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) August 29, 1995
CANANDAIGUA WINE COMPANY, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 0-7570 16-0716709
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
116 Buffalo Street, Canandaigua, New York, 14424
--------------------------------------------------
(Address of Principal Executive Offices)(Zip Code)
Registrant's telephone number, including area code (716) 394-7900
(Former Name or Former Address, if Changed Since Last Report)
Item 2. Acquisition or Disposition of Assets
On September 1, 1995, Canandaigua Wine Company, Inc. (the "Registrant"),
through its wholly-owned subsidiary, Barton Incorporated ("BI"), acquired
certain assets from United Distillers Glenmore, Inc. and several of its North
American affiliates (collectively, "UDG"). The acquisition was made pursuant to
an Asset Purchase Agreement dated August 29, 1995 (the "Purchase Agreement")
entered into between BI and UDG (terms used in this Item 2 and not defined
herein shall have the meanings as defined in the Purchase Agreement which is
attached hereto as an Exhibit). The acquisition included all of UDG's rights to
the Fleischmann, Skol, Mr. Boston, Canadian Ltd., Old Thompson, Kentucky Tavern,
Chi Chi's, Glenmore and Di Amore distilled spirits brands; the U.S. rights to
Inver House, Schenley and El Toro distilled spirits brands; inventories and
other related assets. The acquisition also included two of UDG's production
facilities: one located in Owensboro, Kentucky and the other located in Albany,
Georgia (the "Plants"). In addition, pursuant to the Purchase Agreement, the
parties entered into multi-year agreements under which BI will (i) purchase
various bulk distilled spirits from UDG and (ii) provide continued packaging
services for certain of UDG's distilled spirits brands as well as warehousing
services. The Registrant, through BI, intends to operate the acquired production
facilities and continue the sale of products under the acquired brands.
The consideration for the acquisition of the tangible and intangible
assets was the result of arms length negotiations and consisted of cash in the
Closing Amount of $144,312,522. Within 60 days after the Closing Date, UDG is to
deliver to BI a Closing Statement setting forth any required Closing Adjustment,
in accordance with the Purchase Agreement. The Closing Adjustment will be paid
by BI or UDG as appropriate, provided that BI may dispute the Closing
Adjustment. If BI and UDG are unable to agree upon the Closing Adjustment, then
the dispute will be submitted to an internationally recognized firm of
independent public accountants chosen jointly by BI and UDG whose decision
regarding the resolution of the dispute shall be final and binding on BI and
UDG.
The source of the cash payment made at closing, together with payment of
other costs and expenses required by the transaction, was financing provided to
the Registrant pursuant to a certain Third Amended and Restated Credit Agreement
dated as of September 1, 1995 (the "Amended Credit Agreement") among the
Registrant, its principal operating subsidiaries (the "Subsidiaries"), and a
syndicate of 20 banks for which The Chase Manhattan Bank (National Association)
("Chase") acts as administrative agent (terms used below in this Item 2 and not
defined herein shall have the meanings as defined in the Amended Credit
Agreement). The syndicate includes Chase's Rochester Division, The First
National Bank of Chicago, Wells Fargo Bank, N.A., Manufacturers and Traders
Trust Company, Fleet Bank, PNC Bank, National Association, National City Bank,
Natwest Bank N.A., NBD Bank, The Bank of Nova Scotia, Credit Suisse, The Daiwa
Bank, Limited, Key Bank of New York, Chemical Bank, Cooperative Cental
Raiffeisenboerenleenbank B.A. "Rabobanknederland", LTCB Trust Company,
Corestates Bank, N.A., DG Bank Deutsche Genossenschaftsbank, The Fuji Bank
Limited, The Sumitomo Bank, Limited (the "Banks"). The Amended Credit Agreement
provides for (i) a $246,000,000 Term Loan, (ii) a $185,000,000 Revolving Credit
Loan, with each loan expiring in approximately six years and (iii) the
previously existing $25,000,000 irrevocable letter of credit issued in
connection with the Registrant's June 29, 1993 acquisition of BI.
