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
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) AUGUST 3, 1998
AVIATION SALES COMPANY
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
DELAWARE 1-11775 65-0665658
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(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
6905 NW 25TH STREET, MIAMI, FL 33122
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (305) 592-4055
N/A
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(FORMER NAME OR FORMER ADDRESS; IF CHANGED SINCE LAST REPORT)
Page 1 of 7 pages.
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ITEM 5. OTHER EVENTS.
CONTRACT TO ACQUIRE TRIAD INTERNATIONAL MAINTENANCE CORPORATION ("TIMCO")
On August 10, 1998, a wholly-owned subsidiary of Aviation Sales Company, a
Delaware corporation (the Company"), Aviation Sales Maintenance, Repair &
Overhaul Company, a Delaware corporation (the "Buyer"), entered into a Stock
Purchase Agreement (the "Purchase Agreement") with Primark Corporation, a
Michigan corporation (the "Seller") and Triad International Maintenance
Corporation, a Delaware corporation and a wholly-owned subsidiary of the Seller
("TIMCO"), pursuant to which Buyer agreed to purchase from Seller all of the
outstanding common stock of TIMCO. TIMCO, based in Greensboro, North Carolina,
operates an FAA licensed aircraft repair station specializing in the overhaul of
widebody aircraft.
Subject to certain closing conditions, the Buyer will purchase all of the
issued and outstanding common stock of TIMCO from the Seller for a purchase
price of $70 million, subject to adjustments, on the closing date (the "Closing
Date"). Additionally, as part of the transaction, the Buyer will agree to
guaranty certain industrial revenue bond financing incurred in connection with
the development of TIMCO's Greensboro operating facilities, in the approximate
amount of $11 million.
The parties have agreed to use commercially reasonable efforts to close
the transactions contemplated by the Purchase Agreement on or before September
30, 1998 and have agreed to an outside Closing Date of October 15, 1998. In the
event the Seller refuses to close the transactions contemplated by the Purchase
Agreement (for any reason except a breach by the Buyer of its closing
conditions) and the Seller thereafter either sells a substantial portion of
either the capital stock or the assets of TIMCO to a third party, then in such
event, Seller shall be immediately required to pay Buyer a fee in the amount of
$5 million.
The obligations of the Buyer under the Purchase Agreement are subject to
the satisfaction on or before the Closing Date of certain closing conditions
(the "Closing Conditions"), including among others: (i) the accuracy of Seller's
representations and warranties as of the Closing Date; (ii) the receipt of
certain consents and governmental approvals, including those approvals required
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976; (iii) the
satisfaction by the Seller of certain other conditions, including: (a) TIMCO
meeting certain net worth and net working capital thresholds as of the Closing
Date, (b) Seller funding TIMCO with certain customer deposits as of the Closing
Date, and (c) Seller providing a $1 million additional payment to TIMCO on the
Closing Date; (iv) certain employees of TIMCO agreeing on or prior to the
Closing Date to employment contracts on terms reasonably satisfactory to Buyer;
and (v) no material adverse change shall have occurred in the financial
condition, assets, business or results of operations of TIMCO between the date
of the Purchase Agreement and the Closing Date. Additionally, Seller is
obligated under the Purchase Agreement to obtain a release of its pledge of the
outstanding shares of TIMCO to a financial institution, and if the Closing has
not occurred by October 15, 1998 because the Seller has not obtained a release
of its pledge of the TIMCO shares to such financial institution, and Buyer is
not otherwise in material breach of the Purchase Agreement, the Seller shall be
obligated to pay the Buyer the sum of $5 million.
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The Closing Conditions do not include a financing contingency and at the
present time the Company does not have sufficient funding available under its
existing credit arrangements to complete the acquisition of TIMCO on the terms
set forth above. The Company is presently negotiating with its lenders, and
while there can be no assurance, the Company expects to be able to obtain the
financing required to complete this purchase. In the event that the Closing does
not occur by October 15, 1998 because the Buyer has not obtained financing
sufficient to consummate the transactions contemplated by the Purchase Agreement
and the Seller is not otherwise in material breach of the Purchase Agreement,
the Buyer shall be obligated to pay the Seller the sum of $5 million.
Pursuant to the terms of the Purchase Agreement, the Seller has agreed
that for a period of five years following the Closing Date, the Seller and its
subsidiaries will not engage, directly or indirectly, in the business of
maintaining, repairing or overhauling aircraft.
Reference is made to the press release disseminated by the Company on
August 11, 1998, which press release is filed herewith as Exhibit 99 hereto. The
information set forth in such release is hereby incorporated by reference.
