Decrane Aircraft Holdings Inc – ‘SC 14D9/A’ on 8/20/98 re: Decrane Aircraft Holdings Inc

As of:  Thursday, 8/20/98   ·   Accession #:  1047469-98-32236   ·   File #:  5-52423

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Amendment to Tender-Offer Solicitation/Recommendation Statement   —   Schedule 14D-9
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: SC 14D9/A   Amendment to Tender-Offer                              9     48K 
                          Solicitation/Recommendation Statement                  
 2: EX-8        Opinion re: Tax Matters                               19    106K 
 3: EX-9        Voting Trust Agreement                                15     38K 
 4: EX-10       Material Contract                                      8     26K 

SC 14D9/A   —   Amendment to Tender-Offer Solicitation/Recommendation Statement
Document Table of Contents

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

------------------------

SCHEDULE 14D-9

(AMENDMENT NO. 1) 

Solicitation/Recommendation Statement Pursuant to 
Section 14(d)(4) of the Securities Exchange Act of 1934 

------------------------

DECRANE AIRCRAFT HOLDINGS, INC. 
(NAME OF SUBJECT COMPANY) 

DECRANE AIRCRAFT HOLDINGS, INC. 
(NAME OF PERSON(S) FILING STATEMENT)

------------------------

COMMON STOCK, PAR VALUE $0.01 PER SHARE 
(TITLE OF CLASS OF SECURITIES)

243662 10 3 
(CUSIP NUMBER OF CLASS OF SECURITIES) 

------------------------

R. JACK DECRANE 
Chairman of the Board and Chief Executive Officer 
DeCrane Aircraft Holdings, Inc. 
2361 Rosecrans Avenue, Suite 180
El Segundo, California 90245-4910 
(310) 725-9123

(Name, address and telephone number of person 
authorized to receive notices and communications
on behalf of the person(s) filing statement)

WITH COPIES TO: 

                                                                [Download Table]
                                                                              
    MELVIN EPSTEIN, ESQ.                        STEPHEN A. SILVERMAN, ESQ.    
Stroock & Stroock & Lavan LLP                       Spolin & Silverman        
       180 Maiden Lane                       100 Wilshire Boulevard, Suite 940
New York, New York 10038-4982                 Santa Monica, California 90401  
       (212) 806-5400                                 (310) 576-1221          

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AMENDMENT NO. 1 TO SCHEDULE 14D-9 

This Amendment supplements and amends as Amendment No. 1 the            
Solicitation/Recommendation Statement on Schedule 14D-9, originally filed on    
July 22, 1998 (the "Schedule 14D-9"), by DeCrane Aircraft Holdings, Inc., a     
Delaware corporation (the "Company"), relating to the tender offer by DeCrane   
Acquisition Co., a Delaware corporation (the "Purchaser"), a company formed by  
DLJ Merchant Banking Partners II, L.P. and affiliated funds ("DLJ"), disclosed  
in a Tender Offer Statement on Schedule 14D-1, dated July 22, 1998, to purchase 
all outstanding shares of common stock, par value $0.01 per share (the          
"Shares"), of the Company at a price per Share of $23.00, net to the seller in  
cash, without interest thereon (the "Offer Price"), upon the terms and subject  
to the conditions set forth in the Offer to Purchase, dated July 22, 1998, and  
the related Letter of Transmittal (which together constitute the "Offer").      
Capitalized terms used and not otherwise defined herein shall have the meanings 
set forth in the Schedule 14D-9                                                 

ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES.              

    (a) On or about June 10, 1998, Charles Becker, President and Chief Operating
Officer of the Company, purchased 100 shares of common stock of the Company in  
the public markets. On or about June 10, 1998, Robert A. Rankin, Chief Financial
Officer and Secretary of the Company (presently on administrative leave),       
purchased 100 shares of common stock of the Company in the public markets.      

  (b) Mitchell I. Quain, a director of the Company, has indicated his intent
to donate 5,220 shares of common stock of the Company to four charitable        
organizations prior to the expiration of the Offer to Purchase: The University  
of Pennsylvania, St. Luke's Foundation, Horace Mann School and the Greenwich    
Jewish Study Group, Inc.                                                        

ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.                                 

