UNITED STATES
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): May 21, 1997
STERICYCLE, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-21229 36-3640402
(State or other juris- (Commission file (IRS employer
diction of incorporation) number) identification number)
1419 Lake Cook Road, Suite 410
Deerfield, Illinois 60015
(Address of principal executive offices)
Registrant's telephone number, including area code: (847) 945-6550
ITEM 2. Acquisition or Disposition of Assets
On May 21, 1997, Stericycle, Inc. (the "Company") completed the acquisition
of Environmental Control Co., Inc. ("ECCO"), a provider of regulated medical
waste management services in the metropolitan New York City area.
Under a Stock Purchase Agreement dated as of May 1, 1997, the Company
acquired all of the issued and outstanding stock of ECCO from its four
shareholders, Bennett Velocci, Orlando Velocci, Umberto Velocci and the Estate
of Vincent Delbroccolo, Sr.
The purchase price, which was the subject of arm's-length negotiation by the
parties, was $6,300,000, as increased by 94.5% of the excess of ECCO's
outstanding accounts receivable over its outstanding obligations as of the date
of closing. The Company paid the purchase price by payment of approximately
$3,700,000 in cash, delivery of 10-year notes in the aggregate amount of
$2,300,000 payable in annual installments of $230,000 with accrued interest at
an effective rate of 5.36% per annum, and issuance of 125,000 shares of the
Company's common stock. In addition, the Company paid a $500,000 cash bonus to
Bennett Velocci upon his employment by the Company following closing. Mr.
Velocci will be responsible for ECCO's day-to-day operations for the one-year
period following closing.
The purchase price is subject to downwards adjustment to reflect (1) ECCO's
outstanding accounts receivable as of the date of closing which remain
uncollected at the expiration of the 120-day period following closing, (2)
ECCO's outstanding obligations as of the date of closing which were not
reflected in the determination of the amount of the cash payment at closing and
which are identified to the selling shareholders prior to the expiration of the
120-day period following closing, and (3) the extent to which ECCO's revenues
during the one-year period following closing are less than a specified level.
The source of funds for the Company's cash payment at closing was cash on
hand.
There was no material relationship between the Company (or any officer,
director or affiliate of the Company or any associate of any such officer or
director) and any of the selling shareholders of ECCO.
ITEM 7. Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired.
In accordance with Rule 3-05(b)(2)(i) of Regulation S-X (17 C.F.R. 210.3-
05(b)(2)(i)), the Company is not required to file any of the financial
statements for ECCO that otherwise would be required to be filed for the periods
specified in Rule 3-05 of Regulation S-X.
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(b) Pro Forma Financial Information
In accordance with Rule 11-01(c) of Regulation S-X (17 C.F.R. 210.11-01(c)),
the Company is not required to file any of the pro forma financial information
that otherwise would be required to be filed pursuant to Article 11 of
Regulation S-X.
(c) Exhibits
A copy of the Stock Purchase Agreement dated as of May 1, 1997 entered into
by Bennett Velocci, Orlando Velocci, Umberto Velocci and the Estate of Vincent
Delbroccolo, Sr. and the Company is filed as EXHIBIT 2.1 to this Report. As
noted in the relevant place, the copy filed omits certain information which has
been filed separately with the Commission.
The copy filed also omits the following schedules and exhibits:
Schedule 2.2 - Sellers' Pro Rata Shares of Purchase Price
Schedule 4.1 - Organization
Schedule 4.3 - Ownership of Stock
Schedule 4.4 - Capital Stock
Schedule 4.5 - Permits, Licenses, etc.
Schedule 4.6 - Compliance with Laws
Schedule 4.7 - Leases
Schedule 4.9 - Taxes
Schedule 4.10 - Changes in Financial Condition
Schedule 4.11 - No Default
Schedule 4.12 - Absence of Undisclosed Liabilities
Schedule 4.13 - Assets of ECCO
Schedule 4.14 - Accounts Receivable
Schedule 4.15 - Title to Assets
Schedule 4.16 - Contracts
Schedule 4.18 - Distributions
Schedule 4.19 - Actions, Suits, etc.
