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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
September 7, 2000
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
COMMISSION FILE NUMBER 1-11775
AVIATION SALES COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 65-0665658
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
3701 FLAMINGO ROAD
MIRAMAR, FLORIDA 33027
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(954) 538-2000
(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 September 7, 2000 ("Closing Date"), Aviation Sales Company
("Company") completed the sale of substantially all of the assets and business
of its Kratz-Wilde Machine Company and Apex Manufacturing operations to Barnes
Group Inc. ("Barnes"). The sale was completed pursuant to the terms of an Asset
Purchase Agreement (the "Agreement"), dated as of August 3, 2000, as amended on
September 7, 2000 (collectively, the "Agreement"), among Barnes, the Company,
Aviation Sales Manufacturing Company ("ASMC"), AVS/Kratz-Wilde Machine Company
("Kratz-Wilde") and Apex Manufacturing, Inc. ("Apex")[ASMC, Kratz-Wilde and Apex
are sometimes collectively referred to as the "Sellers"].
Under the Agreement, the purchase price paid for the assets and
business was $41.0 million, $40.0 million of which was paid in cash at closing
and the balance of which was placed into an escrow account to be disbursed in
the manner set forth below. Additionally, as part of the purchase Barnes assumed
the closing date ordinary course liabilities of the business, all as more
particularly set forth in the Agreement.
Pursuant to the Agreement, the Sellers and the Company have agreed that
the consolidated net worth of the business as of the closing date will not be
less than $50.3 million. The Agreement provides procedures relating to the
determination of the closing date consolidated net worth of the business, and
calls for payments to or from the Sellers or Barnes, as the case may be, if the
closing date consolidated net worth of the business is higher or lower than the
targeted amount (with the escrowed funds to be disbursed to the party entitled
to same after the determination of the closing date consolidated net worth of
the business).
The foregoing is a summary of certain information contained in the
Agreement. Reference is made to the more detailed information contained therein
and attached hereto as Exhibits 2.1 and 2.2.
On the Closing Date, the Company issued a press release announcing the
completion of the sale of its manufacturing operations. A copy of the press
release is attached to this Form 8-K as Exhibit 99.1.
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ITEM 5. OTHER EVENTS
On September 20, 2000, the Company entered into a series of agreements
with Kellstrom Industries, Inc. ("Kellstrom") that will result in Kellstrom
acquiring the Company's redistribution operations. The transactions, which are
expected to close by the end of October, are subject to various closing
conditions, including customary closing conditions, the completion of the
financing described below and the receipt of required governmental approvals.
Under the agreements, the Company and Kellstrom will form a 50/50 joint
venture company, KAV Inventory, LLC ("KAV"), which will acquire the entire
aircraft and engine spare parts inventory and the whole engine inventory of the
Company's redistribution operation, as well as certain rotable parts inventories
from two of the Company's MR&O operations. The purchase price for the inventory
will be 91% of the closing date adjusted book value of such inventory. A portion
of the purchase price will be paid using funds to be borrowed by KAV from a
syndicate of financial institutions led by Bank of America, N.A., with the
balance to be paid in the form of subordinated notes due after the repayment of
such institutional financing. As part of the transactions, KAV will consign the
purchased inventory to Kellstrom, and Kellstrom will thereafter offer the
purchased inventory for sale to its customers.
At the closing, Kellstrom will also purchase the property, plant and
equipment as well as certain of the other assets of the Company's redistribution
operation (subject to certain of the liabilities of that operation), hire the
employees of the redistribution operation, and take over the Company's 545,000
square foot redistribution center in Miramar, Florida. The purchase price for
the assets to be purchased will be the net book value (as of the closing date)
of the purchased assets. Further, as part of the transactions, the Company will
enter into a cooperation agreement with Kellstrom whereby Aviation Sales will
agree to provide repair services for the KAV parts inventory as well as repair
services to Kellstrom with respect to Kellstrom's parts inventory, and Kellstrom
will agree to supply parts to the Company's MR&O operations, on an ongoing
basis. The Company will also enter into a non-compete agreement whereby it will
agree not to engage in the redistribution of aircraft spare parts for a stated
period.
Based upon currently available information, the Company anticipates
that at the closing of the transactions described above it will receive an
aggregate of approximately $145.0 million in cash, which will be used to reduce
the Company's outstanding senior debt. The Company also anticipates that it will
take a substantial non-cash, one-time charge in the third quarter relating to
the contemplated transactions with Kellstrom.
A copy of the Company's Press Release issued on September 20, 2000
announcing that the Company has entered into the above-described series of
agreements with Kellstrom is attached to this Form 8-K as Exhibit 99.2.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
(c) Exhibits.
Exhibit No. Description
2.1 Asset Purchase Agreement by and among Barnes
Group Inc., Aviation Sales Company, Aviation
Sales Manufacturing Company, AVS/Kratz-Wilde
Machine Company and Apex Manufacturing, Inc.
dated as of August 3, 2000
2.2 Amendment No. 1 dated September 7, 2000 to
the Asset Purchase Agreement by and among
Barnes Group Inc., Aviation Sales Company,
Aviation Sales Manufacturing Company,
AVS/Kratz-Wilde Machine Company and Apex
Manufacturing, Inc. dated as of August 3,
2000
99.1 Press Release of Aviation Sales Company dated
September 7, 2000
99.2 Press Release of Aviation Sales Company dated
September 20, 2000
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
AVIATION SALES COMPANY
/s/ Michael C. Brant
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Date: September 21, 2000 Michael C. Brant, Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description
2.1 Asset Purchase Agreement by and among Barnes Group Inc.,
Aviation Sales Company, Aviation Sales Manufacturing Company,
AVS/Kratz-Wilde Machine Company and Apex Manufacturing, Inc.
dated as of August 3, 2000
2.2 Amendment No. 1 dated September 7, 2000 to the Asset Purchase
Agreement by and among Barnes Group Inc., Aviation Sales
Company, Aviation Sales Manufacturing Company, AVS/Kratz-Wilde
Machine Company and Apex Manufacturing, Inc. dated as of
August 3, 2000
99.1 Press Release of Aviation Sales Company dated September 7,
2000
99.2 Press Release of Aviation Sales Company dated September 20,
2000
