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): December 5, 2004
ASSOCIATED MATERIALS INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware
(State or Other Jurisdiction of Incorporation)
000-24956
(Commission File Number)
75-1872487
(I.R.S. Employer Identification Number)
3773 State Road
Cuyahoga Falls, Ohio 44223
(Address and zip code of principal executive offices)
(330) 929-1811
(Registrant's telephone number, including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 1.01--Entry into a Material Definitive Agreement.
Stock Purchase Agreement
On December 5, 2004, AMH Holdings, Inc. ("AMH"), Harvest Partners, Inc.
("Harvest Partners") and certain other stockholders of AMH entered into a Stock
Purchase Agreement (the "Stock Purchase Agreement"), with certain affiliates of
Investcorp S.A. ("Investcorp"), namely AM Holding Limited, AM Equity Limited, AM
Investments Limited, Associated Equity Limited and Associated Investments
Limited (such Investcorp affiliates, the "New Investors"), pursuant to which the
New Investors will pay $150.0 million in cash to acquire a total of 500,000
shares of voting convertible preferred stock of AMH (the "Voting Preferred
Stock") and 1,614,019 shares of non-voting convertible preferred stock of AMH
(the "Non-Voting Preferred Stock" and collectively with the Voting Preferred
Stock, the "Convertible Preferred Stock"). The Voting Preferred Stock represents
50% of the outstanding shares of all voting stock of AMH and the Convertible
Preferred Stock represents 50% of the outstanding shares of all stock of AMH, in
each case on a fully diluted basis. Each share of Voting Preferred Stock is
convertible at any time into fully-paid and non-assessable shares of the voting
common stock of AMH, and each share of Non-Voting Preferred Stock is convertible
at any time into fully paid and non-assessable shares of non-voting common stock
of AMH, in each case at a specified conversion rate, which shall initially be
1:1. The Convertible Preferred Stock will be automatically converted into common
stock of AMH upon the occurrence of a qualified initial public offering.
The sale of the Convertible Preferred Stock pursuant to the Stock Purchase
Agreement, together with certain other transactions contemplated by the Stock
Purchase Agreement (the "Transactions"), is expected to be consummated by the
end of December 2004 following the obtaining of related financing, including
the amendment and restatement of the existing Amended and Restated Credit
Agreement, dated as of August 29, 2003, as further amended by the First
Amendment thereto dated as of March 18, 2004, among AMI and Gentek Building
Products Limited, as borrowers, AMH, as guarantor, and UBS Warburg, LLC and
Credit Suisse First Boston Corporation, as joint lead arrangers (the "Existing
Credit Agreement" and as will be amended and restated, the "Amended and Restated
Credit Agreement") and the satisfaction or waiver of customary closing
conditions. The Amended and Restated Credit Agreement will consist of a $175.0
million senior secured term loan facility (of which $42.0 million will be in
addition to the amount of term loans currently outstanding thereunder) and a
$70.0 million senior secured revolving credit facility.
AMH is a holding company which conducts all of its business through its indirect
wholly-owned subsidiary, Associated Materials Incorporated ("AMI" and, together
with AMH and its subsidiaries, the "Company"). In connection with the
Transaction, the shareholders of AMH created AMH Holdings II, Inc., a Delaware
corporation ("Holdings II"). Holdings II will not have any material assets or
operations other than its 100% ownership of the capital stock of AMH. In
connection with the Transaction, the shareholders of AMH (including the New
Investors) will enter into a Restructuring Agreement, pursuant to
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which such Shareholders will contribute all of the shares of capital stock of
AMH to Holdings II, in exchange for capital stock of Holdings II having
equivalent rights, preferences and privileges. As a result of this exchange, all
of the former stockholders of AMH will become stockholders of Holdings II, and
Holdings II will be the sole stockholder of AMH. AMH will continue to be the
sole stockholder of Associated Materials Holdings Inc. ("AMHI") and AMHI will
continue to be the sole stockholder of AMI.
As provided in the Stock Purchase Agreement, the estimated total amount of
consideration necessary to consummate the Transaction will be approximately
$308.4 million, consisting of (i) $150.0 million from the New Investors to
acquire shares of Convertible Preferred Stock from the existing AMH
stockholders; and (ii) (a) approximately $38.0 million of available cash from
AMI; (b) $ 75.0 million in senior notes to be issued by Holdings II; (c)
approximately $ 42.0 million in additional term loan borrowings under the
Amended and Restated Credit Agreement; and (d) approximately $3.4 million from
the exercise of stock options by management stockholders, which amounts will be
used to pay (x) a dividend of approximately $96.4 million on shares of Holdings
II common stock to all holders of common stock of Holdings II; (y) a management
bonus of $22.0 million to certain members of the Company's senior management;
and (z) $40.0 million in fees and expenses, including among other items, $4.875
million in fees to Harvest Partners, and $15.0 million in fees to Investcorp.
