<PAGE>
As filed with the Securities and Exchange Commission on May 21, 1998
Registration No. 333-
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
-------------
Form S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
-------------
SUNSOURCE INC.
(Exact name of registrant as specified in its charter)
Delaware 23-2874736
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3000 One Logan Square
Philadelphia, Pennsylvania 19103
(215) 282-1290
(Address, including zip code, and telephone number,
including area code, of registrant's
principal executive offices)
------------------------------------
JOSEPH M. CORVINO
Vice President-Finance, Chief Financial Officer,
Treasurer and Secretary
SunSource Inc.
3000 One Logan Square
Philadelphia, Pennsylvania 19103
(215) 282-1290
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------
Copies to:
DONALD A. SCOTT, ESQ.
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, PA 19103
(215) 963-5000
------------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=========================================================================================================================
Title of Each Class of Proposed Proposed
Securities to be Amount to be Maximum Offering Maximum Aggregate Amount of
Registered Registered Price Per Share(1) Offering Price(1) Registration Fee
<S> <C> <C> <C> <C>
Common Stock, par value
$.01 per share............ 524,116 $28.5625 $14,970,063 $4,417
=========================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) under the Securities Act based upon the
average of the high and low sales price reported for such security by the
New York Stock Exchange Composite Tape on May 14, 1998.
-------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
<PAGE>
Subject to Completion, dated May 21, 1998
PROSPECTUS
524,116 Shares
SUNSOURCE INC.
Common Stock
-------------
This Prospectus, as appropriately amended or supplemented, relates to
the offer and sale (the "Offering") from time to time by each of the
stockholders listed under the caption "Selling Stockholders" (the "Selling
Stockholders") of up to 524,116 shares of Common Stock, par value $.01 per
share (the "Common Stock" or the "Shares"), of SunSource Inc. ("SunSource" or
the "Company"). This Offering is made pursuant to the fulfillment by the
Company of its contractual obligation to the Selling Stockholders to register
the Shares held by the Selling Stockholders. The Company will not receive any
of the proceeds from the sale of the Shares offered hereby. The Company has
agreed to bear all of the expenses of the registration of the Shares, but all
commissions, discounts or other fees relating to the sale of the Shares
incurred by the Selling Stockholders will be borne by the Selling
Stockholders. See "Plan of Distribution."
The Shares are traded on the New York Stock Exchange under the symbol
"SDP." On May 19, 1998, the last reported sale price of the Shares on the New
York Stock Exchange Composite Tape was $29 1/16 per share.
For a discussion of certain factors that should be considered in
evaluating an investment in the Shares offered hereby, see "Risk Factors"
beginning on page 4.
----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is June __, 1998.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information may be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, as well as the
following Regional Offices of the Commission: Seven World Trade Center, 13th
Floor, New York, New York 10048; and Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such material may be obtained
from the Public Reference Section of the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates.
Such material also may be accessed electronically by means of the Commission's
home page on the Internet (http://www.sec.gov). In addition, such reports,
proxy statements and other information concerning the Company can be inspected
at the offices of the New York Stock Exchange, 20 Broad Street, New York, New
York 10005.
This Prospectus constitutes a part of a registration statement on Form
S-3 (herein, together with all exhibits and schedules thereto, referred to as
the "Registration Statement") filed by the Company with the Commission under
the Securities Act of 1993, as amended (the "Securities Act") with respect to
the securities offered hereby. This Prospectus does not contain all the
information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the Commission.
Reference is hereby made to the Registration Statement for further information
with respect to the Company and the securities offered hereby. Copies of the
Registration Statement are on file at the offices of the Commission and may be
obtained upon payment of the prescribed fee or may be examined without charge
at the public reference facilities of the Commission described above.
Statements contained herein concerning the provisions of documents are
necessarily summaries of such documents and each statement is qualified in its
entirety by reference to the copy of the applicable document filed with the
Commission.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents of the Company filed with the Commission
pursuant to the Exchange Act are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1997.
(b) The Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998.
(c) The description of the Company's Common Stock contained
in the Registration Statement on Form 8-A filed with the Commission on
August 18, 1997.
