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 (Date of Earliest Event Reported): March 28, 1996
JOHNSTON INDUSTRIES, INC.
______________________________________________________
(Exact name of Registrant as specified in its charter)
Delaware 1-6687 11-1749980
___________________ ____________________ ________________________
(State or other (Commission File (IRS Employer
jurisdiction Number) Number)
of incorporation)
105 Thirteenth Street 31901
Columbus, Georgia
________________________________________ _________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (706) 641-3140
Not Applicable
__________________________________________________________________
(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On March 28, 1996, Johnston Industries, Inc. ("Johnston" or
the "Company") completed the previously announced acquisition of
the publicly held shares of the Company's majority owned
subsidiary, Jupiter National, Inc., ("Jupiter"). The acquisition
was accomplished by means of the merger (the "Merger") of JI
Acquisition Corp., a wholly owned subsidiary of Johnston ("Merger
Sub"), with and into Jupiter, pursuant to the Amended and
Restated Agreement and Plan of Merger, dated as of August 16,
1995 and amended and restated as of January 26, 1996, by and
among Johnston, Merger Sub and Jupiter (the "Merger Agreement").
As a result of the Merger, Jupiter became a wholly owned
subsidiary of Johnston. The Merger was approved by the requisite
vote of stockholders of Jupiter at a special meeting held on
March 12, 1996, and was effected by the filing of a Certificate
of Merger with the Secretary of State of Delaware on March 28,
1996. Pursuant to the Merger Agreement, at the effective time of
the Merger on March 28, 1996, each outstanding share of common
stock of Jupiter (other than shares held by Johnston) was
cancelled and converted into the right to receive $33.97 per
share in cash, without interest (the "Merger Consideration").
The Merger Consideration was determined in negotiations between
Johnston and a committee of independent members of the Jupiter
board of directors, and their respective legal and financial
advisors. The Merger will be accounted for as a purchase by
Johnston of the minority shares.
Prior to the consummation of the Merger, Jupiter was a
majority owned subsidiary of the Company, engaged principally in
two businesses -- textile manufacturing and venture capital
investing. Through its subsidiary, Wellington Sears Company,
Jupiter manufactures and sells cotton and polyester textiles
principally for the home furnishings and industrial products
markets. In addition, principally through its subsidiary,
Greater Washington Investments, a registered small business
investment company, Jupiter holds a portfolio of venture capital
investments which represent debt and equity interests in a number
of developing companies. Johnston
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expects to achieve certain operational and cost efficiencies from
combining certain administrative functions and operations of
Wellington Sears Company with those of Johnston or its other
operating units. However, Johnston does not intend to continue
Jupiter's venture capital business over the long-term, and, will
explore alternative strategies to dispose of that business.
In order to obtain the funds necessary to finance the Merger
and related transactions, and to refinance the Company's existing
debt, Johnston obtained a $160,000,000 secured credit facility
pursuant to a Credit Agreement, dated March 28, 1996, by and
among the Company, Opp and Micolas Mills, Inc., Southern Phenix
Textiles, Inc., Wellington Sears Company, Johnston Industries
Composite Reinforcements, Inc., and T.J. Beall Company
(collectively, the "Borrowers"), the banks named therein (the
"Banks"), The Chase Manhattan Bank, N.A., as administrative
agent, NationsBank, N.A., as syndication agent, and Chase
Securities, Inc., as arranger (the "Credit Agreement"). Under
the Credit Agreement, the Banks have made available to the
Borrowers up to $160,000,000 principal amount of senior secured
financing in the form of (i) a term loan in the principal amount
of $40,000,000 maturing in five years ("Term Loan A"), (ii) a
term loan in the principal amount of $40,000,000 maturing in
seven years ("Term Loan B"), and (iii) revolving credit loans in
an aggregate principal amount of up to the lesser of $80,000,000
or the borrowing base then in effect (the "Revolving Credit
Loan"). The borrowing base is an amount equal to (i) 85% of the
Borrowers' eligible accounts receivable, plus (ii) a percentage
of the Borrowers' eligible inventory (both subject to certain
eligibility criteria), plus (iii) up to 25% of the orderly
liquidation value of the Borrowers' plant and equipment.
Johnston will be required to make scheduled amortization
payments in connection with the Term Loans as follows: (i) with
respect to Term Loan A, $8 million on the second anniversary of
the Closing Date, $10 million on the third and fourth
anniversaries of the Closing Date, and $12 million on the fifth
anniversary of the Closing Date; and (ii) with respect to Term
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Loan B, $500,000 on the second, third, fourth and fifth
anniversaries of the Closing Date, and $19,000,000 on the sixth
and seventh anniversaries of the Closing Date.
All amounts outstanding under the Credit Agreement will bear
interest at (i) the Base Rate or LIBO Rate (as defined in the
Credit Agreement), plus an applicable margin based upon the type
of loan and the ratio of Johnston's consolidated funded debt to
consolidated earnings before interest, taxes, depreciation and
amortization. The Base Rate is defined as the higher of (i) the
Federal Funds Rate, as published by the Federal Reserve Bank of
New York, plus 1/2 of 1 percent or (ii) the prime commercial
lending rate of the Administrative Agent as announced from time
to time. With respect to Term Loan A and the Revolving Credit
Loan, the applicable margin ranges from zero to 125 basis points
for loans bearing interest at a rate based upon the Base Rate
("Base Rate Loans") and 100 to 250 basis points for loans bearing
interest based upon the LIBO Rate ("Eurodollar Loans"). With
respect to Term Loan B, the applicable margin is 175 basis points
for Base Rate Loans and 300 basis points for Eurodollar Loans.
