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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): OCTOBER 6, 1999
PALEX, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 000-22237 76-0520673
(State or other jurisdiction of (Commission (IRS Employer
incorporation) file Number) Identification No.)
6829 FLINTLOCK ROAD
HOUSTON, TEXAS 77040
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 332-6145
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ITEM 5. OTHER EVENTS
On October 6, 1999, PalEx, Inc., a Delaware corporation ("PalEx"), and
International Food Container Organization ("IFCO") announced an amendment to
their previously announced merger agreement. The amendment modifies the
consideration that PalEx's stockholders are to receive and extends the date of
termination of the merger agreement to May 31, 2000.
Under the terms of the amended agreement, PalEx stockholders will receive
$9.00 per share, which may be in the form of cash or common stock of the
combined enterprise, IFCO Systems N.V. ("IFCO Systems"), or a combination of
cash and common stock. The total merger consideration for all the shares of
PalEx common stock is limited to not less than 40% in cash and not more than 60%
in the form of IFCO Systems ordinary shares. If the PalEx stockholders in the
aggregate elect to receive more than 40% in cash, then the maximum amount of
cash consideration will be increased up to 49% and the stock component of the
consideration will be reduced by a corresponding amount.
The merger is subject to stockholder approval, completion of the initial
public offering, listing of the IFCO Systems shares on the Frankfurt Stock
Exchange, and listing of the securities to be issued to PalEx stockholders on
the Nasdaq National Market, as well as other customary conditions. In addition,
PalEx may terminate the merger agreement if it is unable to satisfactorily
modify its credit facility to address the new timetable anticipated for the
merger and related IPO.
This announcement may contain statements that may be deemed "forward-
looking" within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These statements are based
on PalEx's expectations and involve risks and uncertainties that could cause
PalEx's actual results to differ materially from those set forth in such
statements. Such risks and uncertainties include, but are not limited to, risks
associated with closing the announced merger according to its terms, integrating
the combined companies, and achieving their operational and growth objectives.
These include, without limitation, changes in national or international politics
and economics, currency exchange rate fluctuations, changes in capital and
financial markets, and the ability of the combined companies to effectively
integrate their operations. Management believes the assumptions reflected in
these statements are reasonable, but there can be no assurance that actual
results will not differ materially from these expectations. This announcement
should be read in conjunction with the filings made by PalEx with the Securities
and Exchange Commission and the filing that will be made relating to the planned
merger. These filings disclose risk factors and other information that could
cause actual results to materially differ from management's expectations.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
Not applicable.
(b) PRO FORMA FINANCIAL INFORMATION.
Not applicable.
(c) EXHIBITS.
Exhibit 99.1 - Press release dated October 6, 1999.
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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.
PALEX, INC.
Date: October 13, 1999 By: /s/ Edward Rhyne
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Edward Rhyne
Vice President and General Counsel
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Exhibit 99.1
FOR IMMEDIATE RELEASE
OCTOBER 6, 1999
Contact: Jennifer Daniels
(941)533-1148 x. 1530
Email [email protected]
Or, visit PalEx's Web Site at www.palex.com
No. 99-18
PALEX AND IFCO ANNOUNCE AMENDMENT TO MERGER AGREEMENT
HOUSTON, Oct. 6, 1999--PalEx Inc. ("PalEx" or the "Company") (NASDAQ:PALX)
and International Food Container Organization ("IFCO") announced today that they
have executed an amendment to their previously announced merger agreement. The
amendment modifies the form of consideration to be received by PalEx's
shareholders and extends the termination date of the merger agreement to May 31,
2000.
Under the terms of the amended merger agreement, PalEx's stockholders will
receive merger consideration of $9.00 per share. Each PalEx stockholder may
elect to receive the merger consideration in the form of cash or common stock of
the combined enterprise, IFCO Systems N.V. ("IFCO Systems"), or in a combination
of cash and common stock. The merger will be completed concurrently with an
initial public offering by IFCO Systems on the Frankfurt Stock Exchange. ADRs or
similar securities representing the IFCO Systems shares will also be listed on
the Nasdaq National Market.