In addition, all reports and other documents filed by the Company with
the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act, subsequent to the date of effectiveness of the Registration Statement of
which this Prospectus is a part and prior to the termination of the offering
made hereby, shall be deemed to be incorporated by reference in this
Prospectus. Any statement contained in a document incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
This Prospectus incorporates documents by reference which are not
presented herein or delivered herewith. The Company undertakes to provide
without charge to each person, including any beneficial owner, to whom a
Prospectus is delivered, upon written or oral request of such person, a copy
of any or all of such documents which are incorporated herein by reference
(other than exhibits to such documents unless such exhibits are specifically
incorporated by reference in the documents that this Prospectus incorporates).
Such requests should be addressed to Joseph M. Corvino,
2
<PAGE>
Vice-President-Finance, Chief Financial Officer, Treasurer and Secretary, 3000
One Logan Square, Philadelphia, Pennsylvania 19103, telephone: (215) 282-1290.
THE COMPANY
SunSource Inc., a Delaware corporation (the "Company" or "SunSource"),
is one of the largest providers of industrial products and related value-added
services in North America. The Company converted from partnership to corporate
form on September 30, 1997 (the "Conversion"). The Company operates its
businesses through an indirect subsidiary limited partnership, SDI Operating
Partners, L.P. (the "Operating Partnership").
The Company has targeted three businesses within the distribution
industry which are characterized by a potential for value-added services,
economies of scale and opportunities for further consolidation, as follows:
Industrial Services. SunSource Industrial Services Company, with sales
of $502 million in 1997, provides a broad range of products and services
throughout North America through the sales and marketing activities of
SunSource Technology Services ("STS") and Sun Inventory Management Company
("SIMCO"). The Company believes that STS is a leading provider of systems and
parts and engineering services for hydraulic, pneumatic, electronic and
related systems to major industrial concerns, as well as small and medium-size
businesses. STS provides services, including engineering and design of both
products and processes and the assembly and repair of complex systems, which
enable its customers to outsource engineering and other functions which they
previously performed in-house. SIMCO provides inventory management services,
enabling its customers to reduce inventory investment and the associated
expenses of purchasing, receiving, disbursing and accounting for parts and
materials.
Hardware Merchandising Services. Hardware Merchandising Services, which
operates under the name Hillman ("Hillman"), with sales of $107 million in
1997, provides small hardware items and merchandising services to retail
hardware outlets through a nationwide sales and service organization. Hillman
offers a full range of fasteners, letters, numbers, signs, keys, rope and
chain accessories and many other inexpensive specialty goods, which are
"must-have" items for hardware retailers that cannot be managed economically
by the retailer's own employees because of the large number of items and their
low prices.
Glass Merchandising. Glass Merchandising, which operates under the name
Harding ("Harding"), with sales of $88 million in 1997, operates one of the
largest networks of full service retail glass shops in the United States.
Harding is comprised of approximately 85 retail locations throughout the
Southwest and, to a lesser degree, along the East Coast. Harding sells and
installs automotive glass and also sells, fabricates and installs flat glass.
Customers include individual retail consumers, insurance companies and
commercial accounts.
The principal executive office of the Company is located at 3000 One
Logan Square, Philadelphia, PA 19103 and its telephone number is
(215) 282-1290.
3
<PAGE>
RISK FACTORS
An investment in the Shares offered hereby involves various risks. In
addition to general investment risks, prospective investors should consider,
among other things, the following factors:
Restructuring
In December 1996, the Company announced a restructuring plan to
integrate and consolidate its five domestic STS divisions. The Company expects
the restructuring plan to result in the elimination of approximately 175
employees in the STS divisions and produce certain net annualized cost savings
of approximately $5.0 million per year upon its completion. The STS divisions
consist of hydraulic and pneumatic distributors that were acquired by the
Company between 1976 and 1991. Until the restructuring, each of the STS
divisions was operated on a decentralized basis. The announced restructuring
plan is a three-year project to consolidate all financial and other
administrative responsibilities for the STS divisions in one location, and
includes a migration to one management information system. The integration and
consolidation of the finance and administrative functions is expected to be
completed by mid-1999. The restructuring of the sales organization and
distribution network has begun; however, management's current estimate is that
completion of this phase will require approximately an additional 18 months
beyond the original three year project schedule due to the need for further
analysis of STS' customer base and logistics requirements. The failure to
complete the restructuring or successfully integrate the STS divisions would
have an adverse impact on the Company's ability to fully achieve the net cost
savings indicated above. There can be no assurance that the Company will be
able to complete the plan effectively or on a timely basis.
