Filed
by The Middleby Corporation.
Pursuant
to Rule 425 under the Securities Act of 1933
and
deemed filed pursuant to Rule 14a-12 under
the
Securities Exchange Act of 1934
Subject
Company: TurboChef Technologies, Inc.
Commission
File No.: 001-32334
This filing contains “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act
of 1995. Such statements include, but are not limited to, statements relating to
anticipated financial and operating results, the companies’
plans, objectives, expectations and intentions and other statements including
words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend,”
“will,” “should,” “may,” and other similar expressions. Such statements are
based upon the current beliefs and expectations of the management of The
Middleby Corporation (“Middleby”) and
TurboChef Technologies, Inc. (“TurboChef”) and
involve a number of significant risks and uncertainties. Actual results may
differ materially from the results anticipated in these forward-looking
statements. The following factors, among others, could cause or contribute to
such material differences: failure to satisfy any of the conditions of closing
the proposed transaction with TurboChef, including the failure to obtain
TurboChef stockholder approval; the risks that Middleby and TurboChef businesses
will not be integrated successfully; the risk that Middleby and TurboChef will
not realize estimated cost savings and synergies; costs relating to the proposed
transaction; disruption from the transaction making it more difficult to
maintain relationships with customers, employees, distributors or suppliers; the
level of end market activity in Middleby’s and TurboChef’s commercial and
residential markets; unpredictable difficulties or delays in the development of
new product technology; results of pending and future litigation; access to
capital; actions of domestic and foreign governments; variability in financing
costs; quarterly variations in operating results; dependence on key customers;
international exposure; foreign exchange and political risks affecting
international sales; changing market conditions; the impact of competitive
products and pricing and related market conditions; the timely development and
market acceptance of the company's products; and the availability and cost of
raw materials. Additional factors that could cause Middleby’s and
TurboChef’s results to differ materially from those described in the
forward-looking statements can be found in the 2007 Annual Report on Form 10-K
of Middleby and the 2007 Annual Report on Form 10-K of TurboChef filed with the
Securities and Exchange Commission (the “SEC”) and available
at the SEC’s Internet site (http://www.sec.gov). Neither Middleby nor
TurboChef undertakes any obligation to update any forward-looking statements to
reflect circumstances or events that
occur after the date on which such statements were made.
This communication is being made in
respect of the proposed merger transaction involving Middleby, TurboChef and
Chef Acquisition Corp. In connection with the proposed transaction, Middleby
will file with the SEC a registration statement on Form S-4 and TurboChef will
mail a proxy statement/prospectus to its stockholders, and each will be filing
other documents regarding the proposed transaction with the SEC as well. BEFORE
MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS ARE URGED TO READ THE PROXY
STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTION AND ANY OTHER RELEVANT
DOCUMENTS CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The final
proxy statement/prospectus will be mailed to TurboChef’s stockholders.
Stockholders will be able to obtain a free copy of the proxy
statement/prospectus, as well as other filings containing information about
Middleby and TurboChef, without charge, at the SEC’s Internet site
(http://www.sec.gov).
Copies of the proxy
statement/prospectus and the filings with the SEC that will be incorporated by
reference in the proxy statement/prospectus can also be obtained, without
charge, by directing a request to The Middleby Corporation, 1400 Toastmaster
Drive, Elgin, IL 60120 Attention: Investor Relations, (847) 429-7756, or to
TurboChef Technologies, Inc., Six Concourse Parkway, Suite 1900, Atlanta, GA
30328 Attention: Investor Relations, (678) 987-1700.
Middleby, TurboChef and their
respective directors and executive officers and other persons may be deemed to
be participants in the solicitation of proxies in respect of the proposed
transaction. Information regarding Middleby’s directors and executive officers
is available in Middleby’s proxy statement for its 2008 annual meeting of
stockholders, which was filed with the SEC on March 28, 2008, and amended on
April 24, 2008 and Middleby’s 2007 Annual Report on Form 10-K, which was filed
with the SEC on February 27, 2008, and amended on August 6, 2008. Information
regarding TurboChef’s directors and executive officers is available in
TurboChef’s proxy statement for its 2008 annual meeting of stockholders and
TurboChef’s 2007 Annual Report on Form 10-K, which were filed with the SEC on
June 10, 2008 and March 7, 2008, respectively. Other information regarding the
participants in the proxy solicitation and a description of their direct and
indirect interests, by security holdings or otherwise, will be contained in the
proxy statement/prospectus and other relevant material to be filed with the SEC
when they become available.
The following are materials used in a
presentation for investors on August 12, 2008.
***
August
12, 2008
Acquisition
of
TurboChef Technologies, Inc.
TurboChef Technologies, Inc.
