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: JANUARY 9, 1998
PCD INC.
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 0-27744 04-2604950
(Sate or other jurisdiction (Commission (IRS Employer
of incorporation) file number) Identification
No.)
2 TECHNOLOGY DRIVE, CENTENNIAL PARK, PEABODY, MA 01960-7977
(Address of principal executive offices) (ZIP Code)
Registrant's telephone number, including area code: (978) 532-
8800
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On December 26, 1997, PCD Inc. ("PCD") acquired from
UL America, Inc. all of the outstanding capital stock
of Wells Electronics, Inc. ("Wells") pursuant to a
Share Purchase Agreement dated as of November 17, 1997
(the "Share Purchase Agreement") for an aggregate
purchase price of $130,000,000 (subject to adjustment
as provided in the Share Purchase Agreement). The
sources of funds used for the purchase price were:
(i) $83 million from a loan to PCD under a Loan
Agreement with Fleet National Bank as agent for itself
and certain other financial institutions;
(ii) $25 million from a loan to PCD under a
Subordinated Debenture and Warrant Purchase Agreement
with Emerson Electric Co.; and (iii) $22 million from
PCD's cash reserves.
Wells, a manufacturer of burn-in and test sockets for
the global semi-conductor industry, is headquartered in
South Bend, Indiana and has manufacturing facilities
located in Swatara, Pennsylvania and sales offices in
San Jose, California, Northhampton, England and Seoul,
Korea. Wells also operates two principal subsidiaries
in Yokohama, Japan and Singapore.
In determining the amount of consideration to be paid
for the stock of Wells, PCD considered, among other
things, the following factors with respect to Wells:
historical and projected financial results, the quality
and performance of management, and the projected
financial performance of Wells and PCD on a combined
basis.
Before December 26, 1997, there was no material
relationship between PCD and Wells or any of their
respective officers, directors or stockholders, other
than the Share Purchase Agreement and related
agreements.
ITEM 5. OTHER EVENTS.
On December 26, 1997, PCD entered into a Loan Agreement
(the "Loan Agreement") with Fleet National Bank, as
agent for itself and certain other financial
institutions. The Loan Agreement provides for a
$30,000,000 Secured Term Loan A, a $40,000,000 Secured
Term Loan B and a $20,000,000 Secured Revolving Credit
Loan to PCD. The loans to PCD under the Loan Agreement
are secured by a pledge of all of the assets of PCD,
including the stock and assets of all subsidiaries of
PCD (including Wells and its subsidiaries).
On December 26, 1997, PCD entered into a Subordinated
Debenture and Warrant Purchase Agreement
(the "Purchase Agreement") with Emerson Electric Co.
("Emerson"). Pursuant to the Purchase Agreement, PCD
has issued to Emerson a $25,000,000 Subordinated
Debenture (the "Debenture") and a Common Stock
Purchase Warrant (the "Warrant") for the purchase of
up to 525,000 shares of common stock of PCD at an
exercise price of $1.00 per share. The unpaid
principal and accrued interest under the Debenture is
convertible into common stock of PCD upon the
occurrence of certain events of default thereunder, at
a conversion price equal to the lesser of $17.00 per
share or 70% of the average daily closing price of PCD common
stock for the 90 days preceding such default as
reported by The Nasdaq Stock Market, Inc. Both the
shares issuable upon such a conversion of the Debenture
and upon exercise of the Warrant are subject to certain
registration rights granted pursuant to a Registration
Rights Agreement of even date with the Purchase
Agreement.
ITEM 7 FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
It is impracticable at this time to provide
the financial statements of Wells for the
periods specified in Rule 3-05(b) of
Regulation S-X. These financial statements
will be filed by amendment hereto within 60
days of the date this Report on Form 8-K is
required to be filed.
(b) PRO FORMA FINANCIAL INFORMATION
It is impracticable at this time to provide
the pro forma information required by Article
11 of Regulation S-X. This pro forma
information will be filed by amendment hereto
within 60 days of the date this Report on
Form 8-K is required to be filed.
(c) EXHIBITS
EXHIBIT NUMBER
2.1 Share Purchase Agreement among UL
America, Inc., Wells Electronics, Inc. and
PCD Inc. dated as of November 17, 1997.
2.2 Undertaking to Furnish Copies of
Omitted Schedules to Share Purchase
Agreement dated as of November 17, 1997.
10.1 Loan Agreement between PCD Inc. and
Fleet National Bank dated as of December 26,
1997.
10.2 Unlimited Guaranty from Wells Electronics,
Inc. to Fleet National Bank dated as of
December 26, 1997.
10.3 Security Agreement between PCD Inc. and
Fleet National Bank dated as of December 26,
1997.
10.4 Security Agreement between Wells
Electronics, Inc. and Fleet National Bank
dated as of December 26, 1997.
10.5 Stock Pledge Agreement between PCD Inc.
and Fleet National bank dated as of December
26, 1997.
10.6 Stock Pledge Agreement between Wells
Electronics, Inc. and Fleet National Bank
dated as of December 26, 1997.
10.7 Conditional Patent Assignment from PCD
Inc. to Fleet National Bank dated as of
December 26, 1997.
10.8 Conditional Patent Assignment from Wells
Electronics, Inc. to Fleet National
Bank dated as of December 26, 1997.
10.9 Conditional Patent Assignment from
Wells Japan Kabushiki Kaisha to Fleet
National Bank dated as of December 26, 1997.
10.10 Conditional Trademark Collateral Assignment
from PCD Inc. to Fleet National Bank dated
December 26, 1997.
10.11 Conditional Trademark Collateral Assignment
from Wells Electronics, Inc. to Fleet
National Bank dated as of December 26, 1997.
10.12 Collateral Assignment of Contracts, Leases,
Licenses and Permits from PCD Inc. to Fleet
National Bank dated as of December 26, 1997.
10.13 Collateral Assignment of Contracts, Leases,
Licenses and Permits from Wells Electronics,
Inc. to Fleet National Bank dated as of
December 26, 1997.
10.14 Undertaking to Furnish Copies of Omitted
Exhibits and Schedules to Loan Agreement and
Related Documents dated as of December 26,
1997.
10.15 Subordinated Debenture and Warrant Purchase
Agreement between PCD Inc. and Emerson
Electric Co. dated as of December 26, 1997.
10.16 Subordinated Debenture issued to Emerson
Electric Co. dated December 26, 1997.
10.17 Common Stock Purchase Warrant issued to
Emerson Electric Co. dated December 26,
1997.
10.18 Registration Rights Agreement between PCD
Inc. and Emerson Electric Co. dated as of
December 26, 1997.
10.19 Subordination Agreement among PCD Inc.,
Emerson Electric Co. and Fleet National Bank
dated as of December 26, 1997.
10.20 Undertaking to Furnish Copies of Omitted
Exhibits to Subordinated Debenture and
Warrant Purchase Agreement dated as of
December 26, 1997.
99.1 Press Release of PCD Inc. dated December 29,
1997.
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.
PCD INC.
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Registrant
DATED: January 9, 1998 By: /s/ John L. Dwight, Jr.
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John L. Dwight, Jr.
Chairman of the Board,
President and Chief
Executive Officer