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) March 15, 2000
----------------------
PARLEX CORPORATION
- ----------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Massachusetts
- ----------------------------------------------------------------------------
(State or Other Jurisdiction of Incorporation)
0-12942 04-2464749
------------------------ ---------------------------------
(Commission File Number) (IRS Employer Identification No.)
One Parlex Place, Methuen, Massachusetts 01844
- ----------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(978) 685-4341
- ----------------------------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
Not applicable
- ----------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
Item 2. ACQUISITION or DISPOSITION of ASSETS
------------------------------------
Pursuant to a Stock Purchase Agreement dated as of January 21, 2000
(the "Purchase Agreement"), by and among Parlex Corporation (the "Company"),
and Cookson Group plc and Cookson Investments, Inc. (collectively
"Cookson"), the Company completed its acquisition of the stock of two
Cookson Group plc wholly owned subsidiaries, Poly-Flex Circuits Limited (a
United Kingdom company) and Poly-Flex Circuits, Inc. (a Rhode Island
corporation)(collectively "Poly-Flex")(the "Poly-Flex Acquisition"). The
Poly-Flex Acquisition was completed on March 1, 2000. Pursuant to the
Purchase Agreement, the Company paid Cookson $19,650,000.00 in cash. Poly-
Flex designs, manufactures, markets and sells low cost, polymer thick film
flexible circuit assemblies. Poly-Flex's products are custom, application
specific flexible circuit assemblies constructed on a polyester substrate.
The operations of Poly-Flex's two manufacturing facilities, one in the
United Kingdom, and one in Cranston, Rhode Island, are split into two parts
consisting of the "circuit fabrication" area and the "SMT assembly" area.
The circuit fabrication area is where the flexible circuits are printed
using high speed printing presses and die cut using optically registered
hydraulic presses. The SMT assembly area consists of multiple surface mount
lines for electronic component placement and functional test. The Company
currently plans to continue the production of Poly-Flex's products using the
same plant and equipment.
The purchase price for the Poly-Flex Acquisition was determined as a
result of arms-length negotiations between representatives of both the
Company and Cookson. The Poly-Flex Acquisition has been accounted for under
the purchase method of accounting.
To facilitate the acquisition of Poly-Flex, the Company entered into a
Loan Agreement dated as of March 1, 2000, (the "Loan Agreement") among the
Company, and Fleet National Bank. The Loan Agreement provides for two
credit facilities (the "Credit Facilities"), consisting of a $15.0 million
revolving credit facility (the "Revolving Credit Facility") and a $15.0
million term loan (the "Term Loan").
The Company paid the purchase price for the Poly-Flex Acquisition and
paid certain related fees and expenses with available cash and borrowings of
$4,639,589 under the Revolving Credit Facility and $15,000,000 under the
Term Loan.
All amounts outstanding under the Revolving Credit Facility are
payable on December 31, 2001. The $15.0 million Term Loan is payable in 20
consecutive quarterly installments, in an amount equal to: $750,000 for the
first 19 consecutive quarterly installments; and (2) the amount of the
unpaid principal balance for the final installment.
Interest accrues on loans made under the Credit Facilities at the
Company's option at either (1) LIBOR base rate plus an applicable margin
ranging from 1.5% to 2.00% based upon the consolidated leverage of the
Company or (2) Fleet National Bank's prime rate. The post-default rate on
outstanding loans is 4.00% above the otherwise applicable rate of interest.
The Credit Facilities are unsecured.
The information set forth above is qualified in its entirety by
reference to (i) the Purchase Agreement, a copy of which is filed herewith
as Exhibit 2.1, and (ii) the Loan Agreement, a copy of which is filed
herewith as Exhibit 10.S.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
-------------------------------------------------------------------
Financial Statements of the Acquired Business
(a) It is currently impracticable for the Registrant to provide the
required one year financial statements with respect to the
acquired business referred to in Item 2 of this Report. The
Registrant will file the required financial information by
amendment as soon as practicable and in any event no later than
60 days from the date hereof.
(b) It is currently impracticable for the Registrant to provide the
required pro forma financial information with respect to the
acquired business referred to in Item 2. The Registrant will
file the required pro forma financial information by amendment as
soon as such information is available and in any event no later
than 60 days from the date hereof.
(c) Exhibits.
See Exhibit Index attached hereto. The exhibits listed in the Exhibit
Index filed as part of this report are filed as part of or are included in
this report.
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.
PARLEX CORPORATION
(Registrant)
By:
----------------------------
Peter J. Murphy
President and
Chief Executive Officer
Dated: March 15, 2000
EXHIBIT INDEX
Exhibit
Number Exhibit
- ------- -------
2.1 Stock Purchase Agreement dated as of January 21, 2000, by and
among Parlex Corporation, Cookson Group, plc and Cookson
Investments, Inc.
10.S Loan Agreement dated as of March 1, 2000, by and between
Parlex Corporation and Fleet National Bank.