The
Middleby Corporation
Statements
made in this presentation or otherwise attributable to the company
regarding the company's business which are not historical fact are forward-looking
statements made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. The company cautions investors that such statements
are estimates of future performance and are highly dependent upon a variety of
important factors that could cause actual results to differ materially from such
statements. Such factors include, but are not limited to, failure to satisfy any of the
conditions of closing the proposed transaction with TurboChef, including the failure
to obtain TurboChef stockholder approval; the risks that Middleby and TurboChef
businesses will not be integrated successfully; the risk that Middleby and TurboChef
will not realize estimated cost savings and synergies; costs relating to the proposed
transaction; disruption from the transaction making it more difficult to maintain
relationships with customers, employees, distributors or suppliers; the level of end
market activity in Middleby’s and TurboChef’s commercial and residential markets;
unpredictable difficulties or delays in the development of new product technology;
results of pending and future litigation; access to capital; actions of domestic and
foreign governments; variability in financing costs; quarterly variations in operating
results; dependence on key customers; international exposure; foreign exchange
and political risks affecting international sales; changing market conditions; the
impact of competitive products and pricing and related market conditions; the timely
development and market acceptance of the company's products; the availability and
cost of raw materials; and other risks detailed herein and from time-to-time in the
company's SEC filings.
regarding the company's business which are not historical fact are forward-looking
statements made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. The company cautions investors that such statements
are estimates of future performance and are highly dependent upon a variety of
important factors that could cause actual results to differ materially from such
statements. Such factors include, but are not limited to, failure to satisfy any of the
conditions of closing the proposed transaction with TurboChef, including the failure
to obtain TurboChef stockholder approval; the risks that Middleby and TurboChef
businesses will not be integrated successfully; the risk that Middleby and TurboChef
will not realize estimated cost savings and synergies; costs relating to the proposed
transaction; disruption from the transaction making it more difficult to maintain
relationships with customers, employees, distributors or suppliers; the level of end
market activity in Middleby’s and TurboChef’s commercial and residential markets;
unpredictable difficulties or delays in the development of new product technology;
results of pending and future litigation; access to capital; actions of domestic and
foreign governments; variability in financing costs; quarterly variations in operating
results; dependence on key customers; international exposure; foreign exchange
and political risks affecting international sales; changing market conditions; the
impact of competitive products and pricing and related market conditions; the timely
development and market acceptance of the company's products; the availability and
cost of raw materials; and other risks detailed herein and from time-to-time in the
company's SEC filings.
2
Forward
Looking Statements
3
Executive
Summary
u Overview
of the Transaction
u Compelling
Strategic Rationale
u TurboChef
Overview
u Revolutionary
TurboChef Technology
u Building
on Core Competencies
u Complementary
Product Portfolios
u Acquisition
Financing
u TurboChef
Financial Performance
u Plan
for Operational Improvement
|
Price
and Form of
Consideration |
u $6.47 per
share of TurboChef (based on Middleby share price of $57.60 as of
August
11, 2008) u 57% cash
consideration / 43% stock
– $3.67 cash
consideration per share of TurboChef
– 0.0486 share
of Middleby stock per share of TurboChef
• Value of
$2.80 per TurboChef share at current Middleby share price of
$57.60
as of August 11, 2008 u Estimated
transaction costs and change in control payments of ~$18
million
|
|
Valuation
|
u Represents a
15.5% premium to the August 11, 2008 closing price of $5.60
u Total
transaction value of approximately $200 million, including $5 million
of
TurboChef net cash as of June 30, 2008 u Net present
value of TurboChef NOLs of approximately $25 million
|
|
Net
Operating
Losses |
u TurboChef
has a net operating loss of ~$120 million
u Estimated to
represent ~$5 million in cash tax savings annually for the next five
years
and ~$3 million annually through 2028 |
|
Earnings
Impact
|
u Slightly
dilutive in 2009
u Accretive in
2010
u Includes
approximately $8-$10 million of non-cash charges
annually
|
|
Conditions
to
Closing |
u Affirmative
vote of a majority of TurboChef shareholders
u Customary
representations and warranties, including no material adverse effect
at
TurboChef |
|
Timing
|
u Expected to
close in 4th quarter 2008
|
4
Overview
of the Transaction
Ability
to utilize
accumulated net
operating losses
accumulated net
operating losses
Acquire
a proven