Schedule 4.10 - Customers and Suppliers
Schedule 4.21 - Labor Matters
Schedule 4.22 - ERISA
Schedule 4.23 - Insurance
Schedule 4.24 - Bank Accounts
Schedule 4.25 - Agreements or Obligations to Sellers or Affiliates
Schedule 8.6 - Regulatory Approvals
Schedule 9.6 - Bank Loans
Exhibit A - Form of Note
Exhibit B - Form of Letter of Credit
Exhibit C - Form of Stock Pledge Agreement
Exhibit D - Form of Transfer Station Lease
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Exhibit E - Form of Purchase Option
Exhibit F - Form of Memorandum of Lease
Exhibit G - Form of Memorandum of Purchase Option
Exhibit H - Form of Restrictive Covenant Agreement
Exhibit I - Form of General Release by each Seller
Exhibit J - Form of General Release by ECCO
Exhibit K - Financial Statements
Exhibit L - Environmental Matters
Exhibit M - Form of Escrow Agreement
Exhibit N - Form of Authorization of Sellers' Agent
In accordance with Item 601(b)(2) of Regulation S-K (17 C.F.R.
229.601(b)(2)), the Company agrees to furnish supplementally a copy of any
omitted schedule or exhibit to the Commission upon its request.
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SIGNATURE
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.
Date: June 3, 1997.
STERICYCLE, INC.
By /s/ James F. Polark
---------------------------------
James F. Polark
Vice President, Finance
and Chief Financial Officer
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EXHIBIT INDEX
Sequentially
Exhibit Description Numbered Page
2.1 Stock Purchase Agreement dated as of May 1, 1997 8
1996, entered into by Bennett Velocci, Orlando Velocci,
Umberto Velocci and the Estate of Vincent
Delbroccolo, Sr. and Stericycle, Inc.
As noted in the relevant place, this exhibit omits certain information which
has been filed separately with the Commission.
Schedule 2.2 - Sellers' Pro Rata Shares of Purchase Price
Schedule 4.1 - Organization
Schedule 4.3 - Ownership of Stock
Schedule 4.4 - Capital Stock
Schedule 4.5 - Permits, Licenses, etc.
Schedule 4.6 - Compliance with Laws
Schedule 4.7 - Leases
Schedule 4.9 - Taxes
Schedule 4.10 - Changes in Financial Condition
Schedule 4.11 - No Default
Schedule 4.12 - Absence of Undisclosed Liabilities
Schedule 4.13 - Assets of ECCO
Schedule 4.14 - Accounts Receivable
Schedule 4.15 - Title to Assets
Schedule 4.16 - Contracts
Schedule 4.18 - Distributions
Schedule 4.19 - Actions, Suits, etc.
Schedule 4.10 - Customers and Suppliers
Schedule 4.21 - Labor Matters
Schedule 4.22 - ERISA
Schedule 4.23 - Insurance
Schedule 4.24 - Bank Accounts
Schedule 4.25 - Agreements or Obligations to Sellers or Affiliates
Schedule 8.6 - Regulatory Approvals
Schedule 9.6 - Bank Loans
Exhibit A - Form of Note
Exhibit B - Form of Letter of Credit
Exhibit C - Form of Stock Pledge Agreement
Exhibit D - Form of Transfer Station Lease
Exhibit E - Form of Purchase Option
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Exhibit F - Form of Memorandum of Lease
Exhibit G - Form of Memorandum of Purchase Option
Exhibit H - Form of Restrictive Covenant Agreement
Exhibit I - Form of General Release by each Seller
Exhibit J - Form of General Release by ECCO
Exhibit K - Financial Statements
Exhibit L - Environmental Matters
Exhibit M - Form of Escrow Agreement
Exhibit N - Form of Authorization of Sellers' Agent
In accordance with Item 601(b)(2) of Regulation S-K (17 C.F.R.
229.601(b)(2)), the Company agrees to furnish supplementally a copy of any
omitted schedule or exhibit to the Commission upon its request.
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