Changing Industry Environment
The industrial distribution industry is undergoing significant change.
Historically, industrial distributors have served as suppliers of industrial
products and as extensions of manufacturers' sales forces, selling products
through the distribution channels to original equipment manufacturers,
retailers, end users and other customers. In recent years, both manufacturers
and customers have been increasingly relying on industrial distributors such
as the Company to reduce purchasing costs and provide a broad range of
value-added services, including inventory management programs, integrated
supply arrangements, electronic ordering capabilities, engineering design and
technical support services. In addition, customers' desire to consolidate
their supplier relationships has required industrial distributors to achieve
purchasing efficiencies, expand their geographic coverage and increase product
and service offerings through acquisitions of other distributors. These
changes in the industrial distribution industry could cause the industry to
become more competitive. There can be no assurance that the Company will be
able to compete effectively in or adapt to the changing industry environment.
Risks Associated with Acquisitions
An element of the Company's future growth strategy is to pursue selected
acquisitions that either expand or complement its businesses in new or
existing markets. However, there can be no assurance that the Company will be
able to identify or acquire acceptable acquisition candidates on terms
favorable to the Company and in a timely manner to the extent necessary to
fulfill the Company's growth strategy. Future acquisitions may be financed
through the issuance of Shares, which may be dilutive to the Company's
stockholders, or through the incurrence of additional indebtedness.
Furthermore, there can be no assurance that competition for acquisition
candidates will not escalate, thereby increasing the costs of acquisitions.
The process of integrating acquired businesses into the Company's operations
may result in unforeseen difficulties and may require a disproportionate
amount of resources and management's attention, and there can be no assurance
that the Company will be able to successfully integrate acquired businesses
into its operations. The failure to complete or successfully integrate
prospective acquisitions may have an adverse impact on the Company's growth
strategy.
4
<PAGE>
Competition
The distribution industry is highly competitive, with the principal
methods of competition being price, quality of service, quality of products,
product availability, credit terms and the provision of value-added services,
such as engineering design, integrated supply and inventory management. The
Company encounters competition from a large number of regional and local
distributors and from several national distributors, some of which have
greater financial resources than the Company and offer a greater variety of
products.
Seasonality and Industry Cycles
The Company has in the past experienced seasonal fluctuations in sales
and operating results from quarter to quarter. Typically, the first calendar
quarter is the weakest due to the effect of weather on construction activity
which produces a slowdown of sales of material and equipment in the
construction market. Fluctuations in the Company's quarterly operating results
could result in significant volatility in, and otherwise adversely affect, the
market price of the Common Stock.
Some of the principal markets for the products and services offered by
the Company are subject to cyclical fluctuations that generally affect demand
for industrial, commercial and consumer durable goods. Cyclical fluctuations
can affect a number of factors such as pricing, availability and demand for
the Company's products, growth rates in the markets served by the Company's
customers, the delivery and performance of vendors, and the availability of
suitable acquisition candidates. Changes in general economic conditions could
have a material adverse effect on the Company's business, results of
operations and financial condition.
Dependence on Information Systems; Year 2000 Issue
The Company believes that its proprietary computer software programs are
an integral part of its business and growth strategies. The Company depends on
its information systems generally to process orders, to manage inventory and
accounts receivable collections, to purchase, sell and ship products
efficiently and on a timely basis, to maintain cost-effective operations and
to provide superior service to its customers. There can be no assurance that
the precautions which the Company has taken against certain events that could
disrupt the operation of its information systems will prevent the occurrence
of such a disruption. Any such disruption could have a material adverse effect
on the Company's business and results of operations.
