building 2 * Suite 190, Menlo
Park, CA 94025 (650) 854-9111
June 5, 2000
Special Committee of the Board of Directors
EFTC Corporation
9351 Grant Street
Denver, CO 80229
Members of the Special Committee:
The Company and Thayer-BLUM Funding, L.L.C. (the "Investor") have entered
into a Securities Purchase Agreement (the "Purchase Agreement") pursuant to
which the Company issued to the Investor $54 million principal amount of Senior
Subordinated Exchangeable Notes (the "Original Exchangeable Notes") and War-
rants to purchase the Company's Common Stock (the "Initial Investment"). Upon
stockholder approval of the Transactions and consummation of the Offer that
results in the acquisition of at least 500,000 shares of Comi-non Stock, (i) the
Original Exchangeable Notes will automatically be exchanged for the Company's
8.875% Senior Subordinated Convertible Notes due June 2006 (the "Convertible
Notes") with an aggregate principal amount of $54,000,000 plus any accrued but
unpaid interest on the Original Exchangeable Notes, which Convertible Notes
could be converted into shares of Common Stock at an initial conversion price of
$2.58 per share, subject to adjustment as provided therein, and (ii) the
Warrants would be cancelled. We understand that the Company and the Investor
propose to enter into an amendment (the "Amendrnenf') to the Purchase Agreement
providing, among other things, for the issuance by the Company to the Investor
(the "Additional Investment") of $14 million principal amount of Senior
Subordinated Exchangeable Notes -(the "New Notes") and the modification of the
terms of a tender offer for the Company's Common Stock (the "Offer") to be
conducted by the Investor. The New Exchangeable Notes will be exchanged
automatically, in the same circumstances as those requiring the exchange of the
Original Exchangeable Notes, into shares of newly issued convertible preferred
stock of the Company (the "Convertible Preferred Stock") initially convertible
into the Company's Common Stock at $1.80 per share. The Company has requested
Needham & Company to render an opinion as to the fairness, from a finaricial
point of view, to the holders of the Company's Common Stock (other than the
Investor and its affiliates) of the Initial Investment, the Additional
Investment and the Offer, collectively "the Transactions",
New York Office: 445 Park Avenue, New York, NY 10022-4406 (212) 371-8300
Boston Office: One Post Office Square, Suite 3710, Boston, MA 02109
(617) 457-0900
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Special Committee of the Board of Directors
EFTC Corporation
June 5,2000
Page 2
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Needham & Company, Inc.
taken together. The terms and conditions of the Transactions will be set forth
more fully in the Purchase Agreement, as amended by the Amendment. The Original
Exchangeable Notes, the Convertible Notes and the Wan-ants are sometimes
collectively referred to herein as the "Original Securities" and the New
Exchangeable Notes and the Convertible Preferred Stock are sometimes
collectively referred to herein as the "New Securities."
You have asked us to advise you as to the fairness, from a financial point
of view, to the Company and the holders of the Common Stock (other than the
Investor and its affiliates) of the Transactions, when taken together. Needham &
Company, Inc., as part of its investment banking business, is regularly engaged
in the valuation of businesses and their securities in connection with mergers
and acquisitions, negotiated underwritings, secondary distributions of
securities, private placements and other purposes, We have been engaged by the
Company as financial advisor to render this opinion in connection with the
Transactions and will receive a fee for our services, none of which is
contingent on the consummation of the Transactions. In addition, the Company has
agreed to indemnify us for certain liabilities arising from our role as
financial advisor and out of the rendering of this opinion.
For purposes of this opinion we have, among other things: (i) reviewed the
Purchase Agreement and the related forms of the Securities, dated March 30, 2000
as well as the proposed terms of the Amendment and New Securities as
contemplated by the Modification of Terms provided to us on June 5, 20007 (ii)
reviewed certain publicly available information concerning the Company and
certain other information concerning the Company furnished to us by the Company;
(iii) reviewed the historical stock prices and trading volumes of the Common
Stock; (IV) held discussions with members of the management of the Company
concerning the current and future business prospects of the Company; (v)
reviewed and discussed with members of the management of the Company certain
financial forecasts and projections prepared by such management that assume the
Transactions (other than the Initial Investment) do not occur and, in the
alternative, that assume the occurrence of the Transactions, the exchange of the
Original and New Exchangeable Notes and cancellation of the Warrants; (vi)
compared certain publicly available financial data of companies whose securities
are traded in the public markets and that we deemed relevant to similar data for
the Company; (vii) reviewed the financial terms of certain other transactions
that we deemed relevant; (viii) discussed with members of the management of the
Company the strategic rationale and certain other benefits to the Company
resulting from an association with the Investor; and (ix) performed and/or
considered such other studies, analyses, inquiries and investigations as we
deemed appropriate.
