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EXHIBIT 5
[A.G. EDWARDS & SONS, INC. LETTERHEAD]
February 16, 1998
Board of Directors
Continental Circuits Corp.
3502 East Roeser Road
Phoenix, AZ 85040
Members of the Board:
You have requested our opinion as to the fairness, from a financial point
of view to the stockholders of the common stock, with $.01 par value (the
"Shares"), of Continental Circuits Corp. ("Continental"), of the Transaction
Consideration (as hereinafter defined) to be received by the stockholders of
Continental in the proposed tender offer for the stock of Continental and in the
merger (collectively, the "Transaction") of a direct wholly owned subsidiary of
Hadco Corporation ("Hadco") with and into Continental, pursuant to the Agreement
and Plan of Merger by and among Hadco and Continental dated February 16, 1998
(the "Definitive Agreement").
Pursuant to the Definitive Agreement, each of the Shares will be converted
into the right to receive cash in the amount of $23.90 per Share, paid in the
manner set forth in the Definitive Agreement (the "Transaction Consideration").
A.G. Edwards & Sons, Inc. ("Edwards"), as part of its investment banking
business, is regularly engaged in the valuation of businesses and their
securities in connection with mergers and acquisitions, negotiated
underwritings, competitive biddings, secondary distributions of listed and
unlisted securities, private placements and valuations for estate, corporate and
other purposes. We are familiar with Continental through prior underwriting and
financial advisory engagements as well as having acted as Continental's
financial advisor in connection with, and having participated in, certain of the
negotiations leading to the Definitive Agreement, and will receive a fee for our
services, a significant portion of which is contingent upon the consummation of
the Transaction. We are not aware of any present or contemplated relationship
between Edwards, Continental, Continental's directors and officers or its
stockholders, or between Edwards and Hadco, its directors and officers or its
stockholders which, in our opinion, would affect our ability to render a fair
and independent opinion in this matter.
In connection with this opinion, we have among other things:
(i) reviewed the Definitive Agreement dated as of February 16, 1998;
(ii) reviewed Continental's audited financial statements for the three
fiscal years ended July 31, 1997;
(iii) reviewed certain unaudited internal financial information of
Continental for the six month period ended January 31, 1998;
(iv) reviewed certain other financial analyses and forecasts for
Continental, either prepared by the management of Continental or
prepared by securities research analysts and confirmed as
reasonable and appropriate by the management of Continental
(collectively, the "Financial Forecasts");
(v) held discussions with members of the management of Continental
regarding the past and current business operations, financial
condition and future prospects for Continental, as well as other
matters;
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Continental Circuits Corp.
February 16, 1998
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[A.G. EDWARDS & SONS, INC. LOGO]
(vi) compared certain financial information for Continental with similar
information for certain other companies the securities of which are
publicly traded;
(vii) reviewed the financial terms of certain recent business
combinations in the printed circuit board, electronic
manufacturing services, and flexible circuit industries; and
(viii) performed such other studies and analyses as we considered
appropriate.
In preparing our opinion, we have assumed and relied upon the accuracy and
completeness of all financial and other information that was supplied or
otherwise made available to us by Continental. We have not been engaged to, and
therefore we have not verified, the accuracy or completeness of any such
information. We have assumed that the Financial Forecasts reflect the best
currently available estimates and judgments of the management of Continental as
to the expected future financial performance of Continental, and we have not
independently verified such information or assumptions nor do we express any
opinion with respect thereto. We have not made any independent valuation or
appraisal of the assets of the liabilities of Continental, nor have we been
furnished with any such appraisals.
In rendering our opinion, we have also assumed that the Transaction will be
consummated on the terms contained in the Definitive Agreement, without any
waiver of any material terms or conditions by the Company. We have not reviewed
any proxy or information statements or similar documents that may be prepared
for use in connection with the Transaction.
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. Our opinion as expressed herein, in any event, is limited to the
fairness, from a financial point of view, to the stockholders of the Transaction
Consideration to be received by the stockholders of Continental in the
Transaction and does not constitute a recommendation to any stockholders of
Continental as to whether such stockholders should tender their shares or as to
how to vote at a stockholders' meeting held in connection with the Transaction.
It is understood that this letter is for the benefit and use of the Board
of Directors of Continental and may not be summarized, excerpted from or
otherwise publicly referred to without our prior written consent except that
this opinion may be included in its entirety in Continental's
Solicitation/Recommendation Statement on Schedule 14D-9 or in a proxy statement
to the stockholders of Continental as contemplated by the Definitive Agreement.
Based upon and subject to the foregoing it is our opinion that, as of the
date hereof, the Transaction Consideration is fair, from a financial point of
view, to the stockholders of Continental.
Very truly yours,
A.G. EDWARDS & SONS, INC.
/S/ DOUGLAS E. REYNOLDS
DOUGLAS E. REYNOLDS
Managing Director