SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
F O R M 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): November 2, 1994
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MARK IV INDUSTRIES, INC.
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
1-8862 23-1733979
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(Commission File Number) (IRS Employer Identification No.)
501 John James Audubon Pkwy., Amherst, New York 14226-0810
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (716) 689-4972
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____________________________________________________________________________
(Former name or former address, if changed since last report.)
Item 2 - Acquisition and Disposition of Assets
On October 3, 1994, Mark IV Industries, Inc. (the "Company"), and its
wholly owned subsidiary, Mark IV Acquisition Corp. (the "Purchaser"), entered
into an Agreement and Plan of Merger (the "Merger Agreement") with Purolator
Products Company ("Purolator"). Pursuant to the Merger Agreement, the
Purchaser commenced a tender offer (the "Offer") for all outstanding shares of
Purolator's common stock (and associated preferred stock purchase rights), at
a price of $25.00 net per share in cash to the seller. Prior to the
commencement of the Offer, the Company beneficially owned 520,500 shares of
Purolator's common stock (4.69% of Purolator's outstanding common stock),
which shares were acquired by the Company in open market transactions. Upon
the expiration of the Offer at 12:00 Midnight on November 4, 1994, the Company
accepted for payment and thereby purchased approximately 10,236,000 additional
shares of Purolator's common stock (including approximately 342,070 shares
subject to guarantees of delivery), which, when combined with the shares
already owned by the Company, resulted in the Company's ownership of
approximately 96.9% of Purolator's outstanding common stock.
As a result of the Company acquiring in excess of 90% of Purolator's
outstanding common stock, and as provided for in the Merger Agreement, the
Company anticipates the Purchaser will be merged into Purolator as soon as
practicable pursuant to the short-form merger provision of Delaware law
without the vote of the holders of Purolator common stock other than the
Purchaser, (the "Merger"). In the Merger, each share of Purolator's common
stock (other than shares held by the Company and its subsidiaries and those
shares held by stockholders who properly exercise appraisal rights under
Delaware law) will be converted into the right to receive $25.00 per share in
cash. The foregoing is a summary of the Merger Agreement. For additional
information concerning the Merger Agreement and the Offer, reference is made
to the Merger Agreement and the Offer to Purchase, incorporated by reference
as exhibits hereto.
The total amount of funds required by the Company to purchase all of
Purolator's outstanding shares of common stock (including those acquired by
the Company prior to the commencement of the Offer) and to pay related fees
and expenses, is estimated to be approximately $286.3 million. The funds
required for such purchase was provided from bank borrowings under the
definitive credit agreement (the "Credit Agreement") which the Company entered
into with Bank of America National Trust and Savings Association and other
banks and financial institutions, as discussed in Item 5 of this Form 8-K.
The Credit Agreement is incorporated by reference as an exhibit hereto.
Purolator's products include a broad range of filters and separation
systems used in automotive (principally aftermarket), marine, heating,
ventilation, air conditioning, and high-technology liquid-filtration
applications, and specialized industrial filters and separation systems.
Purolator will be included in the Company's Power and Fluid Transfer business
segment. The Company presently intends to cause Purolator to continue to
devote its plant, equipment and other physical properties to the same purposes
for which they were used by Purolator prior to the consummation of the
Offer.Included in Item 7 are Purolator's historical financial statements (Item
7(a) exhibits 13.1 and 13.2) and pro forma financial information (Item 7(b)).
Item 5 - Other Events
On November 2, 1994, the Company entered into the Credit Agreement
referred to in Item 2 of this Form 8-K. The Credit Agreement provides for (i)
a five-year term loan in the principal amount of approximately $300 million
for the purpose of financing the acquisition of Purolator and to repay certain
Purolator debt, and (ii) a five-year revolving credit facility in an amount of
up to $350 million to be used to refinance amounts outstanding under the
Company's previously existing credit agreement and certain existing Purolator
debt, and for working capital and other general corporate purposes. The loans
outstanding under the Credit Agreement bear interest, at the Company's option,
at (i) the reference rate of the agent acting on behalf of the financial
institutions, or (ii) under a LIBOR option with borrowing spreads of LIBOR
plus 0.55% to LIBOR plus 1.00% depending on the Company's consolidated
leverage ratio (as defined in the Credit Agreement). The Company is currently
paying interest on the loans at LIBOR plus 1.00% per annum. The Credit
Agreement contains certain affirmative and negative covenants customary for
this type of agreement and is guaranteed by all of the Company's significant
domestic subsidiaries. All of such guarantees are collateralized by first
priority pledges of all outstanding capital stock of each guarantor
subsidiary. Reference is made to the definitive Credit Agreement for the
actual terms and conditions thereof, which has been incorporated by reference
as an exhibit hereto.