In connection with our review and in arriving at our opinion, we have
assumed and relied on (a) the accuracy and completeness of all of the financial
and other information publicly available or fiimished to or otherwise reviewed
by or discussed with us for purposes of rendering this opinion and (b) the
assessment by the Company's management of the strategic and other benefits
expected to be derived from the Transactions, and have neither attempted to
verify independently nor assumed responsibility to verify any of such
infonnation or assessment. In addition, we have
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Special Committee of the Board of Directors
EFTC Corporation
June 5, 2000
Page 3
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Needham & Company, Inc.
assumed, with your consent, (i) that the terms set forth in the executed
Amendment and related New Securities will not differ materially from the
proposed terms provided to us in the draft Modification of Terms furnished to
us on June 5, 2000, and (ii) that the Purchase Agreement, as amended by the
Amendment the Original Securities and the New Securities are enforceable in
accordance with their terms and that the parties to the Transactions, the
Original Securities and the New Securities, will carry out their obligations as
set forth therein. With respect to the Company's financial forecasts provided to
us by its management, we have assumed for purposes of our opinion that such
forecasts have been reasonably prepared on bases reflecting the best currently
available estimates and judgments of such management, at the time of
preparation, of the future operating and financial performance of the Company.
We express no opinion with respect to such forecasts or the assumptions on which
they were based. We have not assumed any responsibility for or made or obtained
any independent evaluation, appraisal or physical inspection of the assets or
liabilities of the Company. Further, our opinion is based on economic, monetary
and market conditions as they exist and can be evaluated as of the date hereof
Our opinion as expressed herein is lin-fted to the fairness, from a financial
point of view, to the Company and the holders of Common Stock (other than the
Investor and its affiliates) of the Transactions, when taken together, and does
not address the Company's underlying business decision to engage in the
Transactions. Our opinion does not constitute a recommendation to any
shareholder of the Company as to how such shareholder should vote on the
proposed Transactions or as to whether such shareholder should tender shares of
Common Stock pursuant to the Offer. We are not expressing any opinion as to the
prices at which the Common Stock will actually trade at any time.
In the ordinary course of our business, we may actively trade the equity
securities of the Company for our own account or for the accounts of customers
and, accordingly, may at any time hold a long or short position in such
securities.
This letter and the opinion expressed herein are provided at the request
and for the information of the Special Cominittee and the Board of Directors of
the Company and may not be quoted or referred to or used for any purpose without
our prior written consent, except that this letter may be disclosed in
connection with any proxy statement or solicitation/recommendation statement on
Schedule 14D-9 used in connection with the Transactions so long as this letter
is quoted in full in such proxy statement or solicitation/recommendation
statement.
Based upon and subject to the foregoing, it is our opinion that, as of the
date hereof, the Transactions, when taken together, are fair to the Company and
the holders of Common Stock (other than the Investor and its affiliates) from a
financial point of view.
Very truly yours,
[signature logo here]
NEEDHAM & COMPANY, INC.
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[*NEEDHAM logo here]
Needham & Company, Inc. 3000 Sand Hill Road, Building 2*Suite 190, Menlo Park,
CA 94025 (650)854-9111
April 27, 2000
Special Committee of the Board of Directors
EFTC Corporation
9351 Grant Street
Denver, CO 80229
Members of the Special Committee:
Reference is hereby made to our letter to you dated March 29, 2000 (the
"Opinion"), regarding certain transactions between EFTC Corporation and Thayer-
BLUM Funding, L.L.C. Capitalized terms used herein that are defined in the
Opinion have the same meanings for purposes of this letter.
We have been advised that the Investors have requested, pursuant to an
agreement reached with the Company immediately prior to closing of the Initial
Investment, that the initial conversion price of the Convertible Notes be
reduced from $2.60 to $2.58, subject to approval of the Board of Directors and
the Special Committee.
We have not been requested to render, and are not hereby rendering, an
opinion as of the date hereof as to the fairness, from a financial point of
view, to the Company and the holders of the Conunon Stock (other than the
Investor and its affiliates) of the Initial Investment and the Transactions.
