Exhibit 99.1
[LETTERHEAD OF J.P. MORGAN]
April 14, 1999
Special Committee of the Board of Directors
Board of Directors
Alliance Imaging, Inc.
1065 North Pacificenter Drive, Suite 200
Anaheim, CA 92806
Attention: Anthony R. Ignaczak
Mark D. Klein
Gentlemen:
You have requested our opinion as to the fairness, from a financial point of
view, to the stockholders (other than Apollo Management and its affiliates) of
Alliance Imaging, Inc. (the "Company") of the consideration to be paid by the
Company in connection with the proposed merger (the "Merger") of the Company
with Three Rivers Holding Corp. (the "Target"), the parent company of SMT Health
Services Inc. ("SMT"). Pursuant to the Agreement and Plan of Merger, dated as of
April 14, 1999 (the "Agreement"), among the Company and the Target, a
corporation to be formed by the Company ("Acquistion Sub") will merge with and
into the Target, and each share of common stock, $0.01 par value, of the Target
issued and outstanding at the effective time of the Merger (other than shares
held by Dissenting Stockholders (as defined in the Agreement)) shall be
exchanged and converted into the right to receive 4.9 shares of common stock,
$.01 par value (the "Company Common Stock"), of the Company.
In arriving at our opinion, we have reviewed (i) the Agreement; (ii) certain
publicly available information concerning the business of the Company and SMT
and of certain other companies engaged in businesses comparable to those of the
Company and SMT, and the reported market prices for certain other companies'
securities deemed comparable; (iii) publicly available terms of certain
transactions involving companies comparable to the Company and SMT and the
consideration received for such companies; (iv) current and historical market
prices of the Company Common Stock; (v) the audited financial statements of the
Company and SMT for the fiscal years ended December 31, 1998, 1997 and 1996;
(vi) certain internal financial analyses and forecasts prepared by the Company
and SMT and their respective managements; and (vii) the terms of certain other
business combinations that we deemed relevant.
In addition, we have held discussions with certain members of the management of
the Company and SMT and with SMT's outside auditors with respect to certain
aspects of the Merger, the past and current business operations of the Company
and SMT, the financial
JP Morgan
-2-
condition and future prospects and operations of the Company and SMT, the
effects of the Merger on the financial condition of the Company, and certain
other matters we considered necessary or appropriate to our inquiry. We have
visited certain facilities of the Company and SMT, and reviewed such other
financial studies and analyses and considered such other information as we
deemed appropriate for the purposes of this opinion.
In giving our opinion, we have relied upon and assumed, without independent
verification, the accuracy and completeness of all information that was publicly
available or was furnished to us by the Company and SMT or otherwise reviewed by
us, and we have not assumed any responsiblity or liability therefor. We have not
conducted any valuation or appraisal of any assets or liabilities, nor have any
such valuations or appraisals been provided to us. In relying on financial
analyses and forecasts provided to us, we have assumed that they have been
reasonably prepared based on assumptions reflecting the best currently available
estimates and judgments by management as to the expected future results of
operations and financial condition of the Company and SMT to which such analyses
or forecasts relate. We have also assumed that the Merger will have the tax
consequences described in discussions with, and materials furnished to us by,
representatives of the Company, and that the other transactions contemplated by
the Agreement will be consummated as described in the Agreement. We have relied
as to all legal matters relevant to rendering our opinion upon the advice of
counsel.
Our opinion is necessarily based on economic, market and other conditions as in
effect on, and the information made available to us as of, the date hereof. It
should be understood that subsequent developments may affect this opinion and
that we do not have any obligation to update, revise, or reaffirm this opinion.
We are expressing no opinion herein as to the price at which the Company Common
Stock will trade at any future time.
We have acted as financial advisor to the Special Committee of the Board of
Directors of the Company with respect to the proposed Merger and will receive a
fee from the Company for our services. Please be advised that we have no other
financial advisory or other relationships with the Company. As you are aware,
J.P. Morgan Securities Inc. and its affiliates maintain an ongoing relationship
with Apollo Management. In the ordinary course of their businesses, J.P. Morgan
Securities Inc. and its affiliates may actively trade the debt and equity
securities of the Company for their own account or for the accounts of customers
and, accordingly, they may at any time hold long or short positions in such
securities.
On the basis of and subject to the foregoing, it is our opinion as of the date
hereof that the consideration to be paid by the Company in the proposed Merger
is fair, from a financial point of view, to the Company's stockholders (other
than Apollo Management and its affiliates).
JP Morgan
-3-
This letter is provided to the Special Committee of the Board of Directors and
the Board of Directors of the Company in connection with and for the purposes of
their evaluation of the Merger. This opinion does not constitute a
recommendation to any stockholder of the Company as to how such stockholder
should vote with respect to the Merger.
Very truly yours,
J.P. MORGAN SECURITIES INC.
By: /s/ John Fowler
--------------------------------
Name: John Fowler
Title: Managing Director