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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K/A
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 6, 2002 (DECEMBER 21, 2001)
LOGO
DEAN HOLDING COMPANY
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 1-08262 75-2932967
(State or Other Jurisdiction (Commission File Number) (IRS Employer Identification
of Incorporation) No.)
</Table>
2515 MCKINNEY AVENUE, LB 30, SUITE 1200
DALLAS, TEXAS 75201
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(214) 303-3400
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Explanatory Note: This Current Report on Form 8-K/A amends the Registrant's
Current Report on Form 8-K dated January 7, 2002, to include pro forma financial
information relating to the Registrant's acquisition of Dean SoCal, LLC
("SoCal") and the Registrant's divestiture of certain operations, in accordance
with Item 7(b)(2) of Form 8-K. The acquisition of SoCal and the divestiture of
business operations immediately followed the acquisition of the Registrant by
the new Dean Foods Company (formerly known as Suiza Foods Corporation) on
December 21, 2001. The acquisition of the Registrant, the acquisition of SoCal
in an exchange of operations and the divestiture of operations was reported in
the Registrant's Current Report on Form 8-K dated January 7, 2002.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(b) PRO FORMA FINANCIAL INFORMATION
The accompanying unaudited pro forma condensed consolidated balance sheet
and statements of income give effect to the following transactions:
- Acquisition by merger of Dean Foods Company by Blackhawk Acquisition
Corp., a wholly-owned subsidiary of Suiza Foods Corporation. The
acquisition was accounted for under the purchase method of accounting.
Blackhawk Acquisition Corp. survived the merger and immediately
thereafter changed its name to Dean Holding Company ("Dean Holding"), our
current name. Also immediately after the merger, Suiza Foods Corporation
changed its name to Dean Foods Company ("new Dean"). We are now a
wholly-owned subsidiary of new Dean. Upon consummation of the merger, we
repaid amounts outstanding under our revolving credit facility and
terminated our revolving credit facility and commercial paper program.
These events are collectively referred to as the "acquisition by
Blackhawk" in this pro forma financial information.
- Dividend of four of our dairies to new Dean immediately after the merger.
- Exchange of the operations of our National Refrigerated Products Group
("NRP") for the operations of Dean SoCal, LLC, ("Dean SoCal"), a
subsidiary of new Dean.
The pro forma financial information is derived from our historical
financial statements and the historical financial statements of NRP and Dean
SoCal. The unaudited pro forma condensed consolidated balance sheet data is
presented as if the merger and the related transactions had occurred on November
25, 2001. The unaudited pro forma condensed consolidated statements of income
for the year ended May 27, 2001 and for the six months ended November 25, 2001
assume the merger occurred on May 29, 2000. The Dean SoCal historical financial
information included in the unaudited pro forma financial information for the
year ended May 27, 2001 is derived from Dean SoCal's results of operations for
the twelve months ended June 30, 2001. The Dean SoCal historical financial
information included in the unaudited pro forma financial information for the
six months ended November 25, 2001 is derived from Dean SoCal's results of
operations for the six months ended September 30, 2001.
New Dean has not completed a final allocation of the purchase price to the
fair values of our assets and liabilities and the related business integration
plans. New Dean expects that the ultimate purchase price allocation may include
additional adjustments to the fair values of depreciable tangible assets,
identifiable intangible assets (some of which will have indefinite lives) and
the carrying values of certain liabilities. Accordingly, to the extent that such
assessments indicate that the fair value of the assets and liabilities differ
from their preliminary purchase allocations, such difference would adjust the
amounts allocated to those assets and liabilities and would change the amounts
allocated to goodwill. The pro forma statements of income do not include cost
savings from synergies which may be achievable subsequent to the closing of the
merger or the impact of non-recurring items directly related to the merger.
1
The pro forma information shown under this heading is unaudited, is
presented for informational purposes only, is not necessarily indicative of the
financial position or results of operations that would actually have occurred
had the merger or the related transactions been consummated as of the dates or
at the beginning of the periods presented, nor is it necessarily indicative of
future operating results or financial position. The unaudited pro forma
condensed consolidated financial statements should be read in conjunction with
our historical financial statements and related notes thereto and those of new
Dean.
