Filed by Cardinal Health, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Bindley Western Industries, Inc.
Commission File No. 0-11355
[CARDINAL HEALTH LOGO]
NEWS RELEASE 7000 Cardinal Place
Dublin, OH 43017
www.cardinal.com
FOR IMMEDIATE RELEASE
CARDINAL HEALTH
Media Contact: Geoffrey D. Fenton, 614-757-7871
Investor Contact: Stephen T. Fischbach, 614-757-7067
BINDLEY WESTERN
Media/Investor: Paul Blair, 317-704-4305
CARDINAL HEALTH AND BINDLEY WESTERN INDUSTRIES
AGREE TO $2.1 BILLION MERGER
TRANSACTION EXPECTED TO BE ACCRETIVE IMMEDIATELY AND WILL
ENHANCE SERVICE AND EFFICIENCY IN PHARMACEUTICAL DISTRIBUTION
DUBLIN, OHIO AND INDIANAPOLIS, DECEMBER 4, 2000 - Cardinal Health, Inc. (NYSE:
CAH), a leading provider of products and services supporting the health-care
industry, and Bindley Western Industries, Inc. (NYSE: BDY), a wholesale
distributor of pharmaceuticals and provider of nuclear pharmacy services,
announced today that Bindley Western has agreed to merge with Cardinal Health in
a stock-for-stock transaction valued at approximately $2.1 billion.
Terms of the definitive agreement call for Bindley Western shareholders to
receive a fixed exchange of 0.4275 Cardinal Health common shares for each
outstanding share of Bindley Western, with Cardinal Health issuing approximately
16.8 million shares on a fully diluted basis. The transaction will include the
assumption of Bindley Western's debt and is intended to be accounted for as a
pooling of interests for financial reporting purposes and to be tax-free to the
holders of Bindley Western common stock. Bindley Western's average debt for the
12 months ended September 30, 2000 totaled approximately $430 million. In
connection with the transaction, Bindley Western has agreed to issue to Cardinal
Health a stock option exercisable under certain circumstances for newly issued
shares equal to 19.9 percent of Bindley Western's currently outstanding common
shares.
CARDINAL HEALTH, BINDLEY WESTERN
PAGE 2
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The merger is expected to close in the first half of calendar 2001, subject to
regulatory clearances, approval by Bindley Western shareholders, and other
customary conditions. Four senior Bindley Western executives, who own
approximately 20 percent of the outstanding common stock, have agreed to vote in
favor of the merger transaction. Upon completion of the transaction, William E.
Bindley, 60, Bindley Western's founder,
chairman, chief executive officer and president, will join Cardinal Health's
board of directors, which will increase its membership to fourteen.
"This merger is a great fit, both operationally and culturally," said Cardinal
Health Chairman and Chief Executive Officer Robert D. Walter. "We expect the
transaction to be accretive to Cardinal's earnings per share immediately without
consideration of any synergies. There are substantial synergies in the areas of
facilities rationalization, elimination of redundant overhead, improved
inventory and capital usage, and expanded product merchandising. We believe that
synergies should exceed $100 million on an annualized basis by the end of the
third year following the completion of the merger."
"The outstanding financial discipline and record of performance of our
independent companies give us confidence in our future together, and so we
reaffirm Cardinal Health's objective of long-term growth in EPS of 20 percent,"
Walter said.
"There is a natural fit between our organizations that should facilitate a
smooth integration," Walter added. "Like Cardinal Health, Bindley Western has a
history of being entrepreneurial and innovative in pursuing new ventures. This
is a combination of companies with complementary strengths and customer mixes.
Our headquarters are only about 175 miles apart, and Bill Bindley and I have
known each other for years. Our cultures will meld together well."
"We look forward to joining the Cardinal Health team," William E. Bindley said.
"Our strong service orientation, experienced sales teams and solid relationships
with pharmacy providers will complement Cardinal's existing strengths in these
areas. We have created substantial value for our associates and shareholders
over the past five years and are excited about the opportunity to continue this
trend as part of Cardinal Health. Cardinal shares our commitment to long-term
growth and customized service in health care. This transaction will bring
expanded career opportunities for our people, and our customers will benefit
from access to a significantly broader line of products and services as well as
a sophisticated, established e-commerce infrastructure."