The Company faces the "Year 2000" issue. The Year 2000 issue is the
result of computer programs being written using two digits (rather than four)
to define the applicable year, resulting in incorrect calculations for the
year 2000 and beyond. The Company's issues relate not only to its own systems
being Year 2000 compliant, but also the systems of its suppliers and
customers. The Company presently believes that, with modifications to existing
software and converting to new software, the Year 2000 issue will not pose
significant operational problems for its computer systems as so modified or
converted. However, if such modifications and conversions are not completed in
a timely manner, or if the Company's suppliers and customers fail to address
the problem, the Year 2000 issue could have a material adverse effect on the
operations of the Company.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares. All of the proceeds from the sale of the Shares will be received by
the Selling Stockholders.
5
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth certain information regarding the
beneficial ownership of the Shares as of June __, 1998 by each of the Selling
Stockholders. Unless otherwise indicated below, to the knowledge of the
Company, all persons listed below have sole voting and investment power with
respect to the Shares, except to the extent authority is shared by spouses
under applicable law. The Shares that may be offered hereunder were
distributed by Lehman Brothers Capital Partners I to its limited partners on
June __, 1998.
The information included below is based upon information provided by the
Selling Stockholders. Because the Selling Stockholders may offer all, some or
none of their Shares, no definitive estimate as to the number of shares
thereof that will be held by the Selling Stockholders after such offering can
be provided and the following table has been prepared on the assumption that
all Shares offered under this Prospectus will be sold. See "Plan of
Distribution." None of the Selling Stockholders beneficially own Shares
representing 1% or more of the outstanding Shares.
<TABLE>
<CAPTION>
Common Stock to be
Beneficially Owned As
Common Stock Shares that May of June __, 1998 If All
Beneficially Owned Be Offered Shares Offered
Name As of June __, 1998 Hereunder Hereunder Are Sold
- ----------------------------------- ------------------------ ----------------------- ---------------------------
<S> <C> <C> <C>
Mr. Robert C. Altemus 6,002 6,002 -
Mr. Thomas J. Asher 6,002 6,002 -
Mr. Douglas M. Baker 6,002 6,002 -
Mr. Billie B. Beavers 3,751 3,751 -
Mr. Gary A. Beller 6,002 6,002 -
Mr. Robert M. Biggar 6,002 6,002 -
Mr. Walter Blass 6,002 6,002 -
Mr. Peter G. Briggs 3,001 3,001 -
Mr. James A. Carthaus 3,001 3,001 -
Mr. Harry D. Cohen 4,501 4,501 -
Mr. Garland Cupp 3,001 3,001 -
Mr. Richard J. Day 3,751 3,751 -
Ms. Barbara S. Dixon 6,002 6,002 -
Mr. Richard H. Donsky 6,002 6,002 -
Mr. Roderick A. Dowling 6,002 6,002 -
Mr. Alfred J. Fasulo 2,250 2,250 -
Mr. Larry D. Fenwick 1,500 1,500 -
Mr. Stephen H. Fields 6,002 6,002 -
Mr. Francis L. Fraenkel 6,002 6,002 -
