Aearo tenders for 8¼% notes

New York, Feb. 24 - Aearo Co. I said it has begun a cash tender offer for all its $175 million principal amount of 8¼% senior subordinated notes due 2012.

The Indianapolis-based manufacturer of personal protective equipment is also soliciting consents to amend the note indenture to eliminate substantially all of the restrictive covenants.

The offer is being carried out as part of the previously announced acquisition of Aearo's parent, Aearo Technologies Inc., by Pacer Merger Co.

For each $1,000 principal amount of notes, Aearo is offering an amount based on a fixed spread pricing formula. Pricing will be fixed on the third business day before expiration based on a fixed spread of 50 basis points over the yield on the 3% U.S. Treasury note due Feb. 15, 2008. The total includes a consent payment of $30 per $1,000 principal amount that will only be paid to holders who tender by the consent deadline of 5 p.m. ET on March 9.

The offer expires at 8 a.m. ET on March 24.

Aearo will also pay accrued interest up to but excluding the settlement date.

Holders who tender must consent to the proposed amendments.

The offer is subject to conditions, including receipt of sufficient consents to approve the indenture changes and the acquisition being completed by or at the same time as the offer expiration. Aearo needs the consent of holders of a majority of the notes.

Bear, Stearns & Co. Inc. is dealer manager and solicitation agent (call collect 212 272-5112 or 877 696-BEAR). D.F. King & Co., Inc. is the information agent (banks and brokers call 212 269-5550; others call 888 644-5854).

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