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EXHIBIT (a)(6)
XXXXXX BROTHERS
December 24, 1998
COHR Inc.
Board of Directors
00000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
Members of the Board,
We understand that Three Cities Research, Inc. ("TCR") has entered into an
agreement to purchase 48.3% of the Company's outstanding common stock from
Strong Capital Management, Inc. ("Strong") and Franklin Resources, Inc,
("Franklin") for $5.125 per share in cash and, following consummation of such
purchase, to initiate an unconditional tender offer for any and all of the
remaining outstanding shares of the Company's common stock for $5.375 per share
in cash (the "Base Consideration"), subject to increase to $6.375 per share in
the event certain stockholder litigation involving the Company is settled within
certain parameters agreed to by the parties (the "Proposed Transaction"). The
terms and conditions of the Proposed Transaction are set forth in more detail in
the Plan and Agreement of Merger dated as of December 24, 1998 between COHR Inc.
and COHR Acquisition Corporation, a wholly owned subsidiary of TCR (the
"Agreement").
We have been requested by the Board of Directors of the Company to render
our opinion with respect to the fairness, from a financial point of view, to the
Company's stockholders (other than Strong and Franklin) (the "Public
Stockholders") of the consideration to be offered to the Public Stockholders in
the Proposed Transaction. We have not been requested to opine as to, and our
opinion does not in any manner address, the Company's underlying business
decision to proceed with or effect the Proposed Transaction.
In arriving at our opinion, we reviewed and analyzed: (1) a draft copy of
the Agreement and the specific terms of the Proposed Transaction, (2) publicly
available information concerning the Company that we believe to be relevant to
our analysis, including its Annual Report on Form 10-K for the fiscal year ended
March 31, 1998 and its Quarterly Reports on Form 10-Q for the quarters ended
June 30, 1998 and September 30, 1998, (3) financial and operating information
with respect to the business, operations and prospects of the Company furnished
to us by the Company, including without limitation current projections prepared
by management of the Company and information regarding recent financial
performance of the Company, (4) a trading history of the Company's common stock
from December 16, 1996 to the present and a comparison of that trading history
with those of other companies that we deemed relevant, (5) a comparison of the
historical financial results and present financial condition of the Company with
those of other companies that we deemed relevant, (6) a comparison of the
financial terms of the Proposed Transaction with the financial terms of certain
other transactions that we deemed relevant and (7) the results of our prior
efforts to solicit indications of interest from third parties with respect to a
purchase of the Company. In addition, we have had discussions with the
management of the Company concerning its business, operations, assets, financial
condition and prospects and have undertaken such other studies, analyses and
investigations as we deemed appropriate.
In arriving at our opinion, we have assumed and relied upon the accuracy
and completeness of the financial and other information used by us without
assuming any responsibility for independent verification of such information and
have further relied upon the assurances of management of the Company that they
are not aware of any facts or circumstances that would make such information
inaccurate or misleading. With respect to the financial projections of the
Company, upon advice of the Company we have assumed that such projections have
been reasonably prepared on a basis reflecting the best currently available
estimates and judgments of the management of the Company as to the future
financial performance of the Company, and
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that the Company will perform substantially in accordance with such projections.
In arriving at our opinion, we have conducted only a limited physical inspection
of the properties and facilities of the Company and have not made or obtained
any evaluations or appraisals of the assets or liabilities of the Company. In
addition, since the initiation of discussions with TCR, you have not authorized
us to solicit, and we have not solicited, any indications of interest from any
third party with respect to the purchase of all or a part of the Company's
business. Our opinion necessarily is based upon market, economic and other
conditions as they exist on, and can be evaluated as of, the date of this
letter.
Based upon and subject to the foregoing, we are of the opinion as of the
date hereof that, from a financial point of view, the Base Consideration to be
offered to the Public Stockholders in the Proposed Transaction is fair to the
Public stockholders.
We have acted as financial advisor to the Company in connection with the
Proposed Transaction and will receive a fee for our services which is contingent
upon the consummation of the Proposed Transaction. In addition, the Company has
agreed to indemnify us for certain liabilities that may arise out of the
rendering of this opinion. We also have performed various investment banking
services for the Company in the past and have received customary fees for such
services.
This opinion is for the use and benefit of the Board of Directors of the
Company and is rendered to the Board of Directors in connection with its
consideration of the Proposed Transaction. This opinion is not intended to be
and does not constitute a recommendation to any stockholder of the Company as to
whether to accept the consideration to be offered to such stockholder in
connection with the Proposed Transaction.
Very truly yours,
XXXXXX BROTHERS
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