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): November 18, 1994
WATTS INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-14787 04-2916536
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
815 Chestnut Street, North Andover, Massachusetts 01845
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(508) 688-1811
N/A
(Former name or former address, if changed since last report.)
Item 2. Acquisition or Disposition of Assets.
Watts Industries, Inc. (the "Company") has completed four
acquisitions since July 15, 1994, none of which individually is deemed
significant for purposes of Regulation S-X of the Securities and
Exchange Commission and none of which individually required the filing
by the Company of a Current Report on
Form 8-K.
Tanggu Watts.
On July 15, 1994, Watts Investment Company, a wholly owned
subsidiary of the Company, acquired a controlling 60% equity interest
in Tianjin Tanggu Watts Valve Company Limited ("Tanggu Watts"). Tanggu
Watts, which is a Chinese limited liability equity joint venture, was
formed with Tianjin Tanggu Valve Plant ("Tanggu Valve"), a manufacturer
of butterfly valves and other valve products located in Tianjin,
People's Republic of China.
The total registered capital invested in Tanggu Watts by both the
Company and Tanggu Valve was RMB 123,000,000 (Chinese Renminbi), which
is equal to approximately US$14,100,000. Of this amount, the Company
has contributed cash in the approximate amount of US$8,500,000 which is
equal to approximately RMB 73,800,000 or 60% of the total registered
capital. The Company's source of capital to finance this acquisition
was from existing cash balances. Tanggu Valve contributed machinery
and equipment, a land development fee, technology and certain inventory
in the amount of RMB 49,200,000, which is equal to approximately
US$5,600,000 or 40% of the total registered capital.
Tanggu Watts, which maintains its headquarters and manufacturing
operations in Tianjin, People's Republic of China, will manufacture
butterfly, globe and check valves for the water distribution and
industrial markets in the People's Republic of China, the United
States, Europe, Australia and Southeast Asia. The Company intends that
Tanggu Watts will continue to use the assets of Tanggu Watts within the
same industry, as described in the immediately preceding sentence, as
they were used by Tanggu Valve prior to the formation of the joint
venture. Tanggu Valve's sales for the twelve-month period ended
December 31, 1993 were approximately the equivalent of US$8,000,000.
Jameco.
On July 28, 1994, Jameco Acquisition Corp., a wholly owned
indirect subsidiary of the Company, acquired from certain individual
and trust stockholders all of the issued and outstanding capital stock
of Jameco Industries, Inc., a New York corporation ("Jameco"), for a
price of $29,503,030 (of which approximately $25 million was paid in
cash at closing and $3.75 million in cash was deposited into and is
still being held in an interest-bearing escrow account and the
remaining amount was deducted from the total price as a result of
amounts owed to Jameco by one of the selling stockholders). The money
held in the escrow account will be paid pursuant to and in accordance
with terms of the Escrow Agreement, attached as an exhibit to Exhibit
2.2 hereto, to secure the payment of claims for indemnification made
against the three principal selling stockholders. Jameco had
approximately $13 million of outstanding bank debt that remains
outstanding. The Company's source of capital to finance this
acquisition was from existing cash balances.
The acquisition also included the purchase by the Company of the
parcel of land, together with the buildings and improvements thereon,
on which the facilities of Jameco are situated for an additional cash
payment of $5.3 million. Prior to its acquisition by the Company, the
land was owned indirectly by two of the principal selling stockholders
of Jameco.
Jameco, headquartered in Wyandanch, New York, is a manufacturer of
metal and plastic water supply products including valves, tubular
products and sink strainers that are sold primarily to the residential
construction and home repair and remodeling markets in the United
States and overseas. Jameco's sales for the twelve-month period ended
June 30, 1994 were approximately $56 million. The Company intends to
continue to use the assets of Jameco within the same industry in which
they were used prior to the acquisition.
Cryolab.
On August 4, 1994, Circle Seal Controls, Inc., a wholly-owned
subsidiary of the Company, acquired substantially all of the assets,
subject to certain liabilities, of the Cryolab product line (the
"Cryolab Business") of SAES Pure Gas, Inc. ("SAES") for a cash price of
$886,122 paid at closing. The Company's source of capital to finance
this acquisition was from existing cash balances.