The current interest rate under the Amended Credit Agreement may be increased or
decreased depending upon the Registrant's debt ratio and long-term debt ratings.
As compared to the Company's previously existing credit agreement, the Amended
Credit Agreement contains more favorable interest rate terms because of a lower
Applicable Margin on Base Rate Loans and Eurodollar Loans. In addition, as
compared to the previously existing credit agreement, the Amended Credit
Agreement reflects elimination of certain covenants and contains generally more
favorable terms with respect to covenants, fees, types of loans available and
restrictions on investments. In connection with the Amended Credit Agreement,
the Banks have continued their liens and security interests in substantially all
of the assets of the Registrant and the Subsidiaries and were given liens and
security interests in all accounts and general intangibles, inventory,
equipment, trademarks and other properties. Repayment of the loans is also
guaranteed by the Subsidiaries.
The foregoing information contained in this Form 8-K with respect to the
acquisition and the financing thereof is qualified in its entirety by reference
to the complete text of the Purchase Agreement and the Amended Credit
Agreement, copies of which are attached hereto as Exhibits.
Item 5. Press Release
On August 29, 1995, the Registrant issued the following press release:
Canandaigua Wine Company, Inc. (NASDAQ: WINEA and WINEB)
announced today that its spirits division, Barton Incorporated,
and United Distillers Glenmore, Inc. ("UDG") have signed a
definitive agreement under which Barton will purchase from UDG
certain assets including all of UDG's rights to Fleischmann,
Skol, Mr. Boston, Canadian Ltd., Old Thompson, Kentucky Tavern,
Chi Chi's, Glenmore and di Amore spirits brands; the U.S. rights
to the Inver House, Schenley and El Toro spirits brands; related
inventories and other assets; and two production facilities
located in Owensboro, KY and Albany, GA. In addition, the
transaction includes multi-year agreements under which UDG will
supply Barton with bulk whisky and Barton will supply UDG with
services including continued packaging of various UDG brands. The
transaction has been approved by both parties' boards of
directors and is scheduled to be completed on September 1, 1995.
The purchase price is approximately $144 million. In addition,
Barton will purchase at closing approximately $5 million of
certain brandy inventories and packaging supplies related to the
contract production arrangements with UDG. The purchase of assets
is being financed through an increase to Canandaigua's term loan
facility of $155 million. The financing is to be provided by a
syndicate of twenty banks arranged by The Chase Manhattan Bank,
(National Association).
Gross sales, net sales (gross sales less excises taxes) and
operating incomes for the products sold under these brands while
owned by UDG during calendar 1994 were $231 million, $99 million
and $16 million, respectively, on unit volume of approximately
five million cases.
Richard Sands, President and Chief Executive Officer of
Canandaigua, said, "We are very pleased to be acquiring these
brands as another step in our strategy of
making acquisitions to strengthen our presence in the beverage
alcohol industry and to improve economies of scale. The addition
of the UDG brands will almost double our market share in the
United States distilled spirits category, as well as round out
our portfolio of brands and category participation."
Canandaigua Wine Company, Inc., headquartered in Canandaigua, New
York, is a leading producer and marketer of more than 125
national and regional beverage alcohol brands. It is the second
largest supplier of wines, the fifth largest importer of beers
and the eighth largest supplier of distilled spirits in the
United States. The Company's beverage alcohol brands are marketed
in five general categories and include the following principal
brands:
o Table Wines: Almaden, Inglenook, Paul Masson, Taylor
California Cellars, Cribari, Manischewitz, Taylor New York,
Marcus James, Deer Valley and Dunnewood
o Sparkling Wines: Cook's, J. Roget, Great Western and Taylor
New York
o Dessert Wines: Richards Wild Irish Rose, Cisco and Taylor
New York
o Imported Beers: Corona, St. Pauli Girl, Modelo Especial and
Tsingtao
o Distilled Spirits: Barton's Gin and Vodka, Ten High Bourbon
Whiskey, Crystal Palace Gin and Vodka, Montezuma Tequila,
Northern Light Canadian Whisky, Lauder's Scotch Whisky and
Monte Alban Mezcal
On September 1, 1995, the Registrant issued the following press release:
Canandaigua Wine Company, Inc. (NASDAQ: WINEA and WINEB)
announced today that its spirits division, Barton Incorporated,
and United Distillers Glenmore, Inc. ("UDG") have closed the
transaction in which Barton purchased from UDG certain assets
including all of UDG's rights to the Fleischmann, Skol, Mr.
