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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: June 26, 1998
ESCALADE, INCORPORATED
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(Exact name of Registrant as specified in its charter)
Indiana 0-6966 13-2739290
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
817 Maxwell Avenue Evansville, IN 47717
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (812)467-1200
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INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Events
Escalade, Incorporated (the "Company") announced on June 26, 1998 that
it had entered into an Asset Purchase Agreement dated June 26, 1998 (the
"Purchase Agreement") by and among the Company, Indian Industries, Inc., a
wholly-owned subsidiary of the Company ("Indian"), Harvard Sports, Inc., a
wholly-owned subsidiary of the Company ("Harvard"), JEN Sports, Inc., a
wholly-owned subsidiary of Sportcraft, Ltd. ("JEN Sports") and Sportcraft, Ltd.
("Sportcraft"). Pursuant to the Purchase Agreement, the Company, Indian and
Harvard will sell substantially all of the assets of their sporting goods
business operated under the name "Escalade Sports" to JEN Sports for a purchase
price of $74.5 million, subject to upward or downward adjustment based on
Escalade Sports' closing net working capital as provided in the Purchase
Agreement. The asset sale is subject to certain contingencies set forth in the
Purchase Agreement.
Prior to its execution, the Purchase Agreement was approved by the
respective Boards of Directors of the Company, Indian and Harvard. A fairness
opinion was delivered by CIBC Oppenheimer Corp. to the Board of Directors of the
Company. The consummation of the asset sale is subject to the approval of the
asset sale by the Company's stockholders and to certain other conditions set
forth in the Purchase Agreement. The asset sale is currently scheduled to close
in the third quarter of 1998 pursuant to the terms of the Purchase Agreement.
The Company's directors and executive officers, the holders of
approximately 33% of the outstanding shares of Escalade Common Stock, have
granted to JEN Sports irrevocable proxies to vote their shares in favor of the
asset sale, the Purchase Agreement and all other related transactions at a
special meeting of the Escalade stockholders to be convened in connection with
the proposed asset sale.
On August 21, 1998, the Company publicly announced that Sportcraft has
informed Escalade of three conditions that Sportcraft believes constitute
potential impediments to the closing of the asset sale under the terms of the
Purchase Agreement. These conditions are: (1) uncertainty regarding Sportcraft's
ability to obtain the necessary financing to pay the agreed upon $74.5 million
purchase price for the assets of Escalade Sports; (2) whether Escalade will be
able to obtain third party consent to the assignment of a material contract to
Sportcraft; and (3) Sportcraft's concern that Escalade Sports' 1998 sales
prospects will not be at desired levels, which Sportcraft claims would
constitute a material adverse effect.
Sportcraft also informed Escalade that it believes it would be
appropriate for the parties to discuss whether it would make sense to consider
an early termination of the Purchase Agreement in order to minimize fees and
expenses for both parties. Following unsuccessful negotiations between the
parties over the terms and conditions upon which Escalade and Sportcraft could
meet to discuss the above issues, Sportcraft further informed Escalade that
Sportcraft intends to terminate the Purchase Agreement when permitted to do so
under the terms of the Purchase Agreement based on one or more of the reasons
described above.
Escalade does not intend to terminate the acquisition agreement at this
time and is proceeding to take all actions required of Escalade to close the
sale of the assets of Escalade Sports to Sportcraft. Escalade expects Sportcraft
to satisfy its obligations under the Purchase Agreement, but, based on
communications received to date from Sportcraft, Escalade believes that material
uncertainty exists as to whether Sportcraft will complete the purchase of the
Escalade Sports assets.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits
(a) Financial Statements of Business Acquired.
Not Applicable.
(b) Pro Forma Financial Information.
Not Applicable.
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(c) Exhibits.
The following exhibits are filed with this Report on Form 8-K:
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<CAPTION>
Exhibit No. Exhibit
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<C> <S>
2.1 Asset Purchase Agreement dated June 26, 1998, among the
Company, Indian, Harvard, JEN Sports and Sportcraft.*
2.2 Amendment No. 1 to Asset Purchase Agreement dated June
26, 1998, among the Company, Indian, Harvard, JEN Sports
and Sportcraft.*
2.3 Form of Irrevocable Proxy.**
99.1 Press release dated June 26, 1998.
99.2 Press release dated August 21, 1998.
</TABLE>
* Incorporated by reference to Appendix A of the Registrant's preliminary
proxy materials filed with the Commission on July 2, 1998 relating to
the Registrant's special meeting of stockholders to be called in
connection with the asset sale and the transactions contemplated
thereby.
** Incorporated by reference to Exhibit B to Appendix A of the
Registrant's preliminary proxy materials filed with the Commission on
July 2, 1998 relating to the Registrant's special meeting of
stockholders to be called in connection with the asset sale and the
transactions contemplated thereby.
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.
Date: August 25, 1998 ESCALADE, INCORPORATED
/s/ JOHN R. WILSON
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John R. Wilson,
Vice President and Chief Financial Officer
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Exhibit 99.1
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Escalade, Incorporated.
