-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, P5pgqyo8xeUR+suxbQ6qla78R4myj2+co6FAy2wMTQv7691udLiyhOsJvQ4/ogAh 8yhQN9yVXWnpP4sV+aHBBw== 0000105770-95-000025.txt : 19951023 0000105770-95-000025.hdr.sgml : 19951023 ACCESSION NUMBER: 0000105770-95-000025 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950510 ITEM INFORMATION: Acquisition or disposition of assets FILED AS OF DATE: 19951020 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: WEST CO INC CENTRAL INDEX KEY: 0000105770 STANDARD INDUSTRIAL CLASSIFICATION: FABRICATED RUBBER PRODUCTS, NEC [3060] IRS NUMBER: 231210010 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08036 FILM NUMBER: 95582888 BUSINESS ADDRESS: STREET 1: 101 GORDON DR STREET 2: P O BOX 645 CITY: LIONVILLE STATE: PA ZIP: 19341-0645 BUSINESS PHONE: 6105942900 MAIL ADDRESS: STREET 1: 101 GORDON DRIVE STREET 2: PO BOX 645 CITY: LIONVILLE STATE: PA ZIP: 19341-0645 8-K 1 8-K 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 Date of Report (Date of earliest event reported): April 27, 1995 THE WEST COMPANY, INCORPORATED (Exact name of registrant as specified in its charter) Pennsylvania 0-5884 23-1210010 (State or other jurisdiction (Commission File (IRS Employer of incorporation) Number) Identification No.) P.O. Box 777, 101 Gordon Drive, Lionville, Pennsylvania 19341-0777 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including, area code: 610-594-3300 Not Applicable (Former name or former address, if changed from last report) Item 2. Acquisition or Disposition Of Assets. On March 24, 1995, The West Company, Incorporated, a Pennsylvania corporation (the "Company"), Paco Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of the Company ("Purchaser") and Paco Pharmaceutical Services, Inc., a Delaware corporation (" Paco"), executed an Agreement and Plan of Merger (the "Merger Agreement"). Pursuant to the Merger Agreement, on April 26, 1995, Purchaser purchased 3,952,345 shares of common stock, par value $.01 per share (the "Shares"), of Paco, at $12.25 per Share, pursuant to a tender offer commenced on March 30, 1995 (the "Offer"). As a result of consummation of the Offer, Purchaser acquired majority control of Paco as the first step in the acquisition of the entire equity interest in Paco. On April 27, 1995, Paco's stockholders voted to approve and adopt the Merger Agreement and on April 27, 1995 (the " Effective Time"), Purchaser was merged with and into Paco (the "Merger"), with Paco continuing as the surviving corporation. As a result of the Merger, on April 27, 1995 Paco became a wholly-owned subsidiary of the Company. On April 27, 1995, the Company issued a press release relating to consummation of the Merger, a copy of which is attached hereto as Exhibit 99.2 and incorporated by reference herein. In the Merger, each then outstanding share (other than Shares held by the Company, Purchaser or any other subsidiary of the Company, Shares held in the treasury of Paco or those shares with respect to which dissenters' rights have been exercised pursuant to the Delaware General Corporation Law), constituting an aggregate of 4,372,000. Shares on a fully-diluted basis, was converted into the right to receive $12.25 net in cash, for an aggregate amount of approximately $53.6 million (the "Merger Consideration"). The total amount of funds required by Purchaser to acquire all outstanding Shares pursuant to the Offer and the Merger, consummate the transactions contemplated by the Merger Agreement and to pay related fees and expenses is estimated to be approximately $55 million. The Company has provided these funds to Purchaser by contributing equity and advancing funds. The, Company obtained such funds (i) from its general corporate funds, (ii) from general corporate funds of wholly-owned subsidiaries and (iii) by borrowing under two separate but substantially similar revolving credit agreements, both dated October 21, 1994 (each a " Credit Agreement" and collectively, the Credit Agreements", between the Company and CoreStates Bank, N.A. (" CoreStates"), and the Company and PNC Bank, National Association (" PNC"). The Credit Agreement with CoreStates provides