SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported):
January 31, 2000
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THERMO ELECTRON CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 1-8002 04-2209186
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification
incorporation or Number)
organization)
81 Wyman Street, P.O. Box 9046 02454-9046
Waltham, Massachusetts (Zip Code)
(Address of principal executive offices)
(781) 622-1000
(Registrant's telephone number
including area code)
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This Current Report on Form 8-K contains forward-looking statements
that involve a number of risks and uncertainties. Important factors that could
cause actual results to differ materially from those indicated by such
forward-looking statements are set forth under the heading "Forward-looking
Statements" in Exhibit 13 to Thermo Electron Corporation's Annual Report on Form
10-K for the year ended January 2, 1999. These include risks and uncertainties
relating to: the Registrant's spinout and acquisition strategies, competition,
international operations, technological change, possible changes in governmental
regulations, capital spending and government funding policies, dependence on
intellectual property rights, and the potential impact of the year 2000 on
processing date-sensitive information.
Item 5. Other Events
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On January 31, 2000, the Registrant issued a press release, attached
hereto as Exhibit 99, regarding a reorganization plan affecting it and its
majority-owned public subsidiaries.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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(a) Financial Statements of Business Acquired: Not applicable.
(b) Pro Forma Financial Information: Not applicable.
(c) Exhibits
99 Press Release dated January 31, 2000.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized, on this 31st day of January, 2000.
THERMO ELECTRON CORPORATION
By: /s/ Theo Melas-Kyriazi
-----------------------------
Theo Melas-Kyriazi
Vice President and Chief
Financial Officer
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Exhibit 99
Investor Contact: 781-622-1111
Media Contact: 781-622-1252
THERMO ELECTRON ANNOUNCES MAJOR REORGANIZATION PLAN
* Company to be Split into Three Independent Entities: Thermo Electron to
Focus on Measurement and Detection Instruments; Thermo Fibertek and
Medical Products Businesses to be Spun Off as Dividends to Thermo
Electron Shareholders
* Businesses with Aggregate Revenues of $1.2 Billion to be Sold
WALTHAM, Mass., January 31, 2000 - Thermo Electron Corporation (NYSE-TMO)
announced today that its board of directors has authorized a major
reorganization plan that will vastly simplify Thermo Electron by splitting the
company into three independent public entities, two of which will be spun off as
dividends to Thermo Electron shareholders. As part of the plan, which is
expected to take about one year to complete, the company has designated for sale
businesses with aggregate revenues of $1.2 billion. This is in addition to
businesses with approximately $150 million in revenues sold since May 1999.
Ultimately, Thermo Electron will become one integrated, publicly traded company.
The "new" Thermo Electron will focus on its core business - measurement
and detection instruments. Thermo Electron also plans to spin off as a dividend
to Thermo Electron shareholders its Thermo Fibertek subsidiary and a newly
created medical products company. As a stand-alone public entity, Thermo
Fibertek will continue to broaden the use of its separation technologies for
process industries and commercialize new fiber-based composite products. The new
medical products company, which will be formed by combining several existing
businesses, will provide medical equipment and systems to the healthcare
industry. Once the process is complete, each of these three companies will have
its own entirely separate and independent board of directors and management
team.
Richard F. Syron, chairman, president, and chief executive officer of
Thermo Electron, said, "This is a bold plan to deliver shareholder value by
creating three independent, focused companies that have strong prospects for
growth. Further, we believe this plan will allow the 'new' Thermo Electron to
become the preeminent provider of measurement and detection instruments. Thermo
Electron will be a highly integrated, tightly managed operating company. While
still a broad-based instrument company addressing needs in virtually every
industry, we plan to invest significant resources - through internal R&D,
strategic partnerships, and complementary acquisitions - in growing our
expanding product and technology portfolio serving customers in the life
sciences and telecommunications industries.
"In addition, we believe we will create added value for Thermo Electron
shareholders by spinning off two focused companies that also have substantial
opportunities for growth. Shareholders who have struggled in the past with the
company's complexity should benefit from the simplified structure and
well-defined strategy. Each of the three entities that will emerge from this
plan has the scale and business fundamentals to be a strong, stand-alone
company," said Syron. "With a clear mission and approach, each management team
will be able to concentrate on the specific issues and needs facing the
customers it serves. As independent entities, these companies will have greater
access to capital, which, in turn, will enable them to build on their leading
market positions. We believe this will allow each company to become a superior
competitor, thereby offering greater value to customers and shareholders."
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Syron concluded, "Thermo Electron was founded on the principle of
identifying and nurturing new technologies and bringing them to the marketplace.
With this new structure, we believe each company will be able to continue the
Thermo Electron tradition of product innovation and excellence, while creating
even greater opportunities for commercial success."
