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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
October 18, 1995
(Date of earliest event reported)
WITCO CORPORATION
(Exact name or registrant as specified in its charter)
Delaware 1-4654 13-1870000
(State or other (Commission (I.R.S. Employer
jurisdiction or File Identification
organization) Number) Number)
One American Lane
Greenwich, Connecticut 06831
(Address of principal executive offices) (Zip Code)
(203) 552-2000
(Registrant's telephone number, including area code)
Not Applicable
(Former name or address, if changed since last report.)
Page 1 of 12
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This Form 8-K/A amends Item 7(a) and (b) of the Witco Corporation (the
"Company") Current Report on Form 8-K dated October 18, 1995 (filed October 31,
1995) which related to, among other things, Witco's acquisition of OSi
Specialties Holding Company ("OSi").
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
a. Historical Financial Statements
(i) OSi Specialties Holding Company Consolidated Financial
Statements for fiscal years 1994 and 1993 (incorporated by
reference to pages F-1 through F-30 of OSi's Annual Report on
Form 10-K for the fiscal year ended December 31, 1994).
(ii) OSi Specialties Holding Company Consolidated Condensed
Financial Statements for the nine month periods ended
September 30, 1995, and September 30, 1994 (unaudited)
(incorporated by reference to pages one through six of OSi's
Quarterly Report on Form 10-Q for the quarter ended September
30, 1995).
b. Pro Forma Financial Information
Witco Corporation and OSi Specialties
Holding Company Pro Forma Consolidated
Condensed Financial Data (unaudited)
Page 2 of 12
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WITCO CORPORATION AND OSi SPECIALTIES HOLDING COMPANY
PRO FORMA CONSOLIDATED CONDENSED FINANCIAL DATA (UNAUDITED)
On October 19, 1995, the Company acquired OSi Specialties Holding Company and
its wholly owned subsidiary, OSi Specialties, Inc. (collectively "OSi") from an
investor group led by DLJ Merchant Banking Partners, L.P. in a cash transaction
which valued 100 percent of OSi's equity at $486 million. The acquisition was
accounted for as a purchase.
To finance the acquisition, the Company utilized cash on hand and short-term
financing of $375 million under a one year credit agreement with a syndicate of
10 banks with Morgan Guaranty Trust Company of New York, as agent. The credit
agreement, which contains covenants customary in such agreements, is for a
total of $675 million, of which $375 million was utilized for the acquisition.
The Company subsequently purchased for cash all of OSi's 11-1/2% Senior Secured
Discount Debentures due 2004 for $137.6 million and more than 99% of OSi
Specialties' 9-1/4% Senior Subordinated Notes due 2003 for $140.1 million. The
Company funded the acquisition of the Debentures and Notes with additional
short-term bank loans available under the $675 million credit agreement.
The Company intends to replace all or part of the short-term bank loans with
long-term financing in the public markets.
The following pro forma consolidated condensed balance sheet (unaudited) as of
September 30, 1995 and the pro forma consolidated condensed statements of income
(unaudited) for the year ended December 31, 1994 and the nine months ended
September 30, 1995 (collectively, the "Pro Forma Financial Data") combine
(i) the historical consolidated balance sheets of the Company and OSi as if the
acquisition had been effected on September 30, 1995, and (ii) the historical
statements of income as if the acquisition had been effected on January 1, 1994.
The pro forma financial data has been prepared on the basis described in the
notes to the pro forma unaudited consolidated condensed financial data and
includes assumptions relating to the allocation of the consideration paid for
OSi to the assets and liabilities of OSi based on preliminary estimates of their
respective fair values. The actual allocation of such consideration may differ
from that reflected in the pro forma financial data after an appropriate review
of the fair values of the assets and liabilities of OSi has been completed.
Although certain items noted herein are subject to potential adjustment,
management does not believe that the effect of any such adjustments will be
material to the pro forma financial data.
The pro forma financial data presented is not necessarily indicative of the
actual results that would have been achieved had the acquisition closed on the
dates assumed herein.
