SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 30, 1998
HERCULES INCORPORATED
(Exact Name of Registrant as Specified in Charter)
Delaware 1-496 51-0023450
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification Number)
Hercules Plaza, 1313 North Market Street, Wilmington, DE 19894-0001
(Address of principal executive offices) (Zip Code)
Registrant's Telephone number, including area code (302) 594-5000
Item 5. Other Events.
On July 30, 1998, Hercules Incorporated ("Hercules") entered into a
definitive Agreement and Plan of Merger (the "Merger Agreement") with
BetzDearborn Inc. ("BetzDearborn") providing for, among other things, the
merger of a wholly owned subsidiary of Hercules with and into BetzDearborn,
with BetzDearborn becoming a wholly owned subsidiary of Hercules (the
"Merger"). In the Merger, holders of common shares of BetzDearborn,
including shares issued upon the conversion immediately prior to the
effective time of the Merger of shares of Series A ESOP Convertible
Preferred Stock of BetzDearborn, will receive for each such share $72 in
cash, without interest.
Consummation of the Merger is subject to certain conditions, including
approval of the Merger by shareholders of BetzDearborn and the receipt of
regulatory approvals, including the expiration or termination of the
applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
A joint press release, dated July 30, 1998, announcing the Merger was
issued by Hercules and BetzDearborn and is filed as an exhibit hereto and
incorporated by reference herein.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits.
99.1 Joint Press Release of Hercules Incorporated and
BetzDearborn, Inc. dated July 30, 1998.
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.
HERCULES INCORPORATED
Dated: July 30, 1998 By: /s/ Israel J. Floyd
________________________
Israel J. Floyd
Corporate Secretary
Index to Exhibits
Exhibit Exhibit
Number
99.1 Joint Press Release of Hercules Incorporated and
BetzDearborn Inc. dated July 30, 1998.
Exhibit 99.1
HERCULES AND BETZDEARBORN TO MERGE
CREATING GLOBAL LEADER IN SPECIALTY CHEMICALS
Combination of Complementary Paper Chemicals Businesses Will Provide
Most Complete Offering Of Products and Services To Pulp and Paper Industry
Will Also Be Leader in Chemical Treatment of Water and Industrial Processes
WILMINGTON, DE, AND TREVOSE, PA, JULY 30, 1998 -- Hercules Incorporated
(NYSE: HPC) and BetzDearborn Inc. (NYSE: BTL) today announced they have
signed a definitive merger agreement under which Hercules will acquire all
BetzDearborn shares for $72 per share in cash, or a total of approximately
$2.4 billion. Hercules will also assume approximately $700 million in
BetzDearborn debt.
The strategic combination of these leading specialty chemicals
companies will create a premier paper chemical business with the world's
most complete offering of products and services for the pulp and paper
industry. In addition, BetzDearborn's leading water and industrial process
treatment business will give Hercules another leading franchise in
specialty chemicals.
The new business enterprise, a global specialty chemical company with
pro forma combined 1997 revenues of $3.5 billion, will operate under the
Hercules name and will be headquartered in Wilmington, Delaware. The water
and industrial process treatment businesses, excluding paper process, will
continue to operate under the BetzDearborn name.
The one-step cash merger transaction, which is subject to approval of
BetzDearborn shareholders and customary conditions including regulatory
approvals, is expected to close in the fourth quarter of 1998. A committed
bank credit facility underwritten by NationsBank will be used to finance
the acquisition and refinance existing debt. Hercules expects to maintain
an investment grade credit rating. It also expects the transaction to be
accretive to cash earnings in the first year and to reported earnings per
share in the second year, with increasing levels of accretion thereafter.
Although the transaction is driven more by growth opportunities than
cost savings, both companies agree they can capture a minimum of $100
million in synergies. Hercules plans to retain BetzDearborn's strong sales
and marketing force, and talented employees in all parts of both companies
will have significant opportunities for growth and advancement.