The three new companies that will be formed from Thermo Electron are:
THERMO ELECTRON - MEASUREMENT AND DETECTION INSTRUMENTS:
Thermo Electron will focus solely on its measurement and detection instruments
business. Thermo Electron is already a world leader in the instrument industry,
with 1999 instrument revenues of approximately $2.3 billion. The "new" Thermo
Electron will provide instruments for the life sciences, telecommunications,
analytical, process control, laser, optical components, precision
temperature-control, and environmental-monitoring markets. Currently these
technologies are designed and distributed through a number of public and private
companies, including Thermo Instrument Systems and its subsidiaries: Thermo
Optek, ThermoQuest, Thermo BioAnalysis, ONIX Systems, ThermoSpectra, Metrika
Systems, Thermo Vision, and Thermo Environmental Instruments, as well as through
Thermedics Detection and Thermo Sentron. Under the plan, public subsidiaries
would be "spun in" or merged into Thermo Electron, ultimately creating one
integrated public company.
Spectra-Physics Lasers, acquired by Thermo Instrument in February 1999,
will remain a public company while Thermo Electron continues to evaluate this
business.
Richard Syron will remain chairman, president, and chief executive
officer of Thermo Electron, and Earl R. Lewis will continue to serve as
president of the instruments business.
THERMO FIBERTEK - SEPARATION TECHNOLOGIES AND FIBER-BASED PRODUCTS:
Thermo Fibertek is a leading provider of separation technologies for the pulp
and paper industries and is known for its service, product quality, and
technological innovation. The company is a worldwide leader in recycling
equipment and water-management systems, and the number one competitor worldwide
for paper-machine accessories. As an independent company, Thermo Fibertek will
be better positioned to raise capital for investment in additional technologies
and businesses that would allow it to expand its core business. Thermo Fibergen,
which will remain a subsidiary of Thermo Fibertek after the proposed spinoff,
will aggressively fund the continued development and growth of its fiber-based
composite business. In 1999, the companies had consolidated sales of
approximately $225 million.
Thermo Fibertek's obligations relating to its outstanding convertible
debentures will not be affected by the spinoff; the debentures will remain
convertible into Thermo Fibertek common stock and will continue to be guaranteed
by Thermo Electron.
William A. Rainville will remain president and chief executive officer
of Thermo Fibertek. The company is expected to be renamed before the spinoff to
shareholders, which is anticipated to occur by early 2001.
MEDICAL PRODUCTS:
Thermo Electron has had a growing presence in the medical products industry
through a number of wholly owned businesses and public subsidiaries. Currently,
Thermo Electron is the number one player
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in neurodiagnostic and monitoring equipment, and holds the number two position
worldwide in respiratory and pulmonary care products. Several of Thermo
Electron's healthcare businesses will become part of a new medical products
company that will include its neurodiagnostic, patient-monitoring, auditory,
respiratory and pulmonary care, enteral feeding systems, and medical polymers
product lines. In 1999, these businesses had sales of approximately $335
million. As an independent, focused entity, the new medical products company
will be better positioned to market its products and respond to customer demands
in today's competitive healthcare arena. Thermo Cardiosystems and Trex Medical
will not be part of the new medical products company. See "Divestitures" below.
Thermo Electron is currently conducting an extensive search for a
president and chief executive officer of this new medical products company,
considering both internal and external candidates. The company will fill the
position before the spinoff to shareholders, which is expected to occur by early
2001.
DIVESTITURES:
Over the next 12 months, the company also plans to sell businesses with
aggregate sales of approximately $1.2 billion. This is in addition to businesses
with approximately $150 million in revenues sold since May 1999. Thermo Electron
believes that these businesses would better prosper within other strategically
aligned organizations that can provide greater focus, resources, and targeted
marketing strength. The additional businesses that are expected to be sold
include, among others, the following: Thermo Cardiosystems, Trex Medical, the
Thermo TerraTech businesses, Thermo Coleman, Peek, NuTemp, Thermo Trilogy, and
Peter Brotherhood. In the aggregate, the company does not currently expect to
incur losses from the disposition of these businesses.
The proceeds from these divestitures will be retained by Thermo
Electron for reinvestment in future acquisitions and product development efforts
related to measurement and detection instruments.
SPIN-INS:
Thermo Electron has already announced the terms for, and is proceeding with, the
spin-ins of ThermoTrex, ThermoLase, Thermo TerraTech, ThermoRetec, and The
Randers Killam Group. Under the plan, Thermo Electron would also spin in Thermo
Optek, ThermoQuest, Thermo BioAnalysis, Metrika Systems, ONIX Systems, Thermo
Instrument Systems, Thermedics, and as previously announced, Thermo Sentron,
Thermedics Detection, and Thermo Ecotek - described in brief below.