The Credit Agreement provides for certain customary
affirmative and negative covenants and events of default,
including, but not limited to, covenants regarding Johnston's
capital expenditures, funded debt, tangible net worth, leverage,
working capital, interest coverage and fixed charge coverage, as
well as limitations on other indebtedness, mergers, acquisitions
(and asset sales), other liens and investments. As security for
the obligations of the Borrowers under the Credit Agreement, the
banks have been granted a security interest in substantially all
the assets owned or hereafter acquired by the Borrowers.
Under the Credit Agreement, the loans are subject to certain
mandatory prepayments of excess cashflow (as defined) or proceeds
from sales of assets, insurance recoveries or issuances of debt
or equity. In addition, voluntary prepayments are permitted in
whole or in part, with
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prior notice but without premium or penalty for base rate loans
or upon the expiration date of each Eurodollar Loan having an
unexpired interest period.
In connection with the Credit Agreement, Johnston agreed to
pay the Banks a fee equal to 2.00% of the aggregate principal
amount available for drawing under the letters of credit. In
addition, the Credit Agreement provides that Johnston will pay a
commitment fee ranging from 25 to 50 basis points per annum of
the unused portion of the Revolving Loan plus an annual
administrative fee.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements
As of the time of filing this Current Report, it is
impracticable to provide the financial statements required by
this Item 7(a). The registrant intends to file the required
financial statements as soon as practicable and in any event not
later than 60 days after the date of this Current Report.
(b) Pro Forma Financial Information
As of the time of filing this Current Report, it is
impracticable to provide the pro forma financial information
required by this Item 7(b). The registrant intends to file the
required pro forma financial information as soon as practicable
and in any event not later than 60 days after the date of this
Current Report.
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(c) Exhibits.
The exhibits listed in the exhibit index are filed as a
part of or incorporated by reference in this Current Report.
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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 thereunto duly authorized.
JOHNSTON INDUSTRIES, INC.
(Registrant)
Dated: April 1, 1996 By:
John W. Johnson
Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description
10.1* Amended and Restated Agreement and Plan of
Merger dated as of August 16, 1995 and amended
and restated as of January 26, 1996, by and
among Johnston Industries, Inc., JI Acquisition
Corp. and Jupiter National, Inc.
99.1 Press Release issued by Johnston Industries,
Inc. on March 29, 1996.
* Filed as exhibit (c)(1) to Amendment No. 2 to the
Transaction Statement on Schedule 13E-3 filed by Johnston
Industries, Inc., JI Acquisition Corp., Jupiter National,
Inc., and David L. Chandler on February 8, 1996 (Commission
File Number 1-9791) and incorporated herein by reference.
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EXHIBIT 99.1
Contacts: Gerald B. Andrews or John W. Johnson
Johnston Industries, Inc.
(706) 641-3140
Pat Westring or Joel Pomerantz
The Dilenschneider Group
(212) 922-0900
JOHNSTON INDUSTRIES, INC. COMPLETES ACQUISITION OF JUPITER
COLUMBUS, GA, March 29 -- Johnston Industries, Inc. (NYSE:JII),
a diversified textile manufacturing firm, said today it has
completed the previously announced acquisition of the remaining
publicly held shares of its majority subsidiary, Jupiter National, Inc.,
for approximately $39.2 million in cash including related
transactions. Minority shareholders of Jupiter, who approved the
transaction at a special meeting earlier this month, will receive
$33.97 per share for their Jupiter stock.
In order to obtain the funds necessary to finance the acquisition
and related transactions, and to refinance the company's existing debt,
Johnston obtained a $160 million secured credit facility from a syndicate
of financial institutions.
Jupiter's textile unit, Wellington Sears Company is one of the
oldest and most respected names in the textile manufacturing sector, and
will be operated as a division of Johnston along with Johnston's
existing operating units -- Opp and Micolas Mills, Southern Phenix
Textiles, and Johnston Industries Composite Reinforcements. Johnston
does not intend to continue Jupiter's venture capital business, and
is exploring alternatives to dispose of the venture capital investment
portfolio. The net proceeds of the sale of the investment portfolio
will be used to repay debt.
Johnston Industries, Inc. is a diversified manufacturer of
textile fabrics with annual sales of approximately $350 million. In
addition to Wellington Sears, its other operating units -- Opp and
Micolas Mills and Southern Phenix Textiles -- produce woven and non-
woven textiles for the industrial and home furnishings sector and,
to a lesser extent, for the basic automotive and apparel sectors.
The company's newest venture, Johnston Industries Composite
Reinforcements, Inc. makes VECTROPLY (R) and other sophisticated
multiaxial non-crimp reinforcing fabrics from fiberglass, carbon
and aramid fibers used in engineering composites for a wide variety
of applications.
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