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Exhibit 12(c)
October 16, 2000
Board of Directors of Thermo Electron Corporation
Special Committee of The Board of Directors of
Thermo Electron Corporation
81 Wyman Street
Post Office Box 9046
Waltham, MA 02454-0946
Attention: Dr. Richard Syron
Chairman and Chief Executive Officer
Ladies and Gentlemen:
J.P. Morgan Securities Inc. ("J.P. Morgan") understands that Thermo Electron
Corporation ("Thermo Electron") proposes to acquire all of the outstanding
common stock, par value $.01 per share, (the "Shares") of Trex Medical
Corporation (the "Company") not currently held by Thermo Electron from the
holders thereof at a purchase price of $2.15 per Share, net to the seller in
cash (the "Consideration"), pursuant to (i) an offer (the "Offer") by Trex
Medical Acquisition, Inc. (the "Purchaser"), a wholly-owned subsidiary of Thermo
Electron, to purchase all of the outstanding Shares and (ii) the subsequent
merger (the "Merger") of the Purchaser with and into the Company. You have
requested J.P. Morgan's opinion as to the fairness, from a financial point of
view, to Thermo Electron of the Consideration proposed to be paid pursuant to
the Offer and the Merger.
In arriving at our opinion, we have reviewed (i) the audited financial
statements of the Company for the fiscal years ended October 3, 1998 and October
2, 1999; (ii) the unaudited financial statements of the Company for the nine
month period ended July 1, 2000; (iii) forecast income statements for the
Company's subsidiary Trophy Radiologie ("Trophy") for the fiscal years ending
September 30, 2000 and September 29, 2001 provided to us by the Company's
management; (iv) the unaudited consolidated balance sheet of the Company as of
August 30, 2000 provided to us by the Company's management; (v) the range of
indicative bid prices for Trophy provided by potential buyers of Trophy; (vi)
the Asset Purchase and Sale Agreement among Thermo Electron, the Company and
Hologic, Inc. dated August 13, 2000; (vii) the terms and conditions of the $25
million secured note due 2003 received by the Company from Hologic, Inc. as part
of the total consideration for the purchase of the Company's U.S. operations;
(viii) certain financial analyses prepared by Thermo Electron relating to the
assets and liabilities retained by the Company (ix) current and historical
market prices of the Shares; (x) certain publicly available information
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concerning Trophy's businesses and of certain other companies engaged in
businesses deemed by us to be comparable to Trophy's businesses; (xi) the
reported market prices of the securities of certain other companies deemed by us
to be comparable to Trophy's businesses; and (xii) publicly available terms of
certain transactions involving companies deemed by us to be comparable to
Trophy's businesses and the consideration paid for such companies
In addition, we have held discussions with certain members of the management of
the Company and Thermo Electron with respect to certain aspects of the Offer and
the Merger, the past and current business operations of the Company, the
financial condition and future prospects and operations of the Company and
certain other matters we believed necessary or appropriate to our inquiry. We
have 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, or discussed with, us by Thermo Electron or the
Company or was otherwise reviewed by us, and we have not assumed any
responsibility or liability therefor. We have also assumed that there have been
no material changes in the Company's financial condition, results of operations,
business or prospects since the date of the most recent financial statements
made available to us, other than the sale of the Company's U.S. operations. In
addition, at your request, we have not assigned a value to the Company's
potential litigation liability in the Fischer patent infringement litigation,
given the unknown outcome of the case and the difficulty in quantifying
potential exposure.
We have not conducted, and we have not assumed any responsibility for
conducting, any valuation, appraisal or physical inspection of any assets or
liabilities (contingent or otherwise), nor have any such valuations or
appraisals been provided to us. In relying on the financial analyses,
projections and estimates provided to, or discussed with, 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 financial performance of the Company. 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 the conclusions in
this opinion and that we do not have any obligation to update, revise or
reaffirm this opinion.
We have acted as financial advisor to Thermo Electron with respect to the
proposed Offer and Merger and will receive a fee from Thermo Electron for our
services. We have also acted as financial advisor to Thermo Electron for the
purpose of advising Thermo Electron in connection with its strategic
alternatives, including the proposed reorganization of Thermo Electron and its
subsidiaries. We will receive separate fees for services with respect to other
elements of Thermo Electron's reorganization. These other fees include a minimum
retainer and additional compensation if some or all of the other elements of
Thermo Electron's reorganization are completed. In the ordinary course of their
businesses, J.P.
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Morgan and its affiliates may actively trade the debt and equity securities of
Thermo Electron or the Company and their affiliates 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 pursuant to the Offer and the Merger is
fair, from a financial point of view, to Thermo Electron.
This letter is provided to the Board of Directors of Thermo Electron and the
Special Committee of the Board of Directors of Thermo Electron in connection
with and for the purposes of its evaluation of the Offer and the Merger. This
opinion does not constitute a recommendation to any stockholder of the Company
as to whether such stockholder should tender its Shares in the Offer. This
opinion may not be disclosed, referred to, or communicated (in whole or in part)
to any third party for any purpose whatsoever except with our prior written
consent in each instance. We hereby consent to the filing of this opinion as an
exhibit to the Tender Offer Statement on Schedule TO to be filed by Thermo
Electron and the Purchaser and to the provision of this opinion to persons who
request it as contemplated by the Schedule TO.
Very truly yours,
J.P. MORGAN SECURITIES INC.
/s/ J.P. Morgan Securities Inc.
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