SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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 20, 1999
LABTEC INC.
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(Exact Name of Registrant as Specified in Charter)
Massachusetts 0-27302 04-3116697
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File No.) Identification No.)
1499 S.E. Tech Center Place, Suite 350, Vancouver, Washington 98683
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (360) 896-2000
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
ITEM 2. ACQUISITION OF ASSETS.
On August 20, 1999, Labtec Inc., a Massachusetts corporation (the
"Company"), acquired (the "Acquisition") all of the outstanding capital
stock of Connector Resources Unlimited, Inc., a California corporation
("CRU"). The Acquisition was effected pursuant to a Stock Purchase
Agreement, dated as of August 4, 1999 (the "Stock Purchase Agreement"),
among CRU Acquisition Corp., a Delaware corporation and wholly-owned
subsidiary of the Company formed for the purpose of the Acquisition
(the "Purchaser"), the Company and the four stockholders of CRU (the
"Sellers").
Pursuant to the Acquisition, the Purchaser acquired all of the issued
and outstanding capital stock of CRU, consisting of 823,780 shares of
common stock (the "Shares"), in consideration for which the Purchaser
(i) paid to the Sellers $12,000,000 in cash, subject to adjustment
following the closing of the Acquisition based upon CRU's net worth as
of the closing date, and (ii) delivered to the Sellers a promissory
note issued by the Company in the principal amount of $1,500,000
payable to Carl W. Gromada, as collection agent for each of the Sellers
(the "Promissory Note"). The foregoing consideration was allocated pro
rata among the Sellers based upon their respective ownership of CRU
prior to the consummation of the Acquisition. The principal amount of
the Promissory Note is payable in full at the end of its 7-1/2 year
term and accrues interest, payable quarterly, at a rate of 6% through
June 30, 2001 and 9% thereafter. The Promissory Note is unsecured,
subordinated to all institutional indebtedness of the Company,
prepayable by the Company (subject to the subordination provisions), in
whole or in part, without penalty, at any time at the Company's option,
and prepayable by the Company (subject to the subordination
provisions), in full, upon the occurrence of certain prepayment events.
The terms of the Acquisition were determined in accordance with the
Stock Purchase Agreement and were established through arm's-length
negotiations between the Company and the Sellers.
Pursuant to the Stock Purchase Agreement, CRU entered into an
employment agreement with one of the Sellers and committed to employ
one of the other Sellers following the closing of the Acquisition.
The cash portion of the purchase price of the Acquisition was financed
with a new senior secured bank credit facility of the Company led by
The Chase Manhattan Bank, which credit facility also replaced the
Company's previous credit facility led by Bankers Trust Company.
The foregoing summary of the terms of the Acquisition, the Stock
Purchase Agreement and the Promissory Note does not purport to be
complete and is qualified in its entirety by reference to the full text
of the Stock Purchase Agreement and the Promissory Note, copies of
which are filed as Exhibit 2.1 and 2.2 hereto, respectively, and
incorporated herein by reference.
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Prior to the consummation of the Acquisition, the Company did not own,
directly or indirectly, any of the voting securities of CRU, apart from
any beneficial ownership interest it may have had as a result of
entering into the Stock Purchase Agreement.
Through its acquisition of CRU, the Company acquired a developer and
marketer of mass storage devices for computer systems, offering a full
line of enclosures and removable storage modules. CRU's products are
sold throughout North America by distributors such as DSS, Gates/Arrow,
Ingram Micro and Tech Data, as well as large original equipment
manufacturers, systems integrators, value-added resellers and Megahaus,
a mail-order company.
The Company intends to continue using the assets acquired pursuant to
the Acquisition for the purposes previously noted.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
To be filed by amendment.
(b) PRO FORMA FINANCIAL INFORMATION.
To be filed by amendment.
(c) EXHIBITS.
Exhibit
No. Description
2.1 Stock Purchase Agreement, dated as of August 4, 1999, among
the Purchaser, the Company and each of the stockholders of
Connector Resources Unlimited, Inc.
2.2 Promissory Note, dated as of August 20, 1999, issued by the
Company and payable to Carl W. Gromada, as collection agent
for each of the stockholders of Connector Resources
Unlimited, Inc.
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SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of
1934, as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Dated: September 2, 1999
LABTEC INC.
By: /s/ Robert G. Wick
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Name: Robert G. Wick
Title: President and Chief
Executive Officer
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EXHIBIT INDEX
Exhibit
No. Description
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2.1 Stock Purchase Agreement, dated as of August 4, 1999, among
the Purchaser, the Company and each of the stockholders of
Connector Resources Unlimited, Inc.
2.2 Promissory Note, dated as of August 20, 1999, issued by the
Company and payable to Carl W. Gromada, as collection agent
for each of the stockholders of Connector Resources
Unlimited, Inc.
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