UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE
13E-3
RULE 13E-3 TRANSACTION STATEMENT UNDER SECTION 13(e)
OF THE SECURITIES EXCHANGE ACT OF 1934
Cybex International, Inc.
(Name of the Issuer)
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Cybex International, Inc.
UM Holdings, Ltd.
CYB Merger Corp.
John Aglialoro
Joan Carter
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(Names of Persons Filing Statement)
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Common stock, par value $0.10 per share
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(Title of Class of Securities)
(CUSIP Number of Class of Securities)
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Cybex International, Inc.
10 Trotter Drive
Medway, MA 02053
(508) 533-4300
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Mr. John Aglialoro
UM Holdings, Ltd.
56 Haddon Avenue
Haddonfield, NJ 08033
(856) 354-2200
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(Name, Address, and Telephone Numbers of Person Authorized to Receive Notices and Communications on
Behalf of the Persons Filing Statement)
With
copies to
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Lowenstein Sandler P.C.
65 Livingston Avenue
Roseland, NJ 07068
Attn: Peter H. Ehrenberg, Esquire
(973) 597-2500
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Archer & Greiner, P.C.
One Centennial Square
33 East Euclid Avenue
Haddonfield, NJ 08033
Attn: James Carll, Esquire
(856) 795-2121
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This statement is filed in connection with (check the appropriate box):
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a.
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x
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The filing of solicitation materials or an information statement subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the Securities Exchange Act of
1934.
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b.
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¨
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The filing of a registration statement under the Securities Act of 1933.
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c.
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A tender offer.
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d.
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¨
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None of the above.
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Check the following box if the soliciting materials or information statement referred to in checking box (a) are
preliminary copies:
x
Check the following box if the filing is a final amendment
reporting the results of the transaction:
¨
Calculation of Filing Fee
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Transaction valuation*
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Amount of filing
fee*
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$22,947,001
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$3,130
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*
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The filing fee of $3,130 was determined by multiplying .00013640 by the aggregate merger consideration of $22,947,001. The aggregate merger consideration was calculated
based on the sum of (i) 8,699,381 outstanding shares of Common Stock as of November 5, 2012 to be acquired pursuant to the merger multiplied by the merger consideration of $2.55 per share and (ii) 510,125 shares of Common Stock underlying
outstanding options and warrants as of November 5, 2012 to be cancelled pursuant to the merger multiplied by the merger consideration of $2.55 per share, minus the exercise price of such options or warrants.
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x
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Check the box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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Amount
Previously Paid: $3,130
Form or Registration No.: Schedule 14A—Preliminary Proxy Statement
Filing Party: Cybex International, Inc.
Date Filed: November 6, 2012
Introduction
This Rule 13E-3 Transaction Statement, together with the exhibits hereto (“Transaction Statement”) is being filed with the Securities and Exchange Commission (the “SEC”) pursuant to
Section 13(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), by (i) Cybex International, Inc. (the “Company”), a New York corporation and the issuer of the shares of Common Stock, par value
$0.10 per share (the “Common Stock”) that is subject to the Rule 13e-3 transaction; (ii) UM Holdings, Ltd. (“Parent”), a New Jersey corporation; (iii) CYB Merger Corp., a New York corporation and wholly owned subsidiary
of Parent (“Merger Sub”), (iv) John Aglialoro (“Mr. Aglialoro”), and (v) Joan Carter (“Ms. Carter”).
This Transaction Statement relates to the Agreement and Plan of Merger, dated as of October 17, 2012 (as it may be amended from time to time, the “Merger Agreement”) by and among the
Company, UM Holdings, Ltd., and Merger Sub. If the conditions to the closing of the merger are either satisfied or waived, Merger Sub will be merged with and into the Company (the “Merger”), the separate corporate existence of Merger Sub
will cease and the Company will continue its corporate existence under New York law as the surviving corporation in the Merger. Upon completion of the Merger, the Common Stock, other than shares owned by Parent, Mr. Aglialoro, and
Ms. Carter, will be converted into the right to receive $2.55 per share in cash, without interest and less any required withholding taxes. Following completion of the Merger, the Common Stock will no longer be publicly traded, and holders
(other than Parent, its subsidiaries and its stockholders) of the Common Stock that has been converted will cease to have any ownership interest in the Company.
Acting upon the recommendation of a special committee of the Company’s board of directors consisting solely of disinterested directors, the Company’s board of directors (other than
Mr. Aglialoro, Ms. Carter and Arthur W. Hicks, Jr., an officer of the Company and Parent, each of whom abstained from voting on the Merger ) approved the Merger Agreement and the transactions contemplated thereby, including the Merger,
declared the same to be advisable and in the best interests of the Company and its public stockholders and recommended adoption of the Merger Agreement by the stockholders of the Company. The Merger remains subject to the satisfaction or waiver of
the conditions set forth in the Merger Agreement, including obtaining approval of holders of at least two/thirds of the outstanding shares of Common Stock of the Company and of a majority of the shares of Common Stock held by the Company’s
public stockholders. For purposes of this Transaction Statement, the term “public stockholders” shall mean all of the stockholders of the Company other than Parent, Mr. Aglialoro and Ms. Carter.
Concurrently with the filing of this Transaction Statement, the Company is filing with the SEC a preliminary proxy statement (the
“Proxy Statement”) under Regulation 14A of the Exchange Act, pursuant to which the Company’s board of directors is soliciting proxies from stockholders of the Company in connection with the Merger. The Proxy Statement is attached
hereto as Exhibit (a)(1). A copy of the Merger Agreement is attached to the Proxy Statement as Annex A and is incorporated herein by reference.
Pursuant to General Instruction F to Schedule 13E-3, the information in the Proxy Statement, including all annexes, exhibits, and appendices thereto, is expressly incorporated by reference herein in its
entirety, and responses to each item herein are qualified in their entirety by the information contained in the Proxy Statement. The cross-references below are being supplied pursuant to General Instruction G to Schedule 13E-3 and show the location
in the Proxy Statement of the information required to be included in response to the items of Schedule 13E-3. As of the date hereof, the Proxy Statement is in preliminary form and is subject to completion or amendment. Capitalized terms used but not
defined in this Schedule 13E-3 shall have the meanings given to them in the Proxy Statement.
The information concerning the
Company contained in this Schedule 13E-3 and the Proxy Statement was supplied by the Company and none of the other Filing Persons take responsibility for the accuracy of such information. Similarly, all information concerning each other Filing
Person contained in this Schedule 13E-3 and the Proxy Statement has been supplied by such Filing Person. No Filing Person, including the Company, is responsible for the accuracy of any information supplied by any other Filing Person.
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Item 1.
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Summary Term Sheet
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The
information set forth in the Proxy Statement under the following caption is incorporated herein by reference:
“Summary
Term Sheet”
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Item 2.
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Subject Company Information
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(a)
Name and address
. The Company’s name and the address and telephone number of its principal executive offices are as follows:
Cybex International, Inc.
10 Trotter Drive
Medway, MA 02053
(508) 533-4300
(b)
Securities
. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Questions and Answers about the Special Meeting and the Merger”
“The Special Meeting—Record Date, Notice and Quorum”
“The Special Meeting—Required Vote”
“Security Ownership of Certain Beneficial Owners and Management”
(c)
Trading market and price
. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:
“Market Price of Cybex Common Stock”
(d)
Dividends
. The
information set forth in the Proxy Statement under the following caption is incorporated herein by reference:
“Market
Price of Cybex Common Stock”
(e)
Prior public offerings
. Not applicable.
(f)
Prior stock purchases
. The information set forth in the Proxy Statement under the following captions is incorporated herein by
reference:
“Security Ownership of Certain Beneficial Owners and Management”
“Market Price of Cybex Common Stock”
“Special Factors—Opinion of Duff and Phelps”
Mr. Curtis,
appointed as a director in May 2012, has received as part of his compensation from the Company stock-based awards that represent the right to receive 16,667 shares of Common Stock subject to a 3-year vesting period with 1/3 vesting in May 2013, 1/3
in May 2014, and 1/3 in May 2015.
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Item 3.
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Identity and Background of Filing Person
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(a)—(c)
Name and address; Business and background of entities; Business and background of natural persons.
The information set forth in the Proxy Statement under the following captions is
incorporated herein by reference:
“Summary Term Sheet”
“Summary Term Sheet – The Parties to the Merger”
“The Parties to the Merger”
“Security Ownership of Certain
Beneficial Owners and Management”
Set forth below are the names, the present principal occupations or employment,
telephone number and the name, principal business, and address of any corporation or other organization in which such occupation or employment is conducted and the five–year employment history of each of the Filing Persons (other than the
Company). During the past five years, none of the persons or entities described have been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) party to any judicial or administrative
proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities
laws or a finding of any violation of federal or state securities laws. Each person identified is a United States citizen. Mr. Aglialoro is Chairman and Chief Executive Officer of the Company, Chairman of Parent, and President of Merger Sub.
Ms. Carter is a director of the Company, Parent and Merger Sub and is President of Parent and Vice President of Merger Sub.
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Name
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Business Address
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Employment History
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UM Holdings, Ltd., a New Jersey corporation
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56 Haddon Avenue
Haddonfield,
NJ 08033
(856) 354-2200
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N/A
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CYB Merger Corp., a New York corporation
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56 Haddon Avenue
Haddonfield,
NJ 08033
(856) 354-2200
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N/A
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John Aglialoro, a natural person
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UM Holdings, Ltd.
56 Haddon
Avenue
Haddonfield, NJ 08033
(856)
354-2200
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The Company’s Chairman of the Board since 1997 and CEO since 2000. The Chairman of Parent since 1982. President and a director of Merger Sub since 2012.
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Joan Carter, a natural person
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UM Holdings, Ltd.
56 Haddon
Avenue
Haddonfield, NJ 08033
(856)
354-2200
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Director of the Company since 1997. The President of Parent since 1986. Vice President and a director of Merger Sub since 2012.
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(d)
Tender Offer.
Not applicable.
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Item 4.
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Terms of the Transaction
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(a)
Material Terms
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(1)
Tender Offers
. Not applicable.
(2)
Mergers or Similar
Transactions
. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Summary Term Sheet”
“Questions and Answers about the Special
Meeting and the Merger”
“Proposal No. 1: The Merger Agreement—General; The Merger”
“Proposal No. 1: The Merger Agreement—Consideration to be Received Pursuant to the Merger; Treatment of Equity
Awards”
“Proposal No. 1: The Merger Agreement—Payment for Cybex Common Stock in the Merger”
“Special Factors—Background of the Merger”
“Special Factors—Reasons for the Merger; Fairness of the Merger; Recommendation of the Special Committee and our Board of
Directors”
“Special Factors— Purpose and Reasons by the UM Holdings Group for the Merger”
“Special Factors—Plans for the Company after the Merger”
“The Special Meeting—Required Vote”
“Proposal No. 1: The Merger Agreement—Conditions to Completion of the Merger”
“Special Factors—Certain Effects of the Merger”
“Special
Factors—Interests of Our Directors and Executive Officers in the Merger”
“Special Factors—Material United
States Federal Income Tax Consequences”
(b)
Purchases
. Not Applicable.
