SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K/A
(AMENDMENT NO. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): MARCH 12, 1998
American Pacific Corporation
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(Exact name of registrant as specified in its charter)
DELAWARE 1-8137 59-6490478
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
3770 Howard Hughes Parkway, Suite 300, Las Vegas, Nevada 89109
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Address of principal executive offices
Registrant's telephone number, including area code: (702) 735-2200
N/A
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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.
On March 12, 1998, the Registrant consummated the acquisition
from Kerr-McGee Chemical Corporation ("Kerr-McGee") of certain intangible assets
(collectively, the "Rights") related to Kerr McGee's production of Ammonium
Perchlorate ("AP") for a purchase price of $39.0 million (the "Acquisition").
Under the purchase agreement entered into between the parties on October 10,
1997 (the "Purchase Agreement"), the Registrant also acquired an option (the
"Option") to purchase all or any portion of the inventory of AP stored at Kerr-
McGee's premises on the closing date of the Acquisition (the "Closing Date"),
which AP is not owned by, or identified to a firm order from, a Kerr-McGee
customer (the "Inventory"). The Option is exercisable from time to time within
the 12 month period commencing on the Closing Date (the "Option Period"). The
purchase price of the acquired Rights and Option were determined by arms length
negotiations between the parties. There exists no material relationship between
the Registrant, any of its affiliates, directors and officers or any associates
thereof, and Kerr-McGee.
The Acquisition does not include Kerr-McGee's production
facilities (the "Production Facilities") and certain related water and power
supply agreements used by Kerr-McGee in the production of AP. Under the Purchase
Agreement, Kerr-McGee ceased the production and sale of AP, except under the
certain limited circumstances described below, and the Production Facilities may
continue to be used by Kerr- McGee for production of AP under those
circumstances. Under the Purchase Agreement, Kerr-McGee has reserved a
perpetual, royalty-free, nonexclusive license to use any of the technology
forming part of the Rights as may be necessary or useful to use, repair or sell
the Production Facilities (the "Reserved License").
Under the Purchase Agreement, Kerr-McGee reserves the right to
sell the Inventory to the extent not purchased by the Registrant pursuant to the
Option, to process and sell certain reclaimed AP that is not suitable for use in
solid fuel rocket motors, and to produce and sell AP (i) to fulfill orders
scheduled for delivery after the closing, subject to making payments to the
Registrant with respect to such orders, as provided in the Purchase Agreement
and (ii) in the event of the Registrant's inability to meet customer demand or
requirements, breach of the Purchase Agreement or termination of the
Registrant's AP business.
Concurrently with the closing under the Purchase Agreement,
the Registrant completed a private placement of $75.0 million principal amount
of its 9 1/4% Senior Notes due 2005 to institutional investors through Credit
Suisse First Boston Corporation. A portion of the proceeds of such placement
were utilized to pay the purchase price under the Purchase Agreement.
The Registrant has determined that a business was not acquired in the
Acquisition and that the Rights acquired have no independent value to the
Registrant apart from the overall benefit of the transaction that, as a result
thereof, Kerr-McGee has ceased production of AP (except in the limited
circumstances referred to
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above), thereby leaving the Registrant as the sole North American supplier of
AP. Since they have no independent value to the Registrant, the Registrant has
assigned no value to the Rights acquired and has assigned the entire purchase
price to an unidentified intangible consisting of the benefit referred to above.
The Registrant intends to amortize the purchase price for the unidentified
intangible over ten years, the length of the terms of pricing contracts with two
principal AP customers referred to below.
In connection with the Acquisition, the Registrant entered into an
agreement with Thiokol Corporation ("Thiokol") with respect to the supply of AP
through the year 2008. The agreement, which was contingent upon consummation of
the Acquisition, provides that during its term Thiokol will make all of its AP
purchases from the Registrant. The agreement also establishes a pricing matrix
under which AP unit prices vary inversely with the quantity of AP sold by the
Registrant to all of its customers. The Registrant understands that, in addition
to the AP purchased from the Registrant, Thiokol may use AP inventoried by it in
prior years and AP recycled by it from certain existing rocket motors.
In connection with the Acquisition, the Registrant also entered into an
agreement with Alliant Techsystems Incorporated ("Alliant") to extend an
existing agreement through the year 2008. The agreement establishes prices for
any AP purchased by Alliant from the Registrant during the term of the agreement
as extended. Under this agreement Alliant agrees to use its efforts to cause the
Registrant's AP to be qualified on all new and current programs served by
Alliant's Bacchus Works.
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Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(a) Financial Statements of Businesses Acquired.
Not applicable. The acquisition reported herein did not
involve the acquisition of a business within the meaning of Rule 11- 01(d) of
Regulation S-X.
(b) Pro Forma Financial Information.
Pro Forma Financial Information, presented under the
requirements of Rule 11-01(a)(8) of Regulation S-X, is incorporated herein by
reference to the Registrant's Current Report on Form 8-K, dated February 19,
1998 and filed March 3, 1998.
(c) Exhibits:
2.1 Asset Purchase Agreement dated as of October 10, 1997
between AMPAC, Inc. and Kerr-McGee Chemical
Corporation, incorporated herein by reference to
Exhibit 99.1 to the Registrant's Current Report on
Form 8-K, dated February 19, 1998 and filed March 3,
1998.
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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.
AMERICAN PACIFIC CORPORATION
Dated: July 9, 1998 By: /s/ David N. Keys
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Name: David N. Keys
Title: Executive Vice President and
Chief Financial Officer
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