Mr. Daniel Good 12,454 12,454 -
Mr. Bernard J. Hamilton 4,501 4,501 -
Mr. Rudolph Hlavek 1,500 1,500 -
Mr. William C. Jennings 6,002 6,002 -
Mr. James A. Johnson 6,002 6,002 -
Mr. Jeffrey B. Lane 6,002 6,002 -
Mr. Jonathan S. Linen 4,501 4,501 -
Mr. John F. McCann 6,002 6,002 -
Mr. Heath B. McLendon 6,002 6,002 -
Mr. James A. Mitchell 1,500 1,500 -
Mr. William J. Nutt 6,002 6,002 -
Mr. William J. Rex 3,001 3,001 -
Mr. Roby Robinson, Jr. 3,001 3,001 -
Mr. Michael A. Santangelo 6,002 6,002 -
</TABLE>
6
<PAGE>
<TABLE>
<S> <C> <C> <C>
Mr. Robert A. Savage 6,002 6,002 -
Mr. David Schoenthal 6,002 6,002 -
Mr. Robert L. Setzer 3,751 3,751 -
Mr. Charles B. Shelton, III 6,002 6,002 -
Mr. Thomas K. Tracy 6,002 6,002 -
Mr. Richard R. Weller 2,250 2,250 -
Mr. Stanley F. Witkowski 6,002 6,002 -
Mr. Gilbert F. Bach 6,002 6,002 -
Mr. Richard C. Bain, Jr. 6,002 6,002 -
Mr. Phillip Caldwell 6,002 6,002 -
Mr. Stanley Ciemniecki 6,002 6,002 -
Mr. Howard Clark, Jr. 3,751 3,751 -
Mr. John Coghlan 3,001 3,001 -
Mr. Richard H. Darsky 3,001 3,001 -
Mr. Mario D'Urso 6,002 6,002 -
Mr. Robert R. Edmiston 6,002 6,002 -
Mr. Eliot M. Fried (1) 6,002 6,002 -
Mr. Robert E. Genirs 6,002 6,002 -
Mr. Roger H. Goodspeed 6,002 6,002 -
Mr. Sheldon S. Gordon 6,002 6,002 -
Mr. J. Tomilson Hill 6,002 6,002 -
Mr. Arnold S. Hoffman (2) 9,252 6,002 3,250
Mr. Jeffrey P. Hughes 6,002 6,002 -
Mr. Michael C. Jackson 6,002 6,002 -
Mr. Allan S. Kaplan 6,002 6,002 -
Mr. Harvey M. Krueger 6,002 6,002 -
Mr. John R. Laird 1,500 1,500 -
Mr. Bruce R. Lakefield 6,002 6,002 -
Mr. Jack H. Lehman, III 6,002 6,002 -
Mr. Sherman R. Lewis, Jr. 6,002 6,002 -
Mr. James H. Manges 6,002 6,002 -
Mr. Roman Martinez, IV 6,002 6,002 -
Mr. Robert Matza 2,250 2,250 -
Mr. John J. McDougall 6,002 6,002 -
Mr. Edwin J. McGuinn, Jr. 6,002 6,002 -
Mr. Robert B. Millard 6,002 6,002 -
Mr. Charles P. Nastro 6,002 6,002 -
Mr. Robert P. O'Toole 6,002 6,002 -
Mr. Robert Radloff 6,002 6,002 -
Mr. Thomas Robson 6,002 6,002 -
Mr. Theodore Roosevelt, IV 4,501 4,501 -
Mr. John N. Rozsman 6,002 6,002 -
Mr. Gregory E. Sacco, Jr. 6,002 6,002 -
Mr. Albin Salton 6,002 6,002 -
Mr. Mel A. Shaftel 6,002 6,002 -
Mr. William A. Shutzer 6,002 6,002 -
Mr. Allen Sinai 6,002 6,002 -
Mr. Stephen D. Slifer 3,001 3,001 -
Mr. Peter J. Solomon 6,002 6,002 -
Mr. Steven Spiegel 3,001 3,001 -
Mr. James A. Stern 6,002 6,002 -
Mr. Alan M. Sternlieb 6,002 6,002 -
</TABLE>
7
<PAGE>
<TABLE>
<S> <C> <C> <C>
Mr. Jerry F. Stone, Jr. 6,002 6,002 -
Ms. Mary C. Tanner 6,002 6,002 -
Mr. Glenn R. Tilles 3,001 3,001 -
Mr. Alan Washkowitz 6,002 6,002 -
Mr. Steven B. Wolitzer 6,002 6,002 -
Mr. Mark S. Green 6,002 6,002 -
Mr. Frank L. Skillern, Jr. 4,501 4,501 -
Mr. James M. Li 3,001 3,001 -
Mr. John S. Levy 6,002 6,002 -
Mr. Herman H. Weiss 6,002 6,002 -
Mr. George W. Carmany, III 2,250 2,250 -
Mr. John F. Maher 6,002 6,002 -
Mr. Alan R. Batkin 6,002 6,002 -
The Estate of Justus C. Martin, Jr. 6,002 6,002 -
Mario A. Monello 6,002 6,002 -
</TABLE>
(1) Mr. Fried served as a director of the Company from December
1994 to March 25, 1998.
(2) Mr. Hoffman has served as a director of the Company from
1987 to date.