(c)
Different terms
. The information set forth in the Proxy Statement under the following captions is incorporated herein by
reference:
“Special Factors—Certain Effects of the Merger”
“Special Factors—Interests of Our Directors and Executive Officers in the Merger”
“Security Ownership of Certain Beneficial Owners and Management”
(d)
Appraisal rights
. The information set forth in the Proxy Statement under the following captions is incorporated herein by
reference:
“Appraisal Rights”
“Summary Term Sheet – No Appraisal Rights”
“Special Factors
– Absence of Right of Appraisal”
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(e)
Provisions for unaffiliated security holders
. None.
(f)
Eligibility for listing or trading
. Not applicable.
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Item 5.
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Past Contacts, Transactions, Negotiations and Agreements
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(a) (1)—(2)
Transactions
. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Special Factors—Background of the Merger”
“Special Factors—Certain Effects of the Merger”
“Special
Factors—Interests of Our Directors and Executive Officers in the Merger”
(b) – (c)
Significant
corporate events; Negotiations or contacts
. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Special Factors—Background of the Merger”
“Special
Factors—Reasons for the Merger; Fairness of the Merger; Recommendation of the Special Committee and our Board of Directors”
“Special Factors— Purpose and Reasons by UM Holdings Group for the Merger”
“Special Factors— Position of the UM Holdings Group as to the Merger”
“Special Factors—Plans for the Company after the Merger”
“Special Factors—Interests of Our Directors and Executive Officers in the Merger”
“Proposal No. 1: The Merger Agreement—General; The Merger”
“Annex A: Agreement and Plan of Merger”
(d)
Conflicts of interest
. Not applicable.
(e)
Agreements involving
the subject company’s securities
. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Special Factors—Certain Effects of the Merger”
“Special
Factors—Interests of Our Directors and Executive Officers in the Merger”
“The Special Meeting—Required
Vote”
“Proposal No. 1: The Merger Agreement—General; The Merger”
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Item 6.
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Purposes of the Transaction and Plans or Proposals
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(a)
Purposes
. Not applicable.
(b)
Use of securities acquired
. The
information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Special
Factors—Certain Effects of the Merger”
“Proposal No. 1: The Merger Agreement—Payment for Cybex
Common Stock in the Merger”
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“Consideration to be Received Pursuant to the Merger; Treatment of Equity Awards”
(c) (1)-(8)
Plan
s. The information set forth in the Proxy Statement under the following captions is incorporated
herein by reference:
“Questions and Answers about the Special Meeting and the Merger”
“Special Factors—Background of the Merger”
“Special Factors—Reasons for the Merger; Fairness of the Merger; Recommendation of the Special Committee and our Board of Directors”
“Special Factors— Purpose and Reasons by the UM Holdings Group for the Merger”
“Special Factors—Plans for the Company after the Merger”
“Special Factors—Deregistration of Cybex Common Stock”
“Special Factors—Interests of Our Directors and Executive Officers in the Merger”
“Proposal No. 1: The Merger Agreement—General; The Merger”
“Proposal No. 1: The Merger Agreement—Consideration to be Received Pursuant to the Merger; Treatment of Equity
Awards”
“Proposal No. 1: The Merger Agreement—Payment for Cybex Common Stock in the Merger”
“Annex A: Agreement and Plan of Merger”
(d)
Subject Company Negotiations
. Not applicable.
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Item 7.
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Purposes, Alternatives, Reasons and Effects
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(a)
Purposes
. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Special Factors—Background of the Merger”
“Special Factors—Reasons for the Merger; Fairness of the Merger; Recommendation of the Special Committee and our Board of Directors”
“Special Factors— Purpose and Reasons of by the UM Holdings Group for the Merger”
“Special Factors—Plans for the Company after the Merger”
“Special Factors —Deregistration of Cybex Common Stock”
“Summary Term Sheet—Deregistration of Cybex Common Stock”
(b)
Alternatives
. The information set forth in the Proxy Statement under the following captions is incorporated herein by
reference:
“Special Factors—Background of the Merger”
“Special Factors—Reasons for the Merger; Fairness of the Merger; Recommendation of the Special Committee and our Board of
Directors”
“Special Factors—Plans for the Company after the Merger”
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(c)
Reasons
. The information set forth in the Proxy Statement under the following
captions is incorporated herein by reference:
“Special Factors—Background of the Merger”
“Special Factors—Reasons for the Merger; Fairness of the Merger; Recommendation of the Special Committee and our Board of
Directors”
“Special Factors—Purpose and Reasons by the UM Holdings Group for the Merger”
“Special Factors— Position of the UM Holdings Group as to the Merger”
“Special Factors—Plans for the Company after the Merger”
“Special Factors—Certain Effects of the Merger”
(d)
Effects.
The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Questions and Answers about the Special Meeting and the Merger”
“Special Factors—Background of the Merger”
“Special Factors—Reasons for the Merger; Fairness of the Merger; Recommendation of the Special Committee and our Board of Directors”
“Special Factors—Purpose and Reasons by the UM Holdings Group for the Merger”
“Special Factors—Plans for the Company after the Merger”
“Special Factors—Certain Effects of the Merger”
“Special Factors—Interests of Our Directors and Executive Officers in the Merger”
“Special Factors—Material United States Federal Income Tax Consequences”
“Annex A: Agreement and Plan of Merger”
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Item 8.
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Fairness of the Transaction
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(a)—(b)
Fairness; Factors considered in determining fairness
. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Special Factors—Background of the Merger”
“Special Factors—Reasons for the Merger; Fairness of the Merger; Recommendation of the Special Committee and our Board of Directors”
“Special Factors—Opinion of Duff & Phelps”
“Special Factors— Purpose and Reasons by the UM Holdings Group for the Merger”
“Special Factors—Position of the UM Holdings Group as to the Merger”
“Special Factors—Plans for the Company after the Merger”
“Special Factors—Interests of Our Directors and Executive Officers in the Merger”
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“Annex B: Opinion of Duff & Phelps”
The presentation, dated October 16, 2012, of Duff & Phelps to the Special Committee of the Board of Directors of the
Company is filed as Exhibit (c) (2) and is incorporated herein by reference.
(c)
Approval of security
holders
. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Summary Term Sheet”
“Questions and Answers about the Special Meeting and the Merger”
“The Special Meeting—Record Date; Notice and Quorum”
“The Special Meeting—Required Vote”
“Proposal No. 1: The Merger Agreement—Conditions to Completion of the Merger”
(d)
Unaffiliated representative
. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Special Factors—Background of the Merger”
“Special Factors—Reasons for the Merger; Fairness of the Merger; Recommendation of the Special Committee and our Board of Directors”
(e)
Approval of directors
. The information set forth in the Proxy Statement under the following captions is incorporated herein by
reference:
“Special Factors—Background of the Merger”
“Special Factors—Reasons for the Merger; Fairness of the Merger; Recommendation of the Special Committee and our Board of
Directors”
“Questions and Answers about the Special Meeting and the Merger”
(f)
Other offers
. Not applicable
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Item 9.
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Reports, Opinions, Appraisals and Negotiations
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(a)—(c)
Report, opinion or appraisal; Preparer and summary of the report, opinion or appraisal; Availability of documents
. The information set forth in the Proxy Statement under the following
captions is incorporated herein by reference:
“Special Factors—Background of the Merger”
“Special Factors—Reasons for the Merger; Fairness of the Merger; Recommendation of the Special Committee and our Board of
Directors”
“Special Factors—Opinion of Duff & Phelps”
“Where You Can Find More Information”
“Annex B: Opinion of Duff & Phelps”
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The presentation, dated October 16, 2012, of Duff & Phelps to the Special
Committee of the Board of Directors of the Company is filed as Exhibit (c) (2) and is incorporated herein by reference.
The reports, opinions or appraisals referenced in this Item 9 will be made available for inspection and copying at the principal executive offices of the Company during its regular business hours by
any interested equity holder of the Company.
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Item 10.
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Source and Amounts of Funds or Other Consideration
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(a)—(b), (d)
Source of funds; Conditions; Borrowed funds
. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Summary Term Sheet—Important Considerations-Financing”
“Special Factors—Financing”
(c)
Expenses.
The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Summary Term Sheet—Fees and Expenses”
“Special Factors—Fees and Expenses”
“Proposal No. 1:
The Merger Agreement—Fees and Expenses”
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Item 11.
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Interest in Securities of the Subject Company
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(a)
Securities ownership
. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:
“Security Ownership of Certain Beneficial Owners and Management”
(b)
Securities transactions
. Not applicable.
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Item 12.
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The Solicitation or Recommendation
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(d)
Intent to tender or vote in a going-private transaction
. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Questions and Answers about the Special Meeting and the Merger”
“Special Factors—Reasons for the Merger; Fairness of the Merger; Recommendation of the Special Committee and our Board of
Directors”
“Special Factors— Purpose and Reasons by the UM Holdings Group for the Merger”
“Special Factors—Plans for the Company after the Merger”
“The Special Meeting – Our Board’s Recommendation”
“The Special Meeting—Required Vote”
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(e)
Recommendation of others
. The information set forth in the Proxy Statement under
the following captions is incorporated herein by reference:
“Questions and Answers about the Special Meeting and the
Merger”
“Special Factors—Reasons for the Merger; Fairness of the Merger; Recommendation of the Special
Committee and our Board of Directors”
“Special Factors— Purpose and Reasons by the UM Holdings Group for the
Merger”
“Special Factors—Plans for the Company after the Merger”
“The Special Meeting – Our Board’s Recommendation”
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Item 13.
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Financial Statements
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(a)
Financial information
. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“Summarized Financial Information”
“Where You Can Find More
Information”
The audited financial statements set forth in Item 15 of the Company’s Annual Report on Form 10-K
for the Fiscal Year Ended December 31, 2011 and the unaudited financial statements set forth in Item 1 of the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 29, 2012 are incorporated herein by
reference.
The ratio of earnings to fixed charges for each of the two years ending December 31, 2011 and for the
quarterly period ended September 29, 2012 are set forth in the Proxy Statement under the caption “Summarized Financial Information” and is incorporated herein by reference. The book value per share as of September 29, 2012 is set
forth in the Proxy Statement under the caption “Summarized Financial Information” and is incorporated herein by reference.
(b)
Pro forma information
. Not applicable.
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Item 14.
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Persons/Assets, Retained, Employed, Compensated or Used
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(a)—(b)
Solicitations or recommendations; Employees and corporate assets
. The Company intends to utilize an outside proxy solicitation firm. However, no proxy solicitation firm has been
identified as of the date hereof. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“The Special Meeting—Persons Making the Solicitation”
“Questions and Answers about the Special Meeting and the Merger”
“Special Factors—Background of the Merger”
“Special Factors—Fees and Expenses”
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Item 15.