2
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
YEAR ENDED MAY 27, 2001
(IN THOUSANDS)
<Table>
<Caption>
DIVIDEND OF
DIVESTED DIVIDEND OF
HISTORICAL ACQUISITION BY OPERATIONS NRP
DEAN HOLDING BLACKHAWK (G) (H)
------------ -------------- ----------- -----------
Net sales................................ $4,440,366 $ -- $(215,360) $(399,575)
Cost of sales............................ 3,387,707 (7,188)(b) (163,029) (315,664)
---------- -------- --------- ---------
Gross profit............................. 1,052,659 7,188 (52,331) (83,911)
Operating costs and expenses:
Selling and distribution............... 685,915 (2,573)(b) (38,230) (66,472)
General and administrative............. 138,660 (407)(b) (6,462) (8,666)
Amortization of intangibles and other
assets............................... 24,451 (14,559)(b),(c) (1,546) (1,677)
Merger-related costs................... 22,151 (22,151)(d)
---------- -------- --------- ---------
Total operating costs and
expenses....................... 871,177 (39,690) (46,238) (76,815)
---------- -------- --------- ---------
Operating income......................... 181,482 46,878 (6,093) (7,096)
Other (income) expense:
Interest expense, net.................. 70,655 (9,606)(e) 27
Equity in earnings of unconsolidated
affiliates........................... (75) 75
Other income, net...................... (10,000)(a) 86 133
---------- -------- --------- ---------
Total other (income) expense..... 60,580 (9,606) 113 208
Income from continuing operations before
income taxes........................... 120,902 56,484 (6,206) (7,304)
Income taxes............................. 46,251 21,608(f) (2,374)(f) (2,794)(f)
---------- -------- --------- ---------
Income from continuing operations........ $ 74,651 $ 34,876 $ (3,832) $ (4,510)
========== ======== ========= =========
<Caption>
CONTRIBUTION OF
DEAN SOCAL
(H) PRO FORMA
--------------- ----------
Net sales................................ $238,083 $4,063,514
Cost of sales............................ 190,064 3,091,890
-------- ----------
Gross profit............................. 48,019 971,624
Operating costs and expenses:
Selling and distribution............... 36,276 614,916
General and administrative............. 6,769 129,894
Amortization of intangibles and other
assets............................... 1,674 8,343
Merger-related costs...................
-------- ----------
Total operating costs and
expenses....................... 44,719 753,153
-------- ----------
Operating income......................... 3,300 218,471
Other (income) expense:
Interest expense, net.................. 61,076
Equity in earnings of unconsolidated
affiliates...........................
Other income, net...................... 72 (9,709)
-------- ----------
Total other (income) expense..... 72 51,367
Income from continuing operations before
income taxes........................... 3,228 167,104
Income taxes............................. 1,235(f) 63,926
-------- ----------
Income from continuing operations........ $ 1,993 $ 103,178
======== ==========
</Table>
See Notes to Unaudited Pro Forma Condensed Consolidated Statements of Income.
3
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
SIX MONTHS ENDED NOVEMBER 25, 2001
(IN THOUSANDS)
<Table>
<Caption>
HISTORICAL ACQUISITION DIVIDEND OF CONTRIBUTION
DEAN BY DIVESTED DIVIDEND OF OF DEAN
HOLDING BLACKHAWK OPERATIONS(G) NRP(H) SOCAL(H) PRO FORMA
---------- ----------- ------------- ----------- ------------ ----------
Net sales....................... $2,288,539 $ -- $(107,891) $(211,265) $125,183 $2,094,566
Cost of sales................... 1,787,329 (6,128)(b) (83,017) (161,420) 100,315 1,637,079
---------- -------- --------- --------- -------- ----------
Gross profit.................... 501,210 6,128 (24,874) (49,845) 24,868 457,487
Operating costs and expenses:
Selling and distribution...... 304,569 (1,841)(b) (19,410) (30,275) 19,386 272,429
General and administrative.... 77,536 (333)(b) (3,196) (3,764) 2,807 73,050
Amortization of intangibles
and other assets............ 12,151 (7,115)(b),(c) (855) (847) 827 4,161
Merger-related costs.......... 13,540 (13,540)(d)
---------- -------- --------- --------- -------- ----------
Total operating costs and
expenses................. 407,796 (22,829) (23,461) (34,886) 23,020 349,640
---------- -------- --------- --------- -------- ----------
Operating income................ 93,414 28,957 (1,413) (14,959) 1,848 107,847
Other (income) expense:
Interest expense, net......... 32,584 (2,338)(e) 4 2 30,252
Equity in earnings of
unconsolidated affiliates... (1,900) 1,900
Other income, net............. (1,110) 104 78 97 (831)
---------- -------- --------- --------- -------- ----------
Total other (income)
expense.................. 29,574 (2,338) 108 1,980 97 29,421
Income from continuing
operations before income
taxes......................... 63,840 31,295 (1,521) (16,939) 1,751 78,426
Income taxes.................... 23,756 11,645(f) (566)(f) (6,303)(f) 652(f) 29,184
---------- -------- --------- --------- -------- ----------
Income from continuing
operations.................... $ 40,084 $ 19,650 $ (955) $ (10,636) $ 1,099 $ 49,242
========== ======== ========= ========= ======== ==========
</Table>
See Notes to Unaudited Pro Forma Condensed Consolidated Statements of Income.