8
<PAGE>
PLAN OF DISTRIBUTION
The Shares offered hereby may be sold from time to time by the Selling
Stockholders. Such sales may be effected by or for the account of the Selling
Stockholders from time to time in transactions (which may include block
transactions) on the New York Stock Exchange, in negotiated transactions,
through a combination of such methods of sale, or otherwise, at fixed prices
that may be changed, at market prices prevailing at the time of sale or at
negotiated prices. The Selling Stockholders may effect such transactions by
selling the Shares directly to purchasers, through or to broker-dealers acting
as agents for the Selling Stockholders, or to broker-dealers who may purchase
Shares as principals and thereafter sell the Shares from time to time in
transactions (which may include block transactions) on the New York Stock
Exchange, in negotiated transactions, through a combination of such methods of
sale, or otherwise. In effecting sales, broker-dealers engaged by Selling
Stockholders may arrange for other broker-dealers to participate. Such
broker-dealers, if any, may receive compensation in the form of discounts,
concessions or commissions from the Selling Stockholders and/or the purchasers
of the Shares in amounts to be negotiated prior to sale. In addition, any
securities covered by this Prospectus that qualify for sale pursuant to Rule
144 might be sold under Rule 144 rather than pursuant to this Prospectus.
The Selling Stockholders and any broker-dealers, agents or underwriters
that participate with the Selling Stockholders in the distribution of the
Shares may be deemed to be "underwriters" within the meaning of the Securities
Act. Any commissions paid or any discounts or concessions allowed to any such
persons, and any profits received on the resale of the Shares purchased by
them may be deemed to be underwriting commissions or discounts under the
Securities Act.
Upon the Company's being notified by the Selling Stockholders that any
material arrangement has been entered into with a broker or dealer for the
sale of Shares pursuant to this Registration Statement through a secondary
distribution, or a purchase by a broker or dealer, a supplemented Prospectus
will be filed, if required, pursuant to Rule 424(c) under the Securities Act,
disclosing (a) the name of each such broker-dealer(s); (b) the number of
Shares involved; (c) the price at which such Shares were sold; (d) the
commissions paid or discounts or concessions allowed to such broker-dealer(s),
where applicable; (e) where applicable, that such broker-dealer(s) did not
conduct any investigation to verify the information set out or incorporated by
reference in this Prospectus, as supplemented; and (f) other facts material to
the transaction.
The Shares are listed on the New York Stock Exchange under the symbol
"SDP."
The Company is bearing all costs relating to the registration of the
Shares. However, any commissions, discounts or other fees payable to
broker-dealers in connection with any sale of the Shares will be borne by the
Selling Stockholder selling such Shares. In addition, the Selling Stockholders
will be indemnified by the Company against certain civil liabilities,
including liabilities under the Securities Act.
LEGAL MATTERS
The validity of the issuance of the Shares offered by this Prospectus
has been passed upon for the Company by Morgan, Lewis & Bockius LLP,
Philadelphia, Pennsylvania. Donald A. Scott, a partner in Morgan, Lewis &
Bockius LLP, is a director of the Company and the beneficial owner of 2,250
shares.
EXPERTS
The consolidated financial statements of SunSource Inc. and its
subsidiaries, included in the report on Form 10-K of the Company for the
fiscal year ended December 31, 1997 referred to above have been audited by
Coopers & Lybrand LLP, independent accountants, as set forth in their report
dated January 29, 1998, except for Note 22 as to which the date is February 5,
1998, accompanying such financial statements, and are incorporated herein by
reference in reliance upon the report of such firm, which report is given upon
their authority as experts in accounting and auditing.
Any financial statements and schedules hereafter incorporated by
reference in the registration statement of which this prospectus is a part
that have been audited and are the subject of a report by independent
accountants will be so incorporated by reference in reliance upon such reports
and upon the authority of such firms as experts in accounting and auditing to
the extent covered by consents filed with the Commission.
9
<PAGE>
==============================================================================
No dealer, salesperson, or other individual has been authorized to give
any information or to make any representations other than those contained, or
incorporated by reference, in this Prospectus in connection with the offering
covered by this Prospectus and, if given or made, such information or
representations must not be relied upon as having been authorized by the
Company or the Selling Stockholders. This Prospectus does not constitute an
offer to sell, or a solicitation of an offer to buy, any securities other than
those specifically offered hereby in any jurisdiction to any persons to whom
it is unlawful to make such offer or solicitation in such jurisdiction.