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Additional Information
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(b) No executive officer of any entity that is a filing person under this Schedule 13E-3 will receive any compensation, whether present,
deferred or contingent, that is based upon or otherwise relates to this Schedule 13E-3 transaction.
(c)
Other material
information
. The information set forth in the Proxy Statement, including all annexes thereto, is incorporated herein by reference.
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(a) (1)
Not applicable.
(a) (2)(i) Preliminary Proxy Statement of Cybex International, Inc. (incorporated by reference to the
Schedule 14A filed concurrently with the Securities and Exchange Commission) (the “Proxy Statement”).
(a)
(2)(ii) Preliminary Form of Proxy Card (incorporated herein by reference to Annex C of the Proxy Statement).
(a)
(2)(iii) Letter to the Company Stockholders (incorporated herein by reference to the Proxy Statement).
(a)
(2)(iv) Notice of Special Meeting of Stockholders (incorporated herein by reference to the Proxy Statement).
(a)
(3) Press Release dated October 17, 2012 (filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on October 18, 2012 and incorporated herein by reference).
(c) (1) Opinion, dated October 17, 2012, of Duff & Phelps to the Special Committee of the Board of Directors of the
Company (incorporated herein by reference to Annex B of the Proxy Statement).
(c) (2) Presentation, dated
October 16, 2012, of Duff & Phelps to the Special Committee of the Board of Directors of the Company.
(d)
(1) Agreement and Plan of Merger, dated as of October 17, 2012, between the Company, Parent and Merger Sub (incorporated herein by reference to Annex A of the Proxy Statement).
(f) Holders of Cybex Common Stock do not have appraisal rights in connection with the merger.
(g) None.
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SIGNATURE
After due inquiry and to the best of each of the undersigned’s knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.
Dated as of November 6, 2012
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CYBEX INTERNATIONAL, INC.
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By:
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/s/ John Aglialoro
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Name:
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John Aglialoro
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Title:
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Chairman and CEO
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UM HOLDINGS, LTD.
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By:
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/s/ John Aglialoro
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Name:
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John Aglialoro
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Title:
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Chairman and CEO
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CYB MERGER CORP.
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By:
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/s/ John Aglialoro
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Name:
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John Aglialoro
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Title:
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President
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/s/ John Aglialoro
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JOHN AGLIALORO
|
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/s/ Joan Carter
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JOAN CARTER
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13
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Fairness Analysis
Presentation to the Special Committee of the Board of Directors of
Cybex International, Inc.
October 16, 2012
Confidential
The information contained herein is of a confidential nature and is intended for the
exclusive use of the persons or firm to whom it is furnished by us.
Reproduction, publication, or dissemination of portions hereof may not be made without prior
approval of Duff & Phelps, LLC.
Exhibit (c)(2)
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2
Duff & Phelps Disclaimer
The
following
pages
contain
material
that
is
being
provided
by
Duff
&
Phelps,
LLC
(“Duff
&
Phelps”)
to
the
Special
Committee
(the
“Special
Committee”)
of
the
Board
of
Directors
(the
“Board
of
Directors”)
of
Cybex
International,
Inc.
(the
“Company”
or
“Cybex”)
in
connection
with
the
contemplated
transaction
described
herein
(the
“Proposed
Transaction”).
The accompanying material was compiled on a confidential basis for the sole use of
the Special Committee and is not to be distributed to any other
party or
publicly disclosed without the written consent of Duff & Phelps.
The
information utilized in preparing this presentation was obtained from the Company and public sources. Any estimates and projections
contained
herein
have
been
prepared
by
the
senior
management
of
the
Company
(“Management”)
and
involve
numerous
and
significant subjective
determinations, which may or may not prove to be correct. No representation
or warranty, expressed or implied, is made as to the accuracy or
completeness of such information and nothing contained herein is, or shall be
relied upon as, a representation, whether as to the past or the future.
Duff & Phelps did not attempt to independently verify such information.
These materials are not intended to represent an opinion but rather to serve as
discussion materials for the Special Committee to review and as a
basis upon
which Duff & Phelps may render an opinion.
An opinion i) would not
address the merits of the underlying business decision of the Special Committee or the Board of Directors to enter into the
Proposed Transaction; ii) would not constitute a recommendation to the Special
Committee, the Board of Directors or any committee thereof, the
shareholders
of the Company, respectively, or any other person as to how such person should vote or as to any other specific action that should
be
taken
in
connection
with
the
Proposed
Transaction;
and
iii)
would
not
create
any
fiduciary
duty
on
Duff
&
Phelps’
part
to
any
party.
Because this material was prepared for use in the context of an oral presentation
to the Special Committee, which is familiar with the business and
affairs of
the Company, Duff & Phelps does not take any responsibility for the accuracy or completeness of any of the material if used by persons
other than the Special Committee.
No
selected
company
or
selected
transaction
used
in
our
analysis
is
directly
comparable
to
the
Company
or
the
Proposed
Transaction.
Confidential
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3
Table of Contents
1.
Executive Summary
2.
Trading Analysis
3.
Valuation Analysis
Appendix
1.
Selected Public Company Analysis
2.
Premiums Paid Analysis
3.
Assumptions, Qualifications, and Limiting Conditions
Confidential
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5
Executive Summary
Purpose of Engagement
Cybex
has
engaged
Duff
&
Phelps
on
behalf
of,
and
to
serve
as
an
independent
financial
advisor
to,
the
Special
Committee
of
the
Board
of
Directors
of
the
Company
(solely
in
its
capacity
as
such)
and
to
provide
an
opinion
(the
“Opinion”)
as
to
the
fairness,
from
a
financial
point
of
view,
to
the
Public
Stockholders
(as
defined
in
the
Merger
Agreement
to
which
reference
is
made
herein)
of
the
Common
Stock,
par
value
$0.10
per
share
(the
“Common
Stock”),
of
the
Company
of
the
consideration
to
be
received
by
such
Public
Shareholders
in
the
Proposed
Transaction
described
below
(without
giving
effect
to
any
impact
of
the
Proposed
Transaction
on
any
particular
shareholder
other
than
in
its
capacity
as
a
shareholder).
Proposed Transaction
It
is
Duff
&
Phelps’
understanding
that
the
Proposed
Transaction
involves
the
merger
of
a
newly
formed
wholly-owned
subsidiary
of
UM
Holdings,
Ltd.,
a
New
Jersey
corporation
(“Parent”),
with
and
into
the
Company,
with
the
Company
as
the
surviving
corporation,
pursuant
to
which
each
outstanding share of the Common Stock held by the Public Stockholders will be
converted into the right to receive $2.55 per share in cash (the
“Per
Share
Merger
Consideration”).
The
terms
and
conditions
of
the
Proposed
Transaction
are
more
fully
set
forth
in
the
Merger
Agreement
(as
defined herein).
Confidential
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6
Executive Summary
Transaction Overview
The enterprise value of the Company implied by the terms of the Proposed
Transaction based on a preliminary, non-binding, oral offer of $2.55 per
share are presented in the table below
Confidential
Proposed Transaction Summary
($ in thousands, except per share values)
Offer Price per Share
$2.55
Common Shares Issued and Outstanding
17,143,050
Common Equity Value
$43,715
Plus:
Debt
1
21,286
Plus:
Other
Liabilities
2
1,780
Plus: Intrinsic Value of Options and Warrants
602
Plus: Working Capital Deficiency
4,595
Less: Excess Cash
1,3
(2,687)
Less: Present Value of NOL tax Asset
(3,398)
Less:
Non-Operating
Assets
4
(394)
Implied Enterprise Value
$65,498
Implied Multiples
LTM Sales
5
$144,614
0.45x
LTM EBITDA
5,6
$11,629
5.6x
2013 EBITDA
6
$13,333
4.9x
3-yr Average EBITDA
6
$8,697
7.5x
LTM EBITDA
5
$10,961
6.0x
2013 EBITDA
$12,665
5.2x
8/12 Book Value
$19,084
3.4x
LTM EPS
5,6
$0.14
18.7x
2012 EPS
6
$0.19
13.5x
3-yr
Average
EPS
6
$0.06
40.4x
Premium
Over
Current
Stock
Price
7
$1.34
90.3%
1
Per August 31, 2012 balance sheet including $114k of accrued interest
2
Includes
an
interest
rate
swap
liability
of
$1.0M,
property
TIF
liability
of
$0.4M
and $0.4M present value of remaining production liability settlement payments
3
Cash and equivalents of $4.0M less customer deposits of $1.3M
4
Appraised value of vacant land per appraisal dated December 9, 2011
less transaction costs of $50 thousand
5
Latest twelve months as of June 30, 2012
6
Excludes public company costs
7
Price as of October 8, 2012
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7
Executive Summary
Current Equity Capitalization Summary
The table below represents the ownership structure of the Company as of October 8,
2012
UM Holdings Ltd. together with its Co-Founders and Chief Financial
Officer are the largest group of shareholders of the Company and together
own 49.34% of the common stock of the Company
Capitalization Table
Common
% of
Top 10 Institutional Holders
Share Held
Outstanding
Grace & White, Inc.
1,481,232
8.64%
Symphonia SGR
556,732
3.25%
Dimensional Fund Advisors LP
501,592
2.93%
U.S. Bankcorp Asset Management, Inc.
259,626
1.51%
Renaissance Technologies Corp.
220,200
1.28%
Bridgeway Capital Management
75,100
0.44%
Citizens Investment Management Services
75,000
0.44%
Veritable LP
65,000
0.38%
Spark Group
70,800
0.41%
The Glenmede Trust Company, N.A.
44,346
0.26%
Top 10 Institutional Holders
3,349,628
19.54%
Other Public Investors
5,159,126
30.09%
Total Public Float
8,508,754
49.63%
Common
% of
Insider Holdings
Share Held
Outstanding
UM Holdings Ltd.
