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
MAY 8, 1998
(Date of earliest event reported)
U S LIQUIDS INC.
(Exact name of registrant as specified in its charter)
DELAWARE 1-13259 76-0519797
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
411 NORTH SAM HOUSTON PARKWAY EAST, SUITE 400, HOUSTON, TEXAS 77060
(Address of principal executive offices) (Zip Code)
(281) 272-4500
Registrant's telephone number, including area code
Item 2. Acquisition or Disposition of Assets.
(a) On May 11, 1998, U S Liquids Inc. (the "Company") acquired all of the
outstanding capital stock of Northern A-1 Sanitation Services, Inc. ("Northern
A-1"), a Michigan corporation, from USA Waste Services, Inc. ("USA Waste") in
exchange for approximately $13.7 million in cash. This transaction was
consummated pursuant to a Stock Purchase Agreement, dated May 8, 1998, among the
Company, USA Waste and United Waste Systems, Inc.
Northern A-1 is engaged in the collection, processing and disposal of
waste generated in the exploration for and production of oil and natural gas.
Northern A-1 also collects, processes and disposes of industrial wastewater
generated in the Kalkaska, Michigan area. The Company currently intends to
operate Northern A-1 in substantially the same manner as it was operated prior
to this transaction.
The Company funded the purchase price paid for Northern A-1 with
borrowings under the Company's revolving credit facility with Bank of America
National Trust and Savings Association, BankBoston, N.A. and Wells Fargo Bank,
N.A. The purchase price was determined based upon an evaluation of the business
of Northern A-1 and the results of negotiations between the parties.
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The foregoing discussion is only a summary and is qualified in its
entirety by reference to the Exhibits to this Current Report on Form 8-K filed
herewith or to be subsequently filed as indicated.
(b) On May 11, 1998, the Company acquired certain assets from USA Waste in
exchange for approximately $30.8 million in cash. The assets acquired constitute
substantially all of the operating assets of a hazardous and nonhazardous waste
transportation, storage, treatment, processing and disposal business operated by
USA Waste in Detroit, Michigan. This transaction was consummated pursuant to a
Purchase and Sale of Assets Agreement, dated May 8, 1998, among USL City
Environmental, Inc., a subsidiary of the Company, USA Waste and City Management
Corporation, a subsidiary of USA Waste.
In connection with this acquisition, the Company also agreed, for a period
of 20 years, to deliver to certain landfills operated by USA Waste all of the
nonhazardous waste generated from the operations of the acquired business. For
each of the first five years of this arrangement, the tipping fee to be paid by
the Company to USA Waste is $45.50 per cubic yard for the first 120,000 cubic
yards of delivered waste and $8.00 per cubic yard thereafter. During each of the
remaining 15 years of this arrangement, the tipping fee is $8.00 per cubic yard.
The $45.50 per cubic yard tipping fee is higher than the $9.38 per cubic yard
tipping fee currently charged by local landfills for comparable waste. The
Company also agreed, for a period of 14 years commencing in May 2003, to pay to
USA Waste a monthly royalty fee equal to 6% of the net revenues derived from the
assets acquired. In addition, USA Waste agreed, for a period of 20 years, to
deliver to the Company for processing and disposal all leachate (up to a maximum
of 35 million gallons per year) from certain landfills operated by USA Waste in
the Detroit area. The $.0075 per gallon tipping fee to be paid by USA Waste for
delivered leachate is less than the $.02 per gallon tipping fee currently
charged by the acquired business for comparable waste. The tipping fee payable
by USA Waste for delivered leachate and $8.00 of the tipping fee payable by the
Company for delivered nonhazardous waste will be adjusted to reflect any
increase in the consumer price index.
The Company funded the purchase price paid for the acquired business with
borrowings under the Company's revolving credit facility with Bank of America
National Trust and Savings Association, BankBoston, N.A. and Wells Fargo Bank,
N.A. The purchase price was determined based upon an evaluation of the business
acquired and the results of negotiations between the parties.
