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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)
November 25, 1997
LDM Technologies, Inc.
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(Exact name of registrant as specified in its charter)
Michigan 333-21819 38-269-0171
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
2500 Executive Hills Drive, Auburn Hills, Michigan 48326
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (248) 858-2800
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Item 2. Acquisition or Disposition of Assets
On November 25, 1997 a newly-formed subsidiary of LDM Technologies,
Inc., a Michigan corporation ("Registrant") named Anja Verwaltungsgesellschaft
mbH (the "Purchaser"), pursuant to the terms of an Acquisition Agreement dated
November 12, 1997 ("Agreement") filed as Exhibit I to this report on Form 8-K,
purchased substantially all of the operating assets of Aeroquip-Vickers
International GmbH ("Aeroquip") consisting of plant, equipment and inventory and
located in Beienheim, Germany.
The aggregate purchase price paid for the assets was $8.6 million cash,
subject to certain closing adjustments, and in addition the Purchaser assumed
certain liabilities of Aeroquip in the approximate amount of $2.5 million. The
funds required for the purchase price were acquired by the Registrant under its
Senior Credit Facility with Bank America Business Credit, Inc., as agent, for
itself and a group of banks.
There was no material relationship between Aeroquip and the Registrant
or any of its affiliates, any director or officer of the Registrant, or any
associate of any such director or officer.
Aeroquip is engaged in the business of manufacturing and distributing
plastic components for automotive manufacturers. The business and operations of
Aeroquip will be continued by the Registrant substantially as they were
conducted prior to the acquisition.
Item 7. Financial Statements and Exhibits
(a) Financial statements of business acquired: It is impracticable
to file the required financial statements for the acquired
businesses at the time this report on Form 8-K is filed. The
Registrant will file such financial statements by an amendment on
or before February 15, 1998.
(b) Pro forma financial information: It is impracticable to file
the required pro forma financial information at the time this
report on Form 8-K is filed. The Registrant will file such pro
forma financial information by an amendment on or before February
15, 1998.
(c) Exhibits
1. Acquisition Agreement between Aeroquip-Vickers International
GmbH and Anja Verwaltungsgesellschaft mbH dated November 12,
1997.
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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 thereunto duly authorized.
LDM TECHNOLOGIES, INC.
By: /s/ Gary E. Borushko
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Gary E. Borushko
Chief Financial Officer
Dated: December 10, 1997
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
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<S> <C>
1 Acquisition Agreement between Aeroquip-Vickers International GmbH and
Anja Verwaltungsgesellschaft mbH dated November 12, 1997.
</TABLE>
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EXHIBIT 1
ACQUISITION AGREEMENT
between
AEROQUIP-VICKERS INTERNATIONAL GmbH
-hereinafter referred to as "Seller"-
a n d
ANJA VERWALTUNGSGESELLSCHAFT mbH
-hereinafter referred to as "Buyer"-
PREAMBLE
Seller operates a commercial undertaking in Beienheim. It involves the
manufacture and distribution of plastic components for the motor industry.
Seller would like to sell the Beienheim business by transferring the assets,
liabilities and contracts belonging to it. Buyer would like to acquire these.
<PAGE> 2
SEC. I
ASSETS
1. Seller sells to Buyer the fixed assets within the meaning of Commercial
Code Section 266 (2) A I 1 (industrial property rights), 2 (good will),
3 (payments on account), II, 2 (technical equipment and machines), 3
(office furniture and fixtures), 4 (payments on account and facilities
under construction), III 6 (other loans) HGB (German Commercial Code),
which belong to the business on the Closing Date which is 21 November
1997 as well as all inventories within the meaning of Section 266 (2) B
I HGB, receivables and other assets within the meaning of Section 266
(2) B II HGB, and all rights which belong to the business on the Closing
Date and form the basis of prepaid expenses within the meaning of
Section 266 (2) C HGB.