Item 7 - Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Businesses Acquired
The following audited Consolidated Financial Statements of Purolator
Products Company and subsidiaries and the report of Independent Public
Accountants with respect thereto are set forth in this Form 8-K in Exhibit
13.1:
1. Report of Independent Public Accountants with respect to the
Consolidated Financial Statements of Purolator Products Company
and subsidiaries as of December 31, 1993.
2. Consolidated Balance Sheets as of December 31, 1993 and 1992.
3. Consolidated Statements of Operations for the years ended
December 31, 1993, 1992 and 1991.
4. Consolidated Statements of Stockholders' Equity for the years
ended December 31, 1993, 1992 and 1991.
5. Consolidated Statements of Cash Flows for the years ended
December 31, 1993, 1992 and 1991.
6. Notes to Consolidated Financial Statements.
The following unaudited Condensed Consolidated Financial Statements of
Purolator Products Company are set forth in this report in exhibit 13.2:
1. Condensed Consolidated Balance Sheet as of September 30, 1994.
2. Condensed Consolidated Statements of Operations for the nine
months ended September 30, 1994 and 1993.
3. Condensed Consolidated Statements of Cash Flows for the nine
months ended September 30, 1994 and 1993.
4. Notes to Condensed Consolidated Financial Statements.
(b) Pro Forma Financial Information
The pro forma (unaudited) consolidated statements of income for the six
months ended August 31, 1994 and the fiscal year ended February 28, 1994 set
forth below present the results of operations of the Company for such period
and such year as if the following transactions had occurred on March 1, 1994,
the beginning of fiscal 1995, with respect to the consolidated statement of
income for the six months ended August 31, 1994, and on March 1, 1993, the
beginning of fiscal 1994, with respect to the consolidated statement of income
for the fiscal year ended February 28, 1994: (i) the consummation of the
Purolator acquisition in November 1994 and the borrowings under the Credit
Agreement in connection therewith; and (ii) the conversion in October 1994 of
approximately $76.7 million aggregate principal amount of the Company's 6 1/4%
Convertible Subordinated Debentures due 2007 (the "Convertible Debentures")
into approximately 5,340,000 shares of Common Stock at a conversion price of
$14.3685 per share. The pro forma statement of income for the six months
ended August 31, 1994 combines, with appropriate adjustments, the Company's
unaudited consolidated results of operations for its six months ended August
31, 1994 and the unaudited consolidated results of operations of Purolator for
the same six-month period. The pro forma statement of income for the fiscal
year ended February 28, 1994 combines, with appropriate adjustments, the
Company's audited consolidated results of operations for its fiscal year ended
February 28, 1994 and the audited consolidated results of operations of
Purolator for its fiscal year ended December 31, 1993.
The pro forma (unaudited) consolidated condensed balance sheet as of
August 31, 1994 set forth below presents the financial position of the Company
as if the following transactions had occurred on August 31, 1994: (i) the
consummation of the Purolator acquisition in November 1994 and the borrowings
under the Credit Agreement in connection therewith; and (ii) the conversion in
October 1994 of approximately $76.7 million aggregate principal amount of
Convertible Debentures into approximately 5,340,000 shares of Common Stock at
a conversion price of $14.3685 per share. The pro forma balance sheet as of
August 31, 1994 combines, with appropriate adjustments, the Company's
unaudited consolidated condensed balance sheet as of August 31, 1994 and the
unaudited consolidated condensed balance sheet of Purolator as of that same
date.
