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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): June 2, 1999
HARRIS CORPORATION
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(Exact name of registrant as specified in its charter)
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Delaware 1-3863 34-0276860
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(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation) Identification No.)
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1025 West NASA Blvd., Melbourne, FL 32919
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (407) 727-9100
No Change
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(Former name or former address, if changed since last report.)
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Items 1-4. Not Applicable.
Item 5. Other Events.
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On June 2, 1999, Harris Corporation ("Harris" or the
"Company") announced that it is selling all of its semiconductor business.
Harris had previously announced its intention to sell the power portion of
its semiconductor business. Harris has reached an agreement to sell
substantially all of its semiconductor operation to a subsidiary of Sterling
Holding Company L.L.C., a Citicorp Venture Capital, Ltd. investment portfolio
company. Other investors will include certain individuals, and affiliates of
Credit Suisse First Boston Corporation. Harris will retain a 10% ownership
position in the business. Under the terms of the transaction, Harris will
receive about $700 million in cash, notes, retained receivables, and
contingency payments, in addition to the equity in the business. The transaction
does not include Harris' suppression business or photomask operations, which
will be sold separately. The Company plans to use the proceeds from the
divestiture to reduce the indebtedness at Harris and for other general
corporate purposes. The transaction, which is expected to be completed in the
next two months, is subject to financing, and regulatory and certain other
approvals.
A copy of the press release is filed herewith as Exhibit 99
and is incorporated herein by reference.
Upon the close of the sale of the Company's semiconductor
business, the Company expects to file a separate Form 8-K in which it will
report the details of the completed transaction.
Item 6. Not Applicable.
Item 7. Financial Statements and Exhibits.
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(a) Financial Statements.
None.
(b) Pro Forma Financial Information.
None.
(c) Exhibits.
The following document is filed as an Exhibit to this
Report:
99. Press Release, dated June 2, 1999,
announcing that Harris has entered into an
agreement to sell substantially all of its
semiconductor business.
Items 8-9. Not Applicable.
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SIGNATURE
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.
HARRIS CORPORATION
By: /s/ Bryan R. Roub
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Name: Bryan R. Roub
Title: Senior Vice President &
Chief Financial Officer
Date: June 3, 1999
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EXHIBIT INDEX
Exhibit No.
Under Reg.
S-K, Item 601 Description
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99. Press Release, dated June 2, 1999,
announcing that Harris has entered into
an agreement to sell substantially all of
its semiconductor business.
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EXHIBIT 99
HARRIS CORPORATION TO SELL ALL OF ITS SEMICONDUCTOR BUSINESS
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MELBOURNE, FL/NEW YORK, NY, June 2, 1999 - Harris Corporation, which is
repositioning itself to focus exclusively on the worldwide communications
equipment market, today announced it is selling all of its semiconductor
business. The company previously announced its intention to sell the power
portion of its semiconductor business.
"Selling the whole semiconductor business and allowing it to operate as
one company gives it both the size and flexibility it needs to address this
dynamic industry. This will provide the best growth opportunity for the business
and for its employees," said Phillip W. Farmer, chairman and CEO of Harris.
Harris has reached an agreement to sell its semiconductor business to a
subsidiary of Sterling Holding Company LLC, a Citicorp Venture Capital, Ltd.
investment portfolio company. Other investors will include certain individuals,
and affiliates of Credit Suisse First Boston Corporation. Harris will retain a
10 percent ownership position in the business.
Under the terms of the transaction, Harris will receive about $700
million in cash, notes, retained receivables, and contingency payments, in
addition to the equity in the business. The transaction does not include Harris'
suppression business or photomask operations, which will be sold separately. The
company plans to use the proceeds from the divestiture to reduce indebtedness at
Harris and for other general corporate purposes. The transaction, which is
expected to be completed in the next two months, is subject to financing, and
regulatory and certain other approvals.
Sales of the semiconductor business being sold were $530 million during
the latest 12 months. The business manufactures discrete semiconductors and
integrated circuits primarily for the power, space, defense, and communications
markets. It employs more than 6,200 people and includes the world's only 8-inch
wafer power fabrication facility, in Mountaintop, Pa., other fabrication and
assembly operations in Florida and Ohio; along with a major test-and-assembly
facility in Kuala Lumpur, Malaysia. The business has a rich intellectual
property heritage from Harris, GE Solid State and RCA.
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The semiconductor business will be operated as an independent company
led by Gregory L. Williams, current president of Harris Semiconductor Sector.
The buyer intends to offer positions to all Harris semiconductor employees
related to the business.
Divesting the semiconductor business is part of Harris' overall
repositioning effort to operate as one company, providing communications
infrastructure for voice, data and video. As part of the repositioning, Harris
is in the process of eliminating the company's sector organization level and
streamlining its remaining overhead structure. In a separate action announced
earlier, the company expects to complete the spin-off of its Lanier Worldwide
office products business within the next few months.
Upon completion of these actions, Harris will be a more integrated
organization operating through five divisions, with about 11,000 employees and
sales and service facilities in nearly 90 countries. As a company focused on
communications, Harris will provide equipment, systems and support services --
concentrating on the wireless, broadcast, government systems and network support
markets.
In the wireless market, Harris supplies a wide range of digital
microwave radios, wireless local loop telephony systems, and secure radios. In
the broadcast arena, Harris provides advanced digital and analog transmission
systems, and mobile studio systems for television and radio stations. In the
government communications market, Harris' airborne, spaceborne, and ground-based
communications and information systems are used extensively by the U.S.
government. In the network support market, Harris provides a family of line test
systems, craft tool and test sets, network management systems, and network and
PBX switches and enhanced services platforms.
Harris plans to add to its current line of systems and services in such
areas as IP-based broadband wireless access systems, point-to-point microwave
products, video compression products, expanded network management and testing
applications, commercial space communications systems and other natural product
line extensions.
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This press release contains forward-looking statements made in reliance
upon the Safe Harbor Provisions of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Such forward-looking
statements reflect management's current assumptions and estimates of future
performance and economic conditions. The company cautions investors that any
forward-looking statements are subject to risks and uncertainties that may cause
actual results to differ materially from those matters expressed in or implied
by such forward-looking statements. Statements about the expected date of
completion for the transaction and the impact of the transaction on Harris are
forward looking and involve risks and uncertainties. In addition, the company's
consolidated results and the forward-looking statements could be affected by,
among other things, general economic conditions in the markets in which the
company operates; economic developments that have a particularly adverse effect
on one or more of the markets served by the company; the ability to execute
management's repositioning as a pure communications equipment company (including
management's plan to modify its internal structure and divest non-core
businesses); stability of key markets for communications products, particularly
Asia and Brazil; fluctuation in foreign currency exchange rates and the
effectiveness of the company's currency hedging program; worldwide demand and
product pricing for integrated semiconductor circuits; reductions in the U.S.
and worldwide defense and space budgets; effect of continuing consolidation in
the U.S. defense industry on the company's direct and indirect business with the
U.S. government; the company's ability to receive contract awards; continued
development and market acceptance of new products, especially digital television
broadcast products; continued success of the company's patent licensing
programs; the ability of Harris, its customers, and suppliers to become Year
2000 compliant; and the successful resolution of patent infringement and other
general litigation. Harris disclaims any intention or obligation to update or
revise any forward-looking statements, whether as a result of new information,
future events, or otherwise.
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MEDIA INQUIRIES: Jim Burke at 407-727-9126 [email protected].
INVESTOR RELATIONS INQUIRIES: Pamela Padgett at 407-727-9383.
