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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported) FEBRUARY 1, 1998
CROWN GROUP, INC.
(Exact name of registrant as specified in its charter)
TEXAS 0-14939 63-0851141
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
4040 NORTH MACARTHUR BOULEVARD, SUITE 100, IRVING, TEXAS 75038
(Address of principal executive offices)
Registrant's telephone number, including area code (972) 717-3423
_____________________________________________________________
(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
PAACO
Effective February 1, 1998, pursuant to a definitive stock purchase agreement,
Crown Group, Inc. ("Crown") acquired 53% of the common stock of each of Paaco,
Inc. and Premium Auto Acceptance Corporation (collectively, "Paaco") for an
aggregate purchase price of approximately $9.1 million cash. The purchase
price was determined through arms-length negotiations between the parties.
Approximately $4.9 million of Paaco common stock was purchased directly from
Paaco, and the remaining $4.2 million of Paaco common stock was purchased from
Larry Lange, Daniel Chu and Ted Lange (collectively, the "Original
Shareholders"), who prior to this transaction were the sole shareholders of
Paaco. The purchase price was funded from cash on hand.
In connection with the Paaco transaction, Crown and the Original Shareholders
entered into a Shareholders' Agreement (the "Paaco Shareholders' Agreement")
which provides, among other things, that in the event either Crown or any
Original Shareholder desires to sell their interest in Paaco such shareholder
must first offer to sell such interest to Paaco and the other shareholders in
accordance with the provisions of the Paaco Shareholders' Agreement.
The Paaco Shareholders' Agreement also provides that Paaco's Board of Directors
will consist of two directors appointed by Crown and two directors appointed by
the Original Shareholders. Without the unanimous approval of Paaco's Board of
Directors, Paaco can not (i) amend its articles of incorporation or by-laws,
(ii) issue its stock, declare dividends, repurchase its stock, merge or
liquidate, or (iii) make any material acquisitions or dispositions.
Paaco is a vertically integrated used car sales and finance company which
operates seven used car dealerships in the Dallas-Ft. Worth area. Paaco sells,
underwrites and finances used cars and trucks with a focus on the Hispanic
market. For the year ended December 31, 1997 Paaco's revenues were
approximately $49 million.
PRECISION
On February 3, 1998, pursuant to a definitive stock purchase agreement, Crown
acquired 80% of the common stock of Precision IBC, Incorporated ("Precision")
for a purchase price of approximately $2.4 million cash. The purchase price
was determined through arms-length negotiations between the parties. The
shares of Precision common stock were purchased directly from Van P. Finger,
who prior to this transaction was the sole shareholder of Precision. The
purchase price was funded from cash on hand. In connection with this
transaction, Crown loaned Precision approximately $3.1 million, the proceeds of
which were used to pay off existing bank debt.
As part of the Precision transaction, Crown and Mr. Finger entered into a Right
of First Refusal and Put Agreement (the "First Refusal and Put Agreement")
which provides, among other things, that in the event Mr. Finger desires to
sell his interest in Precision, he must first offer to sell such interest to
Crown under the terms and conditions provided in the First Refusal and Put
Agreement. Pursuant to such agreement Mr. Finger has the right to make an
election during the months of June 2000 or June 2001 to cause Crown or
Precision to purchase all of his shares of Precision common stock based upon
the Fair Market Value of his stock, as such term is defined in the First
Refusal and Put Agreement.
Precision is in the business of renting and selling intermediate bulk
containers to industrial and manufacturing concerns. For the year ended
December 31, 1997 Precision's revenues were approximately $3.3 million.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) and (b). The financial statements required to be filed with this report
are not presently available. Crown will file the required financial statements
under cover of Form 8-KA as soon as practicable but not later than 60 days
after the due date of the filing of this report.
(c) Exhibits.
The following exhibits are filed with this report:
Exhibit Number Description of Exhibit
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2.2 Stock Purchase Agreement dated as of February 1, 1998 by and among Paaco, Inc., Premium Auto Acceptance
Corporation, Larry Lange, Daniel Chu, Ted Lange and Crown Group, Inc.
2.3 Stock Purchase Agreement dated February 3, 1998 by and among Van P. Finger and Crown Group, Inc.
10.11 Shareholders' Agreement dated as of February 1, 1998 by and among Larry Lange, Daniel Chu, Ted Lange
and Crown Group, Inc.
10.12 Right of First Refusal and Put Agreement dated February 3, 1998 by and among Van P. Finger and Crown
Group, Inc.
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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.
Crown Group, Inc.
By: \s\ Mark D. Slusser
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Mark D. Slusser
Chief Financial Officer
Dated: February 13, 1998
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INDEX TO EXHIBITS
Exhibit Number Description of Exhibit
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2.2 Stock Purchase Agreement dated as of February 1, 1998 by and among Paaco, Inc., Premium Auto Acceptance
Corporation, Larry Lange, Daniel Chu, Ted Lange and Crown Group, Inc.
2.3 Stock Purchase Agreement dated February 3, 1998 by and among Van P. Finger and Crown Group, Inc.
10.11 Shareholders' Agreement dated as of February 1, 1998 by and among Larry Lange, Daniel Chu, Ted Lange
and Crown Group, Inc.
10.12 Right of First Refusal and Put Agreement dated February 3, 1998 by and among Van P. Finger and Crown
Group, Inc.
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