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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
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SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
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MCWHORTER TECHNOLOGIES, INC.
(Name of Subject Company)
MCWHORTER TECHNOLOGIES, INC.
(Name of Person Filing Statement)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(And Associated Preferred Share Purchase Rights)
(Title of Class of Securities)
582803102
(CUSIP Number of Class of Securities)
JEFFREY M. NODLAND
PRESIDENT AND CHIEF EXECUTIVE OFFICER
MCWHORTER TECHNOLOGIES, INC.
400 EAST COTTAGE PLACE
CARPENTERSVILLE, ILLINOIS 60110
(847) 428-2657
(Name, Address and Telephone Number of Person
Authorized to Receive Notice and Communications
on Behalf of the Person Filing Statement)
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With Copies To:
Warren B. Grayson R. Scott Falk, Esq.
Vice President, General Counsel & Secretary Kirkland & Ellis
McWhorter Technologies, Inc. 200 East Randolph Drive
400 East Cottage Place Chicago, Illinois 60601
Carpentersville, Illinois 60110 (312) 861-2000
(847) 428-2657
[X] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
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EASTMAN CHEMICAL COMPANY McWHORTER TECHNOLOGIES, INC.
Martha Lawson Louise Tonozzi-Fredrick
PHONE: (423) 229 6574 PHONE: (847) 551 3205
EMAIL: mglawson@eastman.com
Eastman to acquire McWhorter Technologies, Inc.
KINGSPORT, Tenn. and Carpentersville, Ill. -May 4, 2000- Eastman Chemical
Company (NYSE:EMN) and McWhorter Technologies, Inc. (NYSE:MWT) today announced
that their boards of directors have approved a definitive merger agreement under
which Eastman will acquire the shares of McWhorter for approximately $200
million cash. Including debt, the transaction is valued at approximately $355
million.
Under the terms of the agreement, a wholly owned subsidiary of Eastman will
commence a tender offer to purchase all outstanding shares of McWhorter common
stock for $19.70 per share in cash. McWhorter's board of directors has
recommended that McWhorter stockholders tender their shares. Following
completion of the tender offer, Eastman intends to consummate a cash merger to
acquire any shares not previously tendered. McWhorter has approximately 10
million shares outstanding.
The transaction, which will be accounted for as a purchase, is expected to
increase Eastman's presence in the coatings, adhesives and specialty polymers
product lines to approximately US$1.4 billion in annual revenues.
"This transaction represents another significant step in Eastman's strategy of
pursuing growth opportunities for our specialty businesses, which offer faster
growth and payback on investments, provide lower cyclicality and capital
intensity and allow us to capitalize on our strengths," said Earnest W.
Deavenport, Jr., chairman and CEO.
Allan Rothwell, president of the Chemicals Group at Eastman, said that he and
his team are eager to complete the transaction and begin integrating the
McWhorter and Eastman businesses. "We have identified a number of synergies that
give us confidence that this acquisition will meet our financial and business
goals," Rothwell stated. "Our current projections and assumptions show this
acquisition will be accretive on a cash basis immediately and should turn
accretive on an earnings basis during 2001."
He noted that previous transactions, including the acquisition of Lawter
International in June of 1999, enhance the synergies of the McWhorter
acquisition.
-More-
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Eastman to acquire McWhorter Technologies, Inc.
Page Two
Jeff Nodland, McWhorter CEO, also expressed support for the merger. "This is a
good transaction that brings two complementary businesses together," he said.
"McWhorter and Eastman have had a similar focus on selling products to the
coatings industry. We expect that our customers will benefit from this
combination as we enhance the capabilities of both organizations to develop
better products and services for the industry," he said. "Since our corporate
cultures are similar, I expect that we will have an efficient integration of our
businesses," Nodland concluded.
The tender offer is conditioned, among other things, upon a minimum tender of
50.1 percent of the outstanding McWhorter shares on a fully diluted basis and
receipt of regulatory approvals. Chase Securities Inc. acted as the financial
advisor to Eastman in connection with this transaction. Lehman Brothers served
as financial advisor to McWhorter.
McWhorter is a leading manufacturer of specialty resins and colorants used in
the production of consumer and industrial coatings and reinforced fiberglass
plastics. Sales revenue for fiscal year ended October 31, 1999 was $444 million
and EBITDA before non-recurring items was $47.5 million. The company was formed
in 1994 when it was spun off from The Valspar Corporation and merged with the
former resin products division of Cargill. McWhorter employment at 14 global
sites is about 1,100. Its headquarters is located in Carpentersville, Ill.
Headquartered in Kingsport, Tenn., Eastman manufactures and markets plastics,
chemicals and fibers. The company employs 15,000 people in more than 30
countries and had 1999 sales of US$4.6 billion.
Additional information is available at http://www.eastman.com.
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FORWARD-LOOKING STATEMENTS
This release contains forward-looking statements within the definition of the
Securities Act of 1933 and the Securities Exchange Act of 1934. Although the
companies believe that these statements are based on reasonable assumptions,
they can give no assurance that their goals will be achieved. The words
"estimates," "believes," "expects," "anticipates," "plans," and "intends,"
variations of such words, and similar expressions are intended to identify
forward-looking statements that involve risk and uncertainty. These statements
are necessarily based upon various assumptions involving judgments with respect
to the future including, among others, the ability to achieve synergies and
revenue enhancements; national, international, regional and local economic,
competitive and regulatory conditions and developments; technological
developments; and other uncertainties, all of which are difficult to predict and
many of which are beyond the control of the companies. Accordingly, while the
companies believe that the assumptions are reasonable, there can be no assurance
that they will approximate actual experience, or that the expectations will be
realized. Other risk factors are detailed from time to time in the two
companies' SEC reports.
Tender Offer Documents
At the time the tender offer is commenced, Eastman will file a tender offer
statement (including an offer to purchase, a related letter of transmittal and
other offer documents) with the Securities and Exchange Commission (SEC), and
McWhorter will file a solicitation/recommendation statement with the SEC.
Investors and security holders are strongly advised to read both the tender
offer statement and the solicitation/recommendation statement regarding the
tender offer, when they become available, because they will contain important
information. The offer to purchase, the related letter of transmittal and
certain other offer documents, as well as the solicitation/recommendation
statement, will be made available to all stockholders of McWhorter at no expense
to them. In addition, investors and security holders may obtain a free copy of
these statements (when available) and other documents filed by Eastman and
McWhorter at the SEC's website at www.sec.gov.