Imo Industries Announces Sale to II Acquisition Corp., An Affiliate of Constellation Capital Partners LLC, And Terminates Sale to United Dominion Industries
25 July 1997
Imo Industries Announces Sale to II Acquisition Corp., An Affiliate of Constellation Capital Partners LLC, And Terminates Sale to United Dominion Industries
LAWRENCEVILLE, N.J., July 25 -- Imo Industries Inc.
announced today that it has executed a definitive agreement with
II Acquisition Corp. ("Acquisition Corp."), an affiliate of Constellation
Capital Partners LLC, pursuant to which Acquisition Corp. will commence a cash
tender offer for all outstanding shares of Imo common stock at a price of
$7.05 per share, net in cash.
Imo had previously announced on June 26, 1997, that it had entered into a
merger agreement with United Dominion Industries Limited pursuant to which a
wholly owned subsidiary of United Dominion ("UD") commenced on July 2, 1997, a
cash tender offer for all of the outstanding shares of Imo common stock at a
price of $6 per share. Earlier today, the Imo Board of Directors unanimously
determined that the Acquisition Corp. offer was on terms more favorable to
Imo's stockholders. In addition, Imo withdrew its approval of United
Dominion's tender offer and the other transactions contemplated by the merger
agreement with United Dominion and exercised its right to terminate the merger
agreement.
Imo's Board has approved Acquisition Corp.'s tender offer, has determined
that Acquisition Corp.'s tender offer is fair to, and in the best interests
of, Imo's stockholders and recommends that Imo's stockholders accept
Acquisition Corp.'s tender offer. Imo's Board of Directors was advised by
Credit Suisse First Boston Corporation that the consideration to be received
by tendering holders of Imo common stock pursuant to Acquisition Corp.'s
tender offer is fair to such holders from a financial point of view.
Pursuant to the terms of the United Dominion merger agreement, $8 million
is being paid to United Dominion as a result of Imo's termination of the
merger agreement and United Dominion will be reimbursed for up to $2 million
of its expenses incurred in connection with the transactions contemplated by
the merger agreement.
Unlike the UD agreement, the Acquisition Corp. agreement does not
contemplate an offer to purchase Imo's 11-3/4% Senior Subordinated Notes due
2006 or solicit consents from the holders of the notes to amend the indenture
governing the notes or contemplate a merger with Imo following completion of
the tender offer.
Acquisition Corp.'s tender offer for the shares of Imo common stock is
conditioned on the receipt of more than 80% of the outstanding shares. Any
shares not purchased in the tender offer will remain outstanding.
Imo Chairman and Chief Executive Officer Donald K. Farrar said,
"Acquisition Corp.'s offer of $7.05 per share exceeds United Dominion's offer
by more than 17% and does not include any financing condition. Imo's Board of
Directors believes Acquisition Corp.'s offer will provide Imo's stockholders
better value than United Dominion's offer. Acquisition Corp. has also
indicated that, after successful completion of its tender offer, it looks
forward to working with us in order to improve our operations and continue to
deliver superior products to our customers."
"Imo has solid operating companies and we look forward to working with our
new associates in their continuous improvement efforts on quality, cost and
service," said Philip W. Knisely, President of Constellation and of
Acquisition Corp.
Acquisition Corp. will commence its tender offer for all the common stock
of Imo on or before August 1, 1997.
If an Imo stockholder that has tendered shares pursuant to UD's offer
wishes to withdraw such tender, such stockholder must deliver a written or
facsimile transmission notice of withdrawal to First Chicago Trust Company of
New York prior to 12:00 midnight, New York City time, on July 30, 1997, unless
the UD offer is extended (in which case a tendering stockholder can withdraw
his tender at any time prior to the expiration of the UD offer).
If UD elects to terminate its offer, it is required to promptly return any
shares tendered. Certain additional procedures that must be followed to
withdraw such tender, as well as First Chicago's address and facsimile
numbers, are set forth in UD's offer to purchase dated July 2, 1997, that was
previously distributed to Imo stockholders. Stockholders with any questions
regarding UD's offer can also contact MacKenzie Partners, the information
agent for UD's offer, at 1-800-322-2885.
Imo Industries, with 1996 sales of $469 million, is a diversified
manufacturer of pumps, fluid sensors, motion control products, remote control
systems, and automobile components, with operations worldwide.
Constellation Capital is a private equity firm based in Richmond, VA.
Constellation also owns Ameridrives International, a manufacturer of
mechanical power transmission clutches and couplings.
SOURCE Imo Industries Inc.