2. The fixed assets being sold include in particular Seller's assets listed
in ANNEX 1 hereto. Assets listed there which are sold in the usual
course of business between 24 October 1997 up to the Closing Date, or
are otherwise removed from the business, are not sold. Such assets which
are purchased, manufactured or otherwise added to the business in the
usual course of business between 24 October 1997 up to the Closing Date
to replace or supplement the objects listed in the list of assets are
sold hereby.
3. The above-mentioned list of assets was taken from Seller's inventory
which was the basis of Seller's balance sheet which was part of the
financial statements as per 24 October 1997. Assets belonging to the
business which are not listed there, but did not have to be included in
the inventory, are sold hereby.
4. The following assets are not sold hereby:
- loans made to affiliated companies, shareholdings, loans made to
companies in which a minority interest is held, securities, within the
meaning of Section 266 (2) A 1112, 3, 4, 5 HGB,
- securities within the meaning of Section 266 (2) B III HGB,
- checks, cash in hand, deposits with the Federal Bank and the Federal
Postal System Bank and deposits with commercial banks within the meaning
of Section 266 (2) B IV HGB belonging to the business on the Closing
Date.
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SEC. 2
INDUSTRIAL PROPERTY RIGHTS,
INTANGIBLE ASSETS, LICENCES
1. The patents, utility models and design patterns as well as applications
and filings for such rights listed in ANNEX 2 hereto are among the
assets being sold.
2. At Buyer's request, Seller will make any and all statements and take any
action necessary to transcribe the above-mentioned protective rights.
Costs incurred for the transcription shall be borne by Buyer.
Buyer agrees to remove without delay all references to Seller or
Aeroquip Sterling in all future trade and manufacturing transactions and
documentations.
3. Rights to inventions, know-how, business secrets, procedures, formulas
and other intangible things not subject to special legal protection, as
well as all tangible forms of such things, are also among the assets
being sold. In the same way, rights to commercial know-how, trade
secrets and administrative or manufacturing processes and software for
the integrated finance and manufacturing system, as well as all tangible
forms of such things, in particular documents relating to suppliers and
customers as well as the business correspondence and papers of the
business, are part of the assets being sold.
SEC. 3
LIABILITIES
1. Buyer will take over with debt releasing effect the liabilities,
contingent liabilities and obligations of Seller listed in ANNEX 3 as
they exist on the Closing Date except for payment obligations resulting
from product liability or product warranties in respect of goods shipped
on or prior to the Closing Date if these obligations exceed the amount
of the reserve set up for warranties in the take over balance sheet.
Seller shall indemnify and reimburse Buyer if claims for payment in
respect of such liabilities are made upon the Buyer. Seller shall remain
responsible for any liabilities, contingent liabilities and obligations
in respect of the assets and contracts taken over under this Agreement
resulting from its activities on or prior to the Closing Date not listed
in ANNEX 3. Buyer will be responsible for any liabilities, contingent
liabilities and obligations in respect of the assets and contracts
taken over under this Agreement resulting after the Closing Date.
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2. The parties agree that a Phase 2 Environmental Audit on the premises of
the Beienheim facility (the "Site") shall be performed within sixty days
after the Closing Date by Buyer in order to identify non-compliance at
the Site with existing laws and regulations as of the Closing Date, if
any. The scope of the Phase 2 Environmental Audit shall include all
relevant environmental issues according to standards of German law.
Costs of the Phase 2 Environmental Audit will be borne by Buyer. Seller
reserves the right to engage its own experts to observe Buyer's Phase 2
Environmental Audit and to evaluate the nature and extent of the
measures which Buyer's environmental audit firm considers necessary to
remove any non-compliance with existing laws and regulations as of the
Closing Date at the Site. The parties shall induce their experts to
agree upon the measures which are reasonably necessary to remove any
non-compliance with existing laws and regulations as of the Closing Date
at the Site ("Phase 2 Recommendations").
3. Seller shall carry out at its own expense and without delay all measures
which are necessary to implement the Phase 2 Recommendations at the
Site.