for revolving credit advances up to $30 million, and the Credit Agreement with PNC provides for revolving credit advances up to $10 million. Each advance made under the Credit Agreements bears interest at the applicable LIBOR rate, as adjusted; plus the applicable premium thereon calculated with reference to certain leverage ratios. The Credit Agreements provide for maturity of all loans made thereunder no later than October 20, 1995, but are renewable at CoreStates' or PNC's option, respectively, for additional periods of 364 days. Additionally, the Credit agreements contain customary affirmative and negative covenants by the Company. The consummation of the transactions contemplated by the Offer does not constitute a violation the Credit Agreements. The Company intends to refinance on a more permanent basis, all or part of the funds to be used in connection with the Offer and to be borrowed under the Credit Agreements. The Company, however, has not currently concluded a plan or entered into arrangements to complete this refinancing. Item 7. Financial Statements and Exhibits. The following financial statements and exhibits are filed herewith unless otherwise indicated: (a) Financial Statements of Businesses Acquired Consolidated balance sheets of PACO and subsidiaries as of March 31, 1994 and 1993 and related consolidated statements of operations, changes in stockholders' equity (deficit) and cash flows for operations, the years ended March 31, 1994, 1993 and 1992 (incorporated by reference to PACO's Annual Report on Form 10-K for the fiscal year ended March 31, 1994). Consolidated balance sheets of PACO and subsidiaries as of December 31, 1994 and March 31, 1994 and related consolidated statements of income and cash flows for the nine months ended December 31, 1994 (incorporated by reference to PACO's Quarterly Report on Form 10-Q for the quarterly period ended December 31, 1994). (b) Pro Forma Financial Information Pro forma condensed balance sheet at December 31, 1994. Pro forma condensed statement of income, for the year ended December 31, 1994. (c) Exhibits: 99.1 Agreement and Plan of Merger, dated March 24, 1995, among the Company, Purchaser and Paco (incorporated by reference to Exhibit (c)(1) of the Company's Tender Offer Statement on Schedule 14D-1 filed with the Securities and Exchange Commission on March 30, 1995 (the "Schedule 14D-1")). 99.2 Text of Press Release, dated April 27, 1995, issued by the Company. 99.3 Credit Agreement dated October 21, 1994 by and between the Company and CoreStates, as amended (incorporated by reference to Exhibit (b)(1) of the Schedule 14D-1). 99.4 Credit Agreement dated October 21, 1994 by and between the Company and PNC (incorporated by reference to Exhibit (b)(2) of the Schedule 14D-1). The West Company, Inc. and subsidiaries Pro Forma Financial Information ( in thousands, except share and per share data) The following proforma condensed consolidated balance sheet of The West Company, Inc. and subsidiaries combines on a purchase basis the net assets of Paco Pharmaceutical Services, Inc. and subsidiaries as if they had been acquired 100% on December 31, 1994. The actual date of purchase occurred on April 26, 1995 , when The West Company, Inc. purchased 3,952,345 shares of the common stock of Paco Pharmaceutical Services for cash equal to $12.25 per share.. On April 27, 1995, Paco's stockholders voted to approve and adopt the Merger Agreement and as a result the Company became a wholly owned subsidiary of the West Company, Inc. on that date., acquiring the remaining outstanding shares. The following financial information should be read in conjunction with the Company.s Annual Report on Form 10-K for the year ended December 31 , 1994 and Paco's Annual Report on Form 1O-K for the year ended March 31, 1994 and Paco's Quarterly report on Form 1O-Q for the period ended December 31, 1994 incorporated herein by reference. The proforma balance sheet reflects the acquisition of 100% of Paco's outstanding common stock after giving effect to the exercise of all options to purchase Paco common stock , related expenses, and certain purchase accounting adjustments as described in notes hereto: Condensed Consolidated Balance Sheet: As of December 31, 1994
