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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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
Date of report (Date of earliest event reported): February 1, 1997
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RPM, INC.
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(Exact Name of Registrant as Specified in Charter)
Ohio 0-5132 34-6550857
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification Number)
2628 Pearl Road, P.O Box 777 Medina, Ohio 44258
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (330) 273-5090
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Effective as of February 1, 1997, RPM, Inc. (the "Company")
acquired 100% of the issued and outstanding Common Shares of Tremco
Incorporated, an Ohio corporation ("Tremco") from The B.F.Goodrich Company
("B.F.Goodrich"). The acquisition was accomplished pursuant to a Stock Purchase
Agreement, dated as of October 21, 1996, between B.F.Goodrich and the Company
(the "Stock Purchase Agreement"), as amended by Amendment No. 1 to the Stock
Purchase Agreement, dated as of February 1, 1997, between B.F.Goodrich and the
Company (the "Amendment"). Copies of the Stock Purchase Agreement and of the
Amendment are filed as Exhibits to the Form 8-K.
Tremco manufactures and sells roofing systems, sealants and
coatings. Tremco is headquartered in Cleveland, Ohio and employs about 1,700
employees at office and manufacturing locations in the United States, Canada,
the United Kingdom, the Netherlands and Australia, with offices and joint
ventures in several other countries. The roofing systems, sealants and coatings
manufactured under the Tremco brand name are sold to customers primarily in
building, construction, building maintenance and retail markets. Tremco had
sales in 1995 of approximately $330 million.
As consideration for the acquisition of Tremco, the Company
will pay B.F.Goodrich approximately $243,000,000.00 in cash. The purchase price
and the other terms of the Stock Purchase Agreement were determined through
arms-length negotiations. There are no material relationships between Tremco and
the Company or any of their affiliates, directors or officers.
The cash portion of the purchase price paid for Tremco by RPM
was financed under a Credit Agreement, dated as of February 3, 1997, between the
Company, certain Banks, National City Bank, N.A., as Documentation Agent, and
The Chase Manhattan Bank, N.A., as Administrative Agent (the "Credit
Agreement"). A copy of the Credit Agreement is incorporated herein by reference
to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarterly
period ended February 28, 1997. The principal amount advanced and paid on
February 3, 1997 is subject to a variable interest rate based on the London
Interbank Borrowing Rate (LIBOR) plus 37.5 basis points.
2
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Businesses Acquired.*
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Tremco Incorporated Combined Financial Statements as of
October 31, 1996
Report of Independent Auditors
Combined Statement of Assets to be Acquired and
Liabilities to be Assumed
Combined Statement of Revenues and Expenses
Combined Statement of Cash Flows
Notes to Combined Financial Statements
(b) Pro Forma Financial Information.
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Pro Forma Condensed Combined Financial Statements (Unaudited)
RPM, Inc. and Subsidiaries and Tremco Incorporated
Pro Forma Condensed Combined Statement of Income
(Unaudited) for the Year Ended May 31, 1996
Pro Forma Condensed Combined Statement of Income
(Unaudited) for the Nine Months Ended February 28,
1997
(c) Exhibits.
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Exhibit No. Description
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2.1 Stock Purchase Agreement, dated as of
October 21, 1996, between B.F.Goodrich
and the Company.*
2.2 Amendment No. 1 to the Stock Purchase
Agreement, dated as of February 1, 1997,
between B.F.Goodrich and the Company. *
4.1 Credit Agreement, dated as of February 3,
1997, between the Company, the Banks
identified on the Signature Pages
thereto, National City Bank as
Documentation Agent, and The Chase
Manhattan Bank as Administrative Agent,
is incorporated herein by reference to
Exhibit 10.1 to the Company's Quarterly
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* Previously filed.
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Report on Form 10-Q for the quarterly
period ended February 28, 1997.
23.1 Consent of Independent Auditors.*
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* Previously filed.
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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.
RPM, INC.
