SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE TO
(RULE 14D-100)
TENDER OFFER STATEMENT UNDER SECTION 14(D)(1)
OR SECTION 13(E)(1) OF THE SECURITIES EXCHANGE ACT OF 1934.
PUERTO RICAN CEMENT COMPANY, INC.
(Name of Subject Company (issuer))
TRICEM ACQUISITION, CORP.
an indirect wholly owned subsidiary of
CEMEX, S.A. de C.V.
(Names of Filing Persons (offerors))
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COMMON STOCK, PAR VALUE $1.00 PER SHARE
(Title of Class of Securities)
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745075-10-1
(CUSIP Number of Class of Securities)
Ramiro Villarreal
CEMEX, S.A. de C.V.
Ave. Constitucion 444 Pte.
Monterrey, Nuevo Leon, Mexico 64000
Telephone: (011-528) 328-3000
(Name, address and telephone number of
person authorized to receive
notices and communications on
behalf of filing persons)
Copies to:
Randall H. Doud, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, N.Y. 10036
Telephone: 212-735-3000
[X] Check the box if the filing relates solely to preliminary
communications made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to
which the statement relates:
[X] third-party tender offer subject to Rule 14d-1.
[_] issuer tender offer subject to Rule 13e-4.
[_] going-private transaction subject to Rule 13e-3.
[_] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting
the results of the tender offer: [_]
(Talking Points for Calls from Investors and Investment Analysts)
CEMEX LOGO
PRC
Questions and Answers
Q: What are Industry Structure Highlights? Competitors, Installed
Capacity, Market Shares?
A: Puerto Rican Cement is the largest of the two domestic cement
producers in Puerto Rico. It has an installed cement capacity of
1.4MM metric tpy. PRC has a dry production process.
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Cement Sales Market
Capacity Volume '01 Share
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Puerto Rican Cement 1.40 0.94 50%
Essroc San Juan (Italcementi) 0.70 0.59 32%
Imports 0.33 18%
TOTAL 2.10 1.86 100%
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PRC's ready-mix operations include 17 plants with national coverage.
Sales volume in 2001 was 0.85 MM m3.
Other businesses include aggregates, paper bags, gypsum,
transportation, real estate and a financing company which in 2001
represented less than 4% EBITDA.
Q: What has been the evolution of cement demand in the past years? What
is the sales mix bulk vs. bags?
A: Cement demand in Puerto Rico has grown at a CAGR of 3.0% in the
90-01 period. Sales volume in 2001 was 1.9 MM tons.
55% of cement is sold in bulk.
Q: How does Puerto Rico fit into your Caribbean market? What is your
position in the region?
A: CEMEX is a competitive player in the Caribbean market. The addition
of PRC to the CEMEX portfolio would further consolidate CEMEX's
position in this region.
Important synergies in procurement, IT, etc., can be achieved by
centralizing some of PRC operations into CEMEX's South and Central
America & Caribbean operations.
Q: What is the Enterprise Value of the company? What is the valuation
multiple you are paying?
A: The offer of $35/share implies an equity value for the company of
US$180MM. Considering PRC's current net debt level of US$70MM, its
enterprise value is US$250MM.
For the EV/ton analysis, we are adjusting the EV to reflect only the
cement business. We are assuming that on a steady-state basis, the
cement business is responsible for 75% of the cash flows of the
company, and therefore of the Enterprise Value of the company.
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TEV 250
% attributable to cement business 75%
TEV cement business 188
Capacity 1.4
EV / ton 134
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Q: What are the major conditions for the successful completion of the
tender offer? What is the timing for the tender offer and for the
closing of the transaction?
A: The transaction, which was unanimously approved by all of the
directors present at meetings of the boards of both PRC and CEMEX'S
subsidiary, TRICEM ACQUISITION, CORP., is subject to tenders in the
offer of at least a majority of the outstanding shares of PRC,
regulatory approvals, and other customary closing conditions . The
tender offer is expected to be launched within the next couple of
weeks and last at least 20 business days. Filing of the regulatory
approvals (mainly Hart-Scott-Rodino, which applies to the US and not
the Caribbean) will be done as early as possible. Closing is
expected during the third quarter.