4
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS)
(a) On December 1, 2000, we sold a $30 million subordinated note which was
received as part of the proceeds from the sale of our vegetable business in our
1999 fiscal year, for cash proceeds of $10 million. Due to the uncertainty of
the collectibility of the note, the note was originally valued at a nominal
amount. As a result of the sale, we reversed $10 million of the original reserve
against the note, resulting in a $10 million pre-tax gain in our second quarter
of fiscal 2001.
(b) Pro forma adjustment to depreciation and amortization to reflect the
depreciation and amortization of the fair values of property and equipment and
identifiable intangibles over their estimated useful lives.
(c) Pro forma adjustment to eliminate our historical amortization of
goodwill, net of the amounts related to our divested operations, in the amount
of $19.1 million for the year ended May 27, 2001 and approximately $9.6 million
for the six months ended November 25, 2001.
On June 29, 2001, the Financial Accounting Standards Board issued a new
business combinations financial accounting standard and a new goodwill and
intangible asset financial accounting standard. The new business combinations
financial accounting standard and the portion of the new intangible asset
financial accounting standard related to the elimination of the requirement to
amortize goodwill and intangibles with indefinite lives, are effective for
acquisitions completed after June 30, 2001 and therefore no amortization for
goodwill or intangibles with indefinite lives has been included for the purchase
of Dean Holding.
New Dean has not completed a final allocation of the purchase price to the
fair value of our assets and liabilities and the related business integration
plans. New Dean expects that the ultimate purchase price allocation may include
additional adjustments to the fair values of depreciable tangible assets,
identifiable intangible assets (some of which will have indefinite lives) and
the carrying value of certain liabilities. Accordingly, to the extent that such
assessments indicate that the fair value of the assets and liabilities differ
from their preliminary purchase price allocations, such difference would adjust
the amounts allocated to those assets and liabilities and would change the
amounts allocated to goodwill. Assuming a weighted average useful life of
depreciable assets of 15 years, every $10 million of excess purchase price which
is reallocated between depreciable assets and goodwill will result in a change
in depreciation expense for the year ended May 27, 2001 of approximately $0.7
million and for the six month period ended November 25, 2001 of approximately
$0.3 million.
(d) We recorded a pre-tax charge of $22.2 million and $13.5 million in the
year ended May 27, 2001 and the six months ended November 25, 2001,
respectively, for merger-related costs. These costs directly related to the
merger have been eliminated from the pro forma statements of income.
(e) Pro forma adjustment to reflect interest expense on new borrowings
under a receivable backed loan and to eliminate historical interest expense on
our revolving credit facility and commercial paper program which were terminated
upon consummation of the merger.
(f) Pro forma adjustment to reflect income taxes at the Dean Holding
effective tax rate for the period.
(g) Reflects our dividend at fair value of Coburg Dairy, Inc. based in
North Charleston, South Carolina, Cream O Weber Dairy, Inc. based in Salt Lake
City, Utah, H. Meyer Dairy Company based in Cincinnati, Ohio and U.C. Milk
(Goldenrod) Company, Inc. based in Madisonville, Kentucky to new Dean, our sole
shareholder, immediately after the merger. The dividend was made to facilitate
the divestiture by new Dean of operations conducted by these subsidiaries in
connection with obtaining regulatory approval for the merger.
(h) On December 21, 2001, in connection with the merger, we entered into a
Securities Purchase Agreement with Morningstar Foods Inc., a wholly-owned
subsidiary of new Dean, pursuant to which we immediately exchanged the
operations of our NRP for the operations of Dean SoCal, a subsidiary of new
Dean. Dean SoCal operates in Southern California and produces a full line of
dairy and related products under the Swiss(R) and Adohr Farms(R) brands. Dean
SoCal is operated as part of our dairy group. The pro forma adjustments for the
divestiture of NRP represent the elimination of its historical operating
results, while the
5
pro forma adjustments for the acquisition of Dean SoCal represent the inclusion
of its historical operating results in the pro forma operations of Dean Holding.
