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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) December 17, 1998
HOLMES PRODUCTS CORP.
(Exact Name of Registrant as Specified in Charter)
Massachusetts 333-44473 04-2768914
(State or Other Jurisdiction of (Commission File (IRS Employer
Incorporation) Number) Identification No.)
233 Fortune Boulevard, Milford, MA 01757
(Address of Principal Executive Officer) (Zip Code)
Registrant's telephone number, including area code: (508) 634-8050
Not applicable
(Former Name or Former Address, if changed since Last Report)
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Item 5. Other Events.
On December 17, 1998, Holmes Products Corp., a Massachusetts
corporation ("Parent"), announced the signing of an Agreement and
Plan of Merger, dated as of December 17, 1998 (the "Merger
Agreement"), among Parent, Moriarty Acquisition Corp., a Delaware
corporation and wholly owned subsidiary of Parent (the "Purchaser")
and The Rival Company, a Delaware corporation (the "Company"). The
Merger Agreement provides for the commencement by the Purchaser of a
tender offer to purchase for cash all of the outstanding shares of
Common Stock, par value $.01 per share, of the Company (the "Shares")
at a price of $13.75 per Share, net to the seller, subject to the
satisfaction of certain conditions (the "Tender Offer"), to be
followed by a merger (the "Merger") of the Purchaser with and into
the Company. Pursuant to the Merger, each outstanding Share not
purchased in the Tender Offer, other than Shares as to which
dissenters' rights have been duly asserted and perfected under the
Delaware General Corporation Law and Shares held by the Company,
Parent, the Purchaser or any other subsidiary of Parent, will be
converted into the right to receive $13.75 per Share in cash, without
interest.
The Tender Offer will be conditioned upon, among other things,
the valid tender of at least 70% of the outstanding Shares, and the
receipt of the cash proceeds of financing pursuant to debt and equity
commitments received by Parent to fund the Tender Offer and the
Merger, to refinance certain existing indebtedness of the Company and
Parent and to pay fees and expenses related to the transaction. The
financing is subject to the satisfaction of certain conditions which
will be described in Parent's Tender Offer materials.
The Merger Agreement contains a number of customary
representations, warranties and covenants of the parties. The Merger
is subject to a number of customary conditions, and the Merger
Agreement may be terminated by either party under certain
circumstances. The Merger Agreement also provides that if it is
terminated under specific circumstances, Parent will be entitled to
receive from the Company a termination fee of $4.5 million.
The directors and certain officers of the Company ("Tendering
Stockholders") (who beneficially own an aggregate of 1,049,769 Shares
("Owned Shares") constituting approximately 11.3% of the Shares
outstanding) have entered into a Tender and Voting Agreement with
Parent and the Purchaser dated as of December 17, 1998 (the "Tender
and Voting Agreement"), pursuant to which the Tendering Stockholders
have agreed, among other things, (i) to tender in the Tender Offer
all of the Owned Shares now owned or which may hereafter be acquired
by the Tendering Stockholders; and (ii) to vote the Owned Shares in
favor of the adoption of the Merger Agreement and the approval of the
Merger, and against any action or agreement that would result in a
breach in any
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material respect of any covenant, representation or warranty or any
other obligation or agreement of the Company under the Merger
Agreement.
The press release issued by Parent in connection with the
execution of the Merger Agreement is filed herewith as Exhibit 99.1
and is incorporated herein by reference. The description of the
Merger Agreement and the Tender and Voting Agreement set forth above
and in such exhibit does not purport to be complete and is qualified
in its entirety by reference to the provisions of such agreements,
which will be filed with the Securities and Exchange Commission as
exhibits to Parent's and Purchaser's Tender Offer materials.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
99.1 Text of press release dated December 17, 1998.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
HOLMES PRODUCTS CORP.
(Registrant)
By: /s/ Ira B. Morgenstern
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Name: Ira B. Morgenstern
Title: Senior Vice President - Finance
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Exhibit 99.1
FOR IMMEDIATE RELEASE
December 17, 1998
Investor Contact: Media Contacts:
Holmes Products Corp. Holmes Products Corp.
Ira Morgenstern Fred Adair
Senior Vice President - Finance Senior Vice President of Human Resources
508/634-8050 508/634-8050
or
The Rival Company
William L. Yager
President and Chief Operating Officer
W. Mark Meierhoffer
Senior Vice President
Finance and Administration
816/943-4100
HOLMES PRODUCTS CORP. ANNOUNCES AGREEMENT TO ACQUIRE
THE RIVAL COMPANY FOR $13.75 PER SHARE
Milford, Massachusetts and Kansas City, Missouri -Dec. 17, 1998
- --Holmes Products Corp. ("Holmes"), a leading maker of consumer comfort
products, and The Rival Company ("Rival")(NASDAQ:RIVL), a leading maker of small
kitchen appliances and home environment products, today announced a definitive
merger agreement under which Holmes will acquire Rival for approximately $127.8
million plus the assumption of debt.