The pro forma (unaudited) financial statements have been prepared on the
basis of preliminary assumptions and estimates. The pro forma financial
statements may not be indicative of the results that would have been achieved
if the Purolator acquisition and the borrowings under the Credit Agreement
in connection therewith and the conversion of Convertible Debentures had been
effected on the dates indicated or which may be achieved in the future. The
pro forma financial statements should be read in conjunction with the
consolidated financial statements of the Company, as well as Purolator's
consolidated financial statements identified in Item 7 (a) and included as
exhibits 13.1 and 13.2 hereto.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
For the Six Months Ended August 31, 1994
(Unaudited)
(Amounts in thousands, except per share data)
Pro Forma
Mark IV Purolator Adjustments Pro Forma
(1) (2)
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Net sales $ 721,000 $ 245,800 $ 966,800
Costs and expenses:
Cost of products sold 468,600 181,400 650,000
Selling and administration 133,300 38,700 (3,500)(3) 168,500
Research and development 15,600 3,100 18,700
Depreciation and amortization 23,200 6,800 $ 400 (4) 30,400
Total operating costs 640,700 230,000 (3,100) 867,600
Operating income 80,300 15,800 3,100 99,200
Interest expense (25,300) (2,100) (7,200)(5) (34,600)
Income before taxes 55,000 13,700 (4,100) 64,600
Provision for income taxes (21,200) (700) (3,200)(6) (25,100)
Income from continuing
operations $ 33,800 $ 13,000 $ (7,300) $ 39,500
Income from continuing operations
per share of common stock:
Primary $ .79 $ .82
Fully-diluted $ .71 $ .79
Weighted average number of
shares outstanding:
Primary 42,700 5,400 (7) 48,100
Fully-diluted 51,000 51,000
<FN>
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(1) Represents the Company's consolidated results of operations as reported for its six
months ended August 31, 1994.
(2) Represents Purolator's consolidated results of operations for its six months ended
August 31, 1994.
(3) Represents the elimination of duplicate costs, primarily related to Purolator's
corporate headquarters function.
(4) Reflects increased depreciation and amortization expense based upon a preliminary
estimate of values and remaining lives of fixed and intangible assets acquired.
(5) To adjust interest expense to reflect the amount that might have been paid on
borrowings incurred to finance the acquisition of Purolator as if it had occurred on
March 1, 1994 ($9,600,000), net of the interest reduction related to the conversion
in October 1994 of $76.7 million aggregate principal amount of Convertible
Debentures, as if the conversions had occurred on March 1, 1994 ($2,400,000). The
adjustment excludes a net of tax charge of $1,100,000 ($.02 per share) representing
the unamortized balance of deferred charges related to the Company's previously
existing credit agreement. Such amount will be recognized as an extraordinary item
in the Company's historical income statements as of the November 1994 borrowings
under the Credit Agreement.
(6) To adjust the tax provision to reflect the tax expense anticipated in consolidation
with the Company's results of operations.
(7) Represents the increase in weighted average shares outstanding as a result of the
October 1994 conversion of Convertible Debentures, as if the conversion had occurred
on March 1, 1994.
</FN>
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
For the Fiscal Year Ended February 28, 1994
(Unaudited)
(Amounts in thousands, except per share data)
Pro Forma
Mark IV Purolator Adjustments Pro Forma
(1) (2)
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Net sales $1,244,200 $ 435,800 $1,680,000
Costs and expenses:
Cost of products sold 803,500 321,500 1,125,000
Selling and administration 236,300 72,100 (7,000)(3) 301,400
Research and development 30,900 6,200 37,100
Depreciation and amortization 41,700 13,600 $ 900 (4) 56,200
Total operating costs 1,112,400 413,400 (6,100) 1,519,700
Operating income 131,800 22,400 6,100 160,300
Interest expense (50,100) (4,100) (10,800)(5) (65,000)
Income before taxes 81,700 18,300 (4,700) 95,300
Provision for income taxes (30,600) (500) (4,900)(6) (36,000)
Income from continuing
operations $ 51,100 $ 17,800 $ (9,600) $ 59,300
Income from continuing operations
per share of common stock:
Primary $ 1.20 $ 1.24
Fully-diluted $ 1.09 $ 1.19
Weighted average number of
shares outstanding:
Primary 42,500 5,400(7) 47,900
Fully-diluted 50,700 50,700
<FN>
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(1) Represents the Company's audited consolidated results of operations as reported for
its fiscal year ended February 28, 1994.