6,931,328
40.43%
Joan Carter
757,192
4.42%
John Aglialoro
755,149
4.40%
Jerry Lee
45,346
0.26%
James Carll
44,346
0.26%
Harvey Morgan
23,485
0.14%
Robert Smyth
23,256
0.14%
Art Curtis
16,667
0.10%
Arthur Hicks
15,346
0.09%
John McCarthy
10,518
0.06%
Edward Kurzontkowski
5,815
0.03%
Raymond Giannelli
5,698
0.03%
Edward Pryts
150
0.00%
Insider Holdings
8,634,296
50.37%
Total Common Shares Issued and Outstanding
17,143,050
100.00%
3 Month Average Daily Volume
16,180
0.09%
Source: CapitalIQ
Confidential
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8
Executive Summary
Scope of Analysis
Reviewed the following documents:
–
The Company’s annual reports and audited financial statements on Form 10-K
filed with the Securities and Exchange Commission (“SEC”) for
the
years ended 2007 through 2011 and the Company’s unaudited interim financial statements for the six months ended June 30, 2012
included in the Company’s Form 10-Q filed with the SEC;
–
Unaudited financial information for the Company for the eight months ended on or
around August 31, 2012;
–
Other internal documents relating to the history, current operations, and probable
future outlook of the Company, including financial projections,
provided to
us by Management;
–
A letter dated October 5, 2012 from Management which made certain representations
as to historical financial statements, financial projections
and
the
underlying
assumptions,
and
a
pro
forma
schedule
of
assets
and
liabilities
(including
identified
contingent
liabilities)
for
the
Company
(the “Management Representation Letter”); and
–
Documents
related
to
the
Proposed
Transaction,
including
the
draft
dated
October
11,
2012
of
the
Agreement
and
Plan
of
Merger
by
and
among
the
Company,
Cyb
Merger
Corp.,
a
New
York
corporation
and
Parent
(the
“Merger
Agreement”);
Discussed the information referred to above and the background and other elements
of the Proposed Transaction with Management;
Reviewed the historical trading
price and trading volume of the Company’s common stock, and the publicly traded securities of certain other
companies that Duff & Phelps deemed relevant;
Performed certain valuation and comparative analyses using generally accepted
valuation and analytical techniques including a discounted cash
flow
analysis, an analysis of selected public companies that Duff & Phelps deemed relevant, and an analysis of selected transactions that Duff &
Phelps deemed relevant; and
Conducted such other analyses and considered such other factors as Duff &
Phelps deemed appropriate.
Confidential
In connection with this report, Duff & Phelps has made such reviews, analyses
and inquiries as it has deemed necessary and appropriate under the
circumstances. Duff & Phelps also took into account its assessment of
general economic, market and financial conditions, as well as its experience
in
securities
and
business
valuation,
in
general,
and
with
respect
to
similar
transactions,
in
particular.
Duff
&
Phelps’
procedures,
investigations,
and
financial analysis with respect to the preparation of this report included, but
were not limited to, the items summarized below:
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9
Executive Summary
Conclusion
Duff & Phelps estimated the enterprise value of the Company using a discounted
cash flow analysis and selected public company / M&A
transaction
analysis
Duff
&
Phelps
added
the
Company’s
non-operating
assets
and
subtracted
net
debt,
other
liabilities,
and
the
fair
market
value
of
management
options from enterprise value to estimate the value of the Company’s common
stock
We then compared our concluded value range to the cash merger
consideration of $2.55 per share
Valuation Summary
Confidential
$2.05
$2.30
$2.55
$2.80
$3.05
$3.30
Concluded Valuation Range
Selected Public Company / M&A
Transaction Analysis
Discounted Cash Flow Analysis
$2.40
$3.16
$2.44
$2.78
$2.61
$2.31
$2.21
$2.94
$2.71
$2.55/share Proposed Transaction Price
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11
Trading Analysis
Common Stock Overview
Cybex - Common Stock Overview
Stock Price as of October 8, 2012
$1.34
52-Week Average Closing Price
$1.43
52-Week High Closing Price (4/19/2012)
$2.97
52-Week Low Closing Price (12/28/2011)
$0.40
104-Week Average Closing Price
$1.15
104-Week High Closing Price (4/19/2012)
$2.97
104-Week Low Closing Price (12/28/2011)
$0.40
Total Shares Outstanding
17,143,050
Public Float Shares
8,508,754
Public Float %
49.6%
52-Week Average Trading Volume
60,199
52-Week Average Trading Volume / Public Float
0.7%
104-Week Average Trading Volume
52,456
104-Week Average Trading Volume / Public Float
0.6%
Source: Bloomberg, SEC Filings, and Capital IQ
Confidential
As of August 6, 2012, Cybex had 17,143,050 shares of common stock
outstanding.
Shares of Cybex common stock trade on the NASDAQ Global Market
stock exchange.
Cybex
is
covered
by
one
analyst
-
Sidoti
&
Company,
LLC.
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12
Trading Analysis
5-Year Stock Price Trading History
Confidential
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
Volume
Cybex Stock Price
February 6, 2012
Reached a settlement in litigation, Barnhard vs
Cybex. Pursuant to the settlement, Cybex will
pay to the plaintiff, net of insurance,
approximately $19.5 million
December 8, 2010
Reported that a $66 million jury verdict
has been rendered in the product liability
litigation, Barnhard versus Cybex
Cybex
-
Trading
History
October 8, 2007 to October 8, 2012
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13
Trading Analysis
Confidential
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
Volume
Cybex Stock Price
April
20, 2012
Reported net sales of $37 million versus $31
million the prior year but issued lower guidance
for the second quarter
February 6, 2012
Reached a settlement in litigation, Barnhard vs
Cybex. Pursuant to the settlement, Cybex will
pay to the plaintiff, net of insurance,
approximately $19.5 million
July 24, 2012
Reported net sales of $31 million versus $33
million the prior year
Cybex
-
Trading
History
October 8, 2011 to October 8, 2012
1-Year Stock Price Trading History
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14
Trading Analysis
Confidential
0
100
200
300
400
500
600
700
800
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
$1.40
$1.60
$1.80
$2.00
Volume
Cybex Stock Price
July 24, 2012
Reported net sales of $31 million versus $33
million the prior year
Cybex
-
Trading
History
July
8,
2012
to
October
8,
2012
3-Month Stock Price Trading History
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16
Valuation Analysis
Methodologies
Discounted Cash Flow Analysis
–
Duff & Phelps considered financial projections as provided by Management for
the years ending December 31, 2012-2016
–
Duff & Phelps performed a discounted cash flow analysis of the projected free
cash flows of the Company
–
Free
cash
flow
is
defined
as
cash
generated
by
the
business
that
is
available
to
either
reinvest
or
to
distribute
to
security
holders
–
Projected free cash flows are discounted to the present using a discount rate which
reflects their relative risk
–
The discount rate is equivalent to the rate of return that security holders could
expect to realize on alternative investment opportunities with
similar risk
profiles
–
Beyond
the
projection
period,
Duff
&
Phelps
estimated
the
“terminal
value”
using
a
perpetuity
formula
Market Multiples Analysis
–
Duff
&
Phelps
reviewed
the
current
trading
multiples
of
publicly
traded
companies
in
the
leisure
equipment
and
products
industry
that
were
determined to be relevant in its analysis
–
Analyzed the peer group’s trading multiples of enterprise value
(“EV”) to their respective EBITDA and revenue. EV is calculated as the sum of
the equity capitalization (shares outstanding multiplied by the current stock
price) and net indebtedness
–
Reviewed deal multiples of M&A transactions involving target companies in the
leisure equipment and products industry
Confidential
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17
Valuation Analysis
Historical Financial Performance
Presented as reported including public company costs
Confidential
Historical Financial Performance
($ in thousands)
2003A
2004A
2005A
2006A
2007A
2008A
2009A
2010A
2011A
6/12 LTM
8/12 LTM
3yr CAGR
5yr CAGR
Total Sales
$90,480
$103,421
$114,646
$126,924
$146,503
$147,929
$120,474
$122,961
$140,130
$144,614
$144,173
(1.8%)
2.0%
Growth
14.3%
10.9%
10.7%
15.4%
1.0%
-18.6%
2.1%
14.0%
8.9%
NA
Gross Profit
1
$33,751
$40,369
$43,861
$48,955
$53,548
$51,527
$39,782
$48,107
$53,529
$52,516
$52,030
Margin
37.3%
39.0%
38.3%
38.6%
36.6%
34.8%
33.0%
39.1%
38.2%
36.3%
36.1%
EBITDA
2
$5,502
$10,585
$10,981
$13,178
$12,501
$10,722
$3,719
$7,431
$12,937
$10,961
$10,610
6.5%
(0.4%)
Margin
6.1%
10.2%
9.6%
10.4%
8.5%
7.2%
3.1%
6.0%
9.2%
7.6%
7.4%
Growth
92.4%
3.7%
20.0%
-5.1%
-14.2%
-65.3%
99.8%
74.1%
8.0%
NA
Net Income
2
($1,761)
$3,225
$61
$20,054
$9,754
$2,159
($2,437)
$420
$4,087
$1,947
$2,226
Margin
-1.9%
3.1%
0.1%
15.8%
6.7%
1.5%
-2.0%
0.3%
2.9%
1.3%
1.5%
Earnings Per Share
2
($0.23)
$0.24
$0.00
$1.18
$0.55
$0.16
($0.14)
$0.02
$0.24
$0.11
$0.13
14.5%
(27.3%)
Capital Expenditures
$572
$2,147
$4,220
$4,151
$24,947
$7,436
$613
$2,240
$3,073
$3,590
NA
as % of Sales
0.6%
2.1%
3.7%
3.3%
17.0%
5.0%