4. For a period of three (3) years after the Closing Date Seller shall
remain responsible or any non-compliance with existing laws and
regulations as of the Closing Date arising from its activities at the
Site on or prior to the Closing Date. Seller shall indemnify and
reimburse Buyer if claims for payment in respect of such non-compliance
are made upon Buyer.
SEC. 4
CUSTOMER OWNED TOOLING
Seller has the tools listed in ANNEX 4 in its possession that are owned by
customers. These will be taken over by Buyer with the consent of the owners of
such tooling. Such consent shall be obtained by the Seller. The liabilities and
responsibilities for all these customer owned tooling will be assumed by Buyer.
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SEC. 5
CONTRACTS AND CONTRACT OFFERS
Buyer takes over from Seller all rights and duties arising from the contracts
and contract offers listed and contained in Annex 5 hereto, with debt-releasing
effect for Seller. Any contracts or contract offers not listed will not be taken
over.
SEC. 6
EMPLOYMENT CONTRACTS
1. The employment contracts belonging to the business including
apprenticeships listed in ANNEX 6 hereto will pass over to Buyer on the
Closing Date pursuant to Section 613a BGB. All employment contracts
correspond to the standard contracts in ANNEX 6. There exist no
individual agreements materially deviating from these standard
contracts.
2. At the same time, the commitments existing with respect to company
pension entitlements on the part of active employees belonging to the
business will also pass over to Buyer on the Closing Date.
3. Seller's obligations to pay company pensions and obligations under
non-lapsable expectancies of former employees for payment of company
pensions shall remain with Seller.
4. The Seller shall indemnify the Buyer against any costs that may be
incurred as a result of the litigation for alleged unfair dismissal
between the Seller and its employee Schaffelhofer.
SEC. 7
TRANSFER OF OWNERSHIP, TRANSFER OF POSSESSION, CONDITION
1. Ownership of the assets being sold and the industrial property rights
shall pass over to Buyer on the Closing Date. The licences granted
herein will become effective on the Closing Date. Should any third
parties have reserved title to the assets being sold, or if ownership of
the assets being sold has been transferred to third parties by way of
security, Seller will transfer to Buyer its expectancies in this
respect.
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2. Seller will transfer possession of the assets sold hereby to Buyer on
the Closing Date. With respect to things in possession of third parties
Seller will assign to Buyer its repossession claims. Promptly after
possession is transferred, Seller and Buyer will jointly prepare a list
of all tangible assets possession of which has been transferred to
Buyer, or with respect to which Seller's repossession claims have been
assigned.
3. On the Closing Date, Buyer will take over from Seller all liabilities,
rights and duties which are contained in this Agreement as well as
ANNEXES 2, 3, 5 AND 6. Seller and Buyer will jointly attempt to obtain
the approval of the third parties who are parties to the contracts being
taken over. Should it not be possible or expedient to obtain such
approval, Seller and Buyer will act as between themselves and have each
other treated as if the take-over of the contracts and contract offers
had been validly made. In relation to third parties, Seller shall remain
a party to the contracts, but in relation to Buyer, Seller will act as a
party to the contract for Buyer's account.
4. Transfer of ownership of the assets being sold, transfer of possession
as well as the takeover of the contracts and contract offers transferred
and of the rights transferred to Buyer shall be subject to the condition
precedent of complete payment of the purchase price for the business.
SEC. 8
LEASE AGREEMENT
Buyer agrees to take over the existing lease for building and property contained
in ANNEX 5 now borne by Seller and/or enter into a new lease agreement with the
lessor in which Seller is released from all obligations or Buyer may purchase
the building and property and release Seller from all obligations under the
existing lease. Only in the event that the lessor is unprepared to conclude a
lease agreement equally advantageous to Buyer, Seller undertakes to sublease the
building and property under the same terms and conditions as the Seller now
possesses. Buyer undertakes to sublease the property and building under the same
terms and conditions as now entered into by Seller. Seller undertakes to
transfer all purchase options to Buyer. Until the Seller is no longer bound by
the existing lease Buyer shall reimburse Seller for any contractual payments
made by Seller to the Lessor and the Buyer shall bear any expenses necessary to
fulfil the lease.
