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UNITED STATES
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
December 17, 1999
Date of Report
(Date of earliest event reported)
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DECRANE AIRCRAFT HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 333-70365 34-1645569
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
2361 ROSECRANS AVENUE, SUITE 180, EL SEGUNDO, CA
90245 (Address, including zip code, of principal executive offices)
(310) 725-9123
(Registrant's telephone number, including area code)
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NOT APPLICABLE
(Former address and telephone number of principal executive offices, if changed
since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
ACQUISITION OF THE INFINITY PARTNERS, LTD.
On December 17, 1999 we acquired substantially all of the assets,
subject to accounts payable and accrued expenses assumed, of The Infinity
Partners, Ltd. Infinity is a Texas-based designer and manufacturer of
interior components for middle- and high-end corporate aircraft. We intend to
continue to use the acquired assets to manufacture products similar to those
previously manufactured by Infinity.
The total purchase price was $17.6 million, plus a maximum of $25.2
million of contingent consideration payable in 2000 and 2001 based on future
attainment of defined performance criteria. The total purchase price includes
an estimated $0.8 million of acquisition related costs. The acquisition will
be accounted for as a purchase and the difference between the purchase price
and the fair value of the net assets acquired will be recorded as goodwill
and amortized on a straight-line basis over thirty years. The amount of
contingent consideration paid in the future, if any, will increase goodwill
and will be amortized prospectively over the remaining period of the initial
thirty-year term. Our consolidated financial statements will include
Infinity's financial position and its results of operations for periods
subsequent to the acquisition date.
The acquisition was funded with borrowings under our senior credit
facility.
ITEM 5. OTHER EVENTS
REORGANIZATION AND RESTRUCTURING CHARGE
In December 1999, we announced a plan to reorganize and restructure the
operations of two of our subsidiaries, Hollingsead International, Inc. and
Elsinore Engineering, Inc. In conjunction with this restructuring, we expect
to record a nonrecurring pre-tax charge of between $8.0 million and $9.0
million in the fourth quarter of 1999 resulting in a net loss for the quarter
and year ending December 31, 1999.
STOCK OPTION PLAN
In December 1999, DeCrane Holdings amended its qualified management
incentive stock option plan for key employees. The amended plan provides for
the granting of options to purchase 356,257 common shares and expires in
2009. The options generally vest based upon future attainment of defined
performance criteria although alternate vesting schedules may be authorized.
Options to purchase 279,662 shares at $23.00 per share were granted of which
options to purchase approximately 28,000 shares immediately vested. We
believe the per share exercise price of the options granted approximated the
fair market value of the underlying common stock on the grant date.
The stock option plan is attached as Exhibit 10.19 to this Form 8-K.
MANAGEMENT STOCK PURCHASE
In December 1999, management purchased 171,304 shares of DeCrane
Holdings common stock for $23.00 per share. The total purchase price was $3.9
million of which one-half was paid in cash at closing and one-half was loaned
to management by DeCrane Aircraft at applicable federal rates.
The form of the stock subscription agreement is attached as Exhibit 10.20
to this Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired.
The Infinity Partners, Ltd. Regulation S-X compliant audited financial
statements are not available at this time. The audited financial statements for
the appropriate periods will be filed by amendment to this Form 8-K as soon as
practicable, but in no event later than March 1, 2000.
(b) Pro forma financial information.
Unaudited pro forma financial information reflecting The Infinity Partners,
Ltd. acquisition is not available at this time. The pro forma financial
information will be filed by amendment to this Form 8-K as soon as practicable,
but in no event later than March 1, 2000.
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(c) Exhibits.
EXHIBIT
NO. EXHIBIT DESCRIPTION
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10.19 Amended Management Incentive Stock Option Plan **
10.20 Amended Stock Subscription Agreement **
10.21 Amended Incentive Bonus Plan **
13.22.1 Articles of Incorporation DAH-IP Holdings, Inc. **
13.22.2 By Laws of DAH-IP Holdings, Inc. **
13.23.1 Articles of Incorporation of DAH-IP Infinity, Inc. **
13.23.2 By Laws of DAH-IP Infinity, Inc. **
13.24.1 Certificate of Limited Partnership DAH-IP Acquisition Co., L.P. **
the General Partner, and DeCrane Aircraft Holdings, Inc., the Limited Partner **
13.24.2 Limited Partnership Agreement of DAH-IP Acquisition Co., L.P. among DAH-IP Holdings, Inc.,
the General Partner, and DeCrane Aircraft Holdings, Inc., the Limited Partner **
13.24.3 Assignment of Partnership Interest by DeCrane Aircraft Holdings, Inc. to DAH-IP Infinity, Inc. **
21.1 List of Subsidiaries of Registrant **
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* Previously filed
** Filed herewith
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.
DECRANE AIRCRAFT HOLDINGS, INC.
(Registrant)
December 30, 1999 By: /S/ RICHARD J. KAPLAN
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Name: Richard J. Kaplan
Title: Senior Vice President, Chief
Financial Officer, Secretary
and Treasurer
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