Item 8 of Schedule 14D-9 is hereby amended and supplemented by addition 
of the following information:                                                   

BACKGROUND OF THE OFFER                                                         

FAIRNESS OPINION.  WDR has delivered its written opinion, dated July 21,
1998, confirming its oral opinion of July 16, 1998, to the effect that, and     
based upon and subject to the assumptions, limitations and qualifications set   
forth therein, as of the date thereof, the Offer Price to be received in the    
Offer is fair, from a financial point of view to the stockholders of the Company
(the "Fairness Opinion"). The Fairness Opinion does not constitute a            
recommendation to any stockholder of the Company as to how such stockholder     
should vote or whether such stockholder should tender Shares in the Offer. The  
full text of the Fairness Opinion, which sets forth a description of the        
assumptions made, general procedures followed matters considered, and           
limitations on the review undertaken, is set out in Exhibit 5 of Schedule 14D-9.
Stockholders or other interested parties are urged to read the Fairness Opinion 
carefully in its entirety, especially with regard to the assumptions made and   
matters considered by WDR. The summary of the Fairness Opinion set forth in this
Amendment is qualified in its entirety by reference to the full text of such    
Fairness Opinion.                                                               

In rendering its Fairness Opinion, WDR assumed, at the direction of the 
Special Committee, without independent verification, the accuracy and           
completeness, in all material respects, of all the financial and other          
information that was available to it from public sources or that was provided to
it by the Company or its representatives. The Fairness Opinion was necessarily  
based upon economic, monetary, market, and other conditions as in effect, and   
the information made available to WDR as of, the date of such opinion. In       
addition, with the consent of the Special Committee, WDR did not make any       
independent evaluation or appraisal of any of the assets or liabilities         
(contingent or otherwise) of the Company. With respect to the financial         
estimates (including the effects of assumed savings) provided to or otherwise   
reviewed by or discussed with it, WDR assumed, with the consent of the Special  
Committee, that they were reasonably prepared on the basis of and reflecting the
best currently available estimates and judgments of the Company's management as 
to the future financial performance of the Company and that those estimates     
would be materially achieved in the amounts and at the times stated therein. It 
should be understood that,                                                      

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although subsequent developments may affect the Fairness Opinion, WDR does not  
have any obligation to update, revise, or reaffirm the Fairness Opinion.        

   WDR is an internationally recognized investment banking firm which, as part
of its investment banking business, regularly engages in the evaluation of      
businesses and their securities in connection with mergers and acquisitions,    
negotiated underwritings, competitive bids, secondary distributions of listed   
and unlisted securities, private placements and valuations for estate, corporate
and other purposes. The Special Committe selected WDR on the basis of its       
experience and independence. In the past, WDR and its predecessors have provided
investment banking services to the Company and have received customary          
compensation for such services. In the ordinary course of business, WDR and its 
affiliates may actively trade or hold the equity securities of the Company and  
DLJ for their own account or the accounts of their customers and, accordingly,  
may at any time hold a long or short position in such securities.               

  Pursuant to the engagement letter between the Company and WDR, the Company
has paid to WDR for its services a fee of $1,300,000. The Company has also      
agreed to reimburse WDR for its expenses, including attorneys' fees reasonably  
incurred in connection with its engagement, and to indemnify WDR against certain
liabilities and reasonable expenses related to, or arising out of or in         
connection with the engagement of WDR under the engagement letter, including    
liabilities under the federal securities laws in connection with its services.  

In arriving at the Fairness Opinion, WDR did not assign any particular  
weight or factor to any matter considered by it, but rather made qualitative    
judgments based upon its experience in providing such opinions and on then      
existing economic, monetary, market and other conditions as to the significance 
and relevance of each analysis and factor. Accordingly, WDR believes that its   
analysis must be considered as a whole and that selecting portions of its       
analyses and the factors considered, without considering all analyses and       
factors, could create a misleading or incomplete view of the processes          
underlying its Fairness Opinion. In its analyses, with the consent of the       
Special Committee, WDR made numerous assumptions with respect to industry       
performance, general business and economic conditions and other matters, many of
which are beyond the control of the Company or WDR. Any assumed estimates       
contained in WDR's analyses are not necessarily indicative of actual values or  
predictive of future results or values, which may be significantly more or less 
favorable than as set forth therein. Such estimates relating to the value of a  
business or securities do not purport to be appraisals or necessarily reflect   
the prices at which companies or securities may actually be sold.               