Neither the delivery of this Prospectus nor any sale made hereunder shall,
under any circumstances, create any implication that the information herein is
correct as of any time subsequent to its date.
------------------
TABLE OF CONTENTS
Page
Available Information.........................................................2
Incorporation of Certain Documents by Reference...............................2
The Company...................................................................3
Risk Factors..................................................................4
Use of Proceeds...............................................................5
Selling Stockholders..........................................................6
Plan of Distribution..........................................................9
Legal Matters.................................................................9
Experts.......................................................................9
==============================================================================
<PAGE>
==============================================================================
524,116 Shares
SUNSOURCE INC.
Common Stock
------------
PROSPECTUS
------------
June __, 1998
==============================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the expenses (other than
underwriting compensation expected to be incurred) in connection with the
offering described in this Registration Statement. All of such amounts (except
the SEC Registration Fee) are estimated.
SEC Registration Fee.................................................$ 4,417
Legal Fees and Expenses.............................................. 20,000
Accounting Fees and Expenses......................................... 5,000
--------
Total................................................................$ 29,417
========
Item 15. Indemnification of Directors and Officers
The Company's By-laws contain provisions permitted by the Delaware
General Corporation Law (under which the Company is organized) that provide
that directors and officers will be indemnified by the Company to the fullest
extent permitted by law for all losses that may be incurred by them in
connection with any action, suit or proceeding in which they may become
involved by reason of their service as a director or officer of the Company.
In addition, the company's Certificate of Incorporation contains provisions
permitted by the Delaware General Corporation Law that limit the monetary
liability of directors of the Company for certain breaches of their fiduciary
duty, and its By-laws provide for the advancement by the Company to directors
and officers of expenses incurred by them in connection with a proceeding of a
type to which the duty of indemnification applies. The Company maintains
directors' and officer' liability insurance to insure its directors and
officers against certain liabilities incurred in their capacity as such,
including claims based on breaches of duty, negligence, error and other
wrongful act. Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to directors, officers,
or persons controlling the Company pursuant to the foregoing provisions, the
Company has been informed that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in that
Act and is therefore unenforceable.
Item 16. Exhibits
The following exhibits are filed as part of this Registration Statement:
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
4 -- Rights Agreement between the Company and Registrar and Transfer Company
(incorporated by reference to Exhibit 10.5 of the Company's Registration Statement on
Form S-4 (No. 333-19077))
5 -- Opinion of Morgan, Lewis & Bockius LLP regarding legality of securities being
registered
23.1 -- Consent of Morgan, Lewis & Bockius LLP (included in its opinion filed as Exhibit 5
hereto)
23.2 -- Consent of Coopers & Lybrand L.L.P
24 -- Powers of Attorney (included as part of the signature page hereof)
</TABLE>
II-1
<PAGE>
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933.
(ii) To reflect in the Prospectus any facts or
events arising after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Securities and Exchange
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in the
effective Registration Statement.
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in the
Registration Statement.
Provided, however, that paragraphs (1) (i) and (1) (ii) do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be governed by the
final adjudication of such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Philadelphia, Commonwealth of
Pennsylvania, on May 21, 1998.
SUNSOURCE INC.
By: /s/ Joseph M. Corvino
-------------------------------------
Name: Joseph M. Corvino
Title: Vice President-Finance, Chief Financial
Officer, Treasurer and Secretary
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned does hereby
constitute and appoint Joseph M. Corvino and John J. Dabrowski, or either of
them acting alone, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution for him and in his name, place and
stead, in any and all capacities, to sign this Registration Statement on Form
S-3 of SunSource Inc. (and any Registration Statement filed pursuant to Rule
462(b) under the Securities Act), relating to the offer and sale of its Common
Shares and any and all amendments (including post-effective amendments) to the
Registration Statement and to file the same with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or his or their substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons, in the capacities and on
the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
---------- ----- ----
<S> <C> <C>
/s/ Donald T. Marshall Chairman and Chief Executive Officer May 21, 1998
- ----------------------------------- (Principal Executive Officer) and
Donald T. Marshall Director
/s/ Joseph M. Corvino Vice President-Finance, Chief Financial May 21, 1998
- ----------------------------------- Officer, Treasurer and Secretary
Joseph M. Corvino (Principal Financial Officer)
/s/ John J. Dabrowski Controller (Principal Accounting May 21, 1998
- ----------------------------------- Officer)