Under the terms of the merger agreement, unanimously approved by
Rival's Board of Directors, Holmes, through its subsidiary, Moriarty Acquisition
Corp., will commence a cash tender offer to purchase all outstanding shares of
Rival common stock for $13.75 per share. The transaction is subject to customary
closing conditions, including the valid tender of at least 70% of Rival's
outstanding shares, and is expected to be completed during the first quarter of
1999. Any shares not purchased in the tender will be acquired for the same price
in cash in a second-step merger.
Debt and equity commitments have been received by Holmes to fund the
tender offer and the merger, to refinance certain existing indebtedness of Rival
and Holmes and to pay fees and expenses related to the transaction.
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The directors and certain officers of Rival have agreed to tender all
of the Rival shares (approximately 11.3% of the outstanding shares) beneficially
owned by them in the offer.
"The merger of Holmes and Rival is unquestionably a win-win situation
for both companies, our shareholders, our retail partners and consumers," said
Jordan A. Kahn, president and chief executive officer of Holmes. "Rival is a
respected company with strong brands in the kitchen appliance and home comfort
markets, along with product distribution and geographic expansion capabilities
that complement Holmes' established strengths."
The acquisition of The Rival Company will allow Holmes to expand its
product line to include such well-known brands as Bionaire(R), Patton(R) and
Pollenex(R), as well as gain entry into the small kitchen appliance market
through the established Rival(R) brands, including Crock-Pot(R) slow cookers. In
addition, Holmes' international operations will be strengthened by Rival's more
extensive global network. Holmes' strong captive offshore manufacturing will
complement Rival's domestic manufacturing capability. Domestic distribution
capabilities will be significantly expanded as Holmes' east and west coast
distribution centers gain new territorial footholds through Rival's modern
distribution centers in the midwest.
"As we look to the future, Rival's Board of Directors believes this
merger agreement is in the best interests of all of our stockholders. It's no
secret that these are challenging times globally, and we are very pleased to
unite with Holmes on a fair and equitable basis for our shareholders," said
Thomas K. Manning, Rival's chairman and chief executive officer. "Holmes is
known for innovation, integrity and commitment to consumers' health and comfort
- - values that we at Rival also embrace. Combining forces will help us continue
to deliver superior products and service for our customers, with a quality work
environment for associates."
The acquisition will be financed, in part, by an additional equity
investment by Berkshire Partners LLC ("Berkshire"), Holmes' majority shareholder
following the November 1997 recapitalization of Holmes by Berkshire and
management. "Our investment in Holmes to support the Rival acquisition is
consistent with our strategy of investing in and supporting companies with
attractive growth prospects and partnering with talented management teams," said
Richard K. Lubin, Managing Director of Berkshire Partners. "We are excited about
the prospect of combining the strengths of Holmes and Rival and their respective
managements."
Donaldson, Lufkin & Jenrette has acted as Holmes' financial advisor in
connection with the transaction, and is acting as dealer manager for the tender
offer.
Holmes Products Corp. is a leader in the development of home comfort
products, including fans, heaters, humidifiers, and air purifiers. In addition,
Holmes markets and distributes a variety of home and office lighting products.
Holmes' net sales for the year
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ended December 31, 1997 were $192.2 million, and for the nine months ended
September 30, 1998 were $157.6 million. Holmes is headquartered in Milford,
Massachusetts, and has offices in Toronto, Taiwan and Hong Kong. More
information on Holmes may be obtained from the Company's website at
http://www.holmesproducts.com.
The Rival Company is a leading manufacturer of a variety of products
including small kitchen and personal care appliances, such as Crock-Pot(R) slow
cookers, can openers and massagers. The company markets products under the brand
names Rival(R), Rival Select(R), Simer(R), Bionaire(R), Patton(R), Pollenex(R)
and White Mountain(R). Rival's net sales for its fiscal year ended June 30,
1998, were $376.9 million.
Some of the statements in this press release may be considered
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking information is inherently subject
to risks and uncertainties, which include, but are not limited to, the
successful and timely completion of this transaction, the effective integration
of Rival into Holmes and the overall economic, market, and industry conditions,
as well as the risks described from time to time in reports filed by Holmes and
Rival with the Securities and Exchange Commission, including their most recently
filed Form 10-K and Form 10-Q reports. Should any such risks or uncertainties
materialize, or underlying assumptions prove incorrect, actual results or
outcomes may vary materially from those anticipated.
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