UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): APRIL 2, 2004
ARCH CHEMICALS, INC.
(Exact name of registrant as specified in its charter)
VIRGINIA 1-14601 06-1526315
(State or other (Commission File Number) (IRS Employer
jurisdiction Identification
of incorporation) Number)
501 MERRITT 7, NORWALK, CT 06851
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 229-2900
(N/A)
(Former name or former address, if changed since last report)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On April 2, 2004, Arch Chemicals, Inc., a Virginia corporation ("Arch"),
completed its previously announced acquisition of the biocides business (the
"Biocides Business") of Avecia Limited, a company incorporated in England and
Wales ("Avecia"). The Biocides Business is comprised of a Pool & Spa business
and a Protection & Hygiene business. The Pool & Spa business principally
provides alternatives to chlorine-based sanitizers for swimming pools and spas
exclusively through specialty pool and spa dealers. The Protection & Hygiene
business develops, manufactures and markets biocides which are largely used in
anti-bacterial applications.
The acquisition was completed pursuant to a Restated Sale and Purchase
Agreement, dated as of March 8, 2004, among Arch, Avecia Investments Limited,
a wholly-owned subsidiary of Avecia, and certain of its subsidiaries (the
"Purchase Agreement"). The total purchase price, which was determined by arm's
length negotiation between the parties, was approximately $215 million,
consisting of $200 million in cash and 669,750 shares of Arch common stock. Of
these shares, 558,125 were issued to Avecia, Inc., a wholly-owned subsidiary
of Avecia, at the closing on April 2, 2004. The issuance of the remaining
111,625 shares is subject to a delayed acquisition of the portion of the
Biocides Business located in Spain, which is contingent on obtaining Spanish
regulatory approval and is expected to occur prior to June 30, 2004. The
purchase price is further subject to (i) a post-closing working capital
adjustment and (ii) a contingent payment of up to $5 million in cash based
upon earnings attributable to North American sales of certain acquired
products. In addition, to the extent that any unfunded pension liability in
the U.K. pension plan is less than $10 million, the purchase price would be
adjusted upwards by the difference between $10 million and the unfunded
liability, with the consideration to be split equally between a cash
contingent payment and up to 223,250 additional shares of Arch common stock.
The cash contingent payment will be earned based upon cumulative global net
sales of certain acquired products through 2005. The shares issued and to be
issued under the Purchase Agreement are not and will not be registered under
the Securities Act of 1933, as amended; however, Arch has granted Avecia, Inc.
and its affiliates registration rights in certain circumstances in connection
with the shares.
The acquisition was financed principally from borrowings under Arch's
Revolving Credit Agreement dated as of June 30, 2003, as amended, among Arch,
the Lenders Party thereto, JPMorgan Chase Bank, as administrative agent,
JPMorgan Securities Inc., as Joint Lead Arranger and Joint Book Manager, Banc
of America Securities, L.L.C., as Joint Lead Arranger and Joint Book Manager,
Bank of America, National Association, as Documentation Agent, and Fleet
National Bank, as Syndication Agent.
A portion of the assets acquired constitute plant, equipment and other
physical property. Avecia used these assets in connection with its conduct of
the Biocides Business, and Arch intends to continue to use such assets in
connection with the acquired Biocides Business.
The foregoing summary of the acquisition is qualified in its entirety by the
Purchase Agreement, which was filed by Arch with the SEC on March 8, 2004 as
Exhibit 2.1 to Arch's Form 8-K.
The press release announcing the completion of the acquisition was filed by
Arch with the SEC on April 5, 2004 as Exhibit 99.1 to Arch's Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of the Biocides Business.
The financial statements required under this Item are not included in
this report. The required financial statements will be filed no later
than June 16, 2004.
(b) Pro Forma Financial Information.
The pro forma financial information required under this Item is not
included in this report. The required pro forma financial information
will be filed no later than June 16, 2004.
(c) Exhibits.
None.
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.
ARCH CHEMICALS, INC.
(Registrant)
By: /s/ Louis S. Massimo
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Louis S. Massimo
Executive Vice President and
Chief Financial Officer
Date: April 19, 2004