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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
DATE OF REPORT: DECEMBER 10, 1996
(Date of earliest event reported)
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GENCOR INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 0-3821 59-0933147
(State or other jurisdiction of (Commission File Number) (IRS Employer Identification
incorporation or organization) No.)
5201 NORTH ORANGE BLOSSOM TRAIL, ORLANDO, FLORIDA 32810
(Address of principal executive offices, zip code)
(407) 290-6000
(Registrant's telephone number, including area code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
ACQUISITION OF THE PED DIVISION
On December 10, 1996, pursuant to a definitive agreement dated as of August
12, 1996, as amended by the First Amendment dated as of November 22, 1996, and
the Second Amendment dated as of December 10, 1996, (collectively, the
"Acquisition Agreement"), Gencor Industries, Inc., a Delaware corporation,
("Gencor" or "Registrant") completed the acquisition of the Process Equipment
Division ("PED Division") of Ingersoll-Rand Company, a New Jersey corporation
("Ingersoll-Rand") for $60,868,697 (subject to certain post-closing adjustment
as provided for in the Aquisition Agreement). The entire purchase price was
paid for in cash. In addition, Gencor provided Ingersoll-Rand with a $3,069,274
letter of credit in connection with the purchase by Gencor of Ingersoll-Rand's
interest in a Chinese joint venture. For further information concerning the
terms of the acquisition, see the Acquisition Agreement and all amendments
thereto, which are exhibits hereto and are incorporated herein by reference.
Gencor obtained the funds to finance the acquisition from a combination of
debt and equity. The debt funding was provided by Credit Lyonnais, New York
Branch acting for itself and as agent for other financial institutions (the
"Lenders") pursuant to a $95 million Senior Secured Credit Agreement (the
"Credit Agreement") dated as of December 10, 1996, by and among Gencor, the
Lenders and Credit Lyonnais. Gencor also used proceeds from this loan facility
to repay certain existing indebtedness (i) in the amount of $15,594,094.12 to
its former lender SouthTrust Bank of Alabama, National Association and (ii) in
the amount of $440,000 to Lloyds Bank of London. As a condition to closing
(the "Closing") under the Credit Agreement, the Lenders required the operating
management of Gencor to contribute up to $3 million dollars in capital to
Gencor; $2 million supplied prior to the Closing and up to an additional $1
million to be supplied within 10 days after the Closing. Gencor raised this
capital by selling 268,559 shares of its common stock, at a price of $10.625 per
share, to its operating management. This price reflected the average market
closing price for Gencor common stock during the thirty (30) days preceding
August 1, 1996, the date of management's commitment to move such equity
infusion.
The PED Division employs over 500 people and has 9 manufacturing operations
and numerous warehousing, distribution, and sales offices worldwide. The PED
Division manufactures machinery and equipment for grain pelleting, oil seed
processing, and oil production, sugar production, and minerals extraction.
Gencor intends to continue operating the PED Division in the same manner as
Ingersoll-Rand. The acquisition of the PED Division brings to Gencor additional
factories and distribution in the states of New Hampshire, Indiana, Iowa,
Missouri, and Colorado, In addition, this acquisition brings to Gencor
manufacturing and distribution facilities in Sweden, Netherlands, France,
England, Brazil, Ireland and Singapore.
This acquisition increases Gencor's size substantially and provides
significant diversification. Over 65% of the sales from the combined operations
of Gencor and the PED Division will come from international markets.
Additionally, the acquisition will tend to offset the seasonality in revenues
from sales of asphalt production equipment, one of Gencor's primary markets,
prior to the acquisition of the PED Division.
CREDIT LYONNAIS FINANCING
The following discussion of certain provisions of the Credit Agreement and
the related security agreements is subject to, and qualified in its entirety by
reference to, all of the terms of the Credit Agreement and the security
agreements, which are exhibits hereto and incorporated herein by reference.
To secure the indebtedness under the Credit Agreement, Gencor and its
subsidiaries have granted Credit Lyonnais New York Branch (the "Agent") (i)
security interests in all of their respective personal property and
intellectual property, (ii) mortgage interests in their principal real
properties, and (iii) pledges of stock of the Gencor subsidiaries.
Gencor and its subsidiaries will be able to borrow additional funds from
the Lenders pursuant to certain revolving credit loans; provided that such
borrowing is limited to certain percentages of receivables and inventory.