With your consent, we assume no responsibility to update the investigations
made, procedures followed or matters considered, or independently verify any
information relied upon, with respect to the Opinion. Accordingly, we have not
engaged in further analysis with respect to the reduced conversion price and our
statements in this letter should not be considered to be an opinion for any
purpose. Subject to the foregoing, we advise you that we do not believe that the
establishment of the conversion price at $2.58, had it been considered as part
of our analyses in connection with the Opinion, would have altered our
conclusion set forth in the Opinion as of the date of our Opinion.
This letter and the advice expressed herein are provided at the request and
for the information of the Special Committee and the Board of Directors of the
Company and may not be quoted or referred to or used for any purpose without
our prior written consent, except that this letter may be disclosed in
connection with any proxy statement or
New York Office: 445 Park Avenue, New York, NY 10022-4406 (212)371-8300
Boston Office: One Post Office Square, Suite 3710, Boston, MA 02109
(617) 457-0900
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Special Committee of the Board of Directors
EFTC Corporation
April 27,2000
Page 2
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Needham & Company, Inc.
solicitation/recommendation statement on Schedule 14D-9 used in connection with
the Transactions so long as this letter, together with the Opinion, is quoted in
full in such proxy statement or solicitation/recommendation statement.
Very truly your
[SIGNATURE LOGO HERE]
NEEDHAM & COMPANY, INC.
<PAGE>
[NEEDHAM LOGO HERE]
Needham & Company, Inc. 3000 Sand Hill Road, Building 2 Suite 190, Menlo Park,
CA 94025 (650)854-9111
March 29, 2000
Special Committee of the Board of Directors
EFTC Corporation
9351 Grant Street
Denver, CO 80229
Members of the Special Committee:
We understand that EFTC Corporation (the "Company") and Thayer-BLUM
Funding, L.L.C. (the "Investor") propose to enter into a Securities Purchase
Agreement (the "Purchase Agreement") pursuant to which, among other things, (i)
the Investor will purchase $54,000,000 in aggregate principal amount of the
Company's 15% Senior Subordinated Exchangeable Notes due June 2006 (the
"Exchangeable Notes") and warrants to purchase shares of the Company's common
stock, par value $.01 per share (the "Common Stock"), with an exercise price of
$.01 per share (the "Warrants") representing approximately 19.9% of the
outstanding Common Stock at the time of the issuance of the Warrants (such
purchase, the "Initial Investment") and (ii) following consurnmation of the
Initial Investment, the Investor will commence a tender offer (the "Offer") to
purchase up to 8,250,000 shares of Common Stock at a price of $4.00 per share
net to the seller in cash. The Initial Investment and the Offer are collectively
referred to herein as the "Transactions." Upon stockholder approval of the
Transactions and consummation of the Offer that results in the acquisition of at
least 500,000 shares of Common Stock, (i) the Exchangeable Notes would
automatically be exchanged for the Company's 8.875% Senior Subordinated
Convertible Notes due June 2006 (the "Convertible Notes") with an aggregate
principal amount of $54,000,000 plus any accrued but unpaid interest on the
Exchangeable Notes, which Convertible Notes could be converted into shares of
Common Stock at an initial conversion price of $2.60 per share, subject to
adjustment as provided therein, and (ii) the Warrants would be cancelled. The
terms and conditions of the Transactions will be set forth more fully in the
Purchase Agreement. The Exchangeable Notes, the Convertible Notes and the
Warrants are sometimes collectively referred to herein as the "Securities."
You have asked us to advise you as to the fairness, from a financial point
of view, to the Company and the holders of the Common Stock (other than the
Investor and its affiliates) of the
New York Office: 445 Park Avenue, New York, NY 10022-4406 (212)371-8300
Boston Office: One Post Office Square, Suite 3710, Boston, MA 02109
(617) 457-0900
<PAGE>
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Special Committee of the Board of Directors
EFTC Corporation
March 29,2000
Page 2
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Needham & Company, Inc.
Initial Investment and the Transactions, when taken together. Needham & Company,
Inc., as part of its investment banking business, is regularly engaged in the
valuation of businesses and their securities in connection with mergers and
acquisitions, negotiated underwritings, secondary distributions of securities,
private placements and other purposes. We have been engaged by the Company as
financial advisor to render this opinion in connection with the Transactions and
will receive a fee for our services, none of which is contingent on the
consummation of the Transactions. In addition, the Company has agreed to
indemnify us for certain liabilities arising from our role as financial advisor
and out of the rendering of this opinion.