By: /s/ Paul A. Granzier
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Paul A. Granzier
Vice President, Secretary
and General Counsel
Date: April 15, 1997
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PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)
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RPM, INC. AND SUBSIDIARIES
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AND
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TREMCO INCORPORATED
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The following unaudited pro forma condensed statements of income combine the
condensed statement of income of RPM, Inc. and Subsidiaries and Tremco
Incorporated for the year ended May 31, 1996, assuming the purchase of Tremco
Incorporated had been consummated as of June 1, 1995; and for the nine months
ended February 28, 1997, assuming the purchase had been consummated as of June
1, 1996. The pro forma information is based on the historical financial
statements of RPM, Inc. and Subsidiaries and Tremco Incorporated giving effect
to the transaction under the purchase method of accounting and the assumptions
and adjustments in the accompanying footnotes to the pro forma financial
statements.
The pro forma statements have been prepared by RPM, Inc.'s management based upon
the financial statements of Tremco Incorporated after adjusting said financial
statements to reflect the year end of RPM, Inc. These pro forma statements may
not be indicative of the results that actually would have occurred if the
combination had been in effect on the dates indicated or which may be obtained
in the future. The pro forma financial statements should be read in conjunction
with the audited financial statements and notes of Tremco Incorporated
previously filed with the Securities and Exchange Commission.
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PRO FORMA CONDENSED COMBINED
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STATEMENT OF INCOME (UNAUDITED)
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FOR THE YEAR ENDED MAY 31, 1996
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(In thousands except per share amounts)
<TABLE>
<CAPTION>
RPM, Inc. and
Subsidiaries Tremco Pro Forma Pro Forma
(as Reported) Incorporated Adjustments Combined
-------------- --------------- ------------------ --------------
<S> <C> <C> <C> <C>
Net sales $1,136,396 $314,532 $1,450,928
Cost of sales 649,819 186,595 836,414
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Gross profit 486,577 127,937 614,514
Selling, general and administrative expenses 340,851 110,455 (b) $5,150 456,456
Interest expense, net 25,840 (1,765) (a) 17,710 41,785
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Income before income taxes 119,886 19,247 (22,860) 116,273
Provision for income taxes 50,957 9,891 (c) (9,290) 51,558
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Net income $68,929 $9,356 ($13,570) $64,715
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Average shares outstanding 76,548 76,548
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Primary earnings per share $0.90 $0.85
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Fully diluted earnings per share $0.86 $0.81
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<FN>
(a) Reflects the incremental interest expense RPM, Inc. would have incurred
on the additional debt resulting from the acquisition of Tremco
Incorporated, calculated using the applicable borrowing rates during
the period.
(b) Reflects the increase in amortization resulting from tentative
adjustments to the fair value of intangibles.
(c) Reflects the computation of taxes assuming Tremco Incorporated was
included in RPM, Inc. and Subsidiaries federal income tax return for
the period and reflects the income tax effects related to the other pro
forma adjustments.
</TABLE>
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PRO FORMA CONDENSED COMBINED
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STATEMENT OF INCOME (UNAUDITED)
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FOR THE NINE MONTHS ENDED FEBRUARY 28, 1997
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(In thousands except per share amounts)
<TABLE>
<CAPTION>
Tremco
RPM, Inc. and Incorporated
Subsidiaries (June 1, 1996 thru Pro Forma Pro Forma
(as Reported) January 31, 1997) Adjustments Combined
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<S> <C> <C> <C> <C>
Net sales $942,484 $249,714 $1,192,198
Cost of sales 539,949 143,463 683,412
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Gross profit 402,535 106,251 508,786
Selling, general and administrative expenses 291,287 85,221 (b) $3,430 379,938
Interest expense, net 24,296 (596) (a) 11,810 35,510
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Income before income taxes 86,952 21,626 (15,240) 93,338
Provision for income taxes 36,955 8,982 (c) (6,190) 39,747
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Net income $49,997 $12,644 ($9,050) $53,591
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Average shares outstanding 78,127 78,127
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Primary earnings per share $0.64 $0.69
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Fully diluted earnings per share $0.61 $0.65
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<FN>
(a) Reflects the incremental interest expense RPM, Inc. would have incurred
on the additional debt resulting from the acquisition of Tremco
Incorporated, calculated using the applicable borrowing rates during
the period.
(b) Reflects the increase in amortization resulting from tentative
adjustments to the fair value of intangibles.
(c) Reflects the computation of taxes assuming Tremco Incorporated was
included in RPM, Inc. and Subsidiaries federal income tax return for
the period and reflects the income tax effects related to the other pro
forma adjustments.
</TABLE>