The assets acquired, which included inventory, raw materials,
patterns, drawings, toolings, dies, machinery and equipment, goodwill
and certain intellectual property rights, were used by SAES to
manufacture and sell cryogenic valves to control the flow of gases and
liquids exhibiting a temperature of -100 degrees fahrenheit and lower.
The products made in the Cryolab Business include globe, "Y", angle,
vacuum-jacketed, extended stem, and vacuum seal-off type valves and
operators. The Company intends to use the assets of the Cryolab
Business in the existing cryogenic valve business of Circle Seal
Controls, Inc., which is located in Corona, California. SAES's sales
from the Cryolab Business for the twelve-month period ended December
31, 1993 were approximately $1,500,000.
Pibiviesse.
On November 18, 1994, two wholly owned indirect subsidiaries of
the Company acquired from Philabel International NV all of the issued
and outstanding capital stock of Philabel NV, a Dutch holding company
owning all of the issued and outstanding capital stock of Pibiviesse
S.p.A. ("PBVS"), an Italian valve manufacturing company located in
Milan, Italy, for a price of 29,827,193,801 Italian Lire (approximately
US$18.5 million), 90% of which was paid at closing and all or a portion
of the balance to be paid within 4 months of the closing based on a
post-closing determination of the balance sheet of PBVS as of the
closing date, plus certain contingent deferred payments that may become
payable in the future. The contingent deferred payments become payable
upon achievement of a number of different benchmarks for gross revenues
of PBVS during the three-year period ending December 31, 1997 and could
equal a maximum of 6,000,000,000 Italian Lire (approximately US$3.7 million)
in the aggregate if all of the specified benchmarks are achieved.
PBVS manufactures ball and gate valves for the oil and gas
markets. The Company intends to continue to use the assets of PBVS
within the same industry in which they were used prior to the
acquisition. Sales for PBVS for the twelve-month period ended June 30,
1994 were approximately US$34,000,000.
The Company's sources of capital to finance this acquisition were
existing cash balances and a draw down of a portion of the Company's
unsecured line of credit for $125,000,000 with the First National Bank
of Boston.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
(a) Financial Statements of
Businesses Acquired. Not applicable.
(b) At the time of the filing of this Form 8-K, it is
impracticable for the Company to provide the pro
forma financial information relating to the
acquisition by the Company of Tanggu Watts,
Jameco, Cryolab and PBVS. Such financial
information will be filed by amendment not later than
February 3, 1995, in accordance with Item 7, paragraph
(b)(2) of Form 8-K.
(c) Exhibits.
*2.1 Joint Venture Contract, dated
as of June 27, 1994, by and between
Tianjin Tanggu Valve Plant and Watts
Investment Company.
*2.2 Stock Purchase Agreement, dated
as of July 28, 1994, by and between
Jameco Acquisition Corp. and Harry
Lipman, Michael Lipman, Walter Lipman,
Sidney Greenberg, David Chasin, Kenneth
S. Lipman, Peter A. Lipman, Ethel S.
Lipman, Gloria Lipman, Walter Lipman
Trust for the Benefit of Ilene Burstein,
Walter Lipman Trust for the Benefit of
Staci Burstein and Walter Lipman Trust
for the Benefit of Joshua Burstein.
*2.3 Asset Purchase Agreement, dated
as of August 4, 1994, by and between
Circle Seal Controls, Inc. and SAES Pure
Gas, Inc.
*2.4 Stock Purchase Agreement, dated
as of November 18, 1994, by and between
Watts Industries Europe BV, KF Industries
Europe BV, Philabel International NV,
Antonio Vienna, and G.I.V.A. S.p.A.
* The Company will supply the Commission upon
request with copies of any schedules to Exhibits
2.1, 2.2, 2.3, and 2.4 which are not included
herein.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Company has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
WATTS INDUSTRIES, INC.
By:/s/ William C. McCartney
William C. McCartney,
Vice President of
Finance
Date: December 5, 1994