0.5%
1.8%
2.2%
2.5%
NA
Net Working Capital
$18,471
$13,473
$16,648
$18,558
$16,671
$14,964
as % of Sales
12.5%
11.2%
13.5%
13.2%
11.5%
10.4%
1
Excludes depreciation and amortization
2
Excludes one-time costs associated with product liability defense and
settlement
Source: Audited financials and Management
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18
Valuation Analysis
Historical Financial Performance YTD June
Presented as reported including public company costs
Confidential
YTD Historical Financial Performance
($ in thousands)
YTD Jun '10
YTD Jun '11
YTD Jun '12
YTD Aug '11
YTD Aug '12
LTM Jun '11
LTM Aug '12
Total Sales
$53,788
$63,575
$68,059
$82,966
$87,009
$144,614
$144,173
Growth
18.2%
7.1%
4.9%
8.9%
EBITDA
1
$1,520
$4,236
$2,259
$5,326
$2,998
$10,961
$10,610
Margin
2.8%
6.7%
3.3%
6.4%
3.4%
7.6%
7.4%
Growth
178.7%
-46.7%
-43.7%
8.0%
NA
Net Income
1
($1,109)
$1,467
($674)
$915
($946)
$1,947
$2,226
Margin
-2.1%
2.3%
-1.0%
1.1%
NM
1.3%
1.5%
Earnings Per Share
1
($0.06)
$0.09
($0.04)
$0.05
($0.06)
$0.11
$0.13
1
Excludes one-time costs associated with product liability defense and
settlement
Source: Audited financials and Management
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19
Valuation Analysis
Financial Performance Summary
Presented as reported including public company costs
Source: Management, SEC Filings
Confidential
$90.5
$103.4
$114.6
$126.9
$146.5
$147.9
$120.5
$123.0
$140.1
$144.6
$144.2
$5.5
$10.6
$11.0
$13.2
$12.5
$10.7
$3.7
$7.4
$12.9
$11.0
$10.6
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
$0
$20
$40
$60
$80
$100
$120
$140
2003A
2004A
2005A
2006A
2007A
2008A
2009A
2010A
2011A
6/12 LTM
8/12 LTM
Historical Sales and EBITDA
($ in millions)
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20
Valuation Analysis
Discounted Cash Flow Analysis
Duff & Phelps considered financial projections as provided by Management for
the years ending December 31, 2012-2016
The following assumptions were
used in the discounted cash flow analysis:
–
Revenue growth of 3.5% in 2012 trending down to 3.0% growth by 2016 and remaining
at 3.0% through 2021
–
EBITDA margin increases from 8.0% in 2012 to 10.5% by 2016 as a result of
leveraging the Company’s relatively fixed cost structure over
increasing revenues
–
Capital expenditures average 2.4% of revenues over the projection period ending
2021
–
Beyond
the
projection
period,
Duff
&
Phelps
estimated
the
“terminal
value”
using
a
perpetuity
formula
and
assuming
a
3.0%
terminal
growth
rate
–
Duff & Phelps discounted the resulting free cash flows and terminal value using
a weighted average cost of capital range of 12.75% to 14.25%
with a midpoint
of 13.50%
Confidential
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21
Valuation Analysis
Discounted Cash Flow Summary
Confidential
Discounted Cash Flow Analysis
($ in thousands)
Management Projections
8/12 LTM
2012P
2013P
2014P
2015P
2016P
2021P
CAGR
Sales
$144,614
$145,000
$150,000
$155,000
$160,000
$164,800
$191,048
3.1%
Growth
NA
3.5%
3.4%
3.3%
3.2%
3.0%
3.0%
EBITDA
1
11,278
11,668
13,333
14,044
15,912
17,357
20,015
4.5%
EBITDA Margin
7.8%
8.0%
8.9%
9.1%
9.9%
10.5%
10.5%
4 months
Earnings
Before
Interest
and
Taxes
2
$7,361
$10,988
$11,127
$12,424
$13,298
$15,779
Pro Forma Taxes @ 41.7%
(3,070)
(4,582)
(4,640)
(5,181)
(5,545)
(6,580)
Net Operating Profit After Tax
4,292
6,406
6,487
7,243
7,753
9,199
Tax Depreciation
863
2,345
2,917
3,488
4,059
4,237
Capital Expenditures
(416)
(4,000)
(4,000)
(4,000)
(4,000)
(4,662)
(Increase)
Decrease
in
Working
Capital
3
(123)
(1,309)
(208)
(626)
(583)
(752)
Free Cash Flow
$4,615
$3,442
$5,196
$6,105
$7,229
$8,023
Terminal Growth Rate
3.00%
3.00%
3.00%
Weighted Average Cost of Capital
14.25%
13.50%
12.75%
$59,750
$63,750
$68,500
Implied Enterprise Value Multiples
LTM Sales
1,4
$144,614
0.41x
0.44x
0.47x
LTM EBITDA
1,4
$11,629
5.1x
5.5x
5.9x
2012
EBITDA
1
$11,668
5.1x
5.5x
5.9x
2013
EBITDA
1
$13,333
4.5x
4.8x
5.1x
LTM EBIT
1,4
$7,034
8.5x
9.1x
9.7x
2012 EBIT
1
$6,970
8.6x
9.1x
9.8x
2013 EBIT
1
$8,020
7.5x
7.9x
8.5x
1
Excludes forecasted public company costs
2
EBITDA less tax depreciation expense
3
Based on normalized August 31, 2012 working capital
4
Latest twelve months as of June 30, 2012
Concluded Enterprise Value Range (Rounded)
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22
Valuation Analysis
Selected Public Company Analysis
Duff
&
Phelps
reviewed
the
current
trading
multiples
of
thirteen
publicly
traded
companies
split
into
two
groups
that
were
determined
to
be
relevant
in
its
analysis
–
Eight companies are in the leisure equipment and products industry
–
Five
companies
in
the
office
and
capital
equipment manufacturing
industry
due
to
the
similarities
to
Cybex
in
costs/margins
as
well
as
customer
purchasing
habits.
Analyzed the LTM and projected revenue and EBITDA for each of the publicly traded
companies.
Analyzed the peer group’s trading multiples of enterprise
value (“EV”) to their respective EBITDA and revenue.
Selected M&A
Transaction Analysis
Duff & Phelps selected merger and acquisition
transactions involving target companies that Duff & Phelps determined to be relevant to its analysis. Duff & Phelps
computed the LTM EBITDA for each of the target companies (where publicly
disclosed). Duff & Phelps then calculated the implied enterprise value for each
transaction to the target’s respective revenue and EBITDA.
Duff & Phelps selected sixteen precedent transactions.
Selected Public Company / M&A Transaction Analysis
Duff & Phelps analyzed a number of factors in comparing the Company to the
selected public companies and the targets in the selected M&A transactions,
including
historical
and
forecasted
growth
in
sales
and
profits, profit
margins
and
other
characteristics
that
we
deemed
relevant.
Rather than applying the average or median multiple from the public company set,
Duff & Phelps selected multiples that reflect the Company’s size, growth
outlook, profit margins, sales mix, and other characteristics relative to the
group.
Confidential
Based on our review of publicly available information, none of the companies utilized
for comparative purposes in the following analysis are directly
comparable
to
the
Company,
and
none
of
the
transactions
utilized
for
comparative
purposes
in
the
following
analysis
are
directly
comparable
to
the
Proposed Transaction. Duff & Phelps does not have access to nonpublic information
of any of the companies used for comparative purposes.
Accordingly, a complete
valuation analysis of the Company and the Proposed Transaction cannot rely solely upon a quantitative review of the
selected companies and selected transactions, and involves complex considerations and
judgments concerning differences in financial and
operating characteristics of
such companies and targets, as well
as other factors that could affect their
value relative to that
of the Company. For
example, the Company is not directly comparable to the Selected Public Companies and
target companies in the Selected M&A Transactions
Analysis given certain
characteristics including the Company’s small size, its geographic concentration, customer concentration, and recent
performance declines. Therefore, the Selected Public Companies / Selected M&A
Transactions Analysis is subject to certain limitations.`
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23
Valuation Analysis
Selected
Public
Company
Analysis
–
Financial
Performance
Summary
Confidential
Selected Public Company Analysis
Company Information
Revenue Growth
EBITDA Growth
EPS Growth
EBITDA Margin
EBIT Margin
Gross Margin
¹
Company Name
3-YR
CAGR
LTM
2012
2013
3-YR
CAGR
LTM
2012
2013
3-YR
CAGR
LTM
2012
2013
LTM
2012
2013
LTM
2012
2013
3 -
Yr
Avg.
LTM
Tier 1
Accell Group NV
NA
NA
NA
10.3%
NA
NA
NA
18.9%
NA
NA
NA
8.6%
NA
6.7%
7.2%
NA
5.7%
6.1%
NA
NA
Amer Sports Corp.
6.1%
8.0%
7.2%
5.6
18.1%
1.6%
1.3%
17.0
39.4%
1.2%
-0.1%
29.6
8.6%
8.6
9.5
6.6%
6.7
7.7
42.2%
43.8%
Brunswick Corporation
-7.3
2.2
2.2
6.6
8.0
14.6
8.5
19.1
NM
NM
51.1
17.2
8.5
9.1
10.1
5.9
6.6
7.8
18.6
23.7
Callaway Golf Co.
-7.4
-3.0
-4.1
2.9
NM
NM
NM
NM
NM
NM
NM
NM
0.0
-1.6
6.1
-4.3
-6.1
1.4
37.8
36.4
Escalade Inc.
-3.3
7.3
NA
NA
NM
8.7
NA
NA
NM
15.1
NA
NA
9.8
NA
NA
6.7
NA
NA
30.3
30.2
Johnson Health Tech Co., Ltd.
4.2
16.4
16.5
13.9
40.3
21.4
26.7
20.5
NM
-11.0
33.6
24.7
9.4
10.9
11.6
6.1
7.9
8.2
45.6
45.7
Johnson Outdoors Inc.
-1.1
2.4
NA
NA
19.9
10.2
NA
NA
NM
225.9
-69.4
50.5
7.4
NA
NA
4.9
NA
NA
39.1
39.7
Nautilus Inc.
-14.0
7.4
5.1
8.9
22.5
NM
54.2
42.7
NM
NM
212.5
42.0
5.3
6.0
7.9
3.6
3.8
5.7
46.7
44.0
Mean
-3.3%
5.8%
5.4%
8.0%
21.7%
11.3%
22.7%
23.6%
39.4%
57.8%
45.6%
28.8%
7.0%
6.6%
8.7%
4.2%
4.1%
6.1%
37.2%
37.7%
Median
-3.3%
7.3%
5.1%
7.8%
19.9%
10.2%
17.6%
19.1%
39.4%
8.2%
33.6%
27.1%
8.5%
7.6%
8.7%
5.9%
6.1%
6.9%
39.1%
39.7%
Tier 2
Herman Miller Inc.
1.9%
-0.6%
4.5%
6.6%
-2.2%
-1.9%
3.0%
19.6%
-4.9%
-8.8%
12.9%
25.1%
10.1%
10.3%
11.6%
7.9%
8.2%
9.6%
33.1%
34.2%
John Bean Technologies Corporation
-2.4
-3.8
-0.4
3.9
-4.0
-17.6
5.4
6.8
-6.7
-23.4
8.5
7.1
8.9
9.7
10.0
6.3
7.2
7.6
25.9
24.6
Knoll Inc.
-6.3
-2.3
-3.1
7.2
-13.8
-7.2
-6.8
15.9
-13.9
27.7
-7.3
17.1
11.3
11.4
12.4
9.5
10.0
10.7
33.0
32.6
Standex International Corp.
1.5
9.2
12.7
7.0
13.9
10.3
15.8
11.8
40.5
18.3
2.7
14.3
11.8
12.1
12.7
9.7
9.8
10.5
32.5
32.9
Steelcase Inc.