COMPLETION OF SENIOR SUBORDINATED NOTE EXCHANGE
On August 3, 1998, the Company completed the exchange of $165.0 million
of its fully registered Senior Subordinated Notes due 2008 (the "New Notes")
for all of its previously outstanding $165.0 million of Senior Subordinated
Notes due 2008 (the "Old Notes"), which Old Notes had been sold in February
1998 in a transaction exempt from registration under the Securities Act of
1933 pursuant to Rule 144A. The terms of the New Notes and the Old Notes are
substantially identical in all material respects, except for certain transfer
restrictions and registration rights, and except that the holders of the Old
Notes were entitled to receive liquidated damages under certain circumstances
(and the holders of the New Notes are not entitled to receive such damages).
For a full description of the New Notes and the terms of the Exchange, see the
Company's Prospectus, dated June 23, 1998, which is part of the Company's
Registration Statement on Form S-4 (file number 333-48669).
ITEM 7. EXHIBITS.
(a) Exhibits.
EXHIBIT NO. DESCRIPTION
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99 Press Release dated August 11, 1998.
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SIGNATURE
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.
August 26, 1998 AVIATION SALES COMPANY
By: /s/ DALE S. BAKER
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Dale S. Baker, Chairman, President and CEO
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
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99 Press Release dated August 11, 1998
EXHIBIT 99
AVIATION SALES COMPANY TO ACQUIRE TRIAD INTERNATIONAL MAINTENANCE COMPANY
("TIMCO") FOR $70 MILLION
MIAMI--(BUSINESS WIRE)--Aug. 11, 1998--Aviation Sales Company (NYSE:AVS) today
announced that it has executed a definitive agreement with Primark Corporation
(NYSE/PSE: PMK) to acquire Triad International Maintenance Company ("TIMCO").
Under the terms of the acquisition agreement, AVS will pay $70.0 million in
cash, subject to adjustment, to acquire TIMCO. Consummation of the acquisition
is subject to certain conditions, including the receipt of governmental
approvals. TIMCO had revenues of $113.3 million and $72.0 million, respectively,
for the 1997 fiscal year and the six months ended June 30, 1998. The
acquisition, which is expected to close by October 15, 1998, is expected to be
slightly accretive to earnings in fiscal 1998 and should add $0.10 to $0.15 to
diluted earnings per share in fiscal 1999. TIMCO, based in Greensboro, North
Carolina operates an FAA licensed repair station specializing in the overhaul of
widebody aircraft.
Dale S. Baker, the Company's Chairman and CEO stated: "We are extremely excited
about the acquisition of TIMCO, as it positions us to be a major force in the
$17 billion North American aircraft maintenance market. It is the perfect
complement to our Aero Corp. operations. Together, TIMCO and Aero Corp. have
approximately 1.4 million square feet of hangar space, making AVS one of the
largest providers of aircraft maintenance services in North America."
"Our Aero Corp. operation is a high quality provider of heavy aircraft
maintenance, but has been primarily focused on narrow body aircraft. We knew
when we completed the acquisition of Aero Corp. on July 31, 1998 that AVS could
provide the parts and back shop support needed to make a dramatic difference in
Aero Corp's performance, but that we lacked the engineering capabilities and
widebody experience required to provide total aircraft maintenance solutions to
meet all of our customer's Maintenance, Repair and Overhaul ("MR&O")
requirements. TIMCO is widely recognized within the MR&O industry as one of the
best widebody aircraft maintenance companies in the world. They bring not only
an outstanding reputation and top quality customer list to AVS, but also the
widebody experience and the engineering capability that we knew we needed.
Putting Aero Corp., TIMCO and AVS, together ideally positions us to provide
Total Maintenance Solutions to our customers."
Aviation Sales Company is a recognized worldwide leader in the aircraft spare
parts manufacturing, maintenance, repair and overhaul and redistribution market,
selling parts for Boeing, McDonnell Douglas, Lockheed and Airbus aircraft, and
Pratt & Whitney, General Electric and Rolls Royce jet engines. Offering
inventory management services, including purchasing services, repair management,
warehouse management, aircraft disassembly services and consignment and leasing
of aircraft spare parts, Aviation Sales Company is a leader in Total Inventory
Solutions(R) designed to meet the diverse needs of its customers. Aviation Sales
Company also manufactures certain aircraft parts for
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sale to original equipment manufacturers, including precision engine parts, and
provides aircraft and aircraft part repair services at its FAA licensed repair
facilities.
This press release contains forward-looking statements, which involve risks and
uncertainties, including risks associated with the successful integration of the
combined businesses and the realization of commercial synergies, among other
matters. Aviation Sales' actual future results could differ materially from the
results anticipated herein. For further information, please see Aviation Sales'
Annual Report of Form 10-K, as amended for the 1997 fiscal year.
CONTACT: Aviation Sales Company, Miami
Dale S. Baker, Chairman/Chief Executive Officer
305/599-6619
Joseph E. Civiletto, Chief Financial Officer
305/599-6693
Home Page Address: http://www.avsales.com
Corporate News on the Net:
http://www.businesswire.com/cnn/avs.htm
or
Morgen-Walke Associates, New York
June Filingeri/Jennifer Angell
Media contact: Miriam Adler
212/850-5600
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