For purposes of this opinion we have, among other things: (i) reviewed a
draft of the Purchase Agreement and the related drafts of the Securities,
furnished to us on March 28, 2000; (ii) reviewed certain publicly available
information concerning the Company and certain other information concen-iing the
Company ftirnished to us by the Company; (iii) reviewed the historical stock
prices and trading volumes of the Common Stock; (iv) held discussions with
members of the management of the Company concerning the current and future
business prospects of the Company; (v) reviewed and discussed with members of
the management of the Company certain financial forecasts and projections
prepared by such management that assume the Transactions (other than the Initial
Investment) do not occur and, in the alternative, that assume the occurrence of
the Transactions, the exchange of the Exchangeable Notes and cancellation of the
Warrants; (vi) compared certain publicly available financial data of companies
whose securities are traded in the public markets and that we deemed relevant to
similar data for the Company; (vii) reviewed the financial terms of certain
other transactions that we deemed relevant; (viii) discussed with members of the
management of the Company the strategic rationale and certain other benefits to
the Company resulting from an association with the Investor; and (ix) performed
and/or considered such other studies, analyses, inquiries and investigations as
we deemed appropriate.
In connection with our review and in arriving at our opinion, we have
assumed and relied on (a) the accuracy and completeness of all of the financial
and other information publicly available or furnished to or otherwise reviewed
by or discussed with us for purposes of rendering this opinion and (b) the
assessment by the Company's management of the strategic and other benefits
expected to be derived from the Transactions, and have neither attempted to
verify independently nor assumed responsibility to verify any. of such
information or assessment. In addition, we have assumed, with your consent, (i)
that the terms set forth in the executed Purchase Agreement and related
Securities will not differ materially from the proposed terms provided to us in
the draft Purchase Agreement and related Securities fin-nished to us on March
28, 2000, and (ii) that the Purchase Agreement and Securities are enforceable in
accordance with their terms and that the parties to the Transactions and the
Securities will carry out their obligations as set forth therein. With respect
to the Company's financial forecasts provided'to us by its management, we have
assumed for purposes of our opinion that such forecasts have been reasonably
prepared on bases reflecting the best currently available
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Special Committee of the Board of Directors
EFTC Corporation
March 29,2000
Page 3
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Needham & Company, Inc.
estimates and judgments of such management, at the time of preparation, of the
future operating and financial performance of the Company. We express no opinion
with respect to such forecasts or the assumptio ns on which they were based. We
have not assumed any responsibility for or made or obtained any independent
evaluation, appraisal or physical inspection of the assets or liabilities of the
Company. Further, our opinion is based on economic, monetary and market
conditions as they exist and can be evaluated as of the date hereof Our opinion
as expressed herein is limited to the fairness, from a financial point of view,
to the Company and the holders of Common Stock (other than the Investor and its
affiliates) of the Initial Investment and the Transactions, when taken together,
and does not address the Company's underlying business decision to engage in the
Transactions. Our opinion does not constitute a recommendation to any
shareholder of the Company as to how such shareholder should vote on the
proposed Transactions or as to whether such shareholder should tender shares of
Common Stock pursuant to the Offer. We are not expressing any opinion as to the
prices at which the Common Stock will actually trade at any time.
In the ordinary course of our business, we may actively trade the equity
securities of the Company for our own account or for the accounts of customers
and, accordingly, may at any time hold a long or short position in such
securities.
This letter and the opinion expressed herein are provided at the request
and for the information of the Special Committee and the Board of Directors of
the Company and may not be quoted or referred to or used for any purpose without
our prior written consent, except that this letter may be disclosed in
connection with any proxy statement or solicitation/recommendation statement on
Schedule 14D-9 used in connection with the Transactions so long as this letter
is quoted in full in such proxy statement or solicitation/recommendation
statement.
Based upon and subject to the foregoing, it is our opinion that, as of the
date hereof, the Initial Investment and the Transactions, when taken together,
are fair to the Company and the holders of Common Stock (other than the Investor
and its affiliates) from a financial point of view.
Very truly yours,
/s/ Needham & Company
NEEDHAM & COMPANY, INC.