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SEC. 9
RODELHEIM PROPERTY
1. Seller is entitled to use and sublease offices and storage rooms at the
building and property located at Eschborner LandstraBe 145 - 147,
Frankfurt am Main/Rodelheim. Seller subleases to Buyer as of the Closing
Date these premises for its administration and its distribution of
products until the end of 1997 for a lump sum of DM 14,400.00. Instead
of payment of this lump sum, Buyer will continue the administration and
electronic data processing for Seller. This means that Buyer ensures
that its employees will carry out all work related to the administration
and electronic data processing of Seller, including:
1. (a) yearend financial reporting details, until completion of
annual accounts for the 1997 accounting year,
(b) daily expense, purchasing, shipping and revenue accounting
activities,
(c) German accounting requirements, until completion of annual
accounts for the 1997 accounting year,
until 31 January 1998;
2. electronic data processing and operational support for the
Rodelheim subsuppliers, including negotiations co/ Opel
AG and personnel planning until such negotiations are
completed, until 31 March 1998 at the latest,
3. support in tax or social security audits for the
accounting years 1988 to 1997 until completion of such
audits.
This is valid independent of the date of any movement of personnel and
equipment to the Beienheim facility.
2. Buyer shall carry out the above administration and electronic data
processing according to German generally accepted accounting principles
( Sec. 238 et seq. HGB ) and in compliance with any tax laws or
regulations that may apply.
3. Buyer will not disclose any information received in the context of the
above administration and electronic data processing. The Buyer agrees to
take all reasonable
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care necessary to safeguard the confidential nature of this information.
This includes to oblige its employees to maintain confidentiality as
well.
SEC. 10
PRELIMINARY PURCHASE PRICE
1. The preliminary purchase price for the assets, rights and contracts
taken over through this Agreement is
DM 17,868,000.00
(in words: seventeen million eighthundredsixtyeightthousand German
Marks)
in total, plus value added tax, if any.
2. The preliminary purchase price is composed of the following:
<TABLE>
<S> <C>
Property, plant and equipment DM 9,737,000.00
Net working capital (see ANNEX 7) DM 8,131,000.00
</TABLE>
The parties will allocate the goodwill first to machinery and equipment.
3. Payment of the preliminary purchase price in the amount of DM seventeen
million eighthundredsixtyeightthousand shall be made as follows:
a) by assumption of the liabilities, contingent liabilities and
obligations of Seller in the amount of DM 4,471,000.00, and
b) the balance by cash payment of DM DM 13,397,000.00 at the Closing.
SEC. 11
PURCHASE PRICE ADJUSTMENT
1. On 22 November 1997 Seller and Buyer will together conduct a physical
inventory stock take by physically checking the production inventory. On
the basis of this physical inventory stock take, Seller will determine
the value of the stock being taken over on the Closing Date. In so
evaluating the inventory, required accounting principles as well as the
principle of continuity of balance-sheet preparation and evaluation must
be observed
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in line with Seller's financial statements as per 31 December 1996.
Seller will make the evaluation and provide it with an internally
prepared balance sheet of the assets purchased and liabilities and
contracts assumed as of the Closing Date to Buyer within 30 days after
the Closing Date.
2. The preliminary purchase price agreed on hereby will be raised or, as
the case may be, reduced by the amount by which the net book value of
the purchased assets belonging to the business on the Closing Date as
per the Closing Date Balance Sheet exceeds or falls short of the amount
of DM 15,868,000.00 shown in Seller's financial statements as per 22
August 1997 (see ANNEX 8) for the net book value of the purchased
assets. The cash portion of the preliminary purchase price agreed upon
will be raised or, as the case may be, reduced by the amount by which
the assumed liabilities, contingent liabilities and obligations of
Seller as of the Closing Date listed in ANNEX 3 still to be prepared
exceed or fall short of the amount of DM 4,471,000.00. The difference is
to be settled by bank transfer within 10 days of receipt of the final
evaluation. The amount of the difference shall bear interest from the
Closing Date at the discount rate of Deutsche Bundesbank plus 2% per
year.
