EXHIBIT 4
XXXXXX XXXXXXX
XXXXXX XXXXXXX & CO.
INCORPORATED
000 XXXXXXXXXX XXXXXX
XXX XXXXXXXXX, XXXXXXXXXX 00000
(000) 000-0000
April 9, 1997
Board of Directors
Microcom, Inc.
000 Xxxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000-0000
Gentlemen:
We understand that Microcom, Inc. ("Microcom" or the "Company"), Compaq Computer
("Buyer") and Buyer Acquisition Corp., a wholly owned subsidiary of Buyer
("Acquisition Sub") have entered into an Agreement and Plan of Merger, dated as
of April 9, 1997 (the "Merger Agreement"), which provides, among other things,
for (i) the commencement by Acquisition Sub of a tender offer (the "Tender
Offer") for all issued and outstanding shares of common stock, par value $0.01
per share (the "Common Stock"), of Target for $16.25 per share net to the seller
in cash, and (ii) the subsequent merger (the "Merger") of Acquisition Sub with
and into the Company. Pursuant to the Merger, the Company will become a wholly
owned subsidiary of Buyer and each issued and outstanding share of Common Stock,
other than shares held in treasury or held by Buyer or any affiliate of Buyer or
as to which dissenters' rights have been perfected, will be converted into the
right to receive $16.25 per share in cash. The terms and conditions of the
Tender Offer and the Merger are more fully set forth in the Merger Agreement.
You have asked for our opinion as to whether the consideration to be received by
the holders of shares of Common Stock pursuant to the Merger Agreement is fair
from a financial point of view to such holders.
For purposes of the opinion set forth herein, we have:
(i) reviewed certain publicly available financial statements and other
information of the Company and the Buyer;
(ii) reviewed certain internal financial statements and other financial and
operating data concerning the Company prepared by the management of the
Company;
(iii) analyzed certain financial projections prepared by the management of
the Company;
(iv) discussed the past and current operations and financial condition and
the prospects of the Company with senior executives of the Company;
(v) reviewed the reported prices and trading activity for the Common Stock;
(vi) compared the financial performance of the Company and the prices and
trading activity of the Common Stock with that of certain other comparable
publicly-traded companies and their securities;
(vii) reviewed the financial terms, to the extent publicly available, of
certain comparable acquisition transactions;
(viii) participated in discussions and negotiations among
representatives of the Company and, Xxxxx and their financial and legal
advisors;
(ix) reviewed the Merger Agreement and certain related documents;
(x) participated in discussions with certain third parties, including
Xxxxx, who expressed interest in acquiring the Company or certain assets of
the Company, which led to the proposed Merger; and
(xi) performed such other analyses and considered such other factors as we
have deemed appropriate.
We have assumed and relied upon, without independent verification, the accuracy
and completeness of the information reviewed by us for the purposes of this
opinion. With respect to the financial projections, we have assumed that they
have been reasonably prepared on bases reflecting the best currently available
estimates and judgments of the future financial performance of the Company. We
have relied upon, without independent verification, the assessment by the
management of the Company of the Company's technologies and products, and the
validity of, and risks associated with, the Company's existing and future
products and technologies. We have not made any independent valuation or
appraisal of the assets or liabilities of the Company, nor have we been
furnished with any such appraisals. Our opinion is necessarily based on
economic, market and other conditions as in effect on, and the information made
available to us as of, the date hereof.
We have acted as financial advisor to the Board of Directors of the Company in
connection with this transaction and will receive a fee for our services. In
the past, Xxxxxx Xxxxxxx & Co. Incorporated and its affiliates have provided
financial advisory and financing services for Buyer and have received fees for
the rendering of these services.
It is understood that this letter is for the information of the Board of
Directors of the Company and may not be used for any other purpose without our
prior written consent; except that this opinion may be included in any filing
with the Securities and Exchange Commission in connection with the Tender Offer
and the Merger. In addition, Xxxxxx Xxxxxxx expresses no opinion or
recommendation as to whether holders of Common Stock should accept the Tender
Offer.
Based on the foregoing, we are of the opinion on the date hereof that the
consideration to be received by the holders of shares of Common Stock pursuant
to the Merger Agreement is fair from a financial point of view to such holders.
Very truly yours,
XXXXXX XXXXXXX & CO. INCORPORATED
By: /s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
Managing Director
