DANVILLE, Va. and WILSON, N.C., Nov. 8 /PRNewswire-FirstCall/ --
Independent leaf tobacco dealers DIMON Incorporated (NYSE: DMN) and Standard
Commercial Corporation (NYSE: STW) today jointly announced that they have
entered into a definitive merger agreement. Under the terms of the agreement,
Standard Commercial common shareholders would receive three shares of DIMON
common stock for each share of Standard Commercial common stock.
The combination of DIMON and Standard is expected to be accretive to
earnings per share in the first full year after the merger as a result of
significant cost savings and synergies and to drive profitable growth and
build value over the long term by realizing enhanced economies of scale. The
merged company, which will initially be called DimonStandard Incorporated, is
also expected to benefit from a combined portfolio of value-added service
capabilities, and an enhanced ability to compete for future outsourcing of
similar services from its customers, thereby providing a more comprehensive
solution to customer supply needs. The new company will combine proven
abilities in customer service, global agronomic programs, industry-leading
processing capability, new product development, leaf supply and information
technology advancements, while maintaining stability, agility, financial
strength and a commitment to core values. The merged company will have pro
forma annual revenues of approximately $1.9 billion, based on combined results
for the two companies for the twelve months ending June 30, 2004.
Post merger, the shareholders of DIMON and Standard Commercial would own
approximately 52% and 48%, respectively, of the merged Company's equity. Based
on closing prices for the stock of both companies on November 5, 2004, the
merger consideration places a value on the Standard Commercial common stock of
$18.66 per share, which represents an approximately 13.8% premium to Standard
Commercial's closing price. Based on Standard Commercial's total debt, net of
cash, at June 30, 2004, the merger consideration implies a transaction value
for Standard Commercial of approximately $670 million.
Through the merger, it is expected that significant initial cost savings
will be achieved for the fiscal year beginning April 1, 2005, from a broad
range of corporate and operational initiatives. Those cost savings are
expected to increase substantially in subsequent years, driving accretion in
earnings per share and generating overall shareholder value. Total annual
cost savings of over $40 million are expected to phase in over two years.
DIMON intends to obtain a new syndicated senior bank credit facility of
sufficient size to substantially replace both its and Standard Commercial's
existing facilities. In addition, DIMON may consider seeking consents from
holders of its senior notes to facilitate the closing of the merger.
Upon completion of the merger, Brian J. Harker, Chairman and CEO of DIMON,
will serve as Chairman and CEO of DimonStandard, and Robert E. (Pete)
Harrison, Chairman, President and CEO of Standard Commercial, will serve as
President and Chief Operating Officer. Mr. Harrison is expected to succeed
Mr. Harker as CEO after two years. The new board of directors will include
Mr. Harker and six existing independent DIMON directors, together with Mr.
Harrison and five existing independent Standard Commercial directors.
In addition to Brian Harker and Pete Harrison -- who together have a
combined 47 years of industry experience -- DimonStandard will also have a
deep and experienced management team that will provide solid leadership for
years to come. The companies are currently evaluating a future headquarters
location.
Commenting on the merger, Brian Harker said, "We are creating a stronger
enterprise that is well-positioned for long-term success in an increasingly
challenging global marketplace. In many ways, this merger builds on DIMON's
ongoing operational restructuring, which seeks to position our business for
long-term growth and value creation by streamlining operations and investing
in key areas of our business and in new markets. We see this merger as an
excellent means to escalate those efforts, while enhancing our ability to
respond to our customers' evolving needs."
Mr. Harker concluded, "Strategically, operationally and financially, this
is the right transaction at the right time, and with a partner that is an
excellent fit with our company. I have known Pete Harrison for many years
now, and I have the utmost respect for his management skills and expertise. I
look forward to working closely with him in completing our merger, ensuring a
smooth integration process and moving beyond towards sustainable, long-term
value creation to benefit our shareholders, customers, employees and
communities."
Pete Harrison said, "This is a rare opportunity in our industry to combine
the best of two great organizations. In the course of numerous conversations
with Brian about the merger, it became clear to both of us that the timing of
this combination is right and, by structuring the merger as proposed, we
should create tremendous value for our customers, our employees, and our
investors. The power of this combination will be in its execution, and Brian
and I are enthusiastic and focused on achieving the value we foresee."
Mr. Harrison, continued, "In order to ensure a thorough and balanced
merger integration, the companies will form a joint integration team, led by
executives from both companies. That team will determine the best means for
achieving the merger's potential, including areas of the business where growth
opportunities can be expanded, as well as plans for achieving cost savings.
We will be better able to serve our customers while providing a positive,
progressive and career enhancing environment for employees."