The foregoing discussion is only a summary and is qualified in its
entirety by reference to the Exhibits to this Current Report on Form 8-K filed
herewith or to be subsequently filed as indicated.
(c) On May 8, 1998, the Company contracted to acquire certain additional
assets of USA Waste in exchange for approximately $2.7 million in cash. The
assets to be acquired by the Company constitute substantially all of the
operating assets of a hazardous and nonhazardous liquid waste transportation,
storage, treatment, processing and disposal business operated by USA Waste in
Tampa, Florida. The terms of this transaction are set forth in a Purchase and
Sale of Assets Agreement, dated May 8, 1998, among USL City Environmental
Services of Florida, Inc., a subsidiary of the Company, USA Waste and City
Management Corporation and Universal Transit Property Company, each of which is
a subsidiary of USA Waste.
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Pending the consummation of this acquisition, which is expected to occur
upon issuance of certain regulatory permits, USA Waste will operate the business
on terms that have the same effect on the Company's financial condition and
results of operations as if the acquisition had been consummated. The Company
currently intends to use the assets purchased for the same purposes as USA Waste
did prior to this transaction.
The Company funded the purchase price with borrowings under the Company's
revolving credit facility with Bank of America National Trust and Savings
Association, BankBoston, N.A. and Wells Fargo Bank, N.A. The purchase price was
determined based upon an evaluation of the assets acquired by the Company and
the results of negotiations between the parties.
The foregoing discussion is only a summary and is qualified in its
entirety by reference to the Exhibits to this Current Report on Form 8-K, filed
herewith or to be subsequently filed as indicated.
Item 7. Exhibits.
(a) To be filed by an amendment to the Form 8-K filed by the Company on
May 6, 1998. Pursuant to Item 7(a)(4) of Form 8-K, the Company hereby undertakes
to file the financial statements required in response to this Item in such
amendment no later than June 5, 1998.
(b) To be filed by an amendment to the Form 8-K filed by the Company on
May 6, 1998. Pursuant to Item 7(b)(2) of Form 8-K, the Company hereby undertakes
to file the financial statements required in response to this Item in such
amendment no later than June 5, 1998.
(c) EXHIBITS.
2.1 Stock Purchase Agreement, dated May 8, 1998, among U S Liquids
Inc.,United Waste Systems, Inc. and USA Waste Services, Inc.
(Exhibit 10.68 of the U S Liquids Inc. Registration Statement
on Form S-1 (File No. 333- 52121), as amended, is hereby
incorporated by reference).
2.2 Purchase and Sale of Assets Agreement, dated May 8, 1998,
among USL City Environmental, Inc., City Management
Corporation and USA Waste Services, Inc. (Exhibit 10.66 of the
U S Liquids Inc. Registration Statement on Form S-1 (File No.
333-52121), as amended, is hereby incorporated by reference).
2.3 Purchase and Sale of Assets Agreement, dated May 8, 1998,
among USL City Environmental Services of Florida, Inc.,
Universal Transit Property Company, City Management
Corporation and USA Waste Services, Inc. (Exhibit 10.67 of the
U S Liquids Inc. Registration Statement on Form S-1 (File No.
333- 52121), as amended, is hereby incorporated by reference).
2.4 Leachate Treatment Agreement, dated May 8, 1998, between City
Management Corporation and USL City Environmental, Inc.
(Exhibit 10.69
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of the U S Liquids Inc. Registration Statement on Form S-1
(File No. 333-52121), as amended, is hereby incorporated by
reference).
2.5 Disposal Agreement, dated May 8, 1998, between City Management
Corporation and USL City Environmental, Inc. (Exhibit 10.70 of
the U S Liquids Inc. Registration Statement on Form S-1 (File
No. 333-52121), as amended, is hereby incorporated by
reference).
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.
U S LIQUIDS INC.
Date: May 18, 1998 By: /S/ MICHAEL P. LAWLOR
Michael P. Lawlor,
Chief Executive Officer
