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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): March 21, 2001
GENERAC PORTABLE PRODUCTS, INC.
GENERAC PORTABLE PRODUCTS, LLC
GPPW, INC.
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(Exact name of registrants specified in its charter)
Delaware 33-73247 13-4006887
Delaware 39-1932782
Wisconsin 13-4012695
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(State or other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation or Identification No.)
Organization)
1 Generac Way
Jefferson, Wisconsin 53549
(Address of principal executive offices)
Registrants' telephone number:
(920) 674-3750
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Item 5. Other Events.
On March 21, 2001, Generac Portable Products, Inc. ("Generac") entered into
an Agreement and Plan of Merger (the "Merger Agreement") with Briggs & Stratton
Corporation ("Briggs"), GPP Merger Corporation, a wholly owned direct subsidiary
of Briggs, and The Beacon Group III - Focus Value Fund, L.P., the majority
shareholder of Generac ("Beacon"), providing for the merger of GPP Merger
Corporation into Generac, with Generac as the surviving corporation.
The closing of the Merger is expected to occur on the later of (a) April
30, 2001 or (b) the second business day after satisfaction of the conditions of
the Merger. Conditions to the Merger include, among other things, the continued
accuracy of representations and warranties, no material adverse change in the
credit markets or overall financing environment, receipt of waivers under
certain Briggs financing documents, certain regulatory approvals and approval of
the Merger by the requisite vote or consent of the shareholders of Generac.
Pursuant to the terms of the Merger Agreement, the existing shareholders of
Generac and the holders of warrants to purchase Generac stock (collectively, the
"Shareholders") will receive (a) $55 million, adjusted downward for purchase
price adjustments related to the failure, if any, to meet certain targets for
shareholders equity and working capital minus the transaction costs of Generac
and the Shareholders (the "Base Price"), plus (b) an amount (the "Earnout")
equal to (A) 40% of the amount by which Generac's consolidated earnings before
interest, taxes, depreciation and amortization, excluding unusual gains and
losses, for the 12-month period ending June 30, 2002, multiplied by 6, exceeds
the sum of the Base Price plus the transaction costs of Generac and the
Shareholders plus the aggregate amount of indebtedness of Generac on a
consolidated basis as of the closing of the Merger, minus (B) the amount, if
any, payable to holders of options for Generac stock, which options will be
cancelled in connection with the Merger. In no event, however, will the sum of
the Base Price plus the transaction costs of Generac and the Shareholders plus
the aggregate amount of indebtedness of Generac on a consolidated basis as of
the closing of the Merger plus the Earnout plus the option payments exceed $350
million.
It is expected that the Merger will constitute a "change of control" under
the Indenture dated as of July 1, 1998 (the "Indenture") between Generac
Portable Products, LLC ("LLC") and GPPW Inc. ("GPPW" and together with LLC, the
"Offerors") and Marine Midland Bank with respect to the 11-1/4 Senior
Subordinated Notes due 2006 (the "Notes") of the Offerors. The Offerors are
wholly owned subsidiaries of Generac. As a consequence of the "change of
control", the Offerors will be obligated within 30 days after the Merger is
consummated to make an offer to purchase all or a portion of the Notes at a
purchase price equal to 101% of the principal amount of the Notes plus accrued
and unpaid interest to the date of payment.
In addition, it is expected that consummation of the Merger will constitute
an event of default under LLC's existing credit facility under the Credit
Agreement dated as of July 9, 1998 among LLC, GPPW, Bankers Trust Company, as
administrative agent, and the various banks and financial institutions parties
thereto (as amended, the "Credit Agreement"). If LLC is unable to obtain a
waiver of such event of default, LLC's lenders under the Credit Agreement may
cause the loans thereunder to become immediately due and payable. In addition,
it is also expected that consummation of the Merger will constitute an event of
default under LLC's zero coupon notes due July 1, 2006 under the Unit Purchase
Agreement, dated as of November 20, 2000, among Generac, LLC and Beacon. If LLC
is unable to obtain a waiver of such event of default, Beacon may cause such
zero coupon notes to become immediately due and payable. In the event LLC
defaults on the Credit Agreement or the zero coupon notes and the lenders or
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Beacon, as the case may be, cause the loans or zero coupon notes to become
immediately due and payable, there can be no assurance that LLC will be able to
make its respective payments thereunder or that LLC will be able to pay the
Notes upon the occurrence of an event of default following the acceleration of
amounts owing under the Credit Agreement or the zero coupon notes.
LLC expects that an event of default will occur under the Credit Agreement
on March 31, 2001 arising from a failure by Generac to comply with one or more
financial covenants set forth in the Credit Agreement. LLC intends to seek a
waiver of such event of default from the lenders party to the Credit Agreement.
If such event of default occurs and LLC is unable to obtain a waiver of such
event of default, the lenders under the Credit Agreement may cause the loans
thereunder to become immediately due and payable, which would constitute an
event of default under the zero coupon notes and the Notes. There can be no
assurance that LLC would be able to make payments under the Credit Agreement,
the zero coupon notes and the Notes in such circumstances.
A copy of the Merger Agreement is included herein as Exhibit 2.1.
The Merger Agreement is incorporated by reference into this Item 5, and the
foregoing description of such documents and the transactions contemplated
therein are qualified in their entirety by reference to such exhibits.
Item 7. Financial Statements and Exhibits.
(c) Exhibits:
2.1 Agreement and Plan of Merger, dated as of March 21, 2001, by and
among Briggs & Stratton Corporation, GPP Merger Corporation,
Generac Portable Products, Inc. and The Beacon Group III-Focus
Value Fund, L.P.
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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.
GENERAC PORTABLE PRODUCTS, INC.
By: /s/ Gary J. Lato
___________________________________
Gary J. Lato
Vice President
GENERAC PORTABLE PRODUCTS, LLC
By: /s/ Gary J. Lato
___________________________________
Gary J. Lato
Chief Financial Officer
GPPW, Inc.
By: /s/ Faith Rosenfeld
___________________________________
Faith Rosenfeld
President
Date: March 23, 2001
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INDEX TO EXHIBITS
Exhibit
Number Exhibit
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2.1 Agreement and Plan of Merger, dated as of March 21, 2001, by and
among Briggs & Stratton Corporation, GPP Merger Corporation,
Generac Portable Products, Inc. and The Beacon Group III-Focus
Value Fund, L.P.