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UNITED STATES
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: December 16, 1996
QUIXOTE CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
0-7903 36-2675371
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(Commission File Number) (I.R.S. Employer
Identification Number)
One East Wacker Drive, Suite 3000, Chicago, IL 60601
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(Address of principal executive offices) (zip code)
(312) 467-6755
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(Registrant's telephone number, including area code)
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Items 1-4. Not Applicable.
Item 5. Other Events.
On December 8, 1996, Quixote Corporation entered into an agreement to
sell substantially all of the assets of its subsidiary, Disc Manufacturing,
Inc., for approximately $80 million in cash to Cinram, Inc. and its Canadian
parent company, Cinram Ltd., as set forth in the press release attached hereto
and incorporated herein as Exhibit A. Cinram Ltd. is a Toronto-based
manufacturer of prerecorded multimedia products, including CDs, CD-ROMs and
audio and VHS video cassettes.
In connection with the purchase, Quixote and Disc Manufacturing, Inc.
will retain certain liabilities, including, but not limited to, those
associated with the following litigation: Disc Manufacturing, Inc. et al. v.
Massey et al., CV-90-H-01029-NE (U.S. District Court for the Northern District
of Alabama); Disc Manufacturing, Inc. et al. v. Massey et al., CV90-1214L
(Madison County Circuit Court, Alabama); Thomson S.A. v. Time Warner et al.,
No. 94-83 (U.S. District Court for the District of Delaware); DiscoVision
Associates v. Disc Manufacturing, Inc., No. 95-21 (U.S. District Court for the
District of Delaware); Disc Manufacturing, Inc. v. Pioneer and DiscoVision,
No. 95-0306 (U.S. District Court for the Central Court of California-
consolidated with No. 95-21 described above); and Resort Video v. LaserVideo,
Inc., No. 74659 (Superior Court of California for the County of Los Angeles).
Quixote and Disc Manufacturing, Inc. will retain all benefits, rights and
causes of action arising from such litigation.
The transaction, which is subject to Quixote stockholder approval and
Hart-Scott-Rodino review, is expected to close in 90 days.
Items 6-8. Not Applicable.
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EXHIBIT A
QUIXOTE SELLS COMPACT DISC SUBSIDIARY TO CINRAM LTD.
FOR $80 MILLION IN ALL CASH TRANSACTION
Company Will Expand Highway Safety Business and Reduce Debt
CHICAGO, IL., December 9, 1996 - Quixote Corporation (Nasdaq:QUIX) today
announced that it has entered into a definitive agreement to sell
substantially all the assets of its Disc Manufacturing, Inc. (DMI) subsidiary
for approximately $80 million in cash to Cinram, Ltd. (Nasdaq:CNRMF), an
independent manufacturer of multimedia products based in Toronto, Canada.
DMI, an independent U.S. manufacturer of compact discs (CDs) and CD-ROM discs,
had sales of $82.4 million in the fiscal year ending June 30, 1996 and $20.5
million in the first quarter ending September 30, 1996 of fiscal 1997. The
sale, subject to approval by Quixote shareholders, is expected to be completed
in 90 days.
Philip E. Rollhaus, Jr., Quixote's Chairman, commented: "Our decision to
sell DMI allows Quixote to focus our resources on the broad highway products
and highway safety markets, where, we believe, there exists a high potential
for profitable growth through acquisitions and increased investments in new
products. Indeed, we shall now intensify our efforts to take advantage of the
position and strong profitability of our core business, Energy Absorption
Systems, Inc., as a leading, premier manufacturer of highway safety products
both here and abroad to increase our product portfolio so as to serve a
broader highway products market through our well-established and proven sales
and distribution channels.
"Our decision to sell DMI was influenced by the increasing competition
that has affected the CD industry. In response to these dynamics, we believe
that the industry will be moving towards consolidation and we have decided to
recommend to our shareholders that we accept Cinram's offer to purchase DMI.
The sale will expand Cinram's CD and CD-ROM presence in the United States
while complementing Cinram's current product offerings in video and audio
cassette duplication. We believe the transaction offers clear strategic
benefits to both companies."
Mr. Rollhaus added that a portion of the sale proceeds will be used to
reduce Quixote's debt, thereby strengthening the Company's balance sheet.
The Company noted that, although a final determination can not be made
until after closing, the current estimate is that the transaction would
provide for receipt of approximately 95% of book value of the assets conveyed
after providing for expenses and other accounting adjustments required by the
transaction.
Cinram Ltd. is one of the world's largest manufacturers of prerecorded
multimedia products, including music CDs, CD-ROMs and audio and VHS video
cassettes, with sales of $270 million (Canadian) in fiscal 1995. The company
has manufacturing facilities in Canada, the United States, France and Mexico.
Quixote Corporation is a diversified technology company composed of Disc
Manufacturing, Inc., a leading manufacturer of CDs and CD-ROM discs in the
United States, and Energy Absorption Systems, Inc., the world's leading
manufacturer of energy-absorbing highway and truck-mounted impact attenuators
and related highway safety products.
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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.
QUIXOTE CORPORATION
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/s/ Daniel P. Gorey
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By: Daniel P. Gorey
Its: Chief Financial Officer,
Vice President and
Controller
Date: December 16, 1996