No company, transaction or business used in the analyses described under
"Analysis of Certain Other Publicly Traded Companies" and "Analysis of Selected 
Generally Comparable Precedent Transactions" below is identical to the Company. 
Accordingly, an analysis of the results thereof necessarily involves complex    
considerations and judgments concerning differences in financial and operating  
characteristics and other factors which could affect the transaction or the     
public trading or other values of the company or companies to which they are    
being compared. Mathematical analysis (such as determining the average or       
median) is not in itself a meaningful method of assuring comparable acquisition 
or comparable company data.                                                     

    In connection with rendering the Fairness Opinion, WDR employed a variety of
evaluation methods. The material valuation methods are summarized below.        

(a) ANALYSIS OF CERTAIN OTHER PUBLICLY TRADED COMPANIES. Using publicly 
available information, WDR compared selected historical share prices, and       
operating and financial ratios for the Company to the corresponding data and    
ratios for selected companies in the aviation services industry whose securities
are publicly traded and that WDR believed were generally comparable in certain  
respects to the Company in that they were companies in the business of providing
services to the aircraft industry or providing aviation products. Such data and 
ratios included (A) the ratio of Enterprise Value (defined as market            
capitalization of the common stock plus the principal amount of total debt      
outstanding less cash and cash equivalents) to (i) Revenue, (ii) operating      
earnings before depreciation, amortization, interest and taxes ("EBITDA") and   

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(iii) operating earnings before interest and taxes ("EBIT") and (B) the ratio of
the price per share of the common stock to (i) the latest twelve months ("LTM") 
earnings per share ("EPS"), (ii) 1998 estimated Calendar Year EPS and (iii) 1999
estimated Calendar Year EPS. The companies selected for this comparison were AAR
Corp., Aviall, Inc., Aviation Sales Co., AVTEAM, Inc., First Aviation Services  
Inc., Kellstrom Industries, Inc. and Triumph Group, Inc. Although there are no  
companies that directly compare to the Company, WDR believes that the business  
fundamentals of Aviall, Inc., First Aviation Services Inc., and Triumph Group,  
Inc. ("Most Comparable Companies") may be more closely aligned with the         
Company's business fundamentals than the others.                                

An analysis of Enterprise Value to LTM Revenue for the Most Comparable  
Companies yielded a mean multiple of 1.0x compared to the Company multiple of   
1.7x LTM Revenue at the Offer Price. Enterprise Value to LTM EBITDA for these   
companies yielded a mean multiple of 9.2x compared to the Company multiple of   
9.6x LTM EBITDA at the Offer Price. Enterprise Value to LTM EBIT for these      
companies yielded a mean multiple of 10.9x compared to the Company multiple of  
13.6x LTM EBIT at the Offer Price. An analysis of the July 15, 1998 stock price 
to LTM EPS for these companies yielded a mean multiple of 14.0x compared to the 
Company multiple of 28.0x the Offer Price. An analysis of the July 15, 1998     
stock price to the estimated Calendar Year 1998 EPS for these companies yielded 
a mean multiple of 13.9x compared to the Company multiple of 17.0x the Offer    
Price. An analysis of the July 15, 1998 stock price to the estimated Calendar   
Year 1999 EPS for these companies yielded a mean multiple of 9.9x compared to   
the Company multiple of 13.2x the Offer Price.                                  

    An analysis of Enterprise Value to LTM Revenue for AAR Corp., Aviation Sales
Co., AVTEAM, Inc. and Kellstrom Industries, Inc. (the "Less Comparable          
Companies") yielded a mean multiple of 2.2x compared to the Company multiple of 
1.7x LTM Revenue at the Offer Price. Enterprise Value to LTM EBITDA for these   
companies yielded a mean multiple of 13.7x compared to the Company multiple of  
9.6x LTM EBITDA at the Offer Price. Enterprise Value to LTM EBIT for these      
companies yielded a mean multiple of 15.6x compared to the Company multiple of  
13.6x LTM EBIT at the Offer Price. An analysis of the July 15, 1998 stock price 
to LTM EPS for these companies yielded a mean multiple of 25.9x compared to the 
Company multiple of 28.0x the Offer Price. An analysis of the July 15, 1998     
stock price to the estimated Calendar Year 1998 EPS for these companies yielded 
a mean multiple of 18.7x compared to the Company multiple of 17.0x the Offer    
Price. An analysis of the July 15, 1998 stock price to the estimated Calendar   
Year 1999 EPS for these companies yielded a mean multiple of 14.3x compared to  
the Company multiple of 13.2x the Offer Price.                                  

