This excerpt taken from the DAR 10-K filed Mar 16, 2006.
The Company may be unable to realize the expected cost savings from the Transaction.
Even if the Company is able to integrate National By-Products operations successfully, the Company cannot assure its stockholders that this integration will result in the realization of the full benefits of the cost savings or revenue enhancements that the Company expects to result from this integration or that these benefits will be achieved within the timeframe that the Company expects. The cost savings from the Transaction may be offset by costs incurred in integrating National By-Products operations, as well as by increases in other expenses, by operating losses or by problems with the Companys or National By-Products businesses unrelated to the Transaction.
Failure to complete the Transaction could negatively impact the stock price of the Companys common stock and the future business and financial results of the Company because of, among other things, the market disruption that would occur as a result of uncertainties relating to a failure to complete the Transaction.
Although the Company has agreed to make an effort to obtain stockholder approval of the proposals relating to the Transaction, there is no assurance that these proposals will be approved, and there is no assurance that Darling and National By-Products will satisfy the other conditions to the completion of the Transaction. If the Transaction is not completed for any reason, the Company will be subject to several risks, including the following:
In addition, the Company would not realize any of the expected benefits of having completed the Transaction.
If the Transaction is not completed, the price of the Companys common stock may decline to the extent that the current market price of the Companys common stock reflects a market assumption that the Transaction will be completed and that the related benefits and synergies will be realized, or as a result of the markets perceptions that the Transaction was not consummated due to an adverse change in the Company. In addition, the Companys business may be harmed, and the price of the Companys stock may decline as a result, to the extent that customers, suppliers and others believe that the Company cannot compete in the marketplace as effectively without the acquisition of the assets of National By-Products or otherwise remain uncertain about the Companys future prospects in the absence of the Transaction. For example, customers and suppliers may delay, redirect or defer purchasing decisions, which could negatively affect the business and results of operations of the Company, regardless of whether the Transaction is ultimately completed. Similarly, current and prospective employees of the Company may experience uncertainty about their future roles with the Company after the Transaction and choose to pursue other opportunities that could adversely affect the Company if the Transaction is not completed. This may adversely affect the ability of the Company to attract and retain key management and marketing and technical personnel, which could harm the Companys businesses and results.
In addition, if the Transaction is not completed and the Companys board of directors determines to seek another acquisition or business combination, there can be no assurance that a transaction creating stockholder value comparable to the value perceived to be created by the proposed acquisition of National By-Products will be available to the Company.
If the Transaction is not completed, the Company cannot assure its stockholders that these risks will not materialize or materially adversely affect the business, financial results, financial condition and stock price of the Company.