Page 3 of 12
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Witco Corporation and OSi Specialties Holding Company
Pro Forma Consolidated Condensed Statement of Income (Unaudited)
For the Year Ended December 31, 1994
(in thousands except per share data)
<TABLE>
<CAPTION>
Note A Note B
Witco OSi Specialties Pro Forma Pro Forma
Corporation Holding Co. Adjustments Consolidated
<S> <C> <C> <C> <C>
Revenues
Net sales $ 1,841,414 $ 394,322 $ -- $ 2,235,736
Interest 10,032 436 (8,416)(1) 2,052
- ----------------------------------------------------------------- ----------- ----------- ------- -----------
Total Revenues 1,851,446 394,758 (8,416) 2,237,788
- ----------------------------------------------------------------- ----------- ----------- ------- -----------
Costs and Expenses
Cost of goods sold (exclusive of depreciation and amortization) 1,412,079 266,438 -- 1,678,517
Selling and administrative expenses 185,576 55,967 (7,010)(2) 234,533
Depreciation and amortization 88,663 19,935 13,863 (3)(4) 122,461
Interest 29,674 27,405 15,155 (5) 72,234
Other expense (income) - net (9,708) 550 -- (9,158)
- ----------------------------------------------------------------- ---------- --------- ------- -----------
Total Costs and Expenses 1,706,284 370,295 22,008 2,098,587
- ----------------------------------------------------------------- ---------- --------- ------- -----------
Income from Continuing Operations before Federal and Foreign
Income Taxes 145,162 24,463 (30,424) 139,201
Federal and Foreign Income Taxes 50,742 11,580 (7,668)(6) 54,654
- ----------------------------------------------------------------- ----------- --------- -------- -----------
Income from Continuing Operations $ 94,420 $ 12,883 $(22,756) $ 84,547
===================================================================================================================================
Per Common Share: Primary
Income from Continuing Operations $ 1.70 $ 1.52
==== ====
Per Common Share: Fully Diluted
Income from Continuing Operations $ 1.69 $ 1.52
==== ====
Weighted average number of shares:
Primary 56,378 56,378
====== ======
Fully diluted 56,507 56,507
====== ======
</TABLE>
See notes to pro forma consolidated condensed financial data (unaudited)
Page 4 of 12
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Witco Corporation and OSi Specialties Holding Company
Pro Forma Consolidated Condensed Statement of Income (Unaudited)
For the Nine Months Ended September 30, 1995
(in thousands except per share data)
<TABLE>
<CAPTION>
Note A Note B
Witco OSi Specialties Pro Forma Pro Forma
Corporation Holding Co. Adjustments Consolidated
<S> <C> <C> <C> <C>
Revenues
Net sales $ 1,449,085 $ 337,139 $ -- $ 1,786,224
Interest 11,204 412 (6,312)(1) 5,304
- ----------------------------------------------------------------- ----------- ----------- -------- -----------
Total Revenues 1,460,289 337,551 (6,312) 1,791,528
- ----------------------------------------------------------------- ----------- ----------- -------- -----------
Costs and Expenses
Cost of goods sold (exclusive of depreciation and amortization) 1,134,166 223,812 -- 1,357,978
Selling and administrative expenses 139,665 44,400 (5,258)(2) 178,807
Depreciation and amortization 70,909 16,693 10,889 (3)(4) 98,491
Interest 26,146 22,578 9,342 (5) 58,066
Other expense (income) - net (94,702) 1,232 -- (93,470)
- ----------------------------------------------------------------- ----------- ----------- -------- -----------
Total Costs and Expenses 1,276,184 308,715 14,973 1,599,872
- ----------------------------------------------------------------- ----------- ----------- -------- -----------
Income from Continuing Operations before Federal and Foreign
Income Taxes 184,105 28,836 (21,285) 191,656
Federal and Foreign Income Taxes 65,370 10,700 (5,153)(6) 70,917
- ----------------------------------------------------------------- ----------- ----------- -------- -----------
Income from Continuing Operations $ 118,735 $ 18,136 $(16,132) $ 120,739
===================================================================================================================================
Per Common Share: Primary
Income from Continuing Operations $ 2.10 $ 2.14
==== ====
Per Common Share: Fully Diluted
Income from Continuing Operations $ 2.08 $ 2.12
==== ====
Weighted average number of shares:
Primary 56,542 56,542
====== ======
Fully diluted 57,000 57,000
====== ======
</TABLE>
See notes to pro forma consolidated condensed financial data (unaudited)
Page 5 of 12
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Witco Corporation and OSi Specialties Holding Company
