[DONALDSON, LUFKIN & JENRETTE LOGO]
Donaldson, Lufkin & Jenrette Securities Corporation
277 Park Avenue, New York, New York 10172 o (212) 892-3000
February 28, 1998
Board of Directors
Signature Brands USA, Inc.
7005 Cochran Road
Glenwillow, OH 44139-4312
Gentlemen:
You have requested our opinion as to the fairness from a financial point of
view to the stockholders of Signature Brands USA, Inc. (the 'Company'), other
than stockholders who are affiliates of the Company, of the consideration to be
received by such stockholders pursuant to the terms of the Agreement and Plan of
Merger, dated as of February 28, 1998 (the 'Agreement'), by and between the
Company, Sunbeam Corporation ('Sunbeam') and Java Acquisition Corp.
('Acquisition Sub'), a wholly-owned subsidiary of Sunbeam, pursuant to which
Acquisition Sub will be merged (the 'Merger') with and into the Company.
Pursuant to the Agreement, Sunbeam or Acquisition Sub will commence a
tender offer for any and all outstanding shares of the Company's common stock,
par value $.01 per share ('Company Common Stock'), at a price of $8.25 per share
in cash. The tender offer is to be followed by the Merger in which each share of
Company Common Stock not tendered in the tender offer will be converted into the
right to receive $8.25 per share in cash.
In arriving at our opinion, we have reviewed the Agreement as well as
financial and other information that was publicly available or furnished to us
by the Company including information provided during discussions with management
and the Board of Directors. Included in the information provided during
discussions with management and the Board of Directors were certain financial
projections of the Company for the period beginning October 1, 1997 and ending
September 30, 2002 prepared by the management of the Company and the Board of
Directors' assessment of such projections. In addition, we have compared certain
financial and securities data of the Company with various other companies whose
securities are traded in public markets, reviewed the historical stock prices
and trading volumes of the common stock of the Company, reviewed prices and
premiums paid in certain other business combinations and conducted such other
financial studies, analyses and investigations as we deemed appropriate for
purposes of this opinion. We were not requested to, nor did we, solicit the
interest of any other party in acquiring the Company; however, at the Board's
direction, we did hold discussions with certain other parties who communicated
unsolicited indications of interest to the Company.
In rendering our opinion, we have relied upon and assumed the accuracy and
completeness of all of the financial and other information that was available to
us from public sources, that was provided to us by the Company or its
representatives, or that was otherwise reviewed by us. With respect to the
financial projections supplied to us, we have been informed by management of the
Company that they were reasonably prepared on the basis reflecting management's
best currently available estimates and judgments as to the future operating and
financial performance of the Company, and we have also considered the Board of
Directors' assessment of the uncertainties of achieving such projections. We
have not assumed any responsibility for making an independent
evaluation of any assets or liabilities or for making any independent
verification of any of the information reviewed by us. We have relied as to
certain legal matters on advice of counsel to the Company.
Our opinion is necessarily based on economic, market, financial and other
conditions as they exist on, and on the information made available to us as of,
the date of this letter. It should be understood that, although subsequent
developments may affect this opinion, we do not have any obligation to update,
revise or reaffirm this opinion. Our opinion does not address the relative
merits of the Merger and the other business strategies being considered by the
Company's Board of Directors, nor does it address the Board's decision to
proceed with the Merger. Our opinion does not constitute a recommendation to any
stockholder as to whether to tender shares pursuant to the tender offer or
whether and how to vote on the Merger.
Donaldson, Lufkin & Jenrette Securities Corporation ('DLJ'), as part of its
investment banking services, is regularly engaged in the valuation of businesses
and securities in connection with mergers, acquisitions, underwritings, sales
and distributions of listed and unlisted securities, private placements and
valuations for corporate and other purposes. DLJ has performed investment
banking and other services for the Company and Thomas H. Lee Company, an
affiliate of the Company, and its affiliates in the past and has been
compensated for such services.
Based upon the foregoing and such other factors as we deem relevant, we are
of the opinion that the consideration to be received by the stockholders of the
Company, other than stockholders who are affiliates of the Company, pursuant to
the Agreement is fair to such stockholders from a financial point of view.
Very truly yours,
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ Louis P. Friedman
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Louis P. Friedman
Managing Director
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