The Credit Agreement contains certain restrictions and covenants which may
be waived by the Agent. The restrictions and covenants include a prohibition
generally on mergers, consolidations and acquisitions; a prohibition generally
on the sale or transfer of assets other than in the ordinary course of business;
a prohibition generally on the financing additional indebtedness (except for the
financing of fixed or capital assets which does not exceed $3,000,000) certain
restrictions on permissible investments, capital expenditures and leases; and
certain covenants regarding Gencor's compliance with certain financial ratios -
(e.g. EBIDTA, total debt and interest expense.)
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of the PED Division.
The financial statements required by this Item are unavailable at this
time; and Gencor anticipates filing the required financial statements as
soon as practicable, but no later than 60 days after the date this Report
is required to be filed.
(b) Pro forma financial information.
The pro forma financial statements required by this item are unavailable at
this time; and Gencor anticipates filing the required pro forma financial
information as soon as practicable, but not later than 60 days after the
date this Report is required to be filed.
(c) Exhibits
10.1 Purchase Agreement, dated as of August 12, 1996 (previously filed as
on Exhibt to Registrant's Report on Form 8-K dated August 12, 1996.)
10.2 First Amendment to Purchase Agreement, dated as of November 22, 1996.
10.3 Second Amendment to Purchase Agreement, dated as of December 10,
1996.
10.4 $95 million Senior Secured Credit Agreement, by and among Gencor,
the Lenders and Credit Lyonnais, New York Bank as Agent to the
Lenders and the Issuing Bank with respect to the Letters of Credit.
10.5 Borrower Security Agreement dated as of December 10, 1996, made by
Registrant in favor of Credit Lyonnais New York Branch, as Agent.
10.6 Borrower Copyright Security Agreement dated as of December 10, 1996,
made by Registrant in favor of Credit Lyonnais New York Branch, as
Agent.
10.7 Borrower Pledge Agreement dated as of December 10, 1996, made by
Registrant in favor of Credit Lyonnais New York Branch, as Agent.
10.8 California Pellet Mill Company Security Agreement, dated as of
December 10, 1996, made by California Pellet Mill Company in favor
of Credit Lyonnais New York Branch, as Agent.
10.9 California Pellet Mill Company Pledge Agreement, dated as of
December 10, 1996, made by California Pellet Mill Company in favor
of Credit Lyonnais New York Branch, as Agent.
10.10 General Combustion Corporation Security Agreement dated as of
December 10, 1996, made by General Combustion Corporation in favor
of Credit Lyonnais New York Branch, as Agent.
10.11 Equipment Services Group, Inc. Security Agreement dated as of
December 10, 1996, made by Equipment Services Group, Inc. in favor
of Credit Lyonnais New York Branch, as Agent.
10.12 Thermotech Systems Corporation Security Agreement dated as of
December 10, 1996, made by Thermotech Systems Corporation in favor
of Credit Lyonnais New York Branch, as Agent.
10.13 Bituma-Stor, Inc. Security Agreement dated as of December 10, 1996,
made by Bituma-Stor, Inc. in favor of Credit Lyonnais New York
Branch, as Agent.
10.14 Bituma Corporation Security Agreement dated as of December 10, 1996,
made by Bituma Corporation in favor of Credit Lyonnais New York
Branch, as Agent.
10.15 Mortgage made by Gencor, Industries, Inc. in favor of Credit
Lyonnais New York Branch, as Agent for certain real property located
in Orlando, Florida.
10.16 Mortgage made by General Combustion Corporation in favor of Credit
Lyonnais New York Branch, as Agent for certain real property located
in Youngstown, Ohio.
10.17 Mortgage made by Gencor Industries, Inc. in favor of Credit Lyonnais
New York Branch, as Agent for certain real property located in
Marquette, Iowa.
10.18 Mortgage made by California Pellet Mill Company in favor of Credit
Lyonnais New York Branch, as Agent for certain real property located
in Waterloo, Iowa.
10.19 Mortgage made by California Pellet Mill Company in favor of Credit
Lyonnais New York Branch, as Agent for certain real property located
in Crawfordsville, Indiana.
10.20 Tranche A Term Note
10.21 Tranche B Term Note
10.22 Revolving Credit Note
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.
GENCOR INDUSTRIES, INC.
(Registrant)
Date: December 26, 1996 By: /s/ John E. Elliott
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John E. Elliott
Executive Vice-President