Boston, Canadian Ltd., Old Thompson, Kentucky Tavern, Chi Chi's,
Glenmore and di Amore spirits brands; the U.S. rights to the
Inver House, Schenley and El Toro spirits brands; related
inventories and other assets; and two production facilities
located in Owensboro, KY and Albany, GA. In addition, the
transaction included multi-year agreements under which UDG will
supply Barton with bulk whisky and Barton will supply UDG with
services including continued packaging of various UDG brands.
Richard Sands, President and Chief Executive Officer of
Canandaigua, said, "This acquisition more than doubles our market
share, making us the fourth largest spirits supplier in the
United States, and better positions us in the spirits category to
take advantage of our strategy of creating economies of scale and
capitalizing on strong wholesaler relationships. In addition, we
expect to continue pursuing our strategy of making acquisitions
across all three categories of our beverage alcohol business and
believe that numerous opportunities exist in this regard."
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
a. Financial Statements of Business Acquired. At the time of the
filing of this Report, it is impracticable to provide the
financial statements required by Regulation S-X. The required
financial statements will be filed by the Registrant on Form
8-K/A, as soon as practicable, but not later than November 14,
1995.
b. Pro Forma Financial Information. At the time of the filing of
this Report, it is impracticable to provide the pro forma
financial information required by Regulation S-X. The required
pro forma financial information will be filed by the Registrant
on Form 8-K/A, as soon as practicable, but not later than
November 14, 1995.
c. Exhibits. See Index to 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.
CANANDAIGUA WINE COMPANY, INC.
September 15, 1995 By: /s/Richard Sands
Richard Sands, President
and Chief Executive Officer
INDEX TO EXHIBITS
(1) Underwriting agreement
Not Applicable.
(2) Plan of acquisition, reorganization, arrangement, liquidation or
succession
(a) Asset Purchase Agreement among Barton Incorporated (a
wholly-owned subsidiary of the Registrant), United Distillers
Glenmore, Inc., Schenley Industries Inc., Medley Distilling
Company, United Distillers Manufacturing, Inc., and The Viking
Distillery, Inc., dated August 29, 1995 (including a list briefly
identifying the contents of all omitted schedules and exhibits
thereto) is included herein as Exhibit 2(a) at pages 9 through
128 of this Report. The Registrant will furnish supplementally to
the Commission or any security holder upon request a copy of any
omitted schedule or exhibit.
(b) Third Amended and Restated Credit Agreement between the
Registrant, its principal operating subsidiaries, and certain
banks for which The Chase Manhattan Bank (National Association)
acts as Administrative Agent, dated as of September 1, 1995
(including a list briefly identifying the contents of all omitted
schedules and exhibits thereto) is included herein as Exhibit
2(b) at pages 129 through 292 of this Report. The Registrant will
furnish supplementally to the Commission or any security holder
upon request a copy of any omitted schedule or exhibit.
(4) Instruments defining the rights of security holders, including
indentures
Not Applicable.
(16) Letter re change in certifying accountant
Not Applicable.
(17) Letter re director resignation
Not Applicable.
(21) Other documents or statements to security holders
Not Applicable.
(24) Consents of experts and counsel
Not Applicable.
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(25) Power of attorney
Not Applicable.
(27) Financial Data Schedule
Not Applicable.
(99) Additional Exhibits
None.
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