THE THERMO INSTRUMENT GROUP: Because Thermo Instrument Systems currently owns
more than 90 percent of the outstanding shares of Thermo Optek and ThermoQuest
common stock, each of these two companies is expected to be spun in for cash
through a "short-form" merger, at $15.00 and $17.00 per share, respectively.
In addition, Thermo Instrument will make cash tender offers of $28.00
per share for Thermo BioAnalysis, $9.00 per share for Metrika Systems, and $9.00
per share for ONIX Systems, in order to bring its own equity ownership in each
of these businesses to at least 90 percent. If successful, each of these
companies would then be spun into Thermo Instrument through a short-form merger
at the same cash prices as the tender offers.
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Following these tender offers, Thermo Instrument, in turn, would be
taken private. Thermo Electron plans to conduct an exchange offer, in which
Thermo Electron common stock would be offered to Thermo Instrument minority
shareholders in exchange for their Thermo Instrument common stock in order to
bring Thermo Electron's equity ownership in Thermo Instrument to at least 90
percent. If successful, Thermo Instrument would then be spun into Thermo
Electron through a short-form merger. Thermo Instrument minority shareholders
would also receive shares of Thermo Electron common stock in exchange for their
Thermo Instrument shares in the merger at the same exchange ratio that is being
offered in the exchange offer. The company expects to announce the exchange
ratio for this transaction shortly after conducting the tender offers for Thermo
BioAnalysis, Metrika Systems, and ONIX Systems.
THE THERMEDICS GROUP: Thermedics will make cash tender offers of $8.00 per share
for Thermedics Detection and $15.50 per share for Thermo Sentron in order to
bring its own equity ownership in each of these companies to at least 90
percent. If successful, each of these companies would then be spun into
Thermedics through a short-form merger at the same cash prices as the tender
offers.
Following these tender offers, Thermedics, in turn, would be taken
private. Thermo Electron plans to conduct an exchange offer, in which Thermo
Electron common stock would be offered to Thermedics minority shareholders in
exchange for their Thermedics common stock, in order to bring Thermo Electron's
equity ownership in Thermedics to at least 90 percent. If successful, Thermedics
would then be spun into Thermo Electron through a short-form merger. Thermedics
minority shareholders would also receive shares of Thermo Electron common stock
in exchange for their Thermedics shares in the merger at the same exchange ratio
that is being offered in the exchange offer. The company expects to announce the
exchange ratio for this transaction shortly after conducting the tender offers
for Thermedics Detection and Thermo Sentron.
THERMO ECOTEK: Because Thermo Electron currently owns more than 90 percent of
the outstanding shares of Thermo Ecotek common stock, Thermo Electron will spin
in this company through a short-form merger. Thermo Ecotek minority shareholders
will receive 0.431 shares of Thermo Electron common stock in exchange for each
share of Thermo Ecotek stock held. Under Thermo Electron's new focused strategy,
Thermo Ecotek is no longer a core business, and Thermo Electron is evaluating
its strategic options for this company. In the meantime, Thermo Ecotek will
proceed with its ongoing power projects using its own resources to fund
development.
Upon completion of the respective spin-ins, outstanding obligations
under the Thermo Instrument, Thermedics, and Thermo Ecotek convertible
debentures will be assumed by Thermo Electron, and these debentures will become
convertible into Thermo Electron common stock. Thermo Electron's guarantee
obligations under other subsidiary debentures and its obligations under its own
debentures will remain ongoing obligations of Thermo Electron.
TIMING:
Thermo Instrument and Thermedics expect to conduct their respective subsidiary
tender offers during the second quarter of 2000. The Thermo Optek, ThermoQuest,
and Thermo Ecotek short-form mergers are expected to be completed by the end of
the second quarter of 2000. Thermo Electron expects to conduct the exchange
offers for Thermo Instrument and Thermedics during the third quarter of 2000.
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The spinoffs of Thermo Fibertek and the new medical products company,
as well as the planned divestitures, are expected to take up to a year to
complete.
Thermo Electron's board has been advised by McKinsey & Company, Inc.; J.P.
Morgan & Co., Inc.; and The Beacon Group Capital Services, LLC in its
development of this plan.
CONDITIONS:
All of the transactions described here are subject to a number of conditions,
including the following.
The proposed spinoffs of Thermo Fibertek and the new medical products
company will require: a favorable ruling by the Internal Revenue Service
regarding the tax treatment of the spinoffs; Securities and Exchange Commission
(SEC) clearance of necessary filings; final Thermo Electron board action; and
other customary conditions. In addition, the spinoff of the new medical products
company will be conditioned on the successful completion of the proposed Thermo
Instrument and Thermedics spin-ins.