In arriving at its opinion, WDR took into account that, in general, the 
multiples available to the Company at the Offer Price compared favorably to the 
multiples derived for the selected companies. WDR noted that no company utilized
in the above comparable company analysis is identical to the Company.           
Accordingly, an analysis of the foregoing is not purely mathematical and        
involves complex considerations and judgments concerning differences in         
financial and operating characteristics of the comparable companies and other   
factors that could affect their public trading value.                           

 (b) ANALYSIS OF SELECTED GENERALLY COMPARABLE PRECEDENT TRANSACTIONS. WDR
conducted a review of selected aviation services industry transactions in which 
a majority ownership position was purchased. These transactions were analyzed to
provide a reference point as to the enterprise valuation multiples for the      
Company. From the transactions selected, there was a range of multiples, which  
was related to the quality and size of the companies. WDR calculated multiples  
for each transaction based on the ratios of the Transaction Value (defined as   
purchase price of equity plus the principal amount of total debt outstanding    
less cash and cash equivalents) to each of the target company's pre-acquisition 
LTM Revenue, LTM EBITDA, and LTM EBIT. An analysis of Transaction Value to LTM  
Revenue for these companies yielded a range of relevant multiples from a low of 
0.4x to a high of 1.8x with a median of 0.7x compared to the Company multiple of
1.7x LTM Revenue at the Offer Price. Transaction Value to LTM EBITDA for these  
companies yielded a range of relevant multiples from a low of 4.5x to a high of 
13.1x with a median of 6.9x compared to the Company multiple of 9.6x LTM EBITDA 
at the Offer Price. Enterprise Value to                                         

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LTM EBIT for these companies yielded a range of relevant multiples from a low of
6.0x to a high of 15.4x with a median of 10.9x compared to the Company multiple 
of 13.6x LTM EBIT at the Offer Price.                                           

In arriving at its opinion, WDR took into account that, in general, the 
multiples available to the Company at the Offer Price compared favorably to the 
multiples derived for the selected transactions. WDR noted that no transaction  
utilized in the above selected acquisition transaction analysis is identical to 
the Merger. Accordingly, an analysis of the foregoing is not purely mathematical
and involves complex considerations and judgments concerning differences in     
financial and operating characteristics of the acquired companies in such       
transactions and other factors that could affect their acquisition and public   
trading values.                                                                 

(c) DISCOUNTED CASH FLOW ANALYSIS. WDR performed a discounted cash flow 
analysis for the Company on a stand-alone basis based on projections provided by
management of the Company through 1999 and with the consent of the Board of     
Directors extended for an additional three years based on certain assumptions   
including, among others, assumptions as to internal growth rate and operating   
profit (the "Company Projections"). The discounted cash flow analysis estimated 
the theoretical present value of the Company based on the sum of: (i) the       
discounted cash flows that the Company could generate over the five years ending
2002 and (ii) a terminal value assuming that the Company performs in accordance 
with the Company Projections.                                                   

    The terminal value of the Company was based upon a multiple applied to EBIT.
This terminal value and the cash flows generated by the Company were discounted 
to derive the Enterprise Value of the Company. The value of the Shares was      
calculated by taking the Enterprise Value and subtracting the principal amount  
of the total debt outstanding and adding and cash equivalents. Using discount   
rates ranging from 10% to 13%, and exit EBIT multiples from 8x to 12x to        
calculate the terminal values, WDR estimated that, based on discounted cash flow
analysis of the Company Projections, the Enterprise Value of the Company ranged 
from $184.5 million to $297.6 million and the per Share value of the Company    
ranged from $11.83 to $26.29.                                                   

   (d) PREMIUM ANALYSIS. WDR analyzed the premium offered per share of Company
common stock over selected periods and compared it to the average historical    
premium of selected transactions over the same time periods. Based upon the     
Offer Price on July 16, 1998, the premium to the closing price one day prior was
30.5%, to one week prior was 27.8%, and to one month prior was 29.6%, compared  
to 30.6%, 35.0%, and 38.0% respectively for the average of the selected         
historical transactions. The Offer Price represented a 9.5% premium to the      
Company's 52 week high stock price and a 55.9% premium to Company's 52 week low 
stock price.                                                                    

The presentation of WDR at the July 15, 1998 meeting of the Special     
Committee and the July 16, 1998 meeting of the full Board of Directors included 
a description of its analyses as set forth above.                               

