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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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):
June 28, 1996
AIRGAS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-9344 56-0732648
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(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification
incorporation) No.)
100 Matsonford Road, Suite 550
Radnor, PA 19087
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(Address of principal executive offices)
Registrant's telephone number, including area code: (610) 687-5253
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Item 2. Acquisition or Disposition of Assets.
On June 28, 1996, based on the terms of a joint venture agreement (the
"Agreement") by and among Airgas, Inc. (the "Company"), National Welders Supply
Company, Inc. ("NWS"), J.A. Turner, Jr., Judith Carpenter, J.A. Turner, III and
Linerieux B. Turner (the "Turner Shareholders") and certain other parties, the
Company acquired 45% of the voting capital stock of NWS for a payment in cash
and notes totalling approximately $47.6 million. The purpose of the joint
venture is to carry on the business of NWS, enhanced by its association with the
Company and its financial, purchasing and national marketing strengths, and to
pursue acquisition opportunities in the area currently served by NWS and such
other activities as the NWS board of directors may determine. The remaining 55%
of the capital stock of NWS continues to be held by the Turner Shareholders and
certain other minority shareholders. The term of the Agreement is thirteen
years.
In connection with the Agreement and pursuant to a plan of recapitalization, the
Turner Shareholders exchanged their NWS common stock for approximately 3,038,000
shares of NWS cumulative Series A 5% Voting Preferred Stock, par value $.10 per
share. The NWS preferred stock has a liquidation preference of $17.78 per
share. Dividends on the NWS preferred stock are payable quarterly by NWS.
During the three year period beginning on July 1, 2006, the Turner Shareholders
have the right to cause NWS to either (1) redeem all of the NWS preferred stock
for approximately $58.1 million in cash, (2) exchange all of the outstanding NWS
preferred stock for approximately 2.38 million shares of Airgas common stock, or
(3) retain the NWS preferred stock. The NWS preferred stock provides for
antidilution protection against Airgas common stock splits, stock dividends and
certain issuances of additional securities by the Company.
As a result of the Company's investment, Airgas has become a party to a Right of
First Refusal Agreement between the Turner Shareholders, National and Praxair,
Inc. The Agreement requires the Turner Shareholders to retain no less than 50%
of National's voting capital stock. The Turner Shareholders currently own
approximately 51.1% of National's voting capital stock. The shares of NWS
preferred stock and the common stock owned by Airgas will remain subject to the
Right of First Refusal Agreement until its expiration in the year 2006.
Additional terms of the Agreement provide for the Company to elect three of the
six members of the board of directors of NWS. Erroll Sult, a director of the
Company, remains the President and a minority shareholder of NWS. The
Agreement also provides for the Company to indemnify the NWS shareholders
against certain costs and expenses which may arise as a result of the
Agreement. Management is of the opinion that no amounts will be paid under the
indemnification provisions. However, such payments, if any, are not expected
to have a material adverse effect on the Company's consolidated financial
position, results of operations or liquidity.
The assets of NWS include cash and marketable securities (including 974,000
shares of the Company's common stock), accounts receivable, inventories,
cylinders, transportation equipment, air separation plants and related
equipment, land and buildings and certain other plant and equipment.
The Company's investment in NWS was financed using an interim $100 million
credit facility with NationsBank of North Carolina, N.A. and other available
sources.
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NWS is engaged in the manufacture, distribution and marketing of industrial
gases and related welding equipment and supplies in the states of North
Carolina, South Carolina, Virginia, Tennessee and Georgia. The Company and its
joint venture partners intend to continue to operate NWS as an industrial gas
and welding supply business.
The statements in this report relating to matters that are not historical are
forward-looking statements that involve important factors that could cause
actual results to differ materially from those anticipated. Cautionary
statements identifying such important factors are described in reports,
including the Form 8-K, dated May 7, 1996, filed by Airgas with the Securities
and Exchange Commission.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements
It is impracticable to provide the required financial statements of National
Welders Supply, Inc. and Subsidiary for the years ended September 30, 1995 and
September 24, 1994 and as of September 30, 1995 and September 24, 1994 and pro
forma information at the time this report on Form 8-K is being filed. The
Company will file such required financial statements and pro forma information
as an amendment to this Form 8-K as soon as practicable, but no later than 60
days after this Form 8-K is required to be filed.
(c) Exhibits
2. Joint Venture Agreement by and among Airgas, Inc., National Welders
Supply Company, Inc., J.A. Turner, Jr., Judith Carpenter, J.A. Turner,
III, and Linerieux B. Turner and Molo Limited Partnership, Turner
(1996) Limited Partnership, Charitable Remainder Unitrust of James A.
Turner, Jr. and Foundation for the Carolinas
2.1 Articles of Amendment of National Welders Supply Company, Inc.
(Exhibit 2.4.2(B) to the Joint Venture Agreement)
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Signatures
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AIRGAS, INC.
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(Registrant)
BY: /s/ Gordon L. Keen, Jr.
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Gordon L. Keen, Jr.
Vice President-Corporate Development
DATED: June 28, 1996