-4.8
7.4
3.7
5.7
-2.7
6.6
14.6
22.4
11.3
23.3
34.6
31.8
6.9
7.4
8.6
4.9
5.5
6.8
30.1
30.5
Mean
-2.0%
2.0%
3.5%
6.1%
-1.8%
-2.0%
6.4%
15.3%
5.2%
7.4%
10.2%
19.1%
9.8%
10.2%
11.0%
7.7%
8.1%
9.0%
30.9%
30.9%
Median
-2.4%
-0.6%
3.7%
6.6%
-2.7%
-1.9%
5.4%
15.9%
-4.9%
18.3%
8.5%
17.1%
10.1%
10.3%
11.6%
7.9%
8.2%
9.6%
32.5%
32.6%
Aggregate High
6.1%
16.4%
16.5%
13.9%
40.3%
21.4%
54.2%
42.7%
40.5%
225.9%
212.5%
50.5%
11.8%
12.1%
12.7%
9.7%
10.0%
10.7%
46.7%
45.7%
Aggregate Low
-14.0%
-3.8%
-4.1%
2.9%
-13.8%
-17.6%
-6.8%
6.8%
-13.9%
-23.4%
-69.4%
7.1%
0.0%
-1.6%
6.1%
-4.3%
-6.1%
1.4%
18.6%
23.7%
Aggregate Mean
-2.7%
4.2%
4.4%
7.1%
10.0%
4.7%
13.6%
19.5%
10.9%
29.8%
27.9%
24.4%
8.2%
8.2%
9.8%
5.7%
5.9%
7.5%
34.6%
34.9%
Aggregate Median
-2.9%
4.9%
4.1%
6.6%
10.9%
7.7%
8.5%
19.0%
3.2%
15.1%
10.7%
24.7%
8.8%
9.1%
10.0%
6.2%
6.7%
7.7%
33.1%
33.5%
Cybex -
Mgmt Forecast
-1.8%
8.9%
3.5%
3.4%
6.1%
7.5%
-14.2%
14.3%
16.0%
NA
-29.8%
26.5%
8.0%
8.0%
8.9%
4.9%
4.8%
5.3%
34.0%
33.9%
Note: Cybex historical performance and management forecast excludes public company
costs; LTM for Cybex as of 6/30/2012
1
Gross Margin includes depreciation
LTM = Latest Twelve Months
CAGR = Compounded Annual Growth Rate
EBITDA = Earnings Before Interest, Taxes, Depreciation and Amortization
EBIT = Earnings Before Interest and Taxes
Source: Bloomberg, Capital IQ, Company filings
October 8, 2012
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24
Valuation Analysis
Selected
Public
Company
Analysis
–
Valuation
Multiples
Summary
Selected Public Company Analysis
($ in millions, except per share data)
Company Information
Market Data
Common Stock as a Multiple of
Enterprise Value As Multiple Of
Company Name
Stock
Price
% of 52-
Wk High
Enterprise
Value
Book
Value
Tang.
BV
LTM
EPS
2012
EPS
3-Yr Avg.
EBITDA
LTM
EBITDA
2012
EBITDA
2013
EBITDA
LTM
EBIT
2012
EBIT
LTM
Revenue
2012
Revenue
Tier 1
Accell Group NV
$16.86
71.8%
$606
1.2x
2.0x
NA
9.3x
NA
NA
8.9x
7.5x
NA
10.5x
NA
0.60x
Amer Sports Corp.
13.32
94.8
2,172
1.7
5.7
15.5x
14.5
12.6x
10.0x
9.6
8.2
12.9x
12.4
0.85x
0.83
Brunswick Corporation
23.60
87.3
2,297
NM
NM
17.9
14.8
24.0
7.2
6.6
5.6
10.5
9.1
0.62
0.60
Callaway Golf Co.
6.38
87.9
445
0.8
1.0
NM
NM
22.2
NM
NM
8.4
NM
NM
0.50
0.52
Escalade Inc.
5.37
89.1
77
0.8
1.4
10.1
NA
6.9
5.7
NA
NA
8.3
NA
0.56
NA
Johnson Health Tech Co., Ltd.
2.57
79.1
560
2.9
3.2
23.4
14.3
16.6
12.1
9.4
7.8
18.5
13.1
1.13
1.03
Johnson Outdoors Inc.
21.34
98.1
196
1.2
1.4
6.6
19.6
9.0
6.3
NA
NA
9.7
7.8
0.47
NA
Nautilus Inc.
2.83
79.3
71
2.5
5.4
15.3
11.3
35.3
7.1
6.2
4.4
10.6
9.9
0.38
0.38
Mean
85.9%
$803
1.6x
2.9x
14.8x
14.0x
18.1x
8.1x
8.2x
7.0x
11.7x
10.5x
0.64x
0.66x
Median
87.6%
$503
1.2x
2.0x
15.4x
14.4x
16.6x
7.2x
8.9x
7.7x
10.5x
10.2x
0.56x
0.60x
Tier 2
Herman Miller Inc.
$20.03
85.1%
$1,232
4.3x
11.1x
15.8x
13.2x
8.1x
7.1x
6.6x
5.5x
9.1x
8.3x
0.72x
0.68x
John Bean Technologies Corporation
16.00
88.7
575
3.8
14.6
12.8
13.0
3.8
7.0
6.2
5.8
9.9
8.4
0.62
0.60
Knoll Inc.
14.46
83.4
882
4.1
NM
NA
19.2
10.0
8.8
8.6
7.5
10.5
9.9
1.00
0.99
Standex International Corp.
45.50
98.1
582
1.9
4.7
15.0
13.4
5.2
7.8
6.7
6.0
9.5
8.3
0.92
0.81
Steelcase Inc.
10.32
97.7
1,429
NA
2.6
NA
NA
20.9
7.3
6.8
5.5
10.2
9.1
0.51
0.50
Mean
90.6%
$940
3.5x
8.2x
14.5x
14.7x
9.6x
7.6x
7.0x
6.1x
9.8x
8.8x
0.75x
0.72x
Median
88.7%
$882
4.0x
7.9x
15.0x
13.3x
8.1x
7.3x
6.7x
5.8x
9.9x
8.4x
0.72x
0.68x
Aggregate High
98.1%
$2,297
4.3x
14.6x
23.4x
19.6x
35.3x
12.1x
9.6x
8.4x
18.5x
13.1x
1.13x
1.03x
Aggregate Low
71.8%
$71
0.8x
1.0x
6.6x
9.3x
3.8x
5.7x
6.2x
4.4x
8.3x
7.8x
0.38x
0.38x
Aggregate Mean
87.7%
$856
2.3x
4.8x
14.7x
14.3x
14.5x
7.9x
7.6x
6.6x
10.9x
9.7x
0.69x
0.69x
Aggregate Median
87.9%
$582
1.9x
3.2x
15.3x
13.9x
11.3x
7.2x
6.7x
6.0x
10.2x
9.1x
0.62x
0.60x
Cybex - Mgmt Forecast
$1.34
45.1%
$42
1.2x
1.2x
6.6x
7.1x
4.8x
3.6x
3.6x
3.1x
6.0x
6.0x
0.29x
0.29x
Note: Cybex historical performance and management forecast excludes public company costs; LTM for Cybex
as of 6/30/2012
LTM = Latest Twelve Months
Enterprise Value = (Market Capitalization) + (Debt + Preferred Stock + Minority Interest) - (Cash
& Equivalents)
EBITDA = Earnings Before Interest, Taxes, Depreciation and Amortization
EBIT = Earnings Before Interest and Taxes
Source: Bloomberg, Capital IQ, Company filings
October 8, 2012
Confidential
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25
Valuation Analysis
Selected M&A Transaction Analysis
Duff & Phelps identified the following M&A transactions in the leisure
equipment and products industry.
Though reviewed, Duff & Phelps did not
deem any of the selected M&A transaction relevant to its analysis.
Confidential
Selected M&A Transactions
($ in millions)
Date
Target
Buyer
Business
Description
-
Target
Enterprise
Value
LTM
Revenue
LTM
EBITDA
EBITDA
Margin
EV/ LTM
EBITDA
EV/ LTM
Revenue
6/21/2012
Senoh Corporation
Mizuno
Manufactures and sells hardware sports and exercise equipment
$99.5
$120.8
NA
NA
NA
0.82x
6/13/2012
Cascade Helmets
Holdings
Bauer Performance Sports
Designs, manufactures, and sells helmets and eyewear products for
use in lacrosse and field hockey markets
$80.6
$21.9
$5.6
25.8%
14.3x
3.69x
4/3/2012
Raleigh Cycle
Accell Group NV
Designs, develops, manufactures, and sells bicycles
$80.0
$255.3
NA
NA
NA
0.31x
3/18/2012
Adams Golf
Taylor Made Golf Company
Designs, assembles, and distributes golf clubs for various skill
levels primarily in the United States and internationally
$70.4
$96.5
$7.3
7.6%
9.6x
0.73x
9/21/2011
Derby Cycle
Pon Holding Germany GmbH
Engages in the development, production, and sale of bicycles in
Germany and internationally
$285.0
$330.9
$27.7
8.4%
10.3x
0.86x
5/19/2011
Acushnet Company
Fila Korea, Mirae Asset
Financial and others
Manufactures and markets golf balls, clubs, shoes, gloves, bags,
outerwear, socks, and accessories
$1,225.0
$1,200.0
$121.7
10.1%
10.1x
1.02x
1/18/2011
Yes! Golf
Adams Golf
Manufactures and sells golf putters and accessories for professionals
and amateur golfers
$1.5
$2.4
NA
NA
NA
0.63x
10/20/2010
Kasco Corporation
Mamiya-OP Co.
Provides golf equipment
$28.4
$53.6
NA
NA
NA
0.53x
3/15/2010
Sports Supply Group
Andell Holdings
Manufacturers, markets, and distributes sporting goods equipment,
physical education, and recreational and leisure products
$184.0
$256.5
$24.2
9.4%
7.6x
0.72x
1/13/2010
PBM Fitness
Johnson Health Tech
Engages in the design and manufacture of fitness equipment for
various commercial facilities
$2.8
$0.5
NA
NA
NA
NM
12/21/2009
Powabyke
Metroelectric
Designs, manufactures, and markets electrical bicycles, tricycles, and
folders
$1.9
$1.0
NA
NA
NA
1.85x
7/15/2009
Iron Horse Bicycle
Company
Dorel Industries Inc.
Manufactures and provides bicycles
$5.2
$25.0
NA
NA
NA
0.21x
9/5/2008
Amer Sports Bulgaria
Amer Sports Corp.
Manufactures alpine and Nordic skis and snowboards
$7.1
$7.1
NA
NA
NA
1.00x
8/25/2008
Skis Rossignol
Chartreuse & Mont Blanc
Designs and produces hard and soft goods for the winter and summer
seasons
$50.8
$381.8
NA
NA
NA
0.13x
6/26/2008
PTI Sports
Pacific Cycle, Inc.
Engages in designing, manufacturing, and distributing bicycle parts,
helmets, and other accessories
$28.1
$65.0
$5.0
7.7%
5.6x
0.43x
2/21/2008
Bauer Hockey
Kohlberg & Company
Designs, manufactures, and markets ice and roller hockey equipment,
and fitness and recreational skates
$188.8
$160.0
NA
NA
NA
1.18x
Mean
11.5%
9.6x
0.94x
Source: Capital IQ
Median
8.9%
9.8x
0.73x
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26
Valuation Analysis
Market
Multiples
Analysis
–
Selected
Public
Company/M&A
Transaction
Analysis
Summary
Duff & Phelps analyzed a number of factors in comparing the Company to the
selected public companies, including historical and forecasted
growth in
revenue and profits, profit margins and other characteristics that we deemed relevant.
Rather than applying the average or median multiple from the public company set,
Duff & Phelps performed a thorough analysis of each public
company and
then selected multiples that reflect the Company’s size, growth outlook, profit margins, revenue mix, and other characteristics
relative to the group.
