SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
(September 29, 2000)
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Date of Report (Date of earliest event reported)
UNIVERSAL MFG. CO.
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(Exact name of registrant as specified in its charter)
Nebraska 42-0733240
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(State of Incorporation) (Commission file Number) (IRS Employer
Identification No.)
405 Diagonal Street, Algona, Iowa 50511-0190
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(Address of Principal Executive Office)
(515) 295-3557
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(Registrant's Telephone Number, Including Area Code)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
As previously reported on September 7, 2000, Universal Mfg. Co.
("Universal Mfg.") and Universal Distribution LLC ("Universal Distribution"
and collectively with Universal Mfg., "Universal"), a subsidiary of Universal
Mfg., signed an agreement to form a limited liability company (the "Formation
Agreement") with Rainbo Oil Company, an Iowa corporation ("Rainbo Oil") and
Paul Fahey, President and majority shareholder of Rainbo Oil. The Formation
Agreement established the parties' intent to organize a Nebraska limited
liability company to be known as Rainbo Company LLC d/b/a Value Independent
Parts for the purpose of purchasing and operating the automobile parts
distribution business currently operated by Rainbo Oil as an unincorporated
internal business division (the "VIP Division").
Universal finalized its negotiations with Rainbo Oil and the parties
formed Rainbo Company LLC, a Nebraska limited liability company d/b/a Value
Independent Parts on September 21, 2000. Universal Distribution owns a fifty
percent (50%) membership interest in Rainbo Company LLC and Rainbo Oil owns
the remaining fifty percent (50%) membership interest.
In order to capitalize Rainbo Company LLC, Universal Distribution
and Rainbo Oil each made initial $100,000 capital contributions. In addition,
both Universal Distribution and Rainbo Oil loaned Rainbo Company LLC $400,000
pursuant to Promissory Notes dated September 29, 2000. Each Promissory Note
is due and payable in full on October 1, 2005. The principal balance of each
Promissory Note accrues interest until maturity at an annual rate of 9% and
Rainbo Company LLC must pay each lender annual interest payments commencing
October 1, 2001.
Universal Mfg. is the manager of Rainbo Company LLC and has entered
into a management agreement pursuant to which Rainbo Company LLC compensates
Universal Mfg. for its management services.
Effective September 29, 2000, Rainbo Oil sold the VIP Division to
Rainbo Company LLC d/b/a Value Independent Parts. Universal's partnership
with Rainbo Oil and the acquisition of the VIP Division will add additional
markets and product lines to Universal's distribution operations including,
without limitation AC Delco, a division of General Motors and Motorcraft
lines. Pursuant to the terms of the Asset Purchase Agreement, dated September
29, 2000, Rainbo Company LLC acquired all of the assets of Rainbo Oil used in
or necessary to the automobile parts marketing and distribution business as
presently conducted by Rainbo Oil through the VIP Division, wherever situated
or located, whether or not reflected on the books and records of Rainbo. The
assets acquired include equipment, inventory, leases, contracts, vehicles,
business records, accounts receivable, intellectual property and goodwill.
The purchase price for the VIP Division was approximately $5,114,714.07. The
amount and form of consideration paid were determined through arm's length
negotiations.
Rainbo Oil marketed and distributed automobile parts through the VIP
Division and Rainbo Company LLC intends to continue utilizing the acquired
assets in the automobile parts marketing and distribution business. Value
Independent Parts markets primarily to automobile dealerships, independent
jobbers, and repair shops in Northeast Iowa, Northern Illinois, and Southwest
Wisconsin.
Financing for the transaction was provided by Firstar Bank, N.A.
("Firstar"). Universal Mfg. and Rainbo Company LLC each entered into
Revolving Credit Agreements with Firstar dated September 26, 2000. Universal
Mfg.'s Revolving Credit Agreement allows Universal Mfg. to borrow up to
$3,000,000. Rainbo Company LLC's Revolving Credit Agreement allows Rainbo
Company LLC to borrow up to $2,000,000. In order to finance the purchase
price for the VIP Division, Rainbo Company LLC made an initial draw on its
line of credit for approximately $1,800,000 and Universal Mfg. made an
initial draw on its line of credit for the balance of the purchase price .
The collateralized obligations of Universal Mfg. and Rainbo Company
LLC to Firstar under the respective Revolving Credit Agreements were
evidenced by promissory notes payable to Firstar. Each promissory note is due
and payable in full on September 30, 2001 unless extended by Firstar. The
principal balance of each promissory note accrues interest until maturity at
a variable rate equal to the prime rate announced by Firstar less 1%. The
prime rate announced by Firstar as of September 29, 2000 was 9.5% and
therefore, each promissory note will initially accrue interest an annual rate
of 8.5%.
Each party guaranteed the obligations of the other party to Firstar
and Universal Distribution further guaranteed the obligations of both Rainbo
Company LLC and the Company to Firstar.
The proceeding information contains certain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Investors are cautioned that statements herein that are not
historical facts, including statements about Universal's expectations of the
success of the Rainbo Company LLC or market demand or acceptance of Universal
or Rainbo Company LLC products, are forward looking statements that involve
risks and uncertainties. These uncertainties include, without limitation, the
effect of the general economic and market conditions, customer requirements
for Universal products, future actions by Firstar, Ford Motor Company and AC
Delco, General Motors Corporation, the continuing strength of the automotive
industry, increased competition and other factors. Such factors could cause
actual results to differ materially from those in the forward-looking
statements.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of business acquired
In accordance with Item 7(a)(4) of Form 8-K, the historical
financial statements of Rainbo required to be filed with the Commission will
be filed as an amendment to this report under cover of Form 8-K/A on or
before December 13, 2000.
(b) Pro forma financial information
In accordance with Item 7(b)(2) of Form 8-K, any pro forma financial
information required to be filed with the Commission will be filed as an
amendment to this report under cover of Form 8-K/A on or before December 13,
2000.
(c) Exhibits
Exhibit No. Description
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2.1 Asset Purchase Agreement, dated as of September 29, 2000
by and between Rainbo Company LLC and Rainbo Oil Company.
The following is a list of omitted exhibits, schedules and
other attachments which the Registrant agrees to furnish
supplementally to the Commission upon request:
Exhibits to Asset Purchase Agreement:
1.3 Bill of Sale
2.1 Assumption Agreement
3.4 Tax Allocation
8.3 Noncompetition Agreement
9.2 Buyer's Closing Certificate
9.3 Buyer's Certified Resolutions
9.6(a) Assignment and Assumption Agreement
10.2 Seller's Closing Certificate
10.3 Seller's Certified Resolutions
Schedules to Asset Purchase Agreement:
1.1 Equipment
2.1 Assumed Liabilities
5.4 Undisclosed Liabilities
5.5 Absence of Material Changes
5.7 Litigation and Claims
5.9 Inventory
5.10 Customers
5.11 Suppliers, Dealers and Distributors
5.14 Insurance
5.15 Employees
5.16 Benefit Plans
5.17 Material Contracts
5.18 Owned Property
5.19 Intellectual Property
8.6 Key Employees
10.8 Lease Agreements
10.11(f) Assignment of Intellectual Property
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 thereunto duly authorized.
UNIVERSAL MFG. CO.
Date: October 12, 2000 /s/ Donald D. Heupel, President