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):
April 27, 1998
SECURITY NATIONAL FINANCIAL CORPORATION
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(Exact name of registrant as specified in this Charter)
Utah 0-9341 87-0345941
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification
No.)
5300 South 360 West, Suite 310
Salt Lake City, Utah 84123
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(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number,
Including Area Code: (801) 264-1060
Does Not Apply
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(Former name or former address, if changed since last report)
ITEM 2. Acquisition of Consolidare Enterprises, Inc.
On April 27, 1998, Security National Financial Corporation
(the "Company") entered into an Acquisition Agreement (the
"Agreement") with Consolidare Enterprises, Inc., a Florida
corporation, ("Consolidare") and certain shareholders of
Consolidare for the purchase of all of the outstanding shares of
common stock of Consolidare. Consolidare owns approximately
57.4% of the outstanding shares of common stock of Southern
Security Life Insurance Company, a Florida corporation ("SSLIC"),
and all of the outstanding shares of stock of Insuradyne Corp.,
a Florida corporation ("Insuradyne"). SSLIC is a Florida
domiciled insurance company with total assets of approximately
$82.1 million. SSLIC is currently licensed to transact business
in 14 states. SSLIC's total revenues for the year ended December
31, 1997 were $11,695,756. SSLIC had a net income of $195,000
for fiscal 1997.
As consideration for the purchase of the shares of
Consolidare, the Company will pay to the holders of Consolidare
common stock an aggregate of $11,356,400 plus an amount equal to
the current assets of Consolidare as of the closing date. For
purposes of the purchase consideration, current assets of
Consolidare are defined as cash and cash equivalents (with
interest earned through the closing date) and accrued commissions
due to Insuradyne from SSLIC. To pay the purchase consideration,
the Company intends to obtain approximately $6,500,000 from bank
financing, with the balance of approximately $4,856,400 to be
obtained from funds currently held by the Company. In addition
to the purchase consideration, the Company is required to cause
SSLIC to pay, on the closing date, $1,050,000 to George Pihakis,
who is currently President and Chief Executive Officer of SSLIC,
as a lump sum settlement of the executive compensation agreement
between SSLIC and Mr. Pihakis.
The closing of the Agreement is contingent upon regulatory
approvals, including the approval of the Florida Department of
Insurance and the Utah Insurance Department, compliance or waiver
of compliance under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, approval of the Agreement by the affirmative vote of
a majority of the Consolidare shareholders, with no Consolidare
shareholders exercising their rights as dissenting shareholders
under Section 607.1320 of the Florida statutes, as well as the
satisfactory performance of certain covenants and the accuracy of
the parties' respective representations and warranties at
closing. Following the closing of the Agreement, it is the
intention of the Company to merge a newly formed wholly-owned
subsidiary of Security National Life Insurance Company into
Consolidare, with the result that Security National Life
Insurance Company will then own 57.4% of the outstanding shares
of common stock of SSLIC. The Company further intends to
continue to operate SSLIC as a Florida domiciled insurance
company.
ITEM 7. Financial Statements.
C. Exhibits
10.1. Acquisition Agreement among Security National
Financial Corporation, Consolidare Enterprises, Inc. and certain
shareholders of Consolidare (including related exhibits).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
SECURITY NATIONAL FINANCIAL CORPORATION
(Registrant)
Date: May 11, 1998
By: Scott M. Quist
First Vice President, General Counsel
and Treasurer