DXT Dixon Ticonderoga Company

Fila-Fabbrica Italiana Lapis ed Affini S.p.A. Agrees to Acquire Dixon Ticonderoga Company for $7 Per Share MILAN, Italy and HEATHROW, Fla., Dec. 17 /PRNewswire-FirstCall/ -- Co-CEOs Gino N. Pala and Richard F. Joyce of Dixon Ticonderoga Company (AMEX:DXT) and Massimo Candela, CEO of Fila-Fabbrica Italiana Lapis ed Affini S.p.A., announced today that they have reached a definitive agreement for the acquisition by Fila of all the outstanding shares of Dixon common stock for $7.00 per share in cash. The transaction has been approved by the boards of directors of both companies. Under the terms of the definitive agreement, a wholly owned subsidiary of Fila will commence a cash tender offer within the next fifteen business days to acquire all outstanding shares of Dixon common stock at a price of $7 per share. It is likely that such offer will be commenced on or about January 7, 2005. The price represents a premium of approximately 68% over the stock price at the time the parties began negotiating in late August 2004. Following successful completion of the tender offer, any remaining Dixon shares will be acquired in a cash merger at the same price. The consummation of the transaction is subject to the requirement that at least 66 2/3% of Dixon's outstanding shares be validly tendered and not withdrawn prior to the final expiration date of the offer, and other customary conditions. Holders of approximately 28% of the outstanding Dixon shares, including, Messrs. Pala, Joyce and other executive officers of Dixon, have simultaneously entered into an agreement with Fila requiring them to sell their Dixon shares to Fila upon the closing of the tender offer and at the same price, and to vote their shares in favor of the merger. "Through the acquisition of Dixon, Fila will enter a market with a great potential and will benefit from strong synergies. This transaction is an example of our commitment to growth, even in a highly competitive environment such as the American market," said Massimo Candela, CEO of Fila. "This exciting combination creates multiple opportunities for our customers, employees, suppliers and partners," said Mr. Pala. Joyce adds, "It is apparent that Dixon's manufacturing consolidation and restructuring efforts, system investments and aggressive marketing and sales efforts these past few years have not gone unnoticed within our industry. It is not surprising that we would be viewed as a significant enhancement to Fila's global strategy. Employees, customers and consumers will benefit from the greater resources, scale and opportunities of the combined companies." Lazard & Co. served as Fila's financial advisor in connection with the proposed transaction. After reviewing the terms of the proposed transaction and receiving an opinion from Sheldrick, McGehee & Kohler, Inc. that the $7.00 per share consideration to be received by Dixon's stockholders is fair from a financial point of view, Dixon's board of directors approved the transaction and agreed to recommend that Dixon's shareholders tender their shares in Fila's tender offer and approve and adopt the merger agreement and the merger. The acquisition is financed by Banca Intesa, Italy's largest bank, which has had an ownership stake in Fila since 1999 through its Merchant Banking operations. Banca Intesa is also providing an additional back-up line of credit in the event of a refinancing of any of Dixon's existing indebtedness. Notice To Investors This announcement is neither an offer to purchase nor a solicitation of an offer to sell securities. The tender offer for the outstanding shares of Dixon common stock described in this announcement has not commenced. At the time the offer is commenced, a Fila subsidiary will file a tender offer statement with the Securities and Exchange Commission, and Dixon will file a solicitation and recommendation statement with respect to the offer. The tender offer statement (including an offer to purchase, a related letter of transmittal and other offer documents) and the solicitation/recommendation statement will contain important information that should be read carefully before any decision is made with respect to the tender offer. Those materials will be made available to Dixon security holders at no expense to them. In addition, all of those materials (and all other offer documents filed with the Securities and Exchange Commission) will be available at no charge on the Securities and Exchange Commission's Website at http://www.sec.gov/. About Dixon Ticonderoga Company: Dixon, with operations dating back to 1795, is one of the oldest publicly held companies in the U.S. Its consumer group manufactures and markets a wide range of writing instruments, art materials and office products, including the well-known Ticonderoga(R), Prang(R) and Dixon(R) brands. Headquartered in Heathrow, Florida, Dixon employs approximately 1,600 people at eight facilities in the U.S., Canada, Mexico, the U.K. and China. For more information about the company, see Dixon's website at http://www.prang.com/. About Fila: Fila, with operations dating back to 1920, is a privately held Italian company. It manufactures and markets a wide range of design and writing instruments, art materials and modeling paste. Its leading brands in the European market are Giotto, Tratto, Pongo, Das and Dido. Headquartered in Milan, Italy, Fila's group employs about 600 people at four facilities in Italy, France, Spain and Chile. Cautionary Statement Regarding Forward-Looking Information Certain matters discussed in this press release are "forward-looking statements" intended to qualify for the safe harbors from liability established by the Private Securities Litigation Act of 1995. Such forward- looking statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from those currently anticipated. Stockholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements. In particular, because the consummation of the Fila tender offer and the merger are conditioned, among other things, on at least a 66 2/3% of Dixon's outstanding common shares being tendered and not withdrawn prior to the final expiration date of the offer and other conditions, there is not and can be no assurance that the Fila tender offer or the merger will be consummated. The forward-looking statements made herein are only made as of the date of this press release, and we undertake no obligation to publicly update such forward- looking statements to reflect subsequent events or circumstances. DATASOURCE: Dixon Ticonderoga Company CONTACT: Mark Harnett, MacKenzie Partners, Inc., +1-212-929-5877, for Dixon Ticonderoga Company; or investor relations, Gino N. Pala, Co-CEO, or Richard F. Joyce, Co-CEO, both of Dixon Ticonderoga Investor Relations, +1-407-829-9000 Web site: http://www.prang.com/ http://www.sec.gov/

Copyright