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
Date of Report (Date of earliest event reported): May 13, 1998
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RICHFOOD HOLDINGS, INC.
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(Exact name of registrant as specified in charter)
Virginia 0-16900 54-1438602
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
4860 Cox Road, Suite 300
Glen Allen, Virginia 23060
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (804) 915-6000
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Not Applicable
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(former name or former address if changed since last report)
Page 1 of 8 pages.
Exhibit Index appears on page 8.
INFORMATION TO BE INCLUDED IN REPORT
ITEM 2: ACQUISITION OR DISPOSITION OF ASSETS
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On May 13, 1998, Richfood Holdings, Inc., a Virginia corporation ("Richfood"),
announced the completion of the tender offer by DGC Acquisition, Inc., a
Delaware corporation and wholly-owned subsidiary of Richfood ("DGC"), for all of
the outstanding shares of common stock, par value $1.00 per share (the
"Shares"), of Dart Group Corporation, a Delaware corporation ("Dart"), at a
purchase price of $160.00 per share, net to the seller in cash. The tender
offer, which commenced on April 15, 1998, was made upon the terms and subject to
the conditions contained in the Offer to Purchase, dated April 15, 1998, by
Richfood and DGC and the related Letter of Transmittal (which, together with any
amendments and supplements thereto constituted the "Offer"). The Offer expired
at 12:00 midnight, New York City time, Tuesday, May 12, 1998. At that time,
1,180,503 Shares, constituting approximately 96% of the Shares outstanding, were
validly tendered and not withdrawn. On May 13, 1998, all of the validly
tendered Shares were accepted for purchase.
Richfood completed the acquisition of Dart on May 18, 1998, by merging its
wholly-owned subsidiary, DGC, with and into Dart, with Dart surviving as a
wholly-owned subsidiary of Richfood (the "Merger"). In the Merger, Shares that
were not tendered in the Offer (excluding shares owned, directly or indirectly,
by Dart or any wholly-owned subsidiary of Dart or Richfood, DGC or any other
wholly-owned subsidiary of Richfood and excluding Dissenting Shares (as defined
in the Agreement and Plan of Merger (the "Agreement"), dated as of April 9,
1998, by and among Richfood, DGC and Dart)) were automatically converted into
the right to receive $160.00 per Share in cash. The Offer and Merger were
conducted pursuant to the Agreement.
The aggregate purchase price for the Shares acquired in the Offer or
converted in The Merger, and for the cash settlement and cancellation of
previously outstanding options to purchase Shares, was
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$201,116,325, which was determined in arms-length negotiations. The purchase
price was funded from borrowings under a credit facility provided by First Union
National Bank ("First Union"), as lender and administrative agent for a
syndicate of banks, in an aggregate amount of $450 million, $250 million of
which is a five-year revolving credit facility and $200 million of which is an
eighteen month term loan. Borrowings under the facility bear interest at a
variable rate per annum, which is initially equal to LIBOR plus 1%. The
representations, warranties and covenants set forth in the credit facility are
substantially similar to those set forth in Richfood's previously existing
credit facilities with First Union, as lender and administrative agent for a
syndicate of banks. The new credit facility contain provisions requiring early
repayment of the term loan portion thereof with: the net proceeds of any new
offerings of equity securities by Richfood; net proceeds of borrowings of long-
term debt under any new credit facilities entered into by Richfood or any of its
wholly-owned subsidiaries; and with the net proceeds of any sale of Dart's
interests in (i) Trak Auto Corporation, a Delaware corporation ("Trak"), the
stock of which is 67.1% owned by Dart, (ii) Crown Books Corporation, a Delaware
corporation ("Crown"), the stock of which is 52.3% owned by Dart, (iii) Total
Beverage Corporation, a Delaware corporation and wholly-owned subsidiary of Dart
("Total Beverage") and (iv) certain real estate assets.
As of the acquisition date, Dart, headquartered in Landover, Maryland, was
comprised of (i) Shoppers Food Warehouse Corporation, a Delaware corporation
("Shoppers"), which operates a chain of 37 supermarkets in the greater
Washington, D.C. metropolitan area and is 100% owned by Dart; (ii) Trak, a
publicly owned retailer of auto parts; (iii) Crown, a publicly owned retailer of
popular books; and (iv) Total Beverage, a discount beverage retailer based in
Washington, D.C.