Adjustments Pro West Paco F. Reference Forma 2,500} A. Cash and equivalents 27,200 2,500 (21,000)} F. 11,200 Marketable securities 0 5,200 5,200 Accounts receivable 57,800 8,500 66,300 Inventories 38,100 5,200 43,300 Other current assets 13,600 1,800 15,400 Total current assets 136,700 23,200 (18,500) 141,400 Net property, plant & equipment 192,200 29,700 221,900 Investments 21,900 0 21,900 Intangible assets, including goodwill 33,900 6,000 (6,000)} D. 50,600 15,200)} F. 1,500)} G. Other assets and deferred charges 12,700 100 12,800 Total assets 397,400 59,000 (7,800) 448,600 Notes payable 2,700 2,700 Long-term debt, current maturities 19,200 19,200 Accounts payable 19,300 3,200 22,500 Other current liabilities 45,100 2,100 1,500 G. 48,700 Total current liabilities 86,300 5,300 1,500 93,100 32,600 F. Long- term debt 35,900 3,100 1,200 B. 72,800 Deferred income taxes 24,400 6,500 30,900 Other noncurrent liabilities 21,600 0 1,000 C. 22,600 Minority interests 1,900 0 1,900 Shareholders' Equity Common stock 4,200 100 (100) F. 4,200 2,500 A. Capital in excess of par value 23,200 57,600 (60,100)) F. 23,200 Cumulative translation adjustments 17,100 0 0 17,100 Retained earnings 189,800 (13,600) (1,200)) B 189,800 (1,000)) C. (6,000)) D. 21,800 F. 234,300 44,100 (44,100) 234,300 Treasury Stock 7,000 0 0 7,000 Net shareholders' equity 227,300 44,100 (44,100) 227,300 Total liabilities & equity 397,400 59,000 (7,800) 448,600
Notes: Adjustments to Paco: A) Record exercise of options to acquire 371,000 of Paco common shares by Paco's employees and directors for an aggregate exercise price of $2,500. This increases the Paco common shares outstanding to 4,372,000. B) Restate Paco's long- term debt ( convertible subordinated debentures) to fair market value, based on current interest rate of 6 1/2% . Estimated to be equal to subordinated debenture's par value of $4,300 C) Accrue liability for the excess of the projected benefit obligation over the net assets of Paco's noncontributory pension plan covering all nonunion employees. This amounts to $1,000 based on the latest information available D) Eliminate goodwill previously recorded by Paco. E.) The Company is undertaking studies, including appraisals as appropriate , to establish the fair market value of the individual assets and liabilities of Paco . Final results of these studies, not expected to be available for several months, will be used to establish the opening balance sheet carrying values for Paco's net assets. Except as noted above all assets and liabilities are included at historical value in the accompanying proforma balance sheet. Record Acquisition: F.) Record the Company's purchase of all Paco common shares outstanding at $12.25 per share, for a total consideration of $53.6 million. Such amount was financed using available cash of approximately $21 million and available long-term credit facilities of $32.6 million. G) Record liability for fees and expenses related to the acquisition and merger totalling approximately $1.5 million. The West Company, Inc. and subsidiaries Pro Forma Financial Information (in thousands, except share and per share data) The following condensed consolidated proforma income statement for the year ended December 31, 1994 presents the results of operations of The West Company, Inc. and subsidiaries after giving effect to the acquisition of 100% of Paco Pharmaceutical Services, Inc. and subsidiaries as if such acquisition had occurred on January 1, 1994. The adjustments required are described in the notes following the proforma statement. The financial information should be read in conjunction with Company's Annual Report on Form 1 O-K for the year ended December 31, 1994 and Paco's Annual Report on Form 10-K for the year ended March 31, 1994 and Paco's Quarterly report on Form 10-Q for the period ended December 31, 1994 incorporated herein by reference. Condensed Consolidated Statement of Income For the year ended December 31, 1994
