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EXHIBIT (A)(4)
[MESIROW FINANCIAL LETTERHEAD]
November 26, 1996
Board of Directors
Milgray Electronics, Inc.
00 Xxxxxxx Xxxxxxxxx
Xxxxxxxxxxx, Xxx Xxxx 00000
Gentlemen:
Milgray Electronics, Inc. ("Milgray" or the "Company") proposes to enter
into an agreement with Bell Industries, Inc. ("Bell") and ME Acquisition, Inc.,
a wholly owned subsidiary of Bell (the "Purchaser") pursuant to which the
Purchaser will make a tender offer for all of the issued and outstanding shares
of common stock of the Company ("Common Stock"), after which the Purchaser will
be merged with and into the Company. The offer is expected to commence on or
around December 4, 1996, and the price per share offered to holders of Common
Stock of the Company is expected to be $14.77, net to the sellers in cash for
each share of Common Stock that is purchased, or at the effective time of the
merger. You have asked Mesirow Financial, Inc. ("Mesirow") to render its opinion
(the "Opinion") as to whether or not the proposed consideration to be received
by the holders of the Common Stock in the proposed transaction is fair, from a
financial point of view, to such shareholders.
In connection with rendering the Opinion we have, among other things:
(i) reviewed the latest draft, dated November 9, 1996, of the
Agreement and Plan of Merger;
(ii) reviewed the latest available schedules provided by Milgray and
the Purchaser pursuant to the Agreement and Plan of Merger;
(iii) reviewed Milgray's annual reports on Form 10-K and annual
reports to shareholders for the years ended September 30, 1993, 1994, and
1995, quarterly reports on Form 10-Q for the quarters ended December 31,
1995, March 31, 1996, and June 30, 1996 and certain other filings with the
Securities and Exchange Commission made by Milgray, including proxy
statements;
(iv) reviewed the current and historical market prices and trading
data for Milgray Common Stock;
(v) reviewed certain non-public information relating to Milgray
including monthly internal financial statements for the year ended
September 30, 1996;
(vi) reviewed financial forecasts and projections for Milgray prepared
by the senior management of Milgray for the years ended September 30, 1997
through September 30, 2001;
(vii) reviewed certain publicly available information, including
research reports concerning certain other companies engaged in businesses
which we believed to be comparable to Milgray and the trading markets for
certain of such companies' securities;
(viii) reviewed the financial terms of certain recent mergers and
acquisitions which we believed to be relevant;
(ix) conducted discussions with Xxxxxxx X. Xxxxxxxx, President and
Chairman of the Board, Xxxxxxx Xxxxx, a Director and Executive Vice
President and Vice President-Sales/Marketing, and Xxxx Xxxxxxxxx, Vice
President-Finance, Treasurer and Assistant Secretary concerning their
business and operations, assets, present conditions, and future prospects;
(x) conducted discussions with a representative from the Company's
independent certified public accountants, Xxxxx Xxxxxxxx LLP; and
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(xi) performed such other analyses, examinations and procedures,
reviewed such other agreements and documents, and considered such other
factors, as we deemed, in our sole judgment, to be necessary, appropriate
or relevant to render our opinion.
In arriving at our opinion, we have assumed and relied, without independent
verification, upon the accuracy and completeness of the information obtained
from public sources or provided to us by the Company. In addition, we have
assumed that Xxxxxxx's forecasts and projections furnished to us have been
reasonably prepared on bases reflecting the best currently available estimates
and judgments of the Company's management as to the future financial condition
and operating results of the Company. In addition, we have not made an
independent evaluation or appraisal of the assets or liabilities (contingent or
otherwise) of the Company, nor have we been furnished with any such evaluations
or appraisals.
Our opinion is necessarily based upon general economic, financial, market
and other conditions as they exist and can be evaluated on the date hereof. We
were not requested to, and did not, solicit third party indications of interest
in acquiring all or any part of, or merging with, or into, the Company.
Mesirow is a full service securities firm and, therefore, in the ordinary
course of our trading and brokerage activities, Mesirow or any of our affiliates
may at any time hold long or short positions, and may trade or otherwise effect
transactions, for our own account or the accounts of customers, in securities of
Milgray or Bell. Mesirow will receive a fee for rendering this opinion.
Based upon and subject to the foregoing, including the various assumptions
and limitations set forth herein, it is our opinion that, as of the date hereof,
the consideration to be offered to the holders of the Common Stock of Milgray is
fair, from a financial point of view, to such holders.
This opinion is for the use and benefit of the Board of Directors of the
Company and may not be reproduced, summarized, described or referred to or given
to any other person except in connection with the Company's initial public
announcement of the proposed merger, Schedule 14D-9 and any amendment thereof,
or proxy statement regarding the merger.
Very truly yours,
MESIROW FINANCIAL, INC.
Mesirow Financial, Inc.