Pro Forma Consolidated Condensed Balance Sheet (Unaudited)
As of September 30, 1995
(in thousands)
<TABLE>
<CAPTION>
Note C
Witco OSi Specialties Pro Forma Pro Forma
Corporation Holding Co. Adjustments Consolidated
<S> <C> <C> <C> <C>
Assets
- ----------------------------------------------------------------
Current Assets
Cash and cash equivalents $ 307,084 $ 5,344 $ (140,275)(1) $ 172,153
Accounts and notes receivable, less allowances 361,937 71,645 -- 433,582
Inventories 225,786 100,897 -- 326,683
Prepaid and other current assets 42,845 19,294 7,800 (2) 69,939
- ---------------------------------------------------------------- ---------- --------- ---------- ----------
Total Current Assets 937,652 197,180 (132,475) 1,002,357
- ---------------------------------------------------------------- ---------- --------- ---------- ----------
Property, Plant, and Equipment, less accumulated depreciation 573,619 209,205 -- 782,824
Intangible Assets, less accumulated amortization 194,561 10,888 522,082 (3) 727,531
Deferred Costs and Other Assets 111,675 21,386 (19,321)(2) 113,740
Net Assets of Discontinued Operations 167,079 -- -- 167,079
- ---------------------------------------------------------------- ---------- --------- ---------- ----------
Total Assets $1,984,586 $ 438,659 $ 370,286 $2,793,531
===================================================================================================================================
===================================================================================================================================
Liabilities and Shareholders' Equity
Current Liabilities
Notes and loan payable $ 7,104 $ 10,448 $ 344,244 (4) $ 361,796
Accounts payable and other current liabilities 300,821 92,983 20,000 (5) 413,804
- ---------------------------------------------------------------- ---------- --------- ---------- ----------
Total Current Liabilities 307,925 103,431 364,244 775,600
- ---------------------------------------------------------------- ---------- --------- ---------- ----------
Long-term Debt 345,365 260,848 59,066 (6) 665,279
Deferred Federal and Foreign Income Taxes 66,246 7,934 (40,124)(2) 34,056
Deferred Credits and Other Liabilities 216,643 54,575 (1,029)(7) 270,189
Shareholders' Equity 1,048,407 11,871 (11,871)(8) 1,048,407
- ---------------------------------------------------------------- ---------- --------- ---------- ----------
Total Liabilities and Shareholders' Equity $1,984,586 $ 438,659 $ 370,286 $2,793,531
===================================================================================================================================
</TABLE>
See notes to pro forma consolidated condensed financial data (unaudited)
Page 6 of 12
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Witco Corporation and OSi Specialties Holding Company
Notes to Pro Forma Consolidated Condensed Financial Data (Unaudited)
Note A
Certain reclassifications have been made to the OSi Specialties Holding Company
historical income statement amounts to conform with Witco Corporation's
presentation.
Note B
(1) To record foregone interest income due to cash on hand
used for the OSi acquisition.
(2) To record anticipated reductions in costs of OSi due to the elimination
of redundancies in staff and related costs and the cancellation of
service agreements of $5,258 (nine months ended September 30, 1995) and
$7,010 (year ended December 31, 1994).
(3) To record depreciation adjustment to conform useful lives of plant and
equipment to those used by the Company of $1,083 (nine months ended
September 30, 1995) and $789 (year ended December 31, 1994).
(4) To record amortization of excess purchase price over
fair market value of acquired assets and liabilities
assumed (amortized over 40 years) of $9,993 (nine
months ended September 30, 1995) and $13,324 (year
ended December 31, 1994) and reverse OSi
amortization expense of $187 (nine months ended
September 30, 1995) and $250 (year ended
December 31, 1994).
(5) To record interest expense from borrowings for the OSi
acquisition.
(6) To record tax effects of the above entries.
Note C
(1) To record cash on hand used for the OSi acquisition.
(2) To record deferred taxes related to OSi purchase
accounting.
(3) To record excess purchase price over fair market value of acquired
assets and liabilities assumed of $532,970 and reverse historic
OSi excess purchase price over fair market value of acquired assets
and liabilities assumed of $10,888.
(4) To record short-term portion of borrowings for the OSi
acquisition.
