FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: February 7, 1997
Date of Earliest Event Reported: January 24, 1997
BORG-WARNER SECURITY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-5529 13-3408028
(State of Incorporation) (Commission File No.) (I.R.S.
Employer
Identification No.)
200 South Michigan Avenue, Chicago, Illinois 60604
(Address of principal executive offices)
Registrant's telephone number, including area code:
(312) 322-8500
Item 2. Acquisition or Disposition of Assets
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On January 24, 1997 the Company's armored services unit contributed
substantially all of its assets and assigned certain of its liabilities
(including intercompany indebtedness) to Loomis, Fargo & Co. ("Newco") in
exchange for (i) 4,900,000 shares of Newco common stock and (ii) a cash payment
of approximately $105 million, which includes repayment of intercompany
indebtedness. The cash portion of the consideration may be adjusted based on
specified minimum working capital requirements. Among the liabilities of the
armored unit that were not contributed to Newco are casualty and employee claims
incurred prior to the closing.
The Company agreed to indemnify Newco for environmental liabilities associated
with existing underground storage tanks and other known and identified
environmental liabilities. Such indemnification obligation will continue until
the earlier of December 31, 1998 or the first anniversary of an initial public
offering of Newco common stock. The Company has also agreed to indemnify Newco
against liability for breach of its representations and warranties and against
certain claims relating to accounts receivable and taxes.
Newco is a Delaware corporation formed in connection with the business
combination of the Company's armored unit and Loomis Holding Corporation
("Loomis"). As part of the business combination, the shareholders of Loomis
contributed all of the Loomis common stock to Newco in exchange for (i)
5,100,000 shares of Newco common stock, (ii) a non-interest bearing promissory
note in the original principal amount of $6 million and (iii) a cash payment of
approximately $15.2 million made to various business trusts and entities,
including an entity that will administer and pay the casualty and employee
claims of Loomis incurred prior to the closing. Newco also repaid existing
Loomis indebtedness and redeemed outstanding shares of Loomis preferred stock.
The Company and the former Loomis shareholders entered into a stockholders
agreement providing that the Newco board of directors initially will consist of
seven directors: three directors nominated by the Company; three directors
nominated by the former Loomis shareholders and Newco's chief executive officer.
The number of directors that may be designated pursuant to the stockholder
agreement may adjust if either the Company or the former Loomis shareholders
reduce their ownership stake in Newco. The stockholder agreement provides that
the vote of five of the seven directors is required for Newco to engage in
certain specified activities. The Company has nominated Messrs. Adorjan, O'Brien
and Wood, its executive officers, to the Newco board of directors.
The stockholder agreement prohibits the transfer of Newco common stock by either
party for three years following the closing without the prior consent of the
other party. After such period Newco common stock may be transferred only in
accordance with the
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provisions of the stockholder agreement, which include rights of first refusal
and co-sale rights. The current stockholders also have certain preemptive and
registration rights with respect to equity issuances by Newco.
Item 7. Financial Statements and Exhibits.
(b) Pro forma financial information
Pro forma consolidated statements of earnings for the year ended
December 31, 1995 and the nine months ended September 30, 1996 and
pro forma condensed consolidated balance sheet at September 30, 1996
are attached as Exhibit 99 hereto and are incorporated by reference
herein
(c) Exhibits
2.1 Contribution Agreement dated as of November 28, 1996 by and
among Borg-Warner Security Corporation, Wells Fargo Armored Service
Corporation, Loomis-Wells Corporation (now known as Loomis, Fargo &
Co.), Loomis Holding Corporation and Loomis Stockholders Trust.
99 Pro forma consolidated statements of earnings for the year ended
December 31, 1995 and the nine months ended September 30, 1996 and
pro forma condensed consolidated balance sheet at September 30, 1996
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.
BORG-WARNER SECURITY CORPORATION
By /s/ Timothy M. Wood
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Timothy M. Wood
Vice President
Dated: February 7, 1997
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