The closing of the merger is subject to financing considerations and
customary closing conditions, including approval by the shareholders of each
of DIMON and Standard, approval of U.S. and foreign antitrust authorities,
effectiveness of a proxy statement/prospectus relating to shareholder
approval. Certain officers, directors and significant shareholders of Standard
Commercial have signed shareholder agreements pursuant to which they agree to
vote shares beneficially owned by them in favor of the merger.
At 9:00 a.m. Eastern Time today (November 8, 2004), Brian Harker and Pete
Harrison will host a joint conference call to discuss the merger. To
participate in the call dial 888-428-4476 (651-224-7558 outside the Untied
States) and an operator will connect you to the conference. Those wishing to
listen to the call may do so by visiting either DIMON's website
(http://www.dimon.com ) or Standard Commercial's website
(http://www.sccgroup.com ) referencing conference code 754045. A replay of
the call will also be available at these websites or by dialing 800-475-6701
(320-365-3844 outside the United States) using the access code 754045.
Peter J. Solomon Company and Wachovia Securities served as financial
advisors, and Hunton & Williams LLP served as legal advisor to DIMON in this
transaction. Standard Commercial's financial and legal advisors were Matrix
Capital Markets Group, Inc -- Charlotte and Wyrick Robbins Yates & Ponton LLP,
respectively.
DIMON Incorporated is the world's second largest dealer of leaf tobacco
with operations in more than 30 countries. For more information on DIMON,
visit the company's website at http://www.dimon.com .
Standard Commercial Corporation is the world's third largest dealer of
leaf tobacco with operations in more than 30 countries. For more information
on Standard Commercial, visit the company's website at
http://www.sccgroup.com.
This press release contains "forward-looking statements" as defined in the
Private Securities Litigation Reform Act of 1995. These statements are based
on current expectations of future events. Such statements include, but are not
limited to, statements about the benefits of the merger between DIMON and
Standard Commercial, including future financial and operating results, the
combined company's plans, objectives, expectations and intentions and other
statements that are not historical facts. Such statements are based on the
current beliefs and expectations of DIMON's and Standard Commercial's
management and are subject to significant risks and uncertainties. If
underlying assumptions prove inaccurate or unknown risks or uncertainties
materialize, actual results may differ materially from current expectations
and projections. The following factors, among others, could cause actual
results to differ from those set forth in the forward-looking statements:
changes in timing of cost savings initiatives, our ability to successfully
integrate DIMON's and Standard Commercial's operations, changes in the markets
for financing necessary to consummate the merger, changes in the timing of
anticipated shipments, changes in anticipated geographic product sourcing,
political instability in sourcing locations, currency and interest rate
fluctuations, shifts in the global supply and demand position for tobacco
products, and the impact of regulation and litigation on DIMON's and Standard
Commercial's customers.
DIMON and Standard Commercial do not undertake any obligation to publicly
release the results of any revisions that may be made to any forward-looking
statements to reflect the occurrence of anticipated or unanticipated events or
circumstances after the date of such statements. Additional factors that
could cause DIMON's and Standard Commercial's results to differ materially
from those described in the forward-looking statements can be found in DIMON's
and Standard Commercial 's Annual Reports on Form 10-K for each company's
fiscal year ended March 31, 2004, and other filings with the Securities and
Exchange Commission (the "SEC") which are available at the SEC's Internet site
(http://www.sec.gov ).
DIMON and Standard Commercial will be filing a joint proxy
statement/prospectus and other relevant documents concerning the merger with
the U.S. Securities and Exchange Commission. STOCKHOLDERS ARE URGED TO READ
THE PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTION AND OTHER
RELEVANT DOCUMENTS FILED WITH THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. Investors and security holders will be able to obtain a free copy
of the proxy statement/prospectus, as well as other filings containing
information about DIMON and Standard Commercial 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 DIMON Incorporated, 512 Bridge Street, Post Office Box 681,
Danville, Virginia 23543-0681, Attention: Investor Relations, (434) 792 7511
or to Standard Commercial Corporation, 2201 Miller Road, P.O. Box 450, Wilson,
North Carolina 27894-0450, Attention: Investor Relations, (252) 291 5507.
The respective directors and executive officers of DIMON and Standard
Commercial and other persons may be deemed to be "participants" in the
solicitation of proxies in respect of the proposed merger. Information
regarding DIMON's directors and executive officers is available in its proxy
statement filed with the SEC on July 13, 2004, and information regarding
Standard Commercial's directors and executive officers is available in its
proxy statement filed with the SEC on June 23, 2004. 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 the proxy statement/prospectus and other relevant materials to be
filed with the SEC when they become available.
CONTACT:
Ritchie L. Bond
DIMON Incorporated
434-791-6952
Timothy S. Price
Standard Commercial Corporation
252-291-5507