LENS Letter to Juno Shareholders
June 23, 1999 To Our Fellow Shareholders of Juno Lighting, Inc.: THE RECENTLY ANNOUNCED HOLOPHANE CORP. ACQUISITION IMPLIES A VALUATION RANGE FOR JUNO OF BETWEEN $30.67 AND $34.25 PER SHARE The Lens Group* has been advocating for some time that the proposed acquisition of Juno by Fremont Investors I, LLC is not in the best interests of Juno stockholders because the consideration being offered, purportedly $25 per share, is too low. We believe that the price being offered by National Service Industries Inc. ("NSI") for Holophane Corp. ("Holophane"), a competitor of Juno that is listed by Juno in its proxy statement as being one of five companies in its peer group, supports our contention that Juno should be sold at a higher price. Moreover, the Holophane deal is all cash, in contrast toFremont Investors' offer for Juno consisting of both cash and stock. The table below sets forth the Lens Group's analysis of the market multiples implied in the Holophane acquisition the effect of the application of such multiples to Juno.
The table below compares the implied multiples set forth above for the Holophane acquisition with the multiples for the Juno transaction. We ask you - is the $25 per share that Fremont Investors has offered for Juno adequate consideration?
We believe that NSI was able to offer these higher multiples for Holophane due to the industrial synergies available to it as a strategic buyer and that the Holophane acquisition supports our contention that $25 per share is not an adequate price for Juno. We at the Lens Group plan to vote against the Merger Agreement at the Special Meeting and we urge you to do the same. Please join us and JUST VOTE "NO." Please call us if you have any questions or comments. Sincerely,
* The "Lens Group" consists of Lens Investment Management, LLC, Ram Trust Services, Inc., Robert B. Holmes, John B. Goodrich, Nell Minow and Robert A.G.Monks. The Lens Group has filed a proxy statement with the Securities and Exchange Commission ("SEC") in connection with the Special Meeting of stockholders of Juno to be held on June 29, 1999. The Lens Group will send stockholders a final proxy statement at the earliest practicable date. (1) The total value of the Holophane acquisition (total market value of all stock, options, book value of bank borrowings, less cash and equivalents) is $450 million, or an effective price per share of $38.50. (2) Unless otherwise specified, all balance sheet and income statement data is through March 31, 1999 for Holophane and February 28, 1999 for Juno. (3) EV/Adjusted EBIT multiple means Enterprise Value (market value of common plus minority interest capital plus total debt less cash and cash equivalents) divided by Adjusted EBIT. We define "Adjusted EBIT" to mean trailing 12 months earnings before interest and taxes (EBIT) as adjusted to exclude interest, dividend and other miscellaneous income and special and non-recurring charges. (4) We define "Adjusted EBITDA" to mean trailing 12 months earnings before interest, taxes, depreciation and amortization (EBITDA) as adjusted to exclude interest, dividend and other miscellaneous income and special non-recurring charges. The amounts for depreciation and amortization are as of December 31,1998. (5) Trailing 12-month P/E multiple is equal to the market price per share divided by earnings per share for the most recently reported four fiscal quarters. (6) FY1999 P/E multiple is equal to the market price per share divided by theFirst Call Corporation mean earnings per share estimate for the 1999 fiscal year. (7) FY2000 P/E multiple is equal to the market price per share divided by the First Call Corporation mean earnings per share estimate for the 2000 fiscal year. |
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