Indianapolis-based Bindley Western serves independent and retail chain
pharmacies, hospitals, clinics, HMOs, and other managed-care organizations from
16 distribution facilities operating in 14 states. It also operates 32 nuclear
pharmacies. The company employs about 2,000 people and produces annual operating
revenues of about $6 billion, excluding bulk deliveries to chain warehouses.
CARDINAL HEALTH, BINDLEY WESTERN
PAGE 3
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Bindley Western will bring to Cardinal Health a strong position in
pharmaceutical distribution sales to the federal government as well as a
substantial presence in the area of nuclear medicine -- a fast growing field of
patient care that Cardinal does not serve today. Through its subsidiary, Central
Pharmacy Services, Inc., Bindley Western operates nuclear pharmacies that
prepare unit-dose pharmaceuticals using radioactive materials.
Upon completion of the transaction, Bindley Western will be included in Cardinal
Health's pharmaceutical distribution and provider services segment, which
reported annual operating revenues of approximately $19 billion at June 30,
2000. Keith W. Burks, president of Bindley Western Drug Company and Fred P.
Burke, president and chief executive officer of Bindley Western's Central
Pharmacy Services, Inc., will join Cardinal Health and continue in their
leadership roles.
"We are very pleased to welcome Keith, Fred and their teams to Cardinal Health,"
said James F. Millar, president and chief operating officer of Cardinal Health's
pharmaceutical distribution and medical products businesses. "Their commitment
to continue to lead these businesses gives us added confidence in our ability to
combine our resources to create exciting new ways to help customers improve
quality and efficiency in pharmaceutical care.
"Cardinal can help Bindley Western grow," added Millar, "by providing access to
capital, improving inventory efficiencies, and broadening sales through Cardinal
Health's numerous cross-selling initiatives. We will be able to take costs out
of the pharmaceutical supply chain by driving greater volumes through the
advanced and highly automated distribution network of the combined companies.
The merger will enable Cardinal to generate substantial synergies as teams from
both companies work together to identify opportunities for systems efficiencies
and other consolidation. We will aggressively pursue synergies where we can
bring greater value to customers as a result."
Cardinal Health, Inc. (www.cardinal.com) is a leading provider of products and
services supporting the health-care industry. Cardinal Health companies develop,
manufacture, package and market products for patient care; develop drug-delivery
technologies; distribute pharmaceuticals, medical-surgical and laboratory
supplies; and offer consulting and other services that improve quality and
efficiency in health care. The company, which is headquartered in Dublin, Ohio,
employs more than 42,000 people on five continents and produces annualized
revenues approaching $30 billion.
Bindley Western (www.bindley.com) provides a synergistic array of cost-effective
pharmaceutical and supply channel management products. Customers include retail
chain and independent pharmacies, supermarkets and mass retailers with their own
pharmacies, hospitals, clinics, HMOs, and managed care organizations, all of
which are dedicated to lowering the cost of health care and improving the
quality of patient care.
--more--
CARDINAL HEALTH, BINDLEY WESTERN
PAGE 4
WEBCAST TODAY
Cardinal Health and Bindley Western have scheduled a joint Internet "webcast"
today to discuss this transaction. To access this discussion, please visit
www.cardinal.com and follow directions to the company's Investor Center, or call
in to the discussion at (212) 346-7446. The conference will begin at 10:30 a.m.
Eastern Time today.