6
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF NOVEMBER 25, 2001
(IN THOUSANDS)
<Table>
<Caption>
DIVIDEND OF
ACQUISITION BY DIVESTED DIVIDEND OF CONTRIBUTION OF
HISTORICAL BLACKHAWK OPERATIONS NRP DEAN SOCAL
DEAN HOLDING (a) (c) (d) (d) PRO FORMA
------------ -------------- ----------- ----------- --------------- ----------
Current assets:
Cash and cash equivalents... $ 37,411 $ -- $ -- $ (693) $ -- $ 36,718
Receivables, net of
allowance for doubtful
accounts.................. 353,327 (17,511) (33,764) 25,425 327,477
Inventories................. 261,127 23,434 (3,964) (24,365) 4,903 261,135
Deferred income taxes....... 49,340 38,964 (635) (1,773) 542 86,438
Prepaid expenses and other
current assets............ 29,496 (673) (2,338) 1,329 27,814
---------- ---------- -------- --------- -------- ----------
Total current assets.......... 730,701 62,398 (22,783) (62,933) 32,199 739,582
Property, plant and equipment,
net......................... 907,288 (114,597) (54,482) (116,794) 15,915 637,330
Intangible and other assets... 700,335 1,082,723 (495) (127,836) 58,589 1,713,316
---------- ---------- -------- --------- -------- ----------
Total................. $2,338,324 $1,030,524 $(77,760) $(307,563) $106,703 $3,090,228
========== ========== ======== ========= ======== ==========
Current liabilities:
Accounts payable and accrued
expenses.................. $ 447,422 $ 117,945 $(13,067) $ (30,726) $ 16,422 $ 537,996
Income taxes payable........ 43,442 8,058 51,500
Current portion of long-term
debt...................... 20,150 (293) 19,857
---------- ---------- -------- --------- -------- ----------
Total current
liabilities......... 511,014 117,945 (5,302) (30,726) 16,422 609,353
Long-term debt................ 936,015 (91,058)(b) (7,806) 837,151
Other long-term liabilities... 32,310 119,984 152,294
Deferred income taxes......... 118,313 21,096 (8,649) (10,048) 4,275 124,987
Stockholders' equity.......... 740,672 862,557 (56,003) (266,789) 86,006 1,366,443
---------- ---------- -------- --------- -------- ----------
Total................. $2,338,324 $1,030,524 $(77,760) $(307,563) $106,703 $3,090,228
========== ========== ======== ========= ======== ==========
</Table>
See Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet.
7
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
(a) In connection with the merger, new Dean paid each legacy Dean
stockholder $21.00 in cash per share and issued 0.429 shares of new Dean common
stock for each of the 36.0 million shares of legacy Dean common stock
outstanding at the date of the merger. In addition new Dean issued approximately
.752 new Dean stock options for each outstanding stock option of legacy Dean.
The following summarizes the total assumed purchase price and related
preliminary allocation to the net assets acquired:
<Table>
Total purchase price:
Fair value of new Dean common stock based on an average
price per share of $47.83 around the announcement
date................................................... $ 739,366
Cash consideration........................................ 756,760
Estimated transaction costs............................... 55,735
----------
Net purchase price................................ $1,551,861
==========
Purchase price allocation:
Net purchase price........................................ $1,551,861
Historical net assets acquired............................ (740,672)
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Excess purchase price..................................... 811,189
Less allocation of excess purchase price:
Reduction in the carrying value of legacy Dean's senior
notes to reflect higher fair value interest rates..... (41,058)
Increase in the carrying value of inventory to fair
value................................................. (23,434)
Decrease in the carrying value of property, plant and
equipment to fair value based on expected
post-acquisition use.................................. 114,597
Increase in other long-term liabilities to reflect fair
value primarily due to employee benefit plan
obligations and unfavorable contracts................. 119,984
Increase in accounts payable and accrued expenses to
reflect estimated cash liabilities to satisfy (i)
employee surrender rights under Dean's stock option
plans of approximately $81.0 million and (ii)
severance and employee change in control obligations
of $23.9 million and other required reserves.......... 119,313
Increase in the carrying value of equity-method
investments to fair value............................. (30,839)
Allocation of purchase price to identifiable
intangibles, including trademarks, tradenames and
favorable customer contracts, net of existing
historical amounts.................................... (218,253)
Current deferred tax effect of fair value
adjustments........................................... (38,964)
Non-current deferred tax effect of fair value
adjustments........................................... 21,096
----------
Excess purchase price allocated to goodwill............... $ 833,631
==========
</Table>
New Dean has not completed a final assessment of the fair value of our
assets and liabilities and the related business integration plans, and thus the
purchase price allocation process is incomplete. We expect that the ultimate
purchase price allocation will include additional adjustments to the fair values
of depreciable tangible assets, changes in preliminary allocations of a portion
of the purchase price to both definite and indefinite life identifiable
intangible assets and additional adjustments to the carrying value of certain
liabilities, including the finalization of or revisions to potential liabilities
associated with business integration plans and termination and change in control
benefits. Accordingly, to the extent that such assessments indicate that the
fair value of the assets and liabilities differ from the above preliminary
allocations, such differences would be allocated to those assets and liabilities
and would change the amounts allocated to goodwill.
