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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): November 16, 1998
CHATTEM, INC.
(Exact name of registrant as specified in its charter)
Tennessee 0-5905 62-0156300
(State of (Commission File No.) (IRS Employer
incorporation) Identification No.)
1715West 38th Street, Chattanooga, Tennessee 37409
(Address of principal executive offices, including
zip code)
(423) 821-4571
(Registrant's telephone number, including area code)
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Item 5. Other Events.
On November 16, 1998, Chattem, Inc. (the "Company") announced in a press release
that it entered into a definitive agreement with Thompson Medical Company, Inc.
("Thompson"), a privately-held New York corporation, to acquire the DEXATRIM,
SPORTSCREME, ASPERCREME, CAPZASIN-P, CAPZASIN-HP and ARTHRITIS HOT brands from
Thompson for $95,000,000. A copy of the press release issued in connection with
this announcement is incorporated herein by reference and is attached hereto as
Exhibit 99.1.
Item 7. Financial Statements and Exhibits
(c) Exhibits
99.1 Press Release dated November 16, 1998.
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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.
November 18, 1998 CHATTEM, INC.
By: /s/ A. Alexander Taylor II
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A. Alexander Taylor II
President and Chief Operating Officer
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Exhibit 99.1
November 16, 1998
Chattem, Inc. (NASDAQ: CHATT), a Chattanooga, TN-based manufacturer of
health and skin care products and the Sunsource line of dietary supplements,
today announced that it had signed a definitive agreement to acquire the
DEXATRIM, SPORTSCREME, ASPERCREME, CAPZASIN-P, CAPZASIN-HP and ARTHRITIS HOT
brands from Thompson Medical Company, Inc. for $95 million. 1998 net sales
of the acquired products will reach an estimated $55 million.
Dexatrim has been the leading domestic OTC diet aid for over 22 years
and currently holds a 59% market share. The five acquired topical analgesic
brands together rank as the second leading franchise in that category with
Sportscreme being the leading brand in the sports segment while Aspercreme is
the leading odor-free brand. The acquired topical analgesic brands, when
combined with Chattem's own Flex-All and Icy Hot lines, give the Company
significant breadth in this dynamic category and establishes Chattem as a
leader in this segment of the overall analgesic category.
Pursuant to the terms of the acquisition agreement, Chattem will
purchase the brand assets, including inventories and trademarks, plus assume
certain trade liabilities. The transaction is expected to close no later than
December 21, 1998, pending expiration or termination of the
Hart-Scott-Rodino Antitrust Improvements Act waiting period. PaineWebber
Incorporated served as Thompson Medical's financial advisor on the
transaction, while Chattem's financing for the transaction is led by Bank of
America.
Chattem expects the acquired brands to add in the range of $.65 to $.75
to fiscal 1999 earnings per share. Thompson Medical has supported the
acquired brands with significant advertising and promotional expenditures,
and Chattem will continue this aggressive support following the acquisition.
Additionally, all of the acquired brands will benefit from Chattem's
manufacturing, sales and distribution efficiencies.
Fiscal 1998 pro forma revenues for Chattem including the Thompson brands
and a full year of BAN sales would be approximately $307 million, while
1999 fiscal year revenues should reach approximately $335 million.
All forward looking statements, including the expected contribution of
the acquired brands to fiscal 1999 earnings and fiscal 1999 revenues, are
subject to the risks and uncertainties described in the Company's filings
with the Securities and Exchange Commission.