Certain payments will be made at a future date.
In connection with the Transaction, the stockholders of Holdings II will enter
into a stockholders agreement which will govern certain relationships among, and
contains certain rights and obligations of, such stockholders (the "Stockholders
Agreement"). Pursuant to the Stockholders Agreement, Harvest Partners will have
the right to designate three members of a seven member board of directors of
Holdings II and Investcorp will have the right to designate three of the seven
members of the board of directors of Holdings II. An additional board seat will
be occupied by the chief executive officer of AMI, who is currently Michael
Caporale, Jr. The boards of directors of AMH, AMHI and AMI will have the same
composition. Each of Harvest Partners and collectively, the New Investors, will
have a 50% voting interest in Holdings II. In addition, 10% of the non-voting
common stock will be reserved for issuance under or Holdings II stock option
plan to be executed in connection with this Transaction. The Stockholders
Agreement will terminate and supercede the existing Amended and Restated
Stockholders Agreement, dated March 4, 2004, by and among AMH and the existing
stockholders of AMH.
A copy of the Stock Purchase Agreement is attached as Exhibit 2.1 to this
Current Report on Form 8-K and is incorporated herein by reference. The
foregoing description of the Stock Purchase Agreement is qualified in its
entirety by reference to the full text of the Stock Purchase Agreement.
A copy of the Form of the Form of Amended and Restated Certificate of
Incorporation of AMH Holdings, Inc. is attached as Exhibit 99.1 to this Current
Report on Form 8-K and is incorporated herein by reference.
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A copy of the Form of Amended and Restated Certificate of Incorporation of AMH
Holdings II, Inc. is attached as Exhibit 99.2 to this Current Report on Form 8-K
and is incorporated herein by reference.
A copy of the Form of Restructuring Agreement is attached as Exhibit 99.3 to
this Current Report on Form 8-K and is incorporated herein by reference. The
foregoing description of the Restructuring Agreement is qualified in its
entirety by reference to the full text of the Restructuring Agreement.
A copy of the Form of Stockholders Agreement is attached as Exhibit 99.4 to this
Current Report on Form 8-K and is incorporated herein by reference. The
foregoing description of the Stockholders Agreement is qualified in its entirety
by reference to the full text of the Form of Stockholders Agreement.
On December 6, 2004, the Company issued a press release announcing that it had
entered into the Stock Purchase Agreement. A copy of the press release is
attached as Exhibit 99.5 to this Current Report on Form 8-K and is incorporated
herein by reference in its entirety.
Item 3.02--Unregistered Sale of Equity Securities.
The Convertible Preferred Stock will be sold pursuant to an exemption from
registration under Section 4(2) of the Securities Act of 1933, as amended. The
information under the caption "Stock Purchase Agreement" under Item 1.01 of this
report is incorporated herein by reference.
Item 8.01--Other Events.
The information under the caption "Stock Purchase Agreement" under Item 1.01 of
this report is incorporated herein by reference.
Item 9.01--Financial Statements and Exhibits.
(c) Exhibits
Exhibit 2.1 Stock Purchase Agreement, dated as of December 5,
2004, by and between AMH Holdings, Inc. and the
other parties signatory thereto.
Exhibit 99.1 Form of Amended and Restated Certificate of
Incorporation of AMH Holdings, Inc.
Exhibit 99.2 Form of Amended and Restated Certificate of
Incorporation of AMH Holdings II, Inc.
Exhibit 99.3 Form of Restructuring Agreement by and among AMH
Holdings, Inc. and the other parties signatory
thereto.
Exhibit 99.4 Form of Stockholders Agreement by and among the
stockholders of AMH Holdings II, Inc.
Exhibit 99.5 Press Release issued December 6, 2004.
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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.
ASSOCIATED MATERIALS INCORPORATED
By: /s/ D. Keith LaVanway
-------------------------------------
Name: D. Keith LaVanway
Title: Vice President, Chief
Financial Officer, Treasurer
and Secretary
Dated: December 6, 2004
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