3. Buyer shall be free to have all balance sheet positions reviewed by a
chartered accountant of its choice. Buyer will inform Seller within 60
days after the Closing Date whether the Seller's evaluation is accepted
or in what way it does not coincide with the contractual agreements.
Subsequently Seller may within 30 days have Buyer's statement reviewed
by a chartered accountant of its choice, and inform Buyer whether this
evaluation is accepted. If Buyer and Seller cannot agree on the
evaluation, a chartered accountant to be appointed by the "Institut der
Wirtschaftsprufer e.V." at the request of either party shall decide
with binding effect on both parties. Costs incurred for this will be
borne by Buyer and Seller in the proportion of their succeeding or
losing in this matter.
SEC. 12
WARRANTIES
I. Seller warrants by way of an independent guarantee that the following
representations are true and correct on the Closing Date:
1. Seller can freely dispose of the contract objects and the
transactions provided for herein do not and will not violate any
third-party rights.
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2. The assets being sold comprise all of the fixed assets needed for
the current business operations of the business.
3. Seller is the legal and beneficial owner of all assets sold hereby.
With the exception of the usual rights of retention and transfers
of ownership by way of security, these assets are free from any
encumbrances and other third-party rights.
4. The industrial property rights sold or licensed hereby are valid
and have not been challenged by any third party. The conduct of
Seller's business does not infringe third party intellectual
property rights.
5. The contracts transferred hereby have not been breached by Seller
or challenged and remain in force and, to the Seller's best
knowledge, have not been breached by third parties.
6. ANNEX 6 contains a complete list of all employees and apprentices
in the business who are taken over hereby.
7. Except as disclosed in ANNEX 9, no pending or threatened legal
disputes exist at this time.
8. All provisions of building and construction law and trade law as
well as all official orders have been complied with in constructing
operational facilities and buildings.
9. No insolvency or composition proceedings have been instituted
against Seller. There are no circumstances which would justify
this.
10. All information made available by Seller to Buyer and its advisors
prior to the execution hereof are complete and correct to Seller's
best knowledge. No information of relevance to the subject matter
hereof has not been disclosed.
11. Buyer is aware that the roof of the building in Beienheim and
certain areas of the production floor are in need of repair. Buyer
bears all costs arising from the repair to be done.
12. All permits and licences required to conduct the current operations
at the Beienheim plant exist and are valid.
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13. Included in the assumed liabilities (ANNEX 3) is an amount equal to
the liability for pensions for all employees entitled to a company
pension listed in ANNEX 6 calculated according to US GAAP by a
licensed actuary as of the Closing Date.
14. The Seller maintains adequate insurance coverage for carrying on
the Beienheim facility. Such insurance coverage will be maintained
by the Seller until the Closing Date.
15. Between the signing hereof and the Closing Date the Seller shall
not enter into any transactions which exceed the normal scope of
its business; the Annexes hereto contain no agreements, including
employment agreements which deviate from normal business practice,
unless disclosed by the Seller there have been no occurences or
developments prior to the Closing Date that would result in the
exposure of the Buyer to risks exceeding its normal scope of
business.
16. Licences or permits required for running the Beienheim facility
are assignable to the Buyer.
17. No customers of the Seller's Beienheim business have indicated to
the General Manager of the Beienheim facility that they would
terminate or significantly reduce purchases from the Beienheim
operations.