SUBSEQUENT DEVELOPMENTS                                                         

(a) OTHER INDICATIONS OF INTEREST. On July 17, 1998, following the      
announcement of the Merger Agreement, an independent third party ("Potential    
Bidder 1") advised the Company of its interest in pursuing an alternative       
transaction with the Company. Potential Bidder 1 indicated its interest was in  
pursuing a possible merger that would qualify as a pooling of interests         
transaction, but its interest was subject, among other things, to a satisfactory
due diligence review. Accordingly, on July 23, 1998, the Company, after         
receiving the advice of counsel, obtained a confidentiality agreement from      
Potential Bidder 1 on terms substantially identical to the confidentiality      
agreement between the Company and DLJ. Potential Bidder 1 then began its due    
diligence investigation. Recently, however, Potential Bidder 1 informed WDR that
it had concluded, as a result of recent stock market conditions affecting the   
market value of its own shares, that it was not in a position to pursue an      
acquisition of the Company.                                                     

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On or about August 4, 1998, another independent third party ("Potential 
Bidder 2") advised the Company that it might be interested in making an offer to
purchase the Shares for cash. On the advice of counsel, the Board of Directors  
decided to authorize the Company to furnish information to Potential Bidder 2,  
subject to an appropriate confidentiality agreement. Such an agreement was      
executed and information was furnished, but Potential Bidder 2 subsequently     
indicated to WDR that it believed that it was not in a position to pursue the   
transaction.                                                                    

(b) COMPENSATION LITIGATION. On August 5, 1998, the Company and R. Jack 
DeCrane, its Chief Executive Officer, were served in an action filed in state   
court in California by Robert A. Rankin, the Company's Chief Financial Officer  
and Secretary, claiming that he is due additional compensation in the form of   
stock options, and claiming fraud, negligence and breach of contract in         
connection therewith. Mr. Rankin has advised the Company that his claim for     
additional compensation is justified based on his opinion that the Company's    
common stock is worth $29.00 per Share. The action seeks not less than $1.5     
million plus punitive damages and costs. The action is in the early stages of   
development and discovery has not yet been conducted; the Company intends to    
vigorously defend against the claim. Mr. Rankin, has been placed on             
administrative leave with pay. John R. Hinson, the Company's Vice President for 
Planning and Business Development, has been appointed as the interim Chief      
Financial Officer and acting Secretary of the Company.                          

(c) SHAREHOLDERS' LITIGATION. On July 21, 1998, an action entitled TAAM 
ASSOCIATES, INC. V. DECRANE, ET AL. (the "Action"), was commenced in Delaware   
Court of Chancery on behalf of a purported class of stockholders of the Company 
against the Company, its directors and various officers, DLJ and the Purchaser, 
alleging, among other things, that the directors had breached their fiduciary   
duties by entering into the Merger Agreement without engaging in an auction or  
"active market check" and, therefore, did not adequately inform themselves in   
agreeing to terms that are unfair and inadequate from the standpoint of the     
Company's stockholders. On July 24, 1998, the plaintiffs thereafter amended the 
complaint. The amended class action complaint (the "Amended Complaint") alleges,
among other things, that the Company's initial Schedule 14D-9 failed to disclose
adequately (i) material information regarding the equity participation of       
management following the Merger, (ii) the claimed failure to adequately shop the
Company, (iii) complete financial information, (iv) the claimed unreasonableness
of the termination fees, (v) details regarding the Company's financial          
projections and (vi) details regarding WDR's analysis. The Amended Complaint    
seeks a p reliminary and permanent injunction barring defendants from proceeding
with the Merger, or if the Merger is consummated, an order rescinding it or     
awarding damages, together with interest; and an award of attorneys' and        
litigation expenses.                                                            

Plaintiff stipulated to the dismissal without prejudice of the claims   
against those defendants who were officers, but not directors, of the Company.  
Although defendants have not been required to answer the Amended Complaint, if  
required to answer the Amended Complaint, the Company would deny and understands
that other defendants would deny the allegations of wrongdoing and would assert 
various defenses.                                                               

    Without admitting any wrongdoing in the Action, in order to avoid the burden
and expense of further litigation, the Company, DLJ, the Purchaser and the      
individual defendants reached an agreement in principle with the plaintiffs     
which contemplates settlement of the Action.                                    