John J. Dabrowski
</TABLE>
II-3
<PAGE>
<TABLE>
<S> <C> <C>
/s/ O. Gordon Brewer, Jr. Director May 21, 1998
- --------------------------
O. Gordon Brewer, Jr.
/s/ Norman V. Edmonson Director May 21, 1998
- ----------------------
Norman V. Edmonson
/s/ Arnold S. Hoffman Director May 21, 1998
- ---------------------
Arnold S. Hoffman
/s/ Robert E. Keith, Jr. Director May 21, 1998
- ------------------------
Robert E. Keith, Jr.
/s/ John P. McDonnell Director May 21, 1998
- ---------------------
John P. McDonnell
/s/ Donald A. Scott Director May 21, 1998
- -------------------
Donald A. Scott
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
4 -- Rights Agreement between the Company and Registrar and Transfer Company (incorporated by
reference to Exhibit 10.5 of the Company's Registration Statement on Form S-4 (No. 333-19077))
5 -- Opinion of Morgan, Lewis & Bockius LLP regarding legality of securities being registered
23.1 -- Consent of Morgan, Lewis & Bockius LLP (included in its opinion filed as Exhibit 5 hereto)
23.2 -- Consent of Coopers & Lybrand L.L.P
24 -- Powers of Attorney (included as part of the signature page hereof)
</TABLE>
<PAGE>
EXHIBIT 5
Morgan, Lewis & Bockius LLP
Counselors at Law
2000 One Logan Square
Philadelphia, Pennsylvania 19103-6993
Telephone: (215) 963-5000
Fax: (215) 963-5299
May 21, 1998
SunSource Inc.
3000 One Logan Square
Philadelphia, PA 19103
Re: SunSource Inc.
Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
As counsel to SunSource Inc., a Delaware corporation (the "Company"), we have
assisted in the preparation of the subject Registration Statement on Form S-3
(the "Registration Statement"), to be filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Act"), relating
to the public offering of up to 524,116 shares (the "Shares") of the Company's
Common Stock, par value $.01 per share, to be sold by the individuals listed
as the selling stockholders in the Registration Statement.
In rendering the opinion set forth below, we have reviewed (a) the
Registration Statement; (b) the Company's Certificate of Incorporation and
Bylaws; (c) certain records of the Company's corporate proceedings as
reflected in its minute books; and (d) such records, documents, statutes and
decisions as we have deemed relevant. In our examination, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to
us as originals and the conformity with the original of all documents
submitted to us as copies thereof.
Our opinion set forth below is limited to the Delaware General Corporation
Law.
Based upon the foregoing, we are of the opinion that the Shares are validly
issued, fully paid and nonassessable.
We hereby consent to the use of this opinion as Exhibit 5 to the Registration
Statement and to the reference to our firm under the heading "Legal Matters"
in the Registration Statement. In giving such opinion, we do not thereby admit
that we are acting within the category of persons whose consent is required
under Section 7 of the Act or the rules or regulations of the Securities and
Exchange Commission thereunder.
Very truly yours,
/s/ Morgan, Lewis & Bockius LLP
<PAGE>
EXHIBIT 23.2
Consent of Independent Accountants
We consent to the incorporation by reference in this registration statement on
Form S-3 of our report dated January 28, 1998, except for Note 22 as to which
the date is February 5, 1998, on our audits of the consolidated financial
statements of SunSource Inc. as of December 31, 1997 and 1996 and for the
years ended December 31, 1997, 1996 and 1995, which report is included in
SunSource Inc.'s 1997 Annual Report on Form 10-K. We also consent to the
reference to our firm under the caption "Experts".
/s/ Coopers & Lybrand L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
May 21, 1998
