SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 16, 1999 (June 24, 1999)
ATLANTIC AMERICAN CORPORATION
(Exact name of registrant as specified in its charter)
Georgia 0-3722 58-1027114
(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Identification Number) Identification
Number)
4370 PEACHTREE ROAD, N.E., ATLANTA, GEORGIA 30319 (Address of
principal executive offices) (Zip Code)
Registrant's telephone number, including area code (404) 266-5500
None
(Former name, former address and former fiscal year, if changed since last
report)
Item 2. Acquisition or Disposition of Assets
On July 1,1999, Atlantic American Corporation ("the Company") acquired
100% of the outstanding stock of Association Casualty Insurance Company ("ACIC")
and Association Risk Management General Agency, Inc. ("ARMGA",
and collectively with ACIC, the "Acquired Companies"). The Acquired Companies
were acquired for a combination of cash and common stock of the Company
totaling $32.5 million. The cost of the acquisition in millions is summarized as
follows:
Cash Common Stock Total Consideration
Consideration of Company Consideration
ACIC $15.6 $5.5 $21.1
ARMGA 8.4 $3.0 $11.4
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Total $24.0 $8.5 $32.5
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ACIC is a Texas domiciled insurance company that specializes in underwriting
workers' compensation insurance in the state of Texas. ARMGA is a Texas
domiciled general agency. The cash used to finance the transaction was obtained
from the proceeds of issuing $25.0 million of Variable Rate Demand Bonds and a
new $30.0 million revolving credit facility with Wachovia Bank, N.A., each is
decribed below.
Item 5. Other Events
On June 24, 1999 the Company issued $25.0 million in Taxable
Variable Rate Demand Bonds, Series 1999. The proceeds from this issuance were
used to retire $25.0 million of the $26.0 million outstanding on the
Company's existing term loan. The bonds are rated AA/A-1+ by Standard &
Poor's and will mature July 1, 2009. The interest rate on the bonds is variable
and approximates 30-day LIBOR. The bonds are backed by a letter of credit
issued by Wachovia Bank, N.A. The cost of the letter of credit and its
associated fees will be 180 basis points.
On July 1, 1999 the Company entered into a $30.0 million revolving credit
facility with Wachovia Bank, N.A. The facility allows the Company to draw up to
$30.0 million for the acquisition of ACIC and ARMGA as well as for other
corporate needs. Immediately upon closing the facility the Company borrowed
$20.0 million on the facility to fund a portion of the acquisition of ACIC and
ARMGA, see Item 2 above. The interest rate on the facility is 30-day LIBOR plus
200 basis points.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
Financial Statements of Business Acquired.
It is impracticable to provide the required financial statements for the
acquired business at the date of filing of this Form 8-K. Such financial
statements will be filed by admendmet as soon as practicable, but no later than
60-days following the date this Form 8-K is required to be filed.
Pro Forma Financial Information.
It is impracticable to provide the required pro forma financial information for
the acquired business at the date of filing of this form 8-K. Such pro forma
financial information will be filed as soon as practicable, but no later than
60-days following the date this Form 8-K is required to be filed.
Exhibits
(2.1) Acquisition Agreement by and among Atlantic American Corporation,
and Association Casualty Insurance Corporation, Association
Risk Management General Agency, Inc., and Harold K. Fischer, dated
as of April 21, 1999.
(10.1) Indenture of Trust, dated as of June 24, 1999, by and between
Atlantic American Corporation and The Bank of New York, as Trustee.
(10.2) Reimbursement and Security Agreement, dated as of June 24,
1999, between Atlantic American Corporation and Wachovia Bank of
Georgia, NA.
(10.3) Revolving Credit Facility, dated as of July 1, 1999 between Atlantic
American Corporation and Wachovia Bank of Georgia, N.A.
(99.1) Press Release dated June 24, 1999
(99.2) Press Release dated July 6, 1999
SIGNATURE
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Pursuant to the requirements of the Security Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ATLANTIC AMERICAN CORPORATION
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(Registrant)
Date: July ____, 1999 By: __________/s/________________
Edward L. Rand, Jr.
Vice President-Treasurer
(Principal Financial Officer)