The Company, DLJ, the Purchaser and the individual defendants and the   
plaintiffs entered into a memorandum of understanding (the "Memorandum of       
Understanding"), pursuant to which the parties would, subject to certain facts  
being confirmed through discovery which has not been completed, enter into a    
settlement agreement which would be subject to approval by the Court of         
Chancery. The Memorandum of Understanding contemplates that the settlement would
provide: (a) that the Company promptly amend the Schedule 14D-9 dated July 22,  
1998 to include information regarding the financial results of the Company for  
the quarter ended June 30, 1998, and to provide further disclosure (1)          
concerning further contacts and negotiations with other potential acquirors of  
the Company, (2) regarding the analysis                                         

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presented to and considered by the Special Committee in evaluating the Merger   
Agreement, (3) the Special Committee's conclusions regarding the later          
assertions by Mr. Rankin relating to the Fairness Opinion (as described below), 
and (4) regarding financial projections disclosed to DLJ or other potential     
acquirors of the Company; (b) that the Company will use its reasonable best     
efforts to mail such amendment to the Company's stockholders as soon as         
practicable; and (c) reasonably promptly following the execution of the         
Memorandum of Understanding by the parties, the Company shall publicly disclose 
the terms of the proposed settlement set forth therein in a manner deemed       
reasonable by the Company, and (d) for a complete release and settlement of all 
claims, whether asserted directly, derivatively or otherwise, against           
defendants, or any of their affiliates, directors, officers, employees or agents
arising out of the facts set forth in the complaint. The released claims will   
include any claims that could be raised as a result of the matters described in 
this Amendment.                                                                 

The Company, DLJ, the Purchaser and the individual defendants and the   
plaintiffs agreed that the settlement outlined above is fair, in the best       
interest of the Company's stockholders, and confers a substantial benefit on the
Company and its stockholders. Pursuant to the Memorandum of Understanding, a    
draft of this amended Schedule 14D-9 was provided to plaintiffs' lead counsel to
review and comment upon prior to the initial filing with the Commission. The    
Memorandum of Understanding contemplates that, in connection with the benefit   
conferred, plaintiffs' counsel will apply to the Court of Chancery for an award 
of attorney's fees and litigation expenses in an amount not exceeding $375,000, 
which application, the defendants have agreed not to oppose.                    

 (d) FAIRNESS OPINION.  Following the execution and delivery of the Merger
Agreement and the delivery of the Fairness Opinion, Robert A. Rankin, the       
Company's Chief Financial Officer (who has brought suit against the Company in a
compensation dispute, as described above) advised the Company, its counsel, and 
WDR that he had "serious concerns about the accuracy and reliability of" the    
Fairness Opinion. He questioned the accuracy of the presentation of certain     
financial data to the Board of Directors related to the Fairness Opinion,       
whether the appropriate comparable transactions had been used by WDR and certain
other aspects of WDR's presentation. WDR informed the members of the Board of   
Directors, that, in its judgment, the purported concerns raised by Mr. Rankin   
had no material impact on its analysis and WDR again reviewed its selection of  
the comparable transactions and the other aspects of its methodology. The Board 
of Directors and the Company's senior management agreed with WDR's assessment of
Mr. Rankin's concerns.                                                          

    Also subsequent to the delivery of the Fairness Opinion, WDR and the Special
Committee became aware that certain members of senior management, at the end of 
June 1998, had prepared a set of projected consolidated income and cash flow    
statements and balance sheets of the Company for the five year period ended     
December 31, 2002 (the "Five-Year Projections") and that the Five-Year          
Projections had been included in materials made available to DLJ and the        
Purchaser, subsequent to the execution of the Merger Agreement, and to Potential
Bidder 1 and Potential Bidder 2. The Five-Year Projections (which are different 
from the projections described in the Offer) assumed an internal growth rate in 
the Company's operating income of more than 20%, significantly higher than the  
Company Projections. As a result, the Five-Year Projections showed a            
significantly higher EBIT than that relied on by WDR in preparing the discounted
cash flow calculations used in its analysis.                                    

