- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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
June 26, 1998
Date of Report
(Date of earliest event reported)
------------------------
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)
------------------------
NOT APPLICABLE
(Former address and telephone number of principal executive offices, if changed
since last report)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
ACQUISITION OF AVTECH CORPORATION
On June 4, 1998, the Company announced that it signed a definitive agreement
to purchase substantially all of the outstanding stock of Avtech Corporation
("Avtech"). The purchase was consummated on June 26, 1998. Avtech is a leading
provider of cockpit audio, lighting and power control devices and an avionics
systems integrator for the commercial, regional and corporate jet aircraft
markets. Avtech is located in Seattle, Washington.
The total purchase price was $84.7 million in cash at closing, including an
estimated $1.3 million of acquisition related costs. The acquisition was funded
with borrowings under the Company's senior revolving line of credit ("Senior
Credit Facility"). In conjunction with the acquisition, the Senior Credit
Facility was amended to increase the permitted maximum borrowings by $30.0
million to $105.0 million, effective with the closing of the acquisition. The
permitted maximum borrowings are subject to mandatory reductions of up to $45.0
million from the proceeds of certain indebtedness and further automatic
reductions on the last day of each month in a monthly amount of $500,000 from
October 31, 1998 through May 31, 1999 and $1.0 million per month thereafter. The
maximum interest rate margins were increased 0.25% to 1.00% above the prime rate
or 2.25% above the IBOR rate and the maximum commitment fee was increased to
0.425% on the unused portion of the Senior Credit Facility.
The transaction will be accounted for as a purchase and the estimated $60.4
million 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 30 years. The Company's consolidated results of operations will
include the operating results of Avtech subsequent to June 26, 1998.
Copies of the press releases issued by the Company on June 4 and 26, 1998
with respect to the Avtech acquisition are attached hereto as Exhibit 99.1 and
Exhibit 99.2, respectively, and are incorporated herein by reference.
ACQUISITION OF DETTMERS INDUSTRIES, INC.
On June 30, 1998, the Company purchased certain assets, subject to certain
liabilities assumed, of Dettmers Industries, Inc. ("Dettmers"). Dettmers is a
manufacturer of aircraft seats and related cabin furnishings for corporate jet
aircraft. Dettmers is located in Stuart, Florida.
The total purchase price was $2.3 million in cash at closing, including an
estimated $141,000 of acquisition related costs, plus contingent consideration
aggregating a maximum of $2.0 million payable over four years based on future
attainment of defined performance criteria during each of the years in the four
year period ending December 31, 2002. The acquisition was funded with borrowings
under the Company's Senior Credit Facility.
The transaction will be accounted for as a purchase and the estimated $2.0
million difference between the purchase price, excluding contingent
consideration, and the fair value of the net assets acquired will be recorded as
goodwill and amortized on a straight-line basis over 30 years. The amount of
contingent consideration paid in the future, if any, will increase goodwill and
will be amortized prospectively over the remaining period of the initial 30-year
term. The Company's consolidated results of operations will include the
operating results of Dettmers subsequent to June 30, 1998.
A copy of the press release issued by the Company on July 1, 1998 with
respect to the Dettmers acquisition is attached hereto as Exhibit 99.3 and is
incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
a. Financial statements of businesses acquired.
1
Audited financial statements of Avtech Corporation, including notes thereto
and auditors' report thereon, as of September 30, 1997 and 1998 and March 31,
1998 and for each of the three years in the period ended September 30, 1997 and
the six months ended March 31, 1998 are filed herewith as Exhibit 99.4 and are
incorporated herein by reference.
The acquisition of Dettmers Industries, Inc. is not "significant" as such
term is defined in Regulation S-X and therefore audited financial statements are
not filed herewith.
b. Pro forma financial information.
Unaudited pro forma consolidated financial data, including explanatory notes
thereto, as of March 31, 1998 and for the three months ended March 31, 1998 and
the twelve months ended December 31, 1997 are filed herewith as Exhibit 99.5 and
are incorporated herein by reference.
c. Exhibits.
