1
EXHIBIT 5
XXXXXXX XXXXX LETTERHEAD
May 10, 1999
Board of Directors
Gradall Industries, Inc.
000 Xxxx Xxxxxx X.X.
New Philadelphia, Ohio 44663
Members of the Board of Directors:
Gradall Industries, Inc. (the "Company"), JLG Industries, Inc. (the
"Acquiror") and JLG Acquisition Corp., a newly formed, wholly owned subsidiary
of the Acquiror (the "Acquisition Sub") have entered into an Agreement and Plan
of Merger, dated as of May 10, 1999 (the "Agreement"), pursuant to which (i) the
Acquiror will cause the Acquisition Sub to commence a tender offer (the "Tender
Offer") for all outstanding shares of the Company's common stock, par value
$.001 per share, (collectively, the "Company Shares") for $20.00 per share, net
to the seller in cash (the "Consideration"), and (ii) the Acquisition Sub will
be merged with and into the Company in a merger (the "Merger"), in which each
Company Share not acquired in the Tender Offer, other than the Company Shares
held in treasury or held by the Acquiror or any affiliate of the Acquiror or as
to which dissenter's rights have been perfected, will be converted into the
right to receive the Consideration. The Tender Offer and the Merger, taken
together, are referred to as the "Transaction."
You have asked us whether, in our opinion, the Consideration to be received
by the holders of the Company Shares pursuant to the Transaction is fair from a
financial point of view to such holders.
In arriving at the opinion set forth below, we have, among other things:
(1) Reviewed certain publicly available business and financial
information relating to the Company that we deemed to be relevant;
(2) Reviewed certain information, including financial forecasts,
relating to the business, earnings, cash flow, assets, liabilities
and prospects of the Company furnished to us by the Company;
(3) Conducted discussions with members of senior management and
representatives of the Company concerning the matters described in
clauses 1 and 2 above;
(4) Reviewed the market prices and valuation multiples for the Company
Shares and compared them with those of certain publicly traded
companies that we deemed to be relevant;
(5) Reviewed the results of operations of the Company and compared
them with those of certain publicly traded companies that we
deemed to be relevant;
(6) Compared the proposed financial terms of the Transaction with the
financial terms of certain other transactions that we deemed to be
relevant;
(7) Participated in certain discussions and negotiations among
representatives of the Company and the Acquiror and their
financial and legal advisors;
(8) Reviewed the Agreement; and
2
(9) Reviewed such other financial studies and analyses and took into
account such other matters as we deemed necessary, including our
assessment of general economic, market and monetary conditions.
In preparing our opinion, we have assumed and relied on the accuracy and
completeness of all information supplied or otherwise made available to us,
discussed with or reviewed by or for us, or publicly available, and we have not
assumed any responsibility for independently verifying such information or
undertaken an independent evaluation or appraisal of any of the assets or
liabilities of the Company or been furnished with any such evaluation or
appraisal. In addition, we have not assumed any obligation to conduct any
physical inspection of the properties or facilities of the Company. With respect
to the financial forecast information furnished to or discussed with us by the
Company, we have assumed that they have been reasonably prepared and reflect the
best currently available estimates and judgment of the Company's management as
to the expected future financial performance of the Company.
Our opinion is necessarily based upon market, economic and other conditions
as they exist and can be evaluated on, and on the information made available to
us as of, the date hereof.
We are acting as financial advisor to the Company in connection with the
Transaction and will receive a fee from the Company for our services, a
significant portion of which is contingent upon the consummation of the
Transaction. The Company has agreed to indemnify us for certain liabilities
arising out of our engagement. In addition, in the ordinary course of our
business, we may actively trade the Company Shares and other securities of the
Company, as well as securities of the Acquiror for our own account and for the
accounts of customers and, accordingly, may at any time hold a long or short
position in such securities.
This opinion is for the use and benefit of the Board of Directors of the
Company. Our opinion does not address the merits of the underlying decision by
the Company to engage in the Transaction and does not constitute a
recommendation to any shareholder as to whether such shareholder should tender
any Company Shares pursuant to the Tender Offer and how such shareholder should
vote on the proposed Merger or any matter related thereto.
On the basis of and subject to the foregoing, we are of the opinion that,
as of the date hereof, the Consideration to be received by the holders of the
Company Shares pursuant to the Transaction is fair from a financial point of
view to the holders of such shares.
Very truly yours,
/s/ XXXXXXX XXXXX, XXXXXX, XXXXXX & XXXXX
INCORPORATED
2
