Sheldahl Announces Exclusive Negotiations With International Flex Technologies Inc.
26 June 2000
Sheldahl Announces Exclusive Negotiations With International Flex Technologies Inc.
NORTHFIELD, Minn. - Sheldahl, Inc. announced today that it has begun
exclusive negotiations with International Flex Technologies Inc. (IFT), a
privately-held company headquartered in Endicott, New York. The two companies
are currently discussing a proposal under which Sheldahl would acquire IFT in
exchange for shares of Sheldahl's common stock. In addition Morgenthaler
Partners, the majority owner of IFT, and other potential investors have proposed
to infuse approximately $40 million in new capital into Sheldahl in exchange for
shares of a new series of Sheldahl's convertible preferred stock at a conversion
price of $4.62 per share. As a result of the acquisition and new investment,
Morgenthaler Partners, the IFT shareholders and the other new investors would
hold securities representing beneficial ownership of approximately 43% of
Sheldahl.
No assurances are given as to whether an agreement will be signed or a
transaction consummated. However, Sheldahl and IFT have entered into an
agreement pursuant to which Sheldahl and IFT will deal exclusively with each
other until August 7, 2000. The proposal is subject to customary conditions
including, among other things, negotiation of definitive agreements,
completion of satisfactory due diligence, absence of material adverse change,
and regulatory and other approvals, including approval by Sheldahl's
shareholders.
Edward L. Lundstrom, President and Chief Executive Officer, commented, "We
believe the pending acquisition of IFT, along with the infusion of new
capital, if completed, will benefit Sheldahl's shareholders. The combined
technical strengths, production capacity and flexible circuitry foundation
will create a powerful force in the marketplace. We are pleased and excited
with the news and look forward to restructuring our balance sheet and gaining
the financial stability that will drive Sheldahl to future successes."
"We believe the combination of IFT and Sheldahl will create a number of
new business opportunities, enhance shareholder value and benefit the
communities in which we operate," said Donald R. Friedman, IFT President and
Chief Executive Officer. "IFT will benefit from the near-term increase in
manufacturing capacity available at Sheldahl's Longmont, CO facility while
continuing to grow local employment in Endicott, NY. Sheldahl will benefit
from IFT's expertise in high density packaging and fine-line flex products,
and the infusion of new capital."
International Flex Technologies Inc. is a privately held company based in
Endicott, New York. IFT acquired IBM Corporation's? fine-line flexible
circuit business in February, 1999.
Morgenthaler is a private equity investment firm with offices in
Cleveland, Ohio and Menlo Park, California, with approximately $1 billion
under management.
Sheldahl is a leading producer of high-density substrates, high-quality
flexible printed circuitry, and flexible laminates primarily for sale to the
automotive electronics and data communications markets. The Company, which is
headquartered in Northfield, Minnesota, has operations in Northfield;
Longmont, Colorado; South Dakota; Toronto, Ontario, Canada; and Chihuahua,
Chih., Mexico. Its sales offices are located in Detroit, Michigan; Hong Kong,
China; Singapore; and Mainz, Germany. As of January 31, 2000, Sheldahl
employed approximately 820 people. Sheldahl's common stock trades on the
Nasdaq National Market tier of the Nasdaq Stock Market under the symbol: SHEL.
In its fiscal year ended August 27, 1999, Sheldahl reported revenues of
$122.1 million.
The discussion above contains statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements by their nature
involve substantial risks and uncertainties as described by Sheldahl's
periodic filings. Actual results may differ materially depending on a variety
of factors, including but not limited to the following: the achievement of
Sheldahl's projected operating results, the ability of Sheldahl to
successfully obtain waivers from its lenders for any defaults on its debt
covenants, the achievement of efficient volume production and related sales
revenue results at Longmont, the ability of Sheldahl to identify and
successfully pursue other business opportunities, and Sheldahl not entering
into an agreement with respect to a transaction or any such transaction not
being consummated. Additional information with respect to the risks and
uncertainties faced by Sheldahl may be found in, and the prior discussion is
qualified in its entirety by, the Risk Factors contained in the Company's
filings with the Securities and Exchange Commission, including Sheldahl's
Annual Report, Form 10-K for the fiscal year ended August 27, 1999, Forms 10-Q
for the quarters ended November 26, 1999; February 25, 2000, and other SEC
filings. Sheldahl does not undertake any obligation to update any such
factors or to publicly announce developments or events relating to the matters
described herein.