(2) Represents Purolator's audited consolidated results of operations as reported for
its fiscal year ended December 31, 1993.
(3) Represents the elimination of duplicate costs, primarily related to Purolator's
corporate headquarters function.
(4) Reflects increased depreciation and amortization expense based upon a preliminary
estimate of values and remaining lives of fixed and intangible assets acquired.
(5) To adjust interest expense to reflect the amount that might have been paid on
borrowings incurred to finance the acquisition of Purolator had it occurred on March
1, 1993 ($15,600,000), net of the interest reduction related to the conversion in
October 1994 of $76.7 million aggregate principal amount of Convertible Debentures,
as if the conversions had occurred on March 1, 1993 ($4,800,000). The adjustment
excludes a net of tax charge of $1,100,000 ($.02 per share) representing the
unamortized balance of deferred charges related to the Company's previously existing
credit agreement. Such amount will be recognized as an extraordinary item in the
Company's historical income statements as of the November 1994 borrowings under the
Credit Agreement.
(6) To adjust the tax provision to reflect the tax expense anticipated in consolidation
with the Company's results of operations.
(7) Represents the increase in weighted average shares outstanding as a result of the
conversion of the Company's Convertible Debentures in October 1994, as if the
conversion had occurred on March 1, 1993.
</FN>
PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
August 31, 1994
(Unaudited)
(Amounts in thousands)
Pro Forma
Mark IV Purolator Adjustments Pro Forma
ASSETS (1) (2)
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Current assets:
Cash $ 700 $ 7,300 $ 8,000
Accounts receivable 298,200 78,800 377,000
Inventories 265,300 71,700 $ 14,800 (3) 351,800
Other current assets 47,700 14,000 61,700
Total current assets 611,900 171,800 14,800 798,500
Pension related and other
non-current assets 146,200 25,400 4,300 (3) 175,900
Property, plant and equipment, net 369,400 78,900 50,000 (3) 498,300
Cost in excess of net assets
acquired and deferred charges 208,000 108,500 14,800 (3) 331,300
TOTAL ASSETS $1,335,500 $ 384,600 $ 83,900 $1,804,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and current
maturities of debt $ 53,000 $ 4,400 $ (4,000)(4) $ 53,400
Accounts payable 112,600 39,500 152,100
Compensation related
liabilities 40,500 9,200 49,700
Accrued interest 14,800 500 15,300
Accrued expenses and other
liabilities 71,900 29,600 101,500
Income taxes payable 8,800 4,600 13,400
Total current liabilities 301,600 87,800 (4,000) 385,400
Long-term debt:
Senior debt 178,900 40,700 281,900 (4) 501,500
Subordinated debentures 372,200 (76,700)(5) 295,500
Total long-term debt 551,100 40,700 205,200 797,000
Other non-current liabilities 100,300 80,000 (17,900)(3) 162,400
Stockholders' equity:
Common stock 400 100 (5)(6) 500
Additional paid-in capital 262,600 325,300 (248,700)(5)(6) 339,200
Retained earnings 120,000 (137,200) 137,200 (6) 120,000
Other equity adjustments (500) (12,100) 12,100 (6) (500)
Total stockholders' equity 382,500 176,100 (99,400) 459,200
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,335,500 $ 384,600 $ 83,900 $1,804,000
<FN>
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(Footnotes on following page)
(1) Represents the Company's consolidated financial position as reported as of August
31, 1994.
(2) Represents the consolidated financial position of Purolator as of August 31, 1994.
(3) Preliminary allocations have been made to reflect the possible increased asset
values, and associated tax effects. Such amounts, as well as the estimated total
purchase price, will be adjusted as additional analysis is performed and additional
information is received from various outside appraisal groups.
(4) Funds used to acquire Purolator, refinance Purolator's credit facility and to pay
certain acquisition related costs are assumed to have been provided from borrowings
under the Company's Credit Agreement.