   The members of the Special Committee reviewed the Five-Year Projections and
conducted extensive interviews of Mr. DeCrane, the Chief Executive Officer and  
Messrs. R.G. MacDonald and John R. Hinson, respectively, the Vice Chairman of   
the Board and the interim Chief Financial Officer of the Company. Messrs.       
DeCrane, MacDonald and Hinson confirmed that the Five-Year Projections do not   
represent the views of senior management because (i) they employed assumptions  
as to the future development of certain of the Company's operations and certain 
of the Company's markets that are overly optimistic and an internal growth rate 
significantly greater than historical experience, with the result that EBIT     
amounts were also significantly greater, and (ii) the management of the         
Company's business units had not participated in their preparation. Attorneys   
representing Mr. Rankin in litigation wrote to counsel                          

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for the Special Committee and, through Company counsel, were invited to submit  
any additional information for the Committee's consideration. The Special       
Committee discussed with WDR the results of its investigation at a meeting with 
WDR. The Special Committee concluded that the Five-Year Projections (which had  
been delivered to WDR after it rendered the Fairness Opinion) were not reliable 
or representative of the Company management's views of the Company and that they
did not provide a basis for questioning the Fairness Opinion. The Special       
Committee advised the other members of the Board of Directors to that effect,   
and they agreed. The Special Committee also discussed with WDR, at the same     
meeting, the condition of the equity markets since July 16, 1998.               

ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.                                       

                                                                [Download Table]
                                                                        
Exhibit 1.  Merger Agreement dated as of July 16, 1998, by and between  
            DeCrane Acquisition Co. and DeCrane Aircraft Holdings, Inc.*

Exhibit 2.  Pages 7 through 17 of the Proxy Statement dated June 2,     
            1998, relating to its 1998 Annual Meeting of Stockholders   
            held on June 17, 1998 at DeCrane Aircraft Holdings, Inc.*   

Exhibit 3.  Employment Agreement between DeCrane Aircraft Holdings, Inc.
            and R. Jack DeCrane, dated as of July 17, 1998.*            

Exhibit 4.  Confidentiality Agreement, dated as of June 15, 1998,       
            between DeCrane Aircraft Holdings, Inc. and DLJ Merchant    
            Banking II, L.P.*                                           

Exhibit 5.  Opinion of Warburg Dillon Read LLC to the Board of Directors
            of DeCrane Aircraft Holdings, Inc. dated July 21, 1998.*    

Exhibit 6.  Letter of the Board of Directors of DeCrane Aircraft        
            Holdings, Inc. addressed to the stockholders of DeCrane     
            Aircraft Holdings, Inc., dated July 22, 1998.*              

Exhibit 7.  Joint Press Release dated July 17, 1998 of DeCrane Aircraft 
            Holdings, Inc. and DLJ Merchant Banking Partners II, L.P.*  

Exhibit 8.  The Quarterly Report of the Company on Form 10-Q for the    
            quarterly period ended June 30, 1998.                       

Exhibit 9.  Amended Class Action Complaint.                             

Exhibit 10  Memorandum of Understanding.                                

------------------------                                                        

*   Previously filed with the Schedule 14D-9.                                   

7 

SC 14D9/A
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SIGNATURE 

After reasonable inquiry and to the best of my knowledge and belief, I  
certify that the information set forth in this statement is true, complete and  
correct.                                                                        

Dated: August 19, 1998                                                          

                                                                [Download Table]
                                              
DECRANE AIRCRAFT HOLDINGS, INC.               

By:             /s/ R. JACK DECRANE           
     -----------------------------------------
                  R. Jack DeCrane             
               CHAIRMAN OF THE BOARD          
            AND CHIEF EXECUTIVE OFFICER       

8 

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘SC 14D9/A’ Filing		Date		First		Last			Other Filings
		12/31/02		7					10-K,  10-K/A,  NT 10-K
Filed on:		8/20/98							SC 14D1/A
		8/19/98		9
		8/5/98		6
		8/4/98		6
		7/24/98		6
		7/23/98		5
		7/22/98		2		8			SC 14D1,  SC 14D9
		7/21/98		2		8			8-K
		7/17/98		5		8
		7/16/98		2		8			8-K
		7/15/98		4		5
		6/30/98		6		8			10-Q
		6/17/98		8					DEF 14A
		6/15/98		8
		6/10/98		2
		6/2/98		8					DEF 14A
									List all Filings