BEAR STEARNS MERCHANT BANKING TO ACQUIRE
AEARO CORPORATION FROM VESTAR CAPITAL AND MANAGEMENT
Aearo Management and Majority Shareholder Vestar to Retain Ownership Stakes
New York, New York - March 11, 2004 - Bear Stearns Merchant Banking, the private
equity arm of Bear, Stearns & Co. Inc. (NYSE: BSC), has agreed to acquire Aearo
Corporation - a global leader in the hearing, eye, face, head and respiratory
protection segments of the personal protection equipment market and a leading
producer of specialty composite materials for the transportation and precision
electronics markets - for $385 million, including assumed debt of approximately
$210 million.
Upon closing of the acquisition, expected in early April, Aearo's management
team, led by Chairman, President, and Chief Executive Officer, Michael McLain,
will make a substantial capital investment and will own approximately a quarter
of the company's fully diluted common stock, including options. Vestar Capital
and its affiliates intend to retain up to 10% of the company's stock at closing
and will have the opportunity to invest additional equity in the future under
certain circumstances.
"My team and I look forward to working with our new investors at Bear Stearns
Merchant Banking and are pleased that our existing shareholders will have a
continued interest in Aearo," McLain commented. "We plan to focus on our growth
initiatives and on strategic acquisitions that will broaden our product line and
our channel presence. This new partnership will enable us to continue to
strengthen our leadership position in the personal protection equipment market."
Indianapolis-based Aearo has more than 1,500 employees worldwide. The company
recorded net sales of $326.9 million for the twelve months ended December 31,
2003.
"Aearo is a leader in the growing and increasingly important global safety
industry and we are pleased and excited to make this investment," said Douglas
Korn, a senior managing director of Bear Stearns Merchant Banking. "Safety, in
the workplace, in the home, and in government sectors is increasingly a focus of
employers, individuals and agencies around the world. We look forward to
supporting Aearo's terrific management team as they pursue a strategy of
continued growth through industry-leading innovation as well as synergistic
acquisitions." Vestar Managing Director Norman W. Alpert explained that his
private equity firm is confident about the company's prospects. "Our eight-year
investment in Aearo and partnership with Mike McLain and his team have been very
successful from both a strategic and financial standpoint, and we are proud to
have helped position the company as a leader and consolidator of the personal
protection equipment market," Alpert said. "We are delighted with the company's
new relationship with Bear Stearns Merchant Banking. Under their stewardship, we
expect Aearo to take full advantage of the exciting growth and consolidation
opportunities in the industry."
Aearo was advised by Deutsche Bank Securities Inc., which is also providing
fully committed financing for the transaction through an affiliate. Aearo's
legal advisors were Simpson Thacher & Bartlett LLP and Bingham McHale LLP. Bear
Stearns Merchant Banking's legal advisors were O'Melveny & Myers LLP.
About Aearo Corporation
Aearo Corporation is one of the leaders in the hearing, eye, face, head and
respiratory protection segments of the personal protection equipment ("PPE")
market worldwide. PPE encompasses all articles of equipment and clothing worn
for the purpose of protecting against bodily injury, including safety eyewear
and goggles, earmuffs and earplugs, respirators, hard hats, fall protection,
gloves, safety clothing and safety shoes. The Company manufactures and sells
hearing protection devices, communication headsets, prescription and
non-prescription safety eyewear, face shields, reusable and disposable
respirators, fall protection, hard hats and first aid kits, and specialty
composites in more than 70 countries under its well-known brand names:
AOSafety(R), E-A-R(R), Peltor(R) and SafeWaze(TM). More information is available
about Aearo at http://www.aearo.com
About Bear Stearns Merchant Banking
Bear Stearns Merchant Banking, the private equity arm of Bear, Stearns & Co.
Inc., invests private equity capital in compelling leverage buyouts,
recapitalizations and growth capital opportunities alongside superior management
teams. Bear Stearns Merchant Banking is building its second investment
portfolio, investing its current $1.5 billion institutional private equity fund.
Since its inception in 1997, Bear Stearns Merchant Banking has been an investor
in over 30 portfolio companies across a broad range of industries. Recent
announced acquisitions include Sutton Place Group, CamelBak Products, Cavalry
Investments, Vitamin Shoppe, New York & Company and Reddy Ice. More information
about Bear Stearns Merchant Banking can be found at http://www.bsmb.com.
About Vestar Capital Partners
Vestar Capital Partners is a leading investment firm specializing in management
buyouts, recapitalizations and growth capital investments. Vestar's investment
strategy is targeted towards middle-market companies in the U.S. and Europe with
valuations in the $200 million to $2 billion range. Since the firm's founding in
1988, Vestar has completed over forty-five investments in companies with a total
value exceeding $14 billion. These companies have varied in size and geography
and span a broad range of industries. Vestar's current portfolio of 22 companies
includes among other investments, Birds Eye Foods, FL Selenia, Solo Cup, St.
John Knits, Sunrise Medical, Valor Telcom and SAB WABCO. Vestar currently
manages funds totaling approximately $4 billion and has offices in New York
City, Denver, Paris and Milan. More information about Vestar is available at
http://www.vestarcapital.com.
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