SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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):
August 30, 1996
ISOLYSER COMPANY, INC.
(Exact Name of Registrant as Specified in Its Charter)
Georgia
(State or Other Jurisdiction of Incorporation)
0-24866 58-1746149
(Commission File Number) (I.R.S. Employer Identification No.)
4320 International Boulevard, N.W., Norcross, Georgia 30093
(Address of Principal Executive Offices (Zip Code)
(770) 381-7566
(Registrant's Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
By the filing of a certificate of merger with the proper
government officials on August 30, 1996, Isolyser Company, Inc.
("Isolyser" or the "Company") acquired (the "Microtek
Acquisition") Microtek Medical, Inc. ("Microtek") by the merger
of MMI Merger Corp., a wholly-owned subsidiary of Isolyser, with
and into Microtek. Microtek designs, manufactures and sells a
broad range of surgical and medical supplies for use in targeted
niche markets in the health care industry. Its principal product
lines are infection and fluid control products, including
disposable drapes for covering operating room equipment during
surgical procedures and pouches that attach to the surgical
drapes to collect and contain fluids during surgical procedures.
Microtek conducts its operations through property, plant and
equipment located in Columbus, Mississippi, Alpharetta, Georgia,
Jacksonville, Florida, the Dominican Republic, the United Kingdom
and Mexico. Isolyser intends to continue to use such facilities
for their present purposes for the foreseeable future. The
purchase price paid by Isolyser to the former shareholders of
Microtek was approximately $77.2 million (based on the $10.00
closing price on The Nasdaq Stock Market of Isolyser shares on
August 29, 1996, and exclusive of closing expenses), comprised of
approximately 7,723,000 shares of newly issued Isolyser common
stock. Isolyser also issued at closing options under Isolyser's
Stock Option Plan to purchase a total of approximately 1,036,000
shares of Isolyser common stock in connection with the assumption
by Isolyser of previously issued and outstanding stock options to
purchase Microtek common stock. In addition to such purchase
price, Isolyser refinanced approximately $22.4 million of
Microtek's long-term debt (including certain prepayment fees)
which was funded by Isolyser's long term credit facility. The
terms of the merger and purchase price were the result of arms
length negotiations between Isolyser and Microtek. None of the
persons from whom Isolyser acquired Microtek were affiliates of
Isolyser within the meaning of the Securities Act of 1933, as
amended.
Concurrently with the consummation of the Microtek
Acquisition, Isolyser consummated with The Chase Manhattan Bank
(the "Bank"), a credit facility of up to $55 million comprised of
a five-year term loan (which was used to refinance Isolyser's
previously outstanding term debt and a portion of Microtek's
debt) of $15 million and a three-year revolving line of credit
(subject to satisfying certain borrowing base requirements) of up
to $40 million. The credit facility is secured by Isolyser's and
its subsidiaries' equipment, accounts receivable and inventory,
Isolyser's stock of its subsidiaries and certain of Isolyser's
plants. The credit facility provides for various fees
including, but not limited to, a 0.5 percent facility fee paid at
closing, a commitment fee of 0.25 percent per annum of the unused
commitment and a prepayment penalty during the first three years
of the loan in the amount of one percent of the commitment. The
credit facility bears interest, at the Company's option, at
either a floating rate approximating the Bank's prime rate for
the revolver and prime plus 0.5 percent for the term loan or
LIBOR plus 1.5 percent in the case of the revolver or 2 percent
in the case of the term loan. This credit facility (i) requires
the Company to maintain certain minimum income and other
financial ratios and (ii) contains certain other negative
covenants including, but not limited to, covenants prohibiting
the Company (without the prior written consent of the lenders)
from incurring certain debt, making certain investments
(including business acquisitions and joint ventures) creating
further liens, paying dividends (other than dividends of
Isolyser's consolidated subsidiaries) and making capital
expenditures in excess of $20 million in 1996 and $21.5 million
for any fiscal year thereafter. The entire term loan and
approximately $18.8 million of the revolver was used to satisfy
the outstanding principal, accrued interest and related expenses
under the previously outstanding Isolyser and Microtek credit
facilities, which have been terminated.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Businesses Acquired:
The following financial statements are incorporated by
reference from Isolyser's Registration Statement on Form S-4
bearing Registration Statement No. 333-7977 on file with the
Securities and Exchange Commission and, as such, have been
previously reported.
MICROTEK MEDICAL, INC.
Independent Auditors' Report
Consolidated Balance Sheets
November 30, 1995
November 30, 1994
Consolidated Statements of Earnings:
Year ended November 30, 1995
Year ended November 30, 1994
Year ended November 30, 1993
Consolidated Statements of Stockholders' Equity:
Year ended November 30, 1995
Year ended November 30, 1994
Year ended November 30, 1993
Consolidated Statements of Cash Flows:
Year ended November 30, 1995
Year ended November 30, 1994
Year ended November 30, 1993
Notes to consolidated financial statements
MEDI-PLAST INTERNATIONAL INC.
Independent Auditors' Report
Balance Sheets:
December 31, 1994
December 31, 1993
Statement of Operations and Retained Earnings
December 31, 1994
December 31, 1993
Statements of Cash Flows:
December 31, 1994
December 31, 1993
Notes to consolidated financial statements
VENODYNE, a Division of Advanced Investments, Inc.
Independent Auditors' Report
Balance Sheet:
February 24, 1996
Statement of Divisional Income:
Eleven months ended February 24, 1996
Statement of Divisional Cash Flows:
Eleven months ended February 24, 1996
Notes to consolidated financial statements
(b) Pro Forma Financial Information:
The pro forma combined financial information appearing
under the caption "Isolyser and Microtek Pro Forma Combined
Financial Information" in the Joint Proxy Statement/Prospectus
(the "Joint Proxy Statement Prospectus") included as part of
Isolyser's Registration Statement on Form S-4 bearing
Registration Statement No. 333-7977 is incorporated herein by
reference and, as such, has been previously reported.
(c) Exhibits:
2.1* Agreement and Plan of Merger dated as of March 15,
1996 and amended as of June 23, 1996 and July 29,
1996 among Isolyser Company, Inc., MMI Merger
Corp. and Microtek Medical, Inc.
2.2 Certificate of Merger of MMI Merger Corp. and
Microtek Medical, Inc.
10.1 Amended and Restated Credit Agreement dated as of
August 30, 1996, among Isolyser, MedSurg
Industries, Inc., Microtek, White Knight
Healthcare, Inc., the Guarantors named therein,
the Lenders named therein and the Bank
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Olin J. Harrell, CPA
23.3 Consent of Wolf & Company, P.C.
* Previously filed as part of, and incorporated by reference
from the Joint Proxy Statement/Prospectus included in
Registration Statement on Form S-4 bearing File No. 333-
7977.
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.
ISOLYSER COMPANY, INC.
By: C. Fred Harlow
________________________________
C. Fred Harlow, Chief Financial
Officer and Senior Vice
President
Dated: September 10, 1996