---------------------------------------------
EXCEPT FOR HISTORICAL INFORMATION, ALL OTHER INFORMATION IN THIS NEWS RELEASE
CONSISTS OF FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995. THESE STATEMENTS INCLUDE FINANCIAL
PROJECTIONS AND ESTIMATES AND THEIR UNDERLYING ASSUMPTIONS; STATEMENTS REGARDING
PLANS, OBJECTIVES AND EXPECTATIONS WITH RESPECT TO FUTURE OPERATIONS, PRODUCTS
AND SERVICES; AND STATEMENTS REGARDING FUTURE PERFORMANCE OF CARDINAL HEALTH,
INC., BINDLEY WESTERN INDUSTRIES, INC. AND THE COMBINED COMPANY AFTER COMPLETION
OF THE PROPOSED MERGER TRANSACTION. THE FORWARD-LOOKING INFORMATION AND
STATEMENTS IN THIS NEWS RELEASE ARE SUBJECT TO VARIOUS RISKS AND UNCERTAINTIES,
MANY OF WHICH ARE DIFFICULT TO PREDICT AND GENERALLY BEYOND THE CONTROL OF
CARDINAL HEALTH AND BINDLEY WESTERN, THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE PROJECTED, ANTICIPATED OR IMPLIED. THESE RISKS AND
UNCERTAINTIES INCLUDE THOSE DISCUSSED OR IDENTIFIED IN THE PUBLIC FILINGS WITH
THE U.S. SECURITIES AND EXCHANGE COMMISSION (SEC) MADE BY CARDINAL HEALTH AND
BINDLEY WESTERN; RISKS AND UNCERTAINTIES WITH RESPECT TO THE PARTIES'
EXPECTATIONS REGARDING THE TIMING, COMPLETION AND ACCOUNTING AND TAX TREATMENT
OF THE MERGER, THE VALUE OF THE MERGER CONSIDERATION, GROWTH OPPORTUNITIES,
EARNINGS ACCRETION, COST SAVINGS, REVENUE ENHANCEMENTS, SYNERGIES AND OTHER
BENEFITS ANTICIPATED FROM THE TRANSACTION; THE COSTS AND EFFECTS OF GOVERNMENT
REGULATION AND LEGAL AND ADMINISTRATIVE PROCEEDINGS AND DIFFICULTIES RELATED TO
INTEGRATING THE BUSINESSES, AND THE EFFECT OF ANY CHANGES IN CUSTOMER AND
SUPPLIER RELATIONSHIPS, GENERAL CONSUMER PERCEPTIONS OF HEALTH-RELATED CONCERNS
OR THE DISTRIBUTION OUTSOURCING PATTERN FOR HEALTH-CARE PRODUCTS AND/OR SERVICES
AND OF GENERAL ECONOMIC CONDITION SUCH AS CHANGES IN INTEREST RATES AND THE
PERFORMANCE OF THE FINANCIAL MARKETS, CHANGES IN DOMESTIC AND FOREIGN LAWS,
REGULATIONS AND TAXES, CHANGES IN COMPETITION AND PRICING ENVIRONMENTS, AND
GENERAL MARKET AND INDUSTRY CONDITIONS.
INFORMATION REGARDING THE IDENTITY OF THE PERSONS WHO MAY, UNDER SEC RULES, BE
DEEMED TO BE PARTICIPANTS IN THE SOLICITATION OF STOCKHOLDERS OF BINDLEY WESTERN
IN CONNECTION WITH THE PROPOSED MERGER, AND THEIR INTERESTS IN THE SOLICITATION,
ARE SET FORTH IN A SCHEDULE 14A FILED ON DECEMBER 4, 2000 WITH THE SEC. CARDINAL
HEALTH AND BINDLEY WESTERN WILL BE FILING A PROXY STATEMENT/PROSPECTUS AND OTHER
RELEVANT DOCUMENTS CONCERNING THE PROPOSED TRANSACTION WITH THE SEC. INVESTORS
ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE AND
ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ON THE PROPOSED TRANSACTION. INVESTORS WILL BE ABLE TO
OBTAIN THE DOCUMENTS FREE OF CHARGE AT THE SEC'S WEB SITE (WWW.SEC.GOV). IN
ADDITION, DOCUMENTS FILED WITH THE SEC BY CARDINAL HEALTH MAY BE OBTAINED FREE
OF CHARGE BY CONTACTING CARDINAL HEALTH, INC., 7000 CARDINAL PLACE, DUBLIN, OHIO
43017, (614) 757-5000. DOCUMENTS FILED WITH THE SEC BY BINDLEY WESTERN WILL BE
AVAILABLE FREE OF CHARGE BY CONTACTING BINDLEY WESTERN INDUSTRIES, INC., 8909
PURDUE ROAD, INDIANAPOLIS, INDIANA 46268, (317) 704-4000. INVESTORS SHOULD READ
THE PROXY STATEMENT
CARDINAL HEALTH, BINDLEY WESTERN
PAGE 5
/PROSPECTUS CAREFULLY WHEN IT BECOMES AVAILABLE BEFORE MAKING
ANY VOTING OR INVESTMENT DECISION.