(5) To record acquisition costs.
(6) To record the expected long-term portion of debt used for the
refinancing of OSi's revolving credit agreement, Senior Debentures and
Senior Notes.
(7) To record adjustment to fair market value of OSi
pension and OPEB liabilities.
(8) To eliminate OSi shareholders' equity.
Page 7 of 12
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c. Exhibits
23(a) Consent of Arthur Andersen LLP
23(b) Consent of KPMG Peat Marwick LLP
99(a) OSi Specialties Holding Company Consolidated
Financial Statements for fiscal years 1994
and 1993 (incorporated by reference to pages
F-1 through F-30 of OSi's Annual Report on
Form 10-K for the fiscal year ended
December 31, 1994).
99(b) OSi Specialties Holding Company Consolidated
Condensed Financial Statements for the nine
month periods ended September 30, 1995, and
September 30, 1994 (unaudited) (incorporated
by reference to pages one through six of
OSi's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1995).
Page 8 of 12
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
WITCO CORPORATION,
by
/s/ Dustan E. McCoy
Name: Dustan E. McCoy
Title: Vice President, General
Counsel and Secretary
Date: December 20, 1995
Page 9 of 12
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequentially
Number Exhibit Numbered Page
<S> <C> <C>
23(a) Consent of Arthur Andersen LLP 13
23(b) Consent of KPMG Peat Marwick LLP 14
99(a) OSi Specialties Holding Company
Consolidated Financial Statements
for fiscal years 1994 and 1993
(incorporated by reference to
pages F-1 through F-30 of OSi's
Annual Report on Form 10-K for
the fiscal year ended
December 31, 1994).
99(b) OSi Specialties Holding Company
Consolidated Condensed Financial
Statements for the nine month
periods ended September 30, 1995,
and September 30, 1994 (unaudited)
(incorporated by reference to pages
one through six of OSi's Quarterly
Report on Form 10-Q for the quarter
ended September 30, 1995).
Page 10 of 12
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</TABLE>
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CONSENT OF INDEPENDENT AUDITORS
As independent public accountants, we hereby consent to the
incorporation by reference in the Current Report on Form 8-K/A of Witco
Corporation filed with the Securities and Exchange Commission (the "Commission")
on the date hereof of our report dated March 17, 1995, included in the Form 10-K
filed by OSi Specialties Holding Company with the Commission for the fiscal year
ended December 31, 1994. It should be noted that we have not audited any
financial statements of OSi Specialties Holding Company subsequent to December
31, 1994.
ARTHUR ANDERSEN LLP
December 20, 1995
Page 11 of 12
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CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the
Registration Statement (Form S-3, No. 33-45865) and the Post-effective Amendment
No. 2 to the Registration Statement (Form S-3, No. 33-58066), each pertaining to
the issuance of debentures, the Post-effective Amendment No. 1 to the
Registration Statement (Form S-3, No. 33-58120), pertaining to the issuance of
common stock, the Post-effective Amendment No. 2 to the Registration Statement
(Form S-8, No. 33-10715), Post effective Amendment No. 1 to the Registration
Statements (Form S-8, Nos. 33-30995 and 33-45194), each pertaining to stock
option plans of Witco Corporation, the Registration Statement (Form S-8, No.
33-48806), pertaining to an employee benefit plan of Witco Corporation, and the
Registration Statement (Form S-8, No. 33-60755), pertaining to the 1995 stock
option plan for employees of Witco Corporation of our report dated August 27,
1993 with respect to the combined statements of income and cash flows of the
Worldwide Silicone Business of Union Carbide Corporation (Predecessor Company)
for the six-month period ended June 30, 1993 and the year ended December 31,
1992, and the related financial schedule II, which report appears in the 1994
Annual Report on Form 10-K of OSi Specialties Holding Company and is
incorporated by reference in the Form 8-K/A dated December 20, 1995.
As discussed in our report, in 1992 the predecessor Company
adopted the provisions of Statement of Financial Accounting Standards (SFAS) No.
106, "Employers' Accounting for Postretirement Benefits Other Than Pensions",
and SFAS No. 109, "Accounting for Income Taxes".
Stamford, Connecticut KPMG PEAT MARWICK LLP
December 20, 1995
Page 12 of 12
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