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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________
FORM 8-K/A
AMENDED CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): May 31, 2001
GEO SPECIALTY CHEMICALS, INC.
(Exact Name of Registrant as Specified in Its Charter)
Ohio 333-70011 34-1708689
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
28601 CHAGRIN BOULEVARD, SUITE 210
CLEVELAND, OHIO 44122
(Address, including Zip Code, of Principal Executive Offices)
216-464-5564
(Registrant's Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On May 31, 2001, GEO acquired substantially all of the assets and rights
associated with the peroxides business unit of Hercules Incorporated, a Delaware
corporation ("Hercules"), for $92.2 million, subject to a post-closing working
capital adjustment. GEO assumed certain liabilities of the acquired business,
exclusive of pre-closing environmental liabilities. The acquired business is
engaged primarily in the manufacture and sale of various organic peroxide
products used in the vulcanization, catalysis and processing of polymers and
elastometric compounds (the "Peroxides Business"). The purchase price of the
acquired business was arrived at through arms-length negotiations between GEO
and Hercules.
In connection with the acquisition, GEO acquired certain production
facilities from Hercules located in Franklin, Virginia and entered into a long-
term lease with Hercules for the real property underlying such facilities, and
GEO and Hercules entered into a Plant Operating Agreement, pursuant to which
Hercules will provide labor and other services in support of GEO's operation of
such acquired facilities. GEO also entered into a lease with Hercules relating
to certain production facilities and real property located in Gibbstown, New
Jersey, subject to Hercules' post-closing obligation to split such real property
from a larger lot owned by it and transfer full title to such facilities and
real property to GEO. GEO and Hercules also entered into two Tolling Agreements,
pursuant to which Hercules will produce the ECHO(R) A vulcanizing agent and
other peroxide products at Hercules' Brunswick, Georgia and Beringen, Belgium
facilities for GEO on a tolling basis, for an initial term of one year with an
option in favor of GEO for two additional one year terms. In addition, GEO was
granted an option to purchase for $1.00 certain machinery and equipment
associated with the Peroxides Business located at Hercules' production
facilities in Beringen, Belgium.
GEO intends to utilize the acquired and leased production facilities to
produce substantially the same organic peroxide products manufactured by the
Peroxides Business prior to closing.
To fund the acquisition, GEO entered into an Amended and Restated Credit
Agreement with Bankers Trust Company, Salomon Smith Barney Inc. and various
other financial institutions, which is described under Item 5 below.
ITEM 5. OTHER EVENTS.
In connection with the acquisition of the Peroxides Business, GEO entered
into an Amended and Restated Credit Agreement with Bankers Trust Company,
Salomon Smith Barney Inc. and various other financial institutions (the
"Lenders"), pursuant to which the Lenders have extended credit facilities in the
amount of $145.0 million (the "Credit Facilities") to GEO, consisting of (i) a
Term Loan B Facility in the amount of $105.0 million, maturing on December 31,
2007 and bearing interest, at GEO's option, at a Reserve Adjusted Eurocurrency
Rate plus 3.25% to 4.00%, depending on GEO's leverage ratio, or a Base Rate plus
2.25% to 3.00%, depending on GEO's leverage ratio, and (ii) a $40.0 million
Revolving Credit Facility, maturing on June 30, 2005 and bearing interest, at
GEO's option, at a Reserve Adjusted Eurocurrency Rate plus 2.25% to 3.50%,
depending on GEO's leverage ratio, or a Base Rate plus 1.25% to 2.50%, depending
on GEO's leverage ratio. The Term B Loan Facility was made available to GEO to
refinance its existing revolving credit facility, to fund the acquisition of the
Peroxides Business and the expenses incurred in connection with the acquisition,
and for working capital and general corporate purposes. The Revolving Credit
Facility will be available to GEO for ongoing working capital and general
corporate purposes.
