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UNITED STATES
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) October 15, 1998
AVTEAM, INC.
(Exact name of registrant as specified in its charter)
Florida 0-20889 65-0313187
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation or organization) File Number) Identification No.)
3230 Executive Way
Miramar, Florida 33025
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(Address, including zip code, of principal executive office)
(954) 431-2359
Registrant's telephone number, including area code
NOT APPLICABLE
(Former name, former address and fiscal year, if changed since last report)
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ITEM 5. OTHER EVENTS.
On October 12, 1998, a wholly-owned subsidiary of AVTEAM, Inc., a Florida
corporation ("AVTEAM"), AVTEAM Engine Repair Corp., a Florida corporation
("AVTEAM Sub"; and together with AVTEAM, the "Purchaser"), entered into an Asset
Purchase Agreement (the "Purchase Agreement") with M&M Aircraft Services, Inc.,
a Florida corporation (the "Seller"), and its shareholders, pursuant to which
the Purchaser agreed to purchase from the Seller substantially all of the assets
and assume certain liabilities of the Seller for an aggregate purchase price
payable at closing of $30,000,000 and the issuance of 350,000 unregistered
shares of Class A Common Stock, par value $.01 per share, of AVTEAM (the
"Acquisition"). The Seller, based in Medley, Florida, operates a privately held
jet engine overhaul operation, which specializes in the maintenance, overhaul
and repair of Pratt & Whitney JT8D aircraft engines. The purchase price was
determined in arms-length negotiations between the Purchaser and the Seller. The
Acquisition will be financed from the Company's existing $70,000,000 credit
facility with NationsBank, N.A. (the "Credit Facility"). The closing of the
Purchase Agreement is subject to the satisfaction or waiver of certain closing
conditions on or before December 31, 1998 (the "Closing Conditions"), including
among others, the receipt of certain consents and approvals, including those
approvals required by the Federal Aviation Administration, Joint Aviation
Authorities and AVTEAM's lender under the Credit Facility and no material
adverse changes having occurred in the financial condition, assets, business,
prospects or results of operations of the Seller between the date of the
Purchase Agreement and the closing date. Pursuant to the terms of the Purchase
Agreement, the Seller has agreed that for a period of five years following the
closing date, the Seller and its subsidiaries will not engage, directly or
indirectly, in the business of maintaining, repairing or overhauling aircraft
engines.
AVTEAM is financing $25,000,000 of the cash portion of the purchase price
for the Acquisition through the use of all of its available acquisition line
under the Credit Facility. The remaining $5,000,000 cash portion of the
purchase price, including the assumption of certain liabilities of the Seller
for the Acquisition will be financed through available borrowings under the
Credit Facility that are mostly used to acquire inventory for resale. Without
obtaining additional capital, AVTEAM may not be able to acquire inventory
for resale at the rate experienced in the past. As a result, AVTEAM is
currently considering obtaining additional capital for its business activities
after the Acquisition.
The foregoing is a summary of certain information contained in the Purchase
Agreement. Reference is made to the Purchase Agreement and press release
disseminated by the Company on October 12, 1998 for a complete description of
the terms of the Acquisition, which are attached hereto as Exhibits 2.1 and
99.1, respectively, and are incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
2.1 Asset Purchase Agreement, dated October 12, 1998, by
and among AVTEAM, Inc., AVTEAM Engine Repair Corp.,
M&M Aircraft Services, Inc., James McLellan, Leon
Sacco and Mark Schuldiner.
99.1 Press Release dated October 12, 1998.
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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.
Date: October 15, 1998 By: /s/ Donald A. Graw
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Donald A. Graw
President and Chief Executive Officer
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EXHIBIT INDEX
Exhibit Description
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2.1 Asset Purchase Agreement, dated October 12, 1998, by and
among AVTEAM, Inc., AVTEAM Engine Repair Corp., M&M Aircraft
Services, Inc., James McLellan, Leon Sacco and Mark
Schuldiner.
99.1 Press Release dated October 12, 1998.