--more--
MERGER FACT SHEET
CARDINAL HEALTH, INC.
- --------------------
Headquarters: Dublin, Ohio
Trading Symbol: NYSE: CAH
Year Founded: 1971
Business: A leading provider of a broad range of
products and services supporting the
health-care industry
Distribution Facilities Pharmaceutical -- 25
Medical Surgical -- 77
Specialty -- 3
Employees >42,000
Fiscal Year-end June 30
Senior Executives Robert D. Walter, Chairman and Chief
Executive Officer
James F. Millar, President and Chief
Operating Officer, Pharmaceutical
Distribution and Medical Products
Businesses
Financial Highlights: (For Fiscal Year Ended 6/30/00)
- --------------------
Operating Revenue(1) $25.2 billion, up 17% from prior year
Gross Margin $2.9 billion, 11.5% of Operating Revenue
S, G & A Expenses $1.6 billion, 6.5% of Operating Revenue
Operating Income(2) $1.3 billion, 5.0% of Revenue
Net Income(2) $730 million, 2.9% of Revenue
Diluted EPS(2) $2.57
Cash & Equivalents $505 million
Total Assets $10.3 billion
Debt $1.5 billion
Shareholders' Equity $4.0 billion
Net Debt/Total Capital 20%
Average Diluted
Shares Outstanding 284.4 million
Operating Cash Flow $638 million
Annual Return to Share-
holders (as of 11/30/00) 5-Year: 33.2%, 10-Year: 29.5%
Market Capitalization
(as of 12/1/00) $27.8 billion
CARDINAL HEALTH, BINDLEY WESTERN
Page 6
(1) Excludes revenue from bulk deliveries to chain warehouses.
(2) Excluding special charges.
--more--
BINDLEY WESTERN INDUSTRIES, INC.
Headquarters: Indianapolis, Indiana
Trading Symbol: NYSE: BDY
Year Founded: 1968
Business: A Fortune 500 company that provides a
synergistic array of cost effective
pharmaceutical and supply channel
management products and services.
Distribution Facilities Pharmaceutical -- 16, Nuclear Pharmacy -- 32
Employees >2000
Fiscal Year-end December 31
Senior Executives William E. Bindley, Chairman, CEO &
President
Keith W. Burks, Executive Vice President,
President, Bindley Western Drug Company
Financial Highlights: (For Twelve Months Through 6/30/00 -- Unaudited)
- ---------------------
Operating Revenue(1) $5.8 billion, up 28% from prior year
Gross Margin $247 million, 4.2% of Operating Revenue
S, G & A Expenses $149 million, 2.6% of Operating Revenue
Operating Income(2) $98 million, 1.7% of Operating Revenue
Net Income(2) $42 million, .7% of Operating Revenue
Diluted EPS(2) $1.16
Cash & Equivalents $83 million
Total Assets $1.7 billion
Debt $318 million
Shareholders' Equity $426 million
Net Debt/Total Capital 36%
Average Diluted
Shares Outstanding 36.2 million
Operating Cash Flow $114 million
Annual Return to Share-
holders (as of 11/30/00) 5-Year: 38.7%, 10-Year: 24.4%
Market Capitalization
(as of 12/1/00) $1.2 billion
(1) Excludes revenue from bulk deliveries to chain warehouses.
CARDINAL HEALTH, BINDLEY WESTERN
PAGE 7
(2) Excluding special charges. SOURCE Cardinal Health, Inc.
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