18. The financial statements including the profit and loss statements
for the years 1994 through 1996 of the Beienheim facility were
prepared in accordance with US Generally Accepted Accounting
Principles on the basis of the principle of continuity of
accounting and correctly reflect the financial results of the
Beienheim plant. The interim financial statements for the period
ended October 24, 1997 were prepared from the books and records of
the Seller on a consistent basis, are true and correct in all
material respects and accurately reflect the results of operations
of the business for the period ended October 24, 1997 subject to
normal corporate level and period adjustments.
II.1. Should any or several of the above representations be incorrect,
Buyer can demand that Seller creates the situation, within a
reasonable period of time, which would exist if the
representation(s) had been correct. If Seller does not create a
situation consistent with this Agreement within such a reasonable
time, or if this is not possible, Buyer can demand payment from
Seller as compensation for damages.
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2. Buyer's rights to cancel the contract or to demand a reduction of
the purchase price or damages other than mentioned in Section 12
para. II 1 above because of incorrect representations, or to
challenge this Agreement because of the absence of important
features, or to reverse or adjust this Agreement because of
frustration of contract, are expressly ruled out.
3. Warranty claims of Buyer under this Agreement are subject to a
limitation period of two years. The limitation period will begin to
run on the Closing Date.
SEC. 13
FUTURE BUSINESS
Buyer is aware that current forecasts show a decrease in revenues in 1998
compared to 1997 and that this reduction in sales could lead to reductions in
head count at Beienheim (in the order of over 40 employees approximately).
Buyer assumes all liabilities caused by the termination of these employees and
shall release Seller from all claims resulting from the potential termination
of their employment.
SEC. 14
PROHIBITION OF COMPETITION
For the duration of five years after the Closing Date Seller and its affiliates
will refrain from any activities which would constitute direct or indirect
competition with its current Beienheim business. In particular,
Aeroquip-Vickers International GmbH and its affiliates will not set up, acquire
or participate in or advise a company which directly or indirectly competes
with its current Beienheim business operations,
SEC. 15
ONGOING BUSINESS
Seller will conduct the Beienheim operation on an ongoing business basis from
the date of signature of this Agreement until the Closing Date.
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SEC. 16
CONDITION
This Agreement is subject to the Lessor of the property agreeing to either a
sublease by the Seller to the Buyer or a new lease between the Lessor and the
Buyer the terms of which are not less favourable than those of the present
lease between the Lessor and the Seller and in which Seller is released from
all obligations existing under that lease or a sale of the property by the
Lessor to the Buyer at market conditions. Buyer and Seller will work together
to obtain the Lessor's cooperation.
SEC. 17
DISCLOSURE OF FINANCIAL STATEMENTS
The Seller shall make available to the Buyer a set of its audited financial
statements for the fiscal year that was last audited.
SEC. 18
MISCELLANEOUS
1. Each party shall bear the costs of its own advisors.
2. Any amendment of or addition to this agreement including this provision
must be at least in writing. This applies also to the waiver of this
written-form requirement.
3. The agent authorized by Buyer for service of process including service
of statements of claim is:
Rechtsanwalte Hasche, Eschenlohr, Peltzer, Riesenkampff,
Fischotter, Niedenau 68, 60325 Frankfurt am Main.
4. Should any provision of this Agreement be or become partially or
entirely invalid, the validity of the remaining provisions hereof shall
remain unaffected thereby. The invalid provision shall be replaced by a
valid one which most effectively serves the financial purpose intended
by the parties.
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5. This Agreement replaces all earlier agreements between the parties
relating to the subject matter hereof.
6. This Agreement is subject to German law. The courts at Frankfurt am Main
have jurisdiction.
7. This Agreement consists of 14 pages and 3 files of Annexes. File no. 1
includes pages 1 to 598, File no. 2 includes pages 1 to 408 and File
no. 3 includes pages 1 to 170. ANNEXES 1 to 9 are contained in File no.
1. Additional documents belonging to ANNEX 5 are contained in Files no.
2 and no. 3.
Frankfurt am Main, this 12th day of November 1997
[SIG] [SIG]
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Aeroquip-Vickers International GmbH Anja Verwaltungsgesellschaft mbH
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