EXHIBIT
NO. EXHIBIT DESCRIPTION
- ------ --------------------------------------------------------------------------
2.1 Stock Purchase and Sale Agreement by and among the shareholders of Avtech
Corporation and DeCrane Aircraft Holdings, Inc. *
2.2 Asset Purchase and Sale Agreement by and among Dettmers Industries, Inc.,
Peter Dettmers and Andrew Perl, and DeCrane Aircraft Holdings, Inc. and
DAHX Acquisition, Inc. *
10.1 Consent and Amendment No. 3 to Loan and Security Agreement dated as of May
29, 1998 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 *
99.1 Press release issued by DeCrane Aircraft Holdings, Inc. on June 4, 1998
regarding the signing of a definitive agreement to acquire Avtech
Corporation incorporated by reference in Item 2 of this report **
99.2 Press release issued by DeCrane Aircraft Holdings, Inc. on June 26, 1998
regarding consummation of the acquisition of Avtech Corporation
incorporated by reference in Item 2 of this report *
99.3 Press release issued by DeCrane Aircraft Holdings, Inc. on July 1, 1998
regarding consummation of the acquisition of Dettmers Industries, Inc.
incorporated by reference in Item 2 of this report *
99.4 Audited financial statements of Avtech Corporation, including notes
thereto and auditors' report thereon, as of September 30, 1996 and 1997
and March 31, 1998 and for each of the three years in the period ended
September 30, 1997 and the six months ended March 31, 1998 incorporated
by reference in Item 7(a) of this report *
99.5 Unaudited pro forma consolidated financial data, including explanatory
notes thereto, as of March 31, 1998 and for the three months ended March
31, 1998 and the twelve months ended December 31, 1997 incorporated by
reference in Item 7(b) of this report *
- ------------------------
* -- Filed herewith
** -- Previously filed June 5, 1998 on Form 8-K dated June 4, 1998.
2
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)
July 10, 1998 By: /s/ ROBERT A. RANKIN
-----------------------------------------
Name: Robert A. Rankin
Title: CHIEF FINANCIAL OFFICER AND
SECRETARY
3
EXHIBIT INDEX
EXHIBIT
NO. EXHIBIT DESCRIPTION
- ----------- ------------------------------------------------------------------------------------------------
2.1 Stock Purchase and Sale Agreement by and among the shareholders of Avtech Corporation. and
DeCrane Aircraft Holdings, Inc. *.............................................................
2.2 Asset Purchase and Sale Agreement by and among Dettmers Industries, Inc., Peter Dettmers and
Andrew Perl, and DeCrane Aircraft Holdings, Inc. and DAHX Acquisition, Inc. *.................
10.1 Consent and Amendment No. 3 to Loan and Security Agreement dated as of May 29, 1998 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 *.............
99.1 Press release issued by DeCrane Aircraft Holdings, Inc. on June 4, 1998 regarding the signing of
a definitive agreement to acquire Avtech Corporation incorporated by reference in Item 2 of
this report **
99.2 Press release issued by DeCrane Aircraft Holdings, Inc. on June 26, 1998 regarding consummation
of the acquisition of Avtech Corporation incorporated by reference in Item 2 of this report
*.............................................................................................
99.3 Press release issued by DeCrane Aircraft Holdings, Inc. on July 1, 1998 regarding consummation
of the acquisition of Dettmers Industries, Inc. incorporated by reference in Item 2 of this
report *......................................................................................
99.4 Audited financial statements of Avtech Corporation, including notes thereto and auditors' report
thereon, as of September 30, 1996 and 1997 and March 31, 1998 and for each of the three years
in the period ended September 30, 1997 and the six months ended March 31, 1998 incorporated by
reference in Item 7(a) of this report *.......................................................
99.5 Unaudited pro forma consolidated financial data, including explanatory notes thereto, as of
March 31, 1998 and for the three months ended March 31, 1998 and the twelve months ended
December 31, 1997 incorporated by reference in Item 7(b) of this report *.....................
- ------------------------
* -- Filed herewith
** -- Previously filed June 5, 1998 on Form 8-K dated June 4, 1998.