Adjustment Pro West Paco F. Reference Forma Net sales 365,100 64,760 429,860 Cost of goods sold 249,000 56,186 305,186 Gross profit 116,100 8,574 124,674 Selling, general and administrative expenses 69,000 5,410 (1,600) A. 73,210 Other expense (income) 1,700 66 1,766 Operating profit 45,400 3,098 1,200 49,698 Interest expense 3,300 175 2,700 B. 6,175 Income before income taxes and minority interests 42,100 2,923 (1,500) 43,523 Provision for income taxes 13,400 636 (1,500) D. 12,536 Minority interests 1,900 0 1,900 Income from consolidated operations 26,800 2,287 0 29,087 Equity in net income of affiliated companies 500 0 500 Net income 27,300 2,287 0 29,587 Net income per share: 1.70 1.84 Average shares outstanding 16,054 16,054
Notes: A.) Record reduction of Paco selling, general and administrative expense to eliminate : 1. Administrative expenses related to Paco's public reporting obligations estimated at $800 per annum 2. Synergies of the sales and marketing organizations estimated at $600. 3. Eliminate amortization of goodwill of $200 4. Additional synergies are expected to be identified, but no estimate is available. B.) Record additional interest expense at the rate of LIBOR plus 25 basis points on net cash requirements as follows: Cash required for the following: 1. Cost of acquiring Paco outstanding common stock at $12.25 per share, net of proceeds from the option exercise proceeds totalling $51.1 million 2. Fees and expenses related to the acquisition totalling $1.5 million. 3. Interest expense on additional borrowings and less average cash savings on the following: 1. Selling, general an d administrative expenses savings estimated at $1.4 million per annum 2. Paco common dividends of $.IO per share per quarter. C.) Record annual amortization of goodwill related to the Paco acquisition based On an estimated 40 year life. D.) Record income taxes at average domestic tax rate in 1994 of 37.8% on all deductible expenses. 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. THE WEST COMPANY, INCORPORATED By: --------------------------------------- Raymond J. Land Senior Vice President, Finance and Administration Date: May 11, 1995 EXHIBIT INDEX Exhibit --------------------------------------------------------------------------- -- 99.1 Agreement and Plan of Merger, dated March 24, 1995, among the Company, Purchaser and Paco. (incorporated by reference to Exhibit (c)(1) of the Schedule- 14D-1). 99.2 Text of Press Release, dated April 27, 1995, issued by the Company. 99.3 Credit Agreement dated October 21, 1994 by and between the Company and CoreStates, as amended (incorporated by reference to Exhibit (b)(1) of the Schedule 14D-1). 99.4 Credit Agreement dated October 21, 1994 by and between the Company and PNC (incorporated by reference to Exhibit (b)(2) of the Schedule 14D-1). THE WEST COMPANY NEWS RELEASE NYSE SYMBOL: WEST CORPORATE OFFICES 101 Gordon Drive P. O. Box 645 Lionville, PA 19341-0645 610-594-2900 FAX.- 610-594-3000 FOR RELEASE: Immediate CONTACT: Stephen M. Heumann Vice President and Treasurer (610) 594-3346 THE WEST COMPANY, INCORPORATED COMPLETES PACO SHORT FORM MERGER LIONVILLE, PA, April 27, 1995 - The West Company, Incorporated (NYSE: WEST) announced today that it completed its acquisition of Paco Pharmaceutical Services, Inc. via a short-form merger. The merger follows the completion of West's $12.25 per share cash tender offer for Paco common stock. West purchased in the offer 3,951,595 shares of Paco, approximately 99% of the shares outstanding. As a result of the merger, each remaining share of Paco common stock (other than any dissenting shares) has been converted into the right to receive $12.25 cash per share, and Paco has become a wholly-owned subsidiary of West. The West Company is a premier supplier Of PrOducts that Satisfy the unique filling, sealing, dispensing and delivery needs of the health care and consumer products industries. over 85 percent of West's health care markets. products include stoppers, ClOsures, containers, revenue is generated by the medical device components and assemblies made from elastomers, metal, plastic and glass. West also manufactures related packaging machinery. * * * * * * END * * * * * * -----END PRIVACY-ENHANCED MESSAGE-----