8
(b) In connection with the merger new Dean used borrowings under its
revolving credit facility to refinance the outstanding indebtedness under our
revolving credit facility. This resulted in the repayment of $200 million plus
accrued interest of $1.4 million on our revolving credit facility. In addition,
we have new borrowings under a receivable backed loan in the amount of $150
million. Our senior notes were also recorded at fair value in purchase
accounting, which resulted in a reduction of debt of $41.1 million.
(c) Reflects our dividend at fair value of Coburg Dairy, Inc. based in
North Charleston, South Carolina, Cream O Weber Dairy, Inc. based in Salt Lake
City, Utah, H. Meyer Dairy Company based in Cincinnati, Ohio and U.C. Milk
(Goldenrod) Company, Inc. based in Madisonville, Kentucky to new Dean, our sole
shareholder, immediately after the merger. The dividend was made to facilitate
the divestiture by new Dean of operations conducted by these subsidiaries in
connection with obtaining regulatory approval for the merger.
(d) On December 21, 2001, in connection with the merger, we entered into a
Securities Purchase Agreement with Morningstar Foods Inc., a wholly-owned
subsidiary of new Dean, pursuant to which we immediately exchanged the
operations of our National Refrigerated Products Group for the operations of
Dean SoCal, a subsidiary of new Dean. Dean SoCal operates in Southern California
and produces a full line of dairy and related products under the Swiss(R) and
Adohr Farms(R) brands. Dean SoCal is operated as part of our dairy group. The
pro forma adjustments for the divestiture of NRP represent the elimination of
its balance sheet at fair value, while the pro forma adjustments for the
acquisition of Dean SoCal represent the inclusion of its balance sheet at book
value in the pro forma balance sheet of Dean Holding.
9
(c) EXHIBITS
<Table>
2.1 -- Agreement and Plan of Merger, dated as of April 4, 2001,
among Suiza Foods Corporation, Dean Foods Company and
Blackhawk Acquisition Corp. (filed as Exhibit 2.1 to the
Registrant's Quarterly Report on Form 10-Q for the quarterly
period ended February 25, 2001 and incorporated herein by
reference).
2.2* -- Securities Exchange Agreement, dated December 21, 2001
between Dean Holding Company and Morningstar Foods, Inc.
</Table>
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* Previously filed with the Registrant's Current Report on Form 8-K dated and
filed January 7, 2002
10
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 thereunto duly authorized.
DEAN HOLDING COMPANY
By: /s/ BARRY FROMBERG
------------------------------------
Executive Vice President &
Chief Financial Officer
Dated: March 6, 2002
11
EXHIBIT INDEX
<Table>
<Caption>
EXHIBIT
NUMBER DESCRIPTION
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2.1 Agreement and Plan of Merger, dated as of April 4, 2001, among
Suiza Foods Corporation, Dean Foods Company and Blackhawk
Acquisition Corp. (filed as Exhibit 2.1 to the Registrant's
Quarterly Report on Form 10-Q for the quarterly period ended
February 25, 2001 and incorporated herein by reference).
2.2* Securities Exchange Agreement, dated December 21, 2001 between
Dean Holding Company and Morningstar Foods, Inc.
</Table>
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* Previously filed with the Registrant's Current Report on Form 8-K dated
and filed January 7, 2002