technology leader
technology leader
Obtain
leading
position in fast growing
speed cook market
position in fast growing
speed cook market
Create
value by
applying Middleby’s
tested integration
methodologies
applying Middleby’s
tested integration
methodologies
5
Compelling
Strategic Rationale
Countertop
Conveyor Oven
Conveyor Oven
i
Series
Batch Oven
Batch Oven
Freestanding
Conveyor Oven
Conveyor Oven
C3
Oven
Tornado
Oven
High
h Batch
Oven
Oven
Overview
Existing
Commercial Ovens
Select
Customers
New
Commercial Ovens
6
TurboChef
Overview
u TurboChef is a
leading provider of equipment,
technology and services focused on the high-
speed preparation of food products
technology and services focused on the high-
speed preparation of food products
u Products include
user-friendly speed cook ovens
employing proprietary combinations of heating
technologies to cook food products at speeds up to
12 times faster than conventional heating methods
employing proprietary combinations of heating
technologies to cook food products at speeds up to
12 times faster than conventional heating methods
u Customers include
full and quick-service
restaurants, hotels, stadiums, convenience stores
and coffee shops
restaurants, hotels, stadiums, convenience stores
and coffee shops
7
Revolutionary
TurboChef Technology
TurboChef’s
game-changing technology …
ü Small footprint
& ventless technology
ü Sophisticated
controls
ü Lightning fast
speeds
…
greatly expands the addressable market for commercial ovens
– Small size and
ventless technology allows non-traditional establishments such as convenience
stores
and coffee shops to offer top quality, prepared hot foods
and coffee shops to offer top quality, prepared hot foods
– Easy-to-use
controls expand
the range of menu items available for
traditional hot food establishments
– Greatly reduced
cooking time enables food establishments to cater
to the increasing demand for
convenience
convenience
Delivering
Enhanced Value to Our Customers
u Service
Platform
• Tested service
platform
covering all Middleby
brands
covering all Middleby
brands
• Strong reputation
for
quality and
dependability
quality and
dependability
u Advanced
Technology
• Microwave +
impingement
speed cook technology
speed cook technology
• High quality
cooking results at up
to 12x cooking speed of
conventional ovens
to 12x cooking speed of
conventional ovens
• Plug-and-play
ventless set up
u Top Brand
Name
• Successfully
created
commercial speed cook
category
commercial speed cook
category
• Leading customer
base as
foundation for brand
awareness
foundation for brand
awareness
8
Building
on Core Competencies
Capital
Structure Post Transaction
9
Acquisition
Financing
u Middleby will
finance the cash consideration of the acquisition as well as associated fees
with
its existing $450 million senior revolving credit facility
its existing $450 million senior revolving credit facility
– The company is in
the process of expanding its borrowing capacity available under the
$150 million accordion feature
$150 million accordion feature
– Accordion allows
ample capacity for future acquisitions
u Based on 6/30/08
debt balance of $275 million, cash consideration to TurboChef of ~$115
million and ~$18 million of transaction costs and change in control payments, pro forma
leverage of 2.6x LTM 6/30/08 adjusted EBITDA
million and ~$18 million of transaction costs and change in control payments, pro forma
leverage of 2.6x LTM 6/30/08 adjusted EBITDA
– In the absence of
further acquisitions, the company expects to be levered less than 2x by
the end of 2009
the end of 2009
u Middleby will keep
its attractively priced credit facility in place
TurboChef
Historical Financial Results by Segment
___________________________
1.2005
excludes one-time increase in warranty provision of $10 million.
2. 2007
and LTM period include $8 million and $5 million, respectively, of non-recurring
expenses.
10
TurboChef
Financial Performance
|
Corporate
Reorganization |
u Public
company costs
u Redundancies
with Middleby corporate office
|
u $8
million
|
|
Residential
Reorganization |
u Reduction of
significant marketing spending
u Minimize
staffing and cost structure
u Synergies
with Jade residential line
|
u $15
million
|
|
Commercial
Synergies |
u Purchasing
and material costs
u Manufacturing
efficiencies
u Marketing
and trade show costs
u International
distribution consolidation
u Other cost
synergies and reduction opportunities
|
u $4-$8
million
|
Estimated
Cost
Savings
Savings
11
Plan
for Operational Improvement
___________________________
1.LTM
6/30/08 operating income / (loss) of ($16.4) million + depreciation and
amortization of $4.6 million = LTM EBITDA of ($11.8) million. LTM EBITDA plus
$5.4 million of non-recurring
LTM expenses = Adjusted LTM EBITDA of ($6.4) million.
LTM expenses = Adjusted LTM EBITDA of ($6.4) million.
Adjusted
LTM
EBITDA (1)
EBITDA (1)
Plus:
Corporate
Reorganization
Corporate
Reorganization
Plus:
Residential
Reorganization
Residential
Reorganization
Pro
Forma
Post-Reorganization
LTM EBITDA
Post-Reorganization
LTM EBITDA
Plus:
Commercial
Synergies
Commercial
Synergies
Pro
Forma
Synergy Adjusted
LTM EBITDA
Synergy Adjusted
LTM EBITDA
6/30/08
LTM Standalone Actual to 6/30/08 Pro Forma EBITDA
($6)
$8
$15
$17
$4-8
$21-25
Reorganization
Adjustments
12
Plan
for Operational Improvement