GEO's ability to draw funds under the Revolving Credit Facility is subject
to, in addition to the customary restrictions contained in the Amended and
Restated Credit Agreement, a number of restrictions
contained in the Indenture governing GEO's currently outstanding $120.0 million
in aggregate principal amount of 10 1/8% Senior Subordinated Notes due 2008. The
obligations of GEO under the Credit Facilities are secured by a first priority
security interest on all tangible and intangible assets of GEO, including GEO's
ownership interests in its subsidiaries. The Credit Facilities are senior in
right of payment to GEO's outstanding Senior Subordinated Notes.
On April 19, 2001, GEO sold its paper chemicals business to ONDEO Nalco
Company, a subsidiary of Suez Lyonnaise des Eaux. GEO retained all its
manufacturing facilities, and will supply paper coating products to ONDEO Nalco
Company under a long-term supply agreement.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) The following financial statements of the Peroxides Business are filed in
Exhibit 99.1 to this Form 8-K/A Amended Report:
Report of Independent Auditors
Balance Sheets as of December 31, 2000 and 1999 and March 31, 2001
Statements of Income for the years ended December 31, 2000, 1999, and 1998
and the three month periods ended March 31, 2001 and March 31, 2000
Statements of Business Unit Equity for the years ended December 31, 2000,
1999, and 1998 the three month periods ended March 31, 2001 and March 31,
2000
Statements of Cash Flows for the years ended December 31, 2000, 1999, and
1998 and the three months periods ended March 31, 2001 and 2000.
Notes to Financial Statements
(b) The following unaudited pro forma financial information of GEO, reflecting
the acquisition of the Peroxides Business and the disposition of the paper
chemicals business is filed in Exhibit 99.2 to this Form 8-K/A Amended Report:
Unaudited Pro Forma Condensed Balance Sheet as of March 31, 2001.
Unaudited Pro Forma Condensed Statement of Income for the year ended
December 31, 2000.
Unaudited Pro Forma Condensed Statement of Income for the period ended
March 31, 2001.
The unaudited pro forma condensed Balance sheet and Statements of Income
should be read in conjunction with the historical financial statements of GEO
and the notes thereto, which are included in GEO's Annual Report on Form 10-K
for the year ended December 31, 2000, and the historical financial statements of
the Peroxides Business and the notes thereto, which are included in Exhibit 99.1
to this Form 8-K/A Amended Report.
The unaudited pro forma condensed combined statements of income are not
necessarily indicative of the results that would have occurred in the periods
shown if GEO's acquisition of the Peroxides Business had been effected on the
dates assumed in such statements or that will occur in the current year or any
future period.
(c) The following are filed as exhibits to this Form 8-K/A Amended Report:
2.1 Sale and Purchase Agreement, dated as of March 27, 2001, by and
between GEO Specialty Chemicals, Inc. and Hercules Incorporated
(incorporated by reference to Exhibit 2.1 of the Form 8-K of GEO
Specialty Chemicals, Inc. filed on June 15, 2001).
2.2 Asset Purchase Agreement, dated as of April 10, 2001, by and between
GEO Specialty Chemicals, Inc. and ONDEO Nalco Company (incorporated by
reference to Exhibit 2.2 of the Form 8-K of GEO Specialty Chemicals,
Inc. filed on June 15, 2001).
10.1 Amended and Restated Credit Agreement, dated as of May 31, 2001, by
and among GEO Specialty Chemicals, Inc. and Bankers Trust Company,
Salomon Smith Barney Inc. and various other financial institutions
(incorporated by reference to Exhibit 10.1 of the Form 8-K of GEO
Specialty Chemicals, Inc. filed on June 15, 2001).
10.2 Lease Agreement (Franklin, Virginia), dated May 31, 2001, by and
between GEO Specialty Chemicals, Inc. and Hercules Incorporated
(incorporated by reference to Exhibit 10.2 of the Form 8-K of GEO
Specialty Chemicals, Inc. filed on June 15, 2001).