P.O. Box 889
817 Maxwell Avenue
Evansville, IN 47706-0889
Phone (812) 467-1200
Fax (812) 467-1300
FOR IMMEDIATE RELEASE
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ESCALADE TO SELL ESCALADE SPORTS
EVANSVILLE, INDIANA, June 26, 1998 (Nasdaq: ESCA) -- Escalade,
Incorporated ("Escalade") today announced that it has signed a definitive
agreement to sell substantially all of the assets of its sporting goods business
to JEN Sports, Inc., a wholly owned subsidiary of Sportcraft, Ltd. Escalade
currently operates its sporting goods business under the name "Escalade Sports"
through its Indian Industries and Harvard Sports subsidiaries. The purchase
price for the sale of the assets is $74.5 million, subject to adjustment as
provided in the definitive agreement.
Escalade's Board of Directors has unanimously approved the transaction.
Consummation of the asset sale is subject to, among other things, approval by
Escalade's stockholders at a special meeting of stockholders expected to be held
in August 1998. The directors and executive officers of Escalade, who
collectively beneficially own approximately 33% of the outstanding shares, have
granted to Sportcraft irrevocable proxies to vote their shares in favor of the
asset sale at the special meeting of stockholders. The asset sale is currently
expected to close in the third quarter of 1998.
Robert E. Griffin, Escalade's Chairman of the Board and Chief Executive
Officer, said, "We believe that the sale of Escalade Sports is very positive for
both Escalade's stockholders and the employees of Escalade Sports. The sale of
Escalade's sporting goods business will enable Escalade to focus on expanding
its office and graphic arts products business, partially through the use of the
after tax proceeds from the asset sale. We also believe that Sportcraft is an
excellent strategic fit for Escalade Sports and that their combined strengths
will create many complementary operational and market opportunities."
Michael Nally, Sportcraft's Chief Executive Officer, said, "The
acquisition of the Escalade Sports business will significantly strengthen and
expand our presence in the sporting goods industry. We are also very pleased
that the Escalade Sports employees, with their tremendous experience in the
industry and reputation, will become a part of the Sportcraft team, and we look
forward to their significant contributions."
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Escalade, Incorporated, based in Evansville, Indiana, produces and
sells sporting goods products through Escalade Sports. Escalade also produces
and sells office and graphic arts products through Martin Yale. Escalade and its
predecessors have produced sporting goods for over 70 years and have produced
office machines for over 40 years.
Sportcraft, a privately-held company based in Mt. Olive, New Jersey, is
a market leader in indoor/outdoor sports products such as darts, dartboards,
table games, volleyball sets, badminton sets, billiard equipment and table
tennis equipment.
Contact: Robert E. Griffin or John R. Wilson
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Exhibit 99.2
Escalade, Incorporated
P.O. Box 889
817 Maxwell Avenue
Evansville, IN 47706-0889
Phone (812) 467-1200
Fax (812) 467-1300
PRESS RELEASE
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ESCALADE TO PROCEED WITH SALE OF ESCALADE SPORTS
EVANSVILLE, INDIANA, August 21, 1998 (Nasdaq: ESCA) -- Escalade,
Incorporated ("Escalade") today announced that Sportcraft, Ltd. ("Sportcraft")
has informed Escalade of three conditions that Sportcraft believes constitute
potential impediments to the closing of the previously announced purchase of
Escalade Sports by Sportcraft. These conditions are: (1) uncertainty regarding
Sportcraft's ability to obtain the necessary financing to pay the agreed upon
$74.5 million purchase price for the assets of Escalade Sports; (2) whether
Escalade will be able to obtain third party consent to the assignment of a
material contract to Sportcraft; and (3) Sportcraft's concern that Escalade
Sports' 1998 sales prospects will not be at desired levels, which Sportcraft
claims would constitute a material adverse effect.
Robert E. Griffin, Escalade's Chairman of the Board and Chief Executive
Officer, said "We are confident that Escalade will satisfy all of its conditions
to closing the sale of Escalade Sports on or before the closing date. We believe
that all of Escalade's representations and warranties to Sportcraft in the
agreement are, and will continue to be, accurate in all material respects.
Obviously, Sportcraft's financing is beyond Escalade's control, but we trust
that Sportcraft will proceed diligently to obtain its financing so that the
transaction can timely close."
Sportcraft also informed Escalade that it believes it would be appropriate
for the parties to discuss whether it would make sense to consider an early
termination of the acquisition agreement in order to minimize fees and expenses
for both parties and that Sportcraft intends to terminate the acquisition
agreement when permitted by the terms thereof. Escalade does not intend to
terminate the acquisition agreement at this time and is proceeding to take all
actions required of Escalade to close the sale of Escalade Sports to Sportcraft.
Escalade, Incorporated, based in Evansville, Indiana, produces and sells
sporting goods products through Escalade Sports. Escalade also produces and
sells office and graphic arts products through Martin Yale Industries, Inc.
Escalade and its predecessors have produced sporting goods for over 70 years and
have produced office machines for over 40 years.
Contact: Robert E. Griffin or John R. Wilson