The merger agreement provides that the $9.00 stock component in the merger
will be determined based on the initial public offering price of IFCO Systems'
shares. The total merger consideration for all of the shares of PalEx common
stock is limited to not less than 40% in cash and not more than 60% in the form
of IFCO Systems common stock. If PalEx stockholders in the aggregate elect to
receive more than 40% of the total merger consideration in cash, then the
maximum amount of cash consideration will be increased to up to 49% of the total
merger consideration and the stock component of the consideration will be
reduced by a corresponding amount.
Vance Maultsby, PalEx's Chief Executive Officer, stated, "The revised
structure of this transaction provides merger consideration in a form that is
much easier for the marketplace to value. It also gives us greater flexibility
in addressing the desires of some stockholders to receive some cash
consideration and the interests of others to receive stock in the merged
companies."
Mr. Maultsby also stated, "We originally announced this transaction at the
end of March and expected the merger to be completed in the second or third
quarter. This schedule was not achieved due to complexities in structuring the
cross-border transaction. The revised structure addresses these complexities,
and we plan to file our proxy statement/prospectus with the U.S. Securities and
Exchange Commission for its review within the next few days. Due to the time
required for the SEC's review of our filing and anticipated uncertainties in the
stock market toward the end of the year, we now expect to complete the merger
and IFCO Systems' initial public offering by the end of the first quarter of
2000."
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The merger is subject to completion of the initial public offering,
stockholder approval, the listing of the securities to be issued to PalEx
stockholders on the Nasdaq National Market and other customary conditions. In
addition, PalEx may terminate the merger agreement if it is unable to
satisfactorily modify its credit facility to address the new timetable
anticipated for the merger and related IPO.
IFCO owns and manages the leading returnable plastic container ("RPC") pool
in Europe. It also has RPC operations in the U.S., Latin America and Japan.
Started in 1992, the European pool now serves approximately 15,000 supermarket
outlets in 15 countries in Europe. The pool, which now consists of approximately
50 million collapsible, reusable plastic containers, offers produce retailers
and growers significant economic, logistical and environmental advantages over
disposable packaging alternatives. IFCO leases the containers to producers,
retrieves the empty containers from retail customers, washes and in some cases
repairs the containers, and returns the cleaned containers to the producers.
IFCO deploys the containers from a logistical system that includes 91 depots
strategically located throughout Europe. Since 1993, IFCO's European revenues
have grown from DM10 million to DM200 million in 1998, representing compound
annual growth of 82 percent, all of which has been internally-generated.
PalEx is North America's largest provider of new and recycled pallets and
of reconditioned industrial containers, with 69 facilities in 23 states in the
U.S. and seven provinces in Canada. It owns and operates the second-largest
pallet rental pool in North America and is engaged in rental of industrial
containers. PalEx reported revenues of $320 million in 1998 and $197 million in
the six months ended June 27, 1999.
IFCO Systems will include IFCO's European, U.S., Asian and Latin American
returnable packaging operations and PalEx's North American pallet and industrial
container operations. The merger will create a leading global provider of supply
chain support services, with expected 1999 revenues of approximately U.S. $550
million. The new company will own and manage the leading rental pool of RPCs in
Europe and a rental pallet pool in Canada. It will also be the largest provider
of new pallets and pallet and container reconditioning services in North
America. The combined enterprise intends to accelerate the rollout of existing
early-stage IFCO RPC pools in the United States, Asia and Latin America. In
addition, it plans to bundle other supply chain support services with the
existing IFCO operations by designing and managing closed-loop logistics and
materials handling systems for its customers.
---------------------------
This announcement may contain statements that may be deemed "forward-
looking" within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These statements are based
on the Company's expectations and involve risks and uncertainties that could
cause the Company's actual results to differ materially from those set forth in
such statements. Such risks and uncertainties include, but are not limited to,
risks associated with closing the announced merger according to its terms,
integrating the combined companies and achieving their operational and growth
objectives. These include, without limitation, changes in national or
international politics and economics, currency exchange rate fluctuations,
changes in capital and financial markets, and the ability of the combined
companies to effectively integrate their operations. Management believes the
assumptions reflected in these statements are reasonable, but there can be no
assurance that actual results will not differ materially from these
expectations. This announcement should be read in conjunction with the filings
made by the Company with the Securities and Exchange Commission during 1997 and
1998 and the filings that will be made relating to the planned merger. These
filings disclose risk factors and other information that could cause actual
results to materially differ from management's expectations.
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