The
Company
is
significantly
smaller
in
size
on
a
revenue
basis,
has
lower
profit
margins,
and
a
lower
earnings
growth
outlook
than
the
median
of
the selected public companies.
Confidential
Selected Public Company / Transaction Analysis Summary
($ in thousands)
Enterprise Valuation Multiples
Valuation Summary
Metric
Public Company
Median
Transaction
Median
Selected Multiple Range
Company
Performance
Enterprise Value Range
LTM EBITDA
1,2
5.7x
-
12.1x
7.2x
9.8x
5.5x
-
6.5x
$11,629
$63,960
-
$75,589
2013P EBITDA
2
4.4x
-
8.4x
6.0x
4.5x
-
5.5x
$13,333
$59,999
-
$73,332
LTM Sales
1
0.38x
-
1.13x
0.62x
0.73x
0.45x
-
0.55x
$144,614
$65,076
-
$79,538
Concluded Enterprise Value Range
$63,000
-
$76,250
Implied Enterprise Value Multiples
LTM Sales
1
$144,614
0.44x
-
0.53x
LTM EBITDA
1,2
$11,629
5.4x
-
6.6x
2012 EBITDA
2
$11,668
5.4x
-
6.5x
2013 EBITDA
2
$13,333
4.7x
-
5.7x
LTM EBIT
1,2
$7,034
9.0x
-
10.8x
2012 EBIT
2
$6,970
9.0x
-
10.9x
2013 EBIT
2
$8,020
7.9x
-
9.5x
1
Latest twelve months as of June 30, 2012
2
Excludes public company costs
Public Company
Range
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27
Valuation Analysis
Conclusion
Based on our discounted cash flow and market
multiples analyses, Duff & Phelps estimated the
enterprise value of the Company to range from $61.5
million to $72.5 million.
Duff & Phelps estimated the value of the common
equity per share in the range of $2.31 to $2.94 per
share.
Confidential
Valuation Conclusion
($ in thousands, except per share values)
Low
Mid
High
Enterprise Value
Discounted Cash Flow Analysis
$59,750
$63,750
$68,500
Selected Public Company Analysis
63,000
69,625
76,250
Enterprise Value Conclusion (rounded)
$61,500
$66,750
$72,500
Plus:
Cash
and
Equivalents
1,2
2,687
2,687
2,687
Plus:
Present
Value
of
NOL
Tax
Shield
3,280
3,398
3,525
Plus:
After-Tax
Value
of
Excess
Real
Property
3
394
394
394
Less:
Working
Capital
Deficiency
(4,595)
(4,595)
(4,595)
Less:
Debt
1,4
(21,286)
(21,286)
(21,286)
Less:
Other
long
term
liabilities
5
(1,412)
(1,412)
(1,412)
Less:
PV
of
Settlement
Payments
6
(362)
(369)
(375)
Aggregate Equity Value
$40,206
$45,568
$51,439
Less:
Value
of
Stock
Options
7
(466)
(598)
(743)
Less:
Value
of
Warrants
7
(166)
(188)
(213)
Common Equity Value
$39,575
$44,782
$50,483
Shares Issued and Outstanding (000's)
17,143
17,143
17,143
Resulting Per Share Price
$2.31
$2.61
$2.94
Proposed Transaction
$2.55
Implied Multiples
LTM Sales
8
$144,614
0.43x
0.46x
0.50x
LTM EBITDA
8,9
$11,629
5.3x
5.7x
6.2x
2013 EBITDA
9
$13,333
4.6x
5.0x
5.4x
3-yr Average EBITDA
9
$8,697
7.1x
7.7x
8.3x
LTM EBITDA
8
$10,961
5.6x
6.1x
6.6x
2013 EBITDA
$12,665
4.9x
5.3x
5.7x
8/12 Book Value
$19,084
3.2x
3.5x
3.8x
LTM EPS
8,9
$0.14
16.9x
19.2x
21.6x
2012 EPS
9
$0.19
12.2x
13.8x
15.6x
1
Per Management provided August 31, 2012 balance sheet
2
Cash and equivalents of $4.0M less customer deposits of $1.3M
3
Appraised value of vacant land per appraisal dated December 9, 2011 less
transaction costs of $50 thousand
4
Debt plus $114 thousand accrued interest as of August 31, 2012
5
Includes an interest rate swap liability of $1.0M and property TIF liability of
$0.4M
6
Present value of remaing 78 monthly settlement payments of $12 thousand per
month
7
Valued at intrinsic value assuming vesting at change in control
8
Latest twelve months as of June 30, 2012
9
Excludes public company costs
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Selected Public Company Analysis
Appendix 1
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30
Tier 1
LTM Revenue
Brunswick
$3,707
Amer
$2,543
Callaway
$893
Johnson Health
$495
Johnson Outdoors
$415
Nautilus
$188
Cybex
$145
Escalade
$138
Accell
NA
Tier 2
LTM Revenue
Steelcase
$2,830
Herman Miller
$1,716
John Bean
$921
Knoll
$880
Standex
$635
Cybex
$145
$0
$1,000
$2,000
$3,000
$4,000
Median Tier 1: $495
Median Tier 2: $921
Tier 1
LTM EBITDA Margin
Escalade
9.8%
Johnson Health
9.4%
Amer
8.6%
Brunswick
8.5%
Cybex
7.6%
Johnson Outdoors
7.4%
Nautilus
5.3%
Callaway
0.0%
Accell
NA
Tier 2
LTM EBITDA Margin
Standex
11.8%
Knoll
11.3%
Herman Miller
10.1%
John Bean
8.9%
Cybex
7.6%
Steelcase
6.9%
-5%
0%
5%
10%
15%
Median Tier 1: 8.5%
Median Tier 2: 10.1%
LTM Performance versus Peers
Cybex LTM as of June 30, 2012 including public company costs
$ in millions
NA
NA
Confidential
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31
-4%
0%
4%
8%
12%
16%
Median Tier 1: 7.2%
Median Tier 2: 10.6%
-20%
-10%
0%
10%
20%
Median Tier 1: 5.0%
Median Tier 2: -4.7%
2Q Performance versus Peers
NA
NA
Cybex performance includes public company costs. Financial performance based on
second calendar quarter for all peers.
Tier 1
2Q Rev. Growth
Nautilus
14.0%
Johnson Health
13.0%
Amer
12.1%
Johnson Outdoors
5.0%
Escalade
2.9%
Callaway
2.7%
Brunswick
-2.7%
Cybex
-5.4%
Accell
NA
Tier 2
2Q Rev. Growth
Steelcase
5.6%
Standex
5.0%
Herman Miller
-4.7%
Cybex
-5.4%
Knoll
-7.4%
John Bean
-15.1%
Tier 1
2Q EBITDA Margin
Johnson Outdoors
13.6%
Brunswick
13.1%
Escalade
9.5%
Callaway
7.2%
Johnson Health
5.2%
Cybex
1.0%
Nautilus
0.4%
Amer
-2.7%
Accell
NA
Tier 2
2Q EBITDA Margin
Standex
13.0%
Knoll
11.3%
Herman Miller
10.6%
John Bean
9.2%
Steelcase
5.6%
Cybex
1.0%
Confidential
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32
-100%
-75%
-50%
-25%
0%
25%
50%
75%
100%
Median Tier 1: 4.7%
Median Tier 2: -2.3%
2Q Performance versus Peers
NA
NM
NM
Cybex performance includes public company costs. Financial performance based on
second calendar quarter for all peers.
Tier 1
2Q EBITDA Growth
Callaway
94.3%
Johnson Outdoors
20.8%
Brunswick
4.7%
Johnson Health
2.3%
Escalade
-2.4%
Cybex
-87.0%
Amer
NM
Nautilus
NM
Accell
NA
Tier 2
2Q EBITDA Growth
Herman Miller
7.2%
Standex
7.1%
Steelcase
-2.3%
Knoll
-11.5%
John Bean
-16.2%
Cybex
-87.0%
Confidential
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33
0%
2%
4%
6%
8%
10%
12%
14%
Median Tier 1: 10.0%
Median Tier 2: 9.6%
YTD Performance versus Peers
Cybex performance includes public company costs. Financial performance based on
first two calendar quarters for all peers.
NA
NA
Tier 1
YTD Rev. Growth
Johnson Health
16.3%
Amer
10.3%
Nautilus
9.4%
Cybex
7.1%
Escalade
5.4%
Johnson Outdoors
2.4%
Callaway
1.2%
Brunswick
-2.0%
Accell
NA
Tier 2
YTD Rev. Growth
Standex
8.3%
Steelcase
8.2%
Cybex
7.1%
Herman Miller
-4.2%
John Bean
-7.7%
Knoll
-9.1%
Tier 1
YTD EBITDA Margin
Johnson Outdoors
12.0%
Brunswick
11.3%
Escalade
10.7%
Callaway
10.0%
Johnson Health
5.1%
Nautilus
4.1%
Amer
3.5%
Cybex
3.3%
Accell
NA
Tier 2
YTD EBITDA Margin
Standex
11.4%
Knoll
10.6%
Herman Miller
9.6%
John Bean
8.2%
Steelcase
5.5%
Cybex
3.3%
-15%
-10%
-5%
0%
5%
10%
15%
20%
Median Tier 1: 5.4%
Median Tier 2: -4.2%
Confidential
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34
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
Median Tier 1: 3.7%
Median Tier 2: -6.4%
YTD Performance versus Peers
NA
Cybex performance includes public company costs. Financial performance based on
first two calendar quarters for all peers.