(5) Represents the conversion of $76.7 million aggregate principle amount of Convertible
Debentures which were converted into the Company's Common Stock in October 1994.
(6) Represents the elimination of Purolator's stockholders' equity, less the effects of
the conversion identified in Note 5 above.
</FN>
(c) Exhibits
2.1 Agreement and Plan of Merger dated as of October 3, 1994 by and
among Mark IV Industries, Inc., Mark IV Acquisition Corp., and
Purolator Products Company, incorporated by reference to
exhibit (c)(1) to Schedule 14D-1 (Tender Offer)
dated October 7, 1994, as filed with the SEC on such date.
2.2 Offer to Purchase, as revised, incorporated by reference to
exhibit (a)(1) to Amendment No. 1 to Schedule 14D-1 (Tender Offer)
dated October 11, 1994, as filed with the SEC on such date.
10.1 Credit and Guarantee Agreement dated as of November 2, 1994, among
Mark IV Industries, Inc., as Borrower, Mark IV Transportation
Products Corp., Gulton Industries, Inc., Dayco Products, Inc.,
Electro-Voice Incorporated, Anchor Swan, Inc. and Mark IV
Acquisition Corp., as Guarantors, the banks and other
financial institutions which are parties thereto, Bank of America
National Trust and Savings Association, as Administrative Agent
and Bid Agent, and BA Securities, Inc., as Arranger, incorporated
by reference to exhibit (b)(2) to Amendment No. 3 to
Schedule 14D-1 (Tender Offer) dated November 2, 1994, as
filed with the SEC on such date.
13.1 * Audited Consolidated Financial Statements of Purolator Products
Company for the three years in the period ended December 31, 1993.
13.2 * Unaudited Condensed Consolidated Financial Statements of
Purolator Products Company for the nine month period ended
September 30, 1994.
23.1 * Consent of Independent Public Accountants.
27 * Financial Data Schedule for the Financial Statements of Purolator
Products Company for the nine month period ended September 30,
1994.
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* Filed herewith by direct transmission pursuant to the EDGAR program.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MARK IV INDUSTRIES, INC.
BY: /s/ Richard L. Grenolds
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Richard L. Grenolds
Vice President and Chief
Accounting Officer
Dated: November 9, 1994
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Exhibit Index
Description
2.1 Agreement and Plan of Merger dated as of October 3, 1994 by and
among Mark IV Industries, Inc., Mark IV Acquisition Corp., and
Purolator Products Company, incorporated by reference to
exhibit (c)(1) to Schedule 14D-1 (Tender Offer) dated
October 7, 1994, as filed with the SEC on such date.
2.2 Offer to Purchase, as revised, incorporated by reference to
exhibit (a)(1) to Amendment No. 1 to Schedule 14D-1 (Tender Offer)
dated October 11, 1994, as filed with the SEC on such date.
10.1 Credit and Guarantee Agreement dated as of November 2, 1994,
among Mark IV Industries, Inc., as Borrower, Mark IV
Transportation Products Corp., Gulton Industries, Inc., Dayco
Products, Inc., Electro-Voice Incorporated, Anchor Swan, Inc.
and Mark IV Acquisition Corp., as Guarantors, the banks and other
financial institutions which are parties thereto, Bank of America
National Trust and Savings Association, as Administrative Agent
and Bid Agent, and BA Securities, Inc., as Arranger, incorporated
by reference to exhibit (b)(2) to Amendment No. 3 to
Schedule 14D-1 (Tender Offer) dated November 2, 1994, as filed
with the SEC on such date.
13.1 * Audited Consolidated Financial Statements of Purolator Products
Company for the three years in the period ended December 31, 1993.
13.2 * Unaudited Condensed Consolidated Financial Statements of Purolator
Products Company for the nine month period ended
September 30, 1994.
23.1 * Consent of Independent Public Accountants.
27 * Financial Data Schedule for the Financial Statements of Purolator
Products Company for the nine month period ended
September 30, 1994.
_______________________
* Filed herewith by direct transmission pursuant to the EDGAR program.