With the acquisition of Shoppers, Richfood's Retail Grocery Division
operates approximately 100 supermarkets in the Mid-Atlantic region. Shoppers
had approximately $850 million in sales in 1997 and is the third largest
supermarket operator in the Greater Washington, D.C. market, holding
approximately a 14% market share. Shoppers operates warehouse-style, price-
impact supermarkets that are positioned to offer the lowest overall prices in
its market area by passing on to the consumer
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the savings achieved through operating efficiencies and lower overhead
associated with the warehouse format, while providing the product selection and
quality associated with a conventional format. Although similar in many respects
to conventional supermarket operators, Shoppers distinguishes itself by
providing low-price leadership while still emphasizing quality. By combining
higher-end specialty departments with self-service and discount price features,
Shoppers believes that it has established a unique niche among supermarket
operators in Greater Washington, D.C. Prior to the acquisition, Shoppers was
Richfood's second largest wholesale customer, accounting for approximately $300
million, or 9%, of Richfood's sales in fiscal 1998. Richfood intends to operate
Shoppers as a distinct unit separate from its other retail and wholesale
operations and does not presently plan to make any material changes to Shoppers'
strategic focus or operational format.
Richfood intends, as soon as practicable, to cause Dart to divest its
ownership of Crown and Trak. Such transactions could take one or more of the
following forms: (i) a sale of Dart's equity interests in Crown or Trak, or a
distribution of such equity interests to Richfood to be followed by a spin-off
of such equity interests to Richfood's shareholders; (ii) a sale of all of the
outstanding equity of Crown or Trak pursuant to a merger, tender offer or share
exchange; (iii) a sale of all or substantially all of the assets of Crown or
Trak, followed by a distribution of the net proceeds thereof to the respective
stockholders of Crown or Trak; (iv) a recapitalization of Crown or Trak; or (v)
a liquidation of Crown or Trak. On May 22, 1998, Dart completed the sale of the
common stock of Total Beverage to an unaffiliated third party. Terms of the
transaction were not disclosed.
Additional information with respect to the transaction described herein is set
forth in the exhibits hereto, which are incorporated herein by reference.
ITEM 7: FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
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a) Financial Statements of Business Acquired
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The following Audited Historical Financial Statements of Dart are
incorporated by reference to Dart's Annual Report on Form 10-K for the
fiscal year ended January 31, 1998, as filed with the Securities and
Exchange Commission on May 1, 1998 (SEC file no. 0-1946):
Report of Independent Public Accountants
Consolidated Balance Sheets as of January 31, 1997 and January 31, 1998
Consolidated Statements of Operations for the fiscal years ended January
31, 1996, January 31, 1997 and January 31, 1998
Consolidated Statements of Stockholders' Equity for the fiscal years ended
January 31, 1996, January 31, 1997 and January 31, 1998
Consolidated Statements of Cash Flows for the fiscal years ended January
31, 1996, January 31, 1997 and January 31, 1998
Notes to Consolidated Financial Statements
b) Pro Forma Financial Information
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Registrant has determined that it is impracticable to file the required pro
forma financial information concurrently with this Form 8-K. Registrant
will file such pro forma financial information by amendment as soon as
practicable, but not later than July 27, 1998.
c) Exhibits
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Number Exhibit
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2.1 Agreement and Plan of Merger, dated as of April 9, 1998, by and
among Richfood, DGC and Dart.
4.1 Credit Agreement, dated as of May 12, 1998, by and among
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Richfood, as Borrower, First Union National Bank, as
Administrative Agent, Crestar Bank, as Syndication Agent and
The First National Bank of Chicago, as Documentation Agent.
23.1 Consent of Arthur Andersen LLP.
Pursuant to Rule 601(b)(2) of Regulation S-K, the Company agrees to
furnish supplementally to the Securities and Exchange Commission, upon
request, any omitted schedules or similar attachments to the foregoing
Exhibits.
SIGNATURE PAGE FOLLOWS
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SIGNATURE
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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.
RICHFOOD HOLDINGS, INC.
Date: May 28, 1998 By: /s/ John E. Stokely
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John E. Stokely
President and Chief Executive Officer
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EXHIBIT INDEX
Exhibit No. Description Page
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(a) Agreement and Plan of Merger, dated as of April 9, 1998, by and
among Richfood, DGC and Dart (incorporated by reference to Exhibit
(c) to the Tender Offer Statement on Schedule 14D-1 filed with the
Securities and Exchange Commission by Richfood and DGC on April 15,
1998).
(b) Credit Agreement, dated as of May 12, 1998, by and among Richfood,
as Borrower, First Union, as Administrative Agent, Crestar Bank, as
Syndication Agent (incorporated by reference to Exhibit (b) to the
Form 13D filed with the Securities and Exchange Commission by
Richfood on May 26, 1998, reporting Richfood's beneficial ownership
of the Trak Shares).
(c) Consent of Arthur Andersen LLP.
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