Tier 1
YTD EBITDA Growt
Callaway
14.0%
Johnson Outdoors
9.4%
Escalade
8.5%
Brunswick
-1.2%
Johnson Health
-4.0%
Amer
-10.2%
Cybex
-46.6%
Nautilus
NM
Accell
NA
Tier 2
YTD EBITDA Growt
Standex
13.4%
Herman Miller
-4.0%
Steelcase
-6.4%
John Bean
-13.6%
Knoll
-18.1%
Cybex
-46.6%
NM
Confidential
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35
-10%
-5%
0%
5%
10%
15%
20%
Median Tier 1: 5.1%
Median Tier 2: 3.7%
2012P Performance versus Peers
Cybex performance includes public company costs
NA
NA
NA
NA
NA
Tier 1
2012P Rev. Growth
Johnson Health
16.5%
Amer
7.2%
Nautilus
5.1%
Cybex
3.5%
Brunswick
2.2%
Callaway
-4.1%
Accell
NA
Escalade
NA
Johnson Outdoors
NA
Tier 2
2012P Rev. Growth
Standex
12.7%
Herman Miller
4.5%
Steelcase
3.7%
Cybex
3.5%
John Bean
-0.4%
Knoll
-3.1%
Tier 1
2012P EBITDA Margin
Johnson Health
10.9%
Brunswick
9.1%
Amer
8.6%
Cybex
7.6%
Accell
6.7%
Nautilus
6.0%
Callaway
-1.6%
Escalade
NA
Johnson Outdoors
NA
Tier 2
2012P EBITDA Margin
Standex
12.1%
Knoll
11.4%
Herman Miller
10.3%
John Bean
9.7%
Cybex
7.6%
Steelcase
7.4%
-5%
0%
5%
10%
15%
Median Tier 1: 7.6%
Median Tier 2: 10.3%
Confidential
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36
2012P Performance versus Peers
Cybex performance includes public company costs
NA
NA
NA
NM
Tier 1
2012P EBITDA Growth
Nautilus
54.2%
Johnson Health
26.7%
Brunswick
8.5%
Amer
1.3%
Cybex
-15.0%
Callaway
NM
Accell
NA
Escalade
NA
Johnson Outdoors
NA
Tier 2
2012P EBITDA Growth
Standex
15.8%
Steelcase
14.6%
Herman Miller
5.4%
John Bean
3.0%
Knoll
-6.8%
Cybex
-15.0%
-25%
0%
25%
50%
75%
Median Tier 1: 17.6%
Median Tier 2: 5.4%
Confidential
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Leverage versus Peers
Tier 1
Debt / EV
Cybex
54.6%
Amer
40.2%
Accell
37.8%
Brunswick
29.4%
Escalade
24.3%
Johnson Health
18.9%
Callaway
15.7%
Johnson Outdoors
6.4%
Nautilus
0.0%
Tier 2
Debt / EV
Cybex
54.6%
John Bean
31.2%
Knoll
24.7%
Steelcase
20.4%
Herman Miller
20.3%
Standex
8.6%
0%
10%
20%
30%
40%
50%
60%
Median Tier 1: 21.6%
Median Tier 2: 20.4%
Confidential
37
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Premiums Paid Analysis
Appendix 2
|
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Premiums Paid Analysis
Premiums Paid Analysis
Confidential
Control Premium Analysis
Criteria
1-Day (%)
1-Week (%)
1-Month (%)
1-Day (%)
1-Week (%)
1-Month (%)
Cybex -
Stock Price as of 10/08/2012
$1.34
Sporting and Recreational Goods
Median
27.2
27.6
36.5
$1.70
$1.71
$1.83
9
Max
50.0
50.0
97.3
Min
9.5
10.2
27.6
US Companies with Enterprise Value between $25 & $100 mm
Median
45.0
46.9
44.2
$1.94
$1.97
$1.93
62
Max
295.0
321.3
295.0
Min
9.5
8.2
7.1
US Companies with Enterprise Value between $25 & $1000 mm
Median
34.9
37.2
37.6
$1.81
$1.84
$1.84
324
Max
295.0
321.3
295.0
Min
0.1
2.5
0.0
Related
Party
Take
Private
Transactions
Ownership Prior to Transaction between 0% to 25%
Median
38.0
38.0
31.3
$1.85
$1.85
$1.76
23
Max
84.6
88.0
101.1
Min
4.4
7.4
7.1
Ownership Prior to Transaction between 25% to 50%
Median
38.9
30.5
28.6
$1.86
$1.75
$1.72
9
Max
80.1
72.4
75.4
Min
16.5
10.7
10.3
Proposed Transaction $2.55
90.3
80.9
79.6
Note: Excludes negative premiums; deals over the prior 3 years
Source: Capital IQ
Stock Price Premium
Number of
Transactions
Implied Stock Price
39
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Assumptions, Qualifications, and Limiting
Conditions
Appendix 3
|
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Assumptions, Qualifications and Limiting Conditions
If issued, our Opinion letter will include assumptions, qualifications and limiting
conditions similar to the following. This is not meant to
be a complete
list of the assumptions, qualifications and limiting conditions which will be included in our Opinion letter, if rendered.
Assumptions
and
Reliance
–
In
compiling
financial
projections
and
performing
its
analyses
with
respect
to
the
Proposed
Transaction,
Duff
& Phelps:
Relied
upon
the
accuracy,
completeness,
and
fair
presentation
of
all
information,
data,
advice,
opinions
and
representations
obtained
from
public
sources or provided to it from
private sources, including Management, and did not independently verify such
information;
Relied
upon
the
fact
that
the
Special
Committee,
the
Board
of
Directors
and
the
Company
have
been
advised
by
counsel
as
to
all
legal
matters
with
respect
to
the
Proposed
Transaction,
including
whether
all
procedures
required
by
law
to
be
taken
in
connection
with
the
Proposed
Transaction have been duly, validly and timely taken;
Assumed
that
any
estimates,
evaluations,
forecasts
and
projections
furnished
to
Duff
&
Phelps
were
reasonably
prepared
and
based
upon
the
best
currently available information and good faith judgment of the person furnishing
the same;
Assumed
that
information
supplied
and
representations
made
by
Management
are
substantially
accurate
regarding
the
Company
and
the
Proposed Transaction and that there has been no material change therein;
Assumed that the representations and warranties made in the Merger Agreement and
the Management Representation Letter are substantially
accurate;
Assumed
that
the
final
versions
of
all
documents
reviewed
by
Duff
&
Phelps
in
draft
form
conform
in
all
material
respects
to
the
drafts
reviewed;
Assumed
that
there
has
been
no
material
change
in
the
assets,
financial
condition,
business,
or
prospects
of
the
Company
since
the
date
of
the
most recent
financial
statements
and
other
information
made
available
to
Duff
&
Phelps;
Assumed that all of the conditions required to implement the Proposed Transaction
will be satisfied and that the Proposed Transaction will be
completed in
accordance with the Merger Agreement without any amendments thereto or any waivers of any terms or conditions thereof; and
Assumed that all governmental, regulatory or other consents and approvals necessary
for the consummation of the Proposed Transaction will be
obtained without
any adverse effect on the Company or the contemplated benefits expected to be derived in the Proposed Transaction.
To the extent that any of the foregoing assumptions or any of the facts on which the
Opinion is based prove to be untrue in any material
respect,
the
Opinion
cannot
and
should
not
be
relied
upon.
Furthermore,
in
Duff
&
Phelps’
analysis
and
in
connection
with
the
preparation
of
the
Opinion,
Duff
&
Phelps
has
made
numerous
assumptions
with
respect
to
industry
performance,
general
business,
market
and
economic conditions and other matters, many of which are beyond the control of any
party involved in the Proposed Transaction and as to
which Duff & Phelps
does not express any view or opinion in the Opinion including as to the reasonableness of such assumptions.
Confidential
41
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Assumptions, Qualifications and Limiting Conditions
Qualifications –
If issued, our Opinion will be qualified by the following:
Duff
&
Phelps
has
prepared
the
Opinion
effective
as
of
the
date
hereof.
The
Opinion
is
necessarily
based
upon
market,
economic,
financial
and
other conditions as they exist and can be evaluated as of the date hereof, and Duff
& Phelps disclaims any undertaking or obligation to advise any
person
of
any
change
in
any
fact
or
matter
affecting
the
Opinion
which
may
come
or
be
brought
to
the
attention
of
Duff
&
Phelps
after
the
date
hereof.
Duff & Phelps did not evaluate the Company’s solvency or conduct an
independent appraisal or physical inspection of any specific assets or
liabilities
(contingent
or
otherwise).
Duff
&
Phelps
has
not
been
requested
to,
and
did
not,
(i)
initiate
any
discussions
with,
or
solicit
any
indications
of interest from, third parties with respect to the Proposed Transaction, the
assets, businesses or operations of the Company, or any alternatives to
the
Proposed Transaction, (ii) negotiate the terms of the Proposed Transaction, and therefore, Duff & Phelps has assumed that such terms are the
most beneficial terms, from the Company’s perspective, that could, under the
circumstances, be negotiated among the parties to the Merger
Agreement
and
the
Proposed
Transaction,
or
(iii)
advise
the
Special
Committee
or
any
other
party
with
respect
to
alternatives
to
the
Proposed
Transaction or any other aspect of the Proposed Transaction.
Duff & Phelps is not expressing any opinion as to the market price or value of
the Company’s Common Stock after announcement of the Proposed
Transaction.
The
Opinion
should
not
be
construed
as
a
valuation
opinion,
a
credit
rating,
a
solvency
opinion,
an
analysis
of
the
Company’s
credit
worthiness,
tax
advice,
or
accounting
advice.
Duff
&
Phelps
has
not
made,
and
assumes
no
responsibility
to
make,
any
representation,
or
render
any opinion, as to any legal matter.
In rendering the Opinion, Duff & Phelps is not expressing any opinion with
respect to the amount or nature of any compensation to any of the
Company’s officers, directors, or employees, or any class of such persons,
relative to the Merger Consideration to be received by the Public
Shareholders
in
the
Proposed
Transaction,
or
with
respect
to
the
fairness
of
any
such
compensation.
Confidential
42
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Assumptions, Qualifications and Limiting Conditions
Limiting Conditions –
If issued, the use of our Opinion will be strictly limited and will state:
The Opinion is furnished solely for the use and benefit of the Special Committee in
connection with its consideration of the Proposed Transaction
and is not
intended to, and does not, confer any rights or remedies upon any other person, and is not intended to be used, and may not be used,
by
any
other
person
or
for
any
other
purpose,
without
Duff
&
Phelps’
express
consent.
The Opinion (i) does not address the merits of the underlying business decision to
enter into the Proposed Transaction versus any alternative
strategy or
transaction, (ii) does not address any transaction related to the Proposed Transaction, (iii) is not a recommendation as to how the
Special Committee, the Board of Directors or any stockholder should vote or act
with respect to any matters relating to the Proposed Transaction,
or whether
to proceed with the Proposed Transaction or any related transaction, and (iv) does not indicate that the consideration to be received by
the Public Shareholders is the best possibly attainable under any circumstances;
instead, it merely states whether the consideration in the
Proposed
Transaction is within a range suggested by certain financial analyses. The decision as to whether to proceed with the Proposed
Transaction or any related transaction may depend on an assessment of factors
unrelated to the financial analysis on which the Opinion is based.
The
Opinion should not be construed as creating any fiduciary duty on the part of Duff & Phelps to any party.
The
Opinion
is
solely
that
of
Duff
&
Phelps,
and
Duff
&
Phelps’
liability
in
connection
with
this
letter
shall
be
limited
in
accordance
with
the
terms
set
forth
in
the
engagement
letter
between
Duff
&
Phelps
and
the
Company
dated
June
11,
2012
(the
“Engagement
Letter”).
The Opinion is confidential, and its use and disclosure is strictly limited in
accordance with the terms set forth in the Engagement Letter.
Confidential
43
|
Cybex International, Inc. (MM) (NASDAQ:CYBI)
過去 株価チャート
から 5 2024 まで 6 2024
Cybex International, Inc. (MM) (NASDAQ:CYBI)
過去 株価チャート
から 6 2023 まで 6 2024
