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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
November 14, 1997
Date of Report
(Date of earliest event reported)
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DECRANE AIRCRAFT HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-22371 34-1645569
(State or other jurisdiction Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
2361 Rosecrans Avenue, Suite 180, El Segundo, CA 90245
(Address, including zip code, of principal executive offices)
(310) 725-9123
(Registrant's telephone number, including area code)
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155 Montrose West Avenue, Suite 210, Copley, OH 44321
(330) 668-3061
(Former address and telephone number of principal executive offices, if changed
since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Acquisition of Audio International, Inc.
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On November 3, 1997, the Company announced that it signed a definitive
agreement to purchase all of the outstanding stock of Audio International, Inc.
("Audio International"). The purchase was consummated on November 14, 1997.
Audio International, located in Little Rock, Arkansas, provides premium,
customized aircraft entertainment and cabin management products and systems for
the high-end corporate jet market.
The purchase price consists of $24,000,000 in cash paid at closing plus
contingent consideration aggregating a maximum of $6,000,000 payable over two
years based on future attainment of defined performance criteria. The
acquisition was funded with borrowings under the Company's revolving credit
facility. In conjunction with the acquisition, the revolving credit facility was
amended to increase the permitted maximum borrowings by $20 million to $60
million, effective with the closing of the acquisition.
The transaction will be accounted for as a purchase and the difference
between the purchase price and the fair value of the net assets acquired will be
recorded as goodwill and amortized on a straight-line basis over thirty years.
A copy of the press releases issued by the Company on November 3 and 14,
1997 with respect to the acquisition are attached hereto as Exhibit 99.1 and
Exhibit 99.2, respectively, and are incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
a. Financial statements of businesses acquired.
Audited consolidated financial statements of Audio International, prepared
in conformity with Regulation S-X, are not available at this time. The
independent accountants of Audio International are conducting their examination
of the consolidated financial statements for the periods required. The Company
expects to file the required financial statements as soon as practicable as an
amendment to this report, but in no event later than January 28, 1998.
b. Pro forma financial information.
It is impracticable to provide pro forma financial information prepared in
conformity with Regulation S-X at this time. Appropriate pro forma financial
information and explanatory notes will be filed as soon as practicable as an
amendment to this report, but in no event later than January 28, 1998.
c. Exhibits.
Exhibit
No. Exhibit Description
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2.1 Stock Purchase and Sale Agreement by and among Robert
S. Brown, Rick Marsh and Wayne Richie, the shareholders
of Audio International, Inc. and DeCrane Aircraft
Holdings, Inc., including Exhibit 1.2.2, Form of the
Earnout Agreement *
10.1 Consent and Amendment No. 1 to Loan and Security
Agreement dated as of October 21, 1997 among DeCrane
Aircraft Holdings, Inc., Bank of America National Trust
and Savings Association, successor-by-merger to Bank of
America Illinois, as agent and lender, and Comerica
Bank - California, Mellon Bank, N.A. and Sumitomo Bank
of California, as lenders *
10.2 Covenant Not to Compete Agreement between DeCrane
Aircraft Holdings, Inc., Audio International, Inc. and
Robert S. Brown *
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10.3 Covenant Not to Compete Agreement between DeCrane
Aircraft Holdings, Inc., Audio International, Inc. and
Rick Marsh *
10.4 Covenant Not to Compete Agreement between DeCrane
Aircraft Holdings, Inc., Audio International, Inc. and
Wayne Richie *
10.5 Employment Agreement dated November 14, 1997 between
Audio International, Inc. and Robert S. Brown *
10.6 Employment Agreement dated November 14, 1997 between
Audio International, Inc. and Rick Marsh *
99.1 Press release issued by DeCrane Aircraft Holdings, Inc.
on November 3, 1997 **
99.2 Press release issued by DeCrane Aircraft Holdings, Inc.
on November 14, 1997 *
99.3 Consolidated financial statements of Audio
International, Inc. and subsidiary, including notes
thereto and auditors' report thereon, incorporated by
reference in Item 7(a) of this report ***
99.4 Unaudited pro forma consolidated financial information
and explanatory notes thereto, incorporated by
reference in Item 7(b) of this report ***
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* - Filed herewith
** - Previously filed on Form 8-K dated November 3, 1997.
*** - To be filed by amendment as soon as practicable, but in no event later
than January 28, 1998.
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 thereunto duly authorized.
DECRANE AIRCRAFT HOLDINGS, INC.
(Registrant)
November 24, 1997 By: /s/ Robert A. Rankin
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Name: Robert A. Rankin
Title: Chief Financial Officer and Secretary
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EXHIBIT INDEX
Exhibit
No. Exhibit Description
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2.1 Stock Purchase and Sale Agreement by and among Robert
S. Brown, Rick Marsh and Wayne Richie, the shareholders
of Audio International, Inc. and DeCrane Aircraft
Holdings, Inc., including Exhibit 1.2.2, Form of the
Earnout Agreement *
10.1 Consent and Amendment No. 1 to Loan and Security
Agreement dated as of October 21, 1997 among DeCrane
Aircraft Holdings, Inc., Bank of America National Trust
and Savings Association, successor-by-merger to Bank of
America Illinois, as agent and lender, and Comerica
Bank - California, Mellon Bank, N.A. and Sumitomo Bank
of California, as lenders *
10.2 Covenant Not to Compete Agreement between DeCrane
Aircraft Holdings, Inc., Audio International, Inc. and
Robert S. Brown *
10.3 Covenant Not to Compete Agreement between DeCrane
Aircraft Holdings, Inc., Audio International, Inc. and
Rick Marsh *
10.4 Covenant Not to Compete Agreement between DeCrane
Aircraft Holdings, Inc., Audio International, Inc. and
Wayne Richie *
10.5 Employment Agreement dated November 14, 1997 between
Audio International, Inc. and Robert S. Brown *
10.6 Employment Agreement dated November 14, 1997 between
Audio International, Inc. and Rick Marsh *
99.1 Press release issued by DeCrane Aircraft Holdings, Inc.
on November 3, 1997 **
99.2 Press release issued by DeCrane Aircraft Holdings, Inc.
on November 14, 1997 *
99.3 Consolidated financial statements of Audio
International, Inc. and subsidiary, including notes
thereto and auditors' report thereon, incorporated by
reference in Item 7(a) of this report ***
99.4 Unaudited pro forma consolidated financial information
and explanatory notes thereto, incorporated by
reference in Item 7(b) of this report ***
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* - Filed herewith
** - Previously filed on Form 8-K dated November 3, 1997.
*** - To be filed by amendment as soon as practicable, but in no event later
than January 28, 1998.
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