The spin-ins of Thermo Optek, ThermoQuest, and Thermo Ecotek will
require SEC clearance of necessary filings. The tender offers for Thermo
BioAnalysis, Metrika Systems, ONIX Systems, Thermo Sentron, and Thermedics
Detection, as well as the proposed exchange offers for Thermo Instrument and
Thermedics, will require: establishment of exchange ratios for the proposed
Thermo Instrument and Thermedics exchange offers; the receipt of acceptances
from enough minority shareholders so that Thermo Instrument's, Thermedics', or
Thermo Electron's (as applicable) equity ownership in each of the proposed
spin-in companies reaches at least 90 percent; and other customary conditions.
In addition, depending on the exchange ratio that is set, and the number of
Thermo Electron shares outstanding at the time of the transaction, the issuance
of Thermo Electron common stock in the Thermo Instrument spin-in may require the
approval of Thermo Electron's shareholders, per New York Stock Exchange rules.
OTHER IMPORTANT INFORMATION:
THE TRANSACTIONS DESCRIBED IN THIS ANNOUNCEMENT HAVE NOT YET COMMENCED. AS SOON
AS WE COMMENCE OUR EXCHANGE OFFERS FOR THERMO INSTRUMENT AND THERMEDICS, WE WILL
FILE TENDER OFFER STATEMENTS AND REGISTRATION STATEMENTS ON FORM S-4 WITH THE
SEC. IN ADDITION, WE HAVE NOT YET FILED A REGISTRATION STATEMENT WITH RESPECT TO
THE SHARES TO BE ISSUED TO THE MINORITY SHAREHOLDERS OF THERMO ECOTEK. YOU
SHOULD READ EACH OF THESE DOCUMENTS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTIONS. YOU CAN OBTAIN
THE TENDER OFFER STATEMENTS, REGISTRATION STATEMENTS, AND OTHER DOCUMENTS THAT
ARE FILED WITH THE SEC FOR FREE WHEN THEY ARE AVAILABLE ON THE SEC'S WEB SITE AT
http://www.sec.gov. IF YOU WRITE US OR CALL US, WE WILL SEND YOU THESE DOCUMENTS
FOR FREE WHEN THEY ARE AVAILABLE, AS APPLICABLE TO THE PARTICULAR TRANSACTION:
* TENDER OFFER STATEMENTS (EXCEPT FOR EXHIBITS)
* REGISTRATION STATEMENTS ON FORM S-4
* OFFERS TO PURCHASE
* LETTERS OF TRANSMITTAL
* NOTICES OF GUARANTEED DELIVERY
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YOU CAN CALL US AT (781) 622-1111 OR WRITE TO US AT:
INVESTOR RELATIONS DEPARTMENT
THERMO ELECTRON CORPORATION
81 WYMAN STREET, P.O. BOX 9046
WALTHAM, MA 02454-9046
IN ADDITION, THE TENDER OFFERS TO BE CONDUCTED BY THERMO INSTRUMENT FOR THERMO
BIOANALYSIS, METRIKA SYSTEMS, AND ONIX SYSTEMS, AND BY THERMEDICS FOR THERMEDICS
DETECTION AND THERMO SENTRON, AS DESCRIBED IN THIS ANNOUNCEMENT, HAVE NOT YET
COMMENCED. AS SOON AS THOSE TENDER OFFERS COMMENCE, THERMEDICS AND THERMO
INSTRUMENT, RESPECTIVELY, WILL FILE TENDER OFFER STATEMENTS JOINTLY WITH THERMO
ELECTRON WITH THE SEC. YOU SHOULD READ THE TENDER OFFER STATEMENTS WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
TENDER OFFERS. YOU CAN OBTAIN THE TENDER OFFER STATEMENTS AND OTHER DOCUMENTS
THAT ARE FILED WITH THE SEC FOR FREE WHEN THEY ARE AVAILABLE ON THE SEC'S WEB
SITE AT http://www.sec.gov. IF YOU WRITE US OR CALL US AT THE ABOVE ADDRESS OR
PHONE NUMBER, WE WILL SEND YOU THESE DOCUMENTS FOR FREE WHEN THEY ARE AVAILABLE:
* TENDER OFFER STATEMENTS (EXCEPT FOR EXHIBITS)
* OFFERS TO PURCHASE
* LETTERS OF TRANSMITTAL
* NOTICES OF GUARANTEED DELIVERY
The following constitutes a "Safe Harbor" statement under the Private Securities
Litigation Reform Act of 1995: This press release contains forward-looking
statements that involve a number of risks and uncertainties. Important factors
that could cause actual results to differ materially from those indicated by
such forward-looking statements are set forth under the heading "Forward-looking
Statements" in Exhibit 13 to the company's annual report on Form 10-K, for the
year ended January 2, 1999. These include risks and uncertainties relating to:
the company's spinout and acquisition strategies, competition, international
operations, technological change, possible changes in governmental regulations,
capital spending and government funding policies, dependence on intellectual
property rights, and the potential impact of the year 2000 on processing
date-sensitive information.
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