10.3 Lease Agreement (Gibbstown, New Jersey), dated May 31, 2001, by and
between GEO Specialty Chemicals, Inc. and Hercules Incorporated
(incorporated by reference to Exhibit 10.3 of the Form 8-K of GEO
Specialty Chemicals, Inc. filed on June 15, 2001).
10.4 Plant Operating Agreement, dated May 31, 2001, by and between GEO
Specialty Chemicals, Inc. and Hercules Incorporated (incorporated by
reference to Exhibit 10.4 of the Form 8-K of GEO Specialty Chemicals,
Inc. filed on June 15, 2001).
10.5 Supply Agreement, dated April 19, 2001, by and between GEO Specialty
Chemicals, Inc. and ONDEO Nalco Company (incorporated by reference to
Exhibit 10.5 of the Form 8-K of GEO Specialty Chemicals, Inc. filed on
June 15, 2001).
99.1 Financial Statements listed under Item 7(a) of this Form 8-K/A Amended
Report, including the report of Crowe, Chizek and Company LLP.
99.2 Unaudited Pro Forma Financial Information listed under Item 7(b) of
this Form 8-K/A Amended Report.
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.
GEO SPECIALTY CHEMICALS, INC.
Date: August 14, 2001 By: /s/ William P. Eckman
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William P. Eckman, Executive Vice
President and Chief Financial Officer
EXHIBIT INDEX
Exhibit
Number Exhibit Description
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2.1 Sale and Purchase Agreement, dated as of March 27, 2001, by and between GEO
Specialty Chemicals, Inc. and Hercules Incorporated (incorporated by
reference to Exhibit 2.1 of the Form 8-K of GEO Specialty Chemicals, Inc.
filed on June 15, 2001).
2.2 Asset Purchase Agreement, dated as of April 10, 2001, by and between GEO
Specialty Chemicals, Inc. and ONDEO Nalco Company (incorporated by
reference to Exhibit 2.2 of the Form 8-K of GEO Specialty Chemicals, Inc.
filed on June 15, 2001).
10.1 Amended and Restated Credit Agreement, dated as of May 31, 2001, by and
among GEO Specialty Chemicals, Inc. and Bankers Trust Company, Salomon
Smith Barney Inc. and various other financial institutions (incorporated by
reference to Exhibit 10.1 of the Form 8-K of GEO Specialty Chemicals, Inc.
filed on June 15, 2001).
10.2 Lease Agreement (Franklin, Virginia), dated May 31, 2001, by and between
GEO Specialty Chemicals, Inc. and Hercules Incorporated (incorporated by
reference to Exhibit 10.2 of the Form 8-K of GEO Specialty Chemicals, Inc.
filed on June 15, 2001).
10.3 Lease Agreement (Gibbstown, New Jersey), dated May 31, 2001, by and between
GEO Specialty Chemicals, Inc. and Hercules Incorporated (incorporated by
reference to Exhibit 10.3 of the Form 8-K of GEO Specialty Chemicals, Inc.
filed on June 15, 2001).
10.4 Plant Operating Agreement, dated May 31, 2001, by and between GEO Specialty
Chemicals, Inc. and Hercules Incorporated (incorporated by reference to
Exhibit 10.4 of the Form 8-K of GEO Specialty Chemicals, Inc. filed on June
15, 2001).
10.5 Supply Agreement, dated April 19, 2001, by and between GEO Specialty
Chemicals, Inc. and ONDEO Nalco Company (incorporated by reference to
Exhibit 10.5 of the Form 8-K of GEO Specialty Chemicals, Inc. filed on June
15, 2001).
99.1 Financial Statements listed under Item 7(a) of this Form 8-K/A Amended
Report, including the report of Crowe, Chizek and Company LLP.
99.2 Unaudited Pro Forma Financial Information listed under Item 7(b) of this
Form 8-K/A Amended Report.