"This transaction is a superb combination of two complementary
businesses that will create the world's premier paper chemical business and
also give us a new franchise in chemical treatment of water and industrial
process systems," said R. Keith Elliott, Hercules chairman and chief
executive officer. "On the paper chemical side, BetzDearborn is a world
leader in process chemicals with strengths in customer service and support.
By combining their expertise with our leading position in functional
chemicals and low-cost manufacturing capabilities, we will be better
positioned to meet paper manufacturers' growing demand for integrated
services and innovative, cost-effective solutions. We share strong
technology skills, similar chemistries and a focus on reducing operating
costs for customers, which will create new growth opportunities for the
combination."
Elliott added, "Hercules is committed to its shareholders and creating
value for them. Growth is a key part of that commitment. Acquisitions can
help provide that growth, but require a disciplined approach. Like our
recent acquisitions of Citrus Colloids, Houghton's paper chemicals
business, and FiberVisions, this transaction meets or exceeds our stated
criteria of fitting well with our core franchises, producing significant
accretion in both cash earnings and reported earnings, and achieving an
internal rate of return that is at least a 50% premium to the cost of
capital."
William R. Cook, BetzDearborn chairman, president and chief executive
officer, said: "This strategic merger is an extraordinarily good business
fit for both our companies. We are bringing together the best attributes
of BetzDearborn and Hercules to create a powerful new specialty chemicals
company with the technology, financial and manufacturing strength to
achieve strong growth in today's highly competitive global marketplace.
The merger will create value for our shareholders, provide valuable
benefits to our customers and provide the vast majority of our highly
talented and dedicated employees with significant opportunities for career
growth and advancement."
Hercules will be led by Elliott and Cook as co-CEOs, with Elliott
serving as chairman of the board and Cook as vice chairman. Other senior
managers of the combined company will be: Vincent J. Corbo, Hercules
president and chief operating officer and a director, and George MacKenzie,
Jr., Hercules senior vice president and chief financial officer, who will
continue in these positions; Dominick W. DiDonna, senior vice president
international and general manager of paper technology at Hercules, who will
be senior vice president of the combined paper business; and Larry V.
Rankin, executive vice president at BetzDearborn and chairman of
BetzDearborn Canada, who will be senior vice president of the BetzDearborn
water treatment and industrial process business.
Cook and three other BetzDearborn directors will join the Hercules
Board, increasing its size from 10 to 14 members.
Three teams will develop integration plans for implementation
immediately after closing. These integration teams, led by DiDonna for the
paper business, Rankin for the water treatment and industrial process
business, and MacKenzie for corporate functions, will all report to Corbo,
who will spearhead the effort to combine the strengths and resources of
both companies.
Warburg Dillion Read is serving as financial advisor to Hercules and
J.P. Morgan is serving as financial advisor to BetzDearborn.
BetzDearborn, headquartered in Trevose, Pennsylvania, had 1997 sales
of $1.3 billion. It is the world's premier supplier of engineered chemical
treatment programs for influent water, boiler, cooling, wastewater and
process systems in industrial, commercial and institutional establishments.
The company serves customers in over 90 countries with a global workforce
of 6,400 employees, 31 production plants worldwide, five research and
development centers and regional centers in North America, Europe, Latin
America and Asia Pacific. For more information, visit the BetzDearborn
website at www.betzdearborn.com.
Hercules manufactures chemical specialty products for a variety of
markets worldwide. Its businesses include Aqualon, FiberVisions, Food
Gums, Paper Technology and Resins. With shareholder value as its guiding
focus, the corporation concentrates on value-added, high-performance
products where it has a market or technology advantage. Hercules, with
$1.9 billion in 1997 sales, has approximately 7,000 employees, 49
manufacturing plants, two major research centers and eight applications
laboratories. For more information, visit the Hercules website at
www.herc.com.
# # #
Contacts:
Hercules
Media: Claire LaMar Carey (302) 594-6030, [email protected]
Investors: Bob Gallant (302) 594-5254, [email protected]
BetzDearborn
Media: R.J. Palangio (215) 953-2417
Investors: W.T. Drury (215) 953-2355
This news release includes forward-looking statements, as defined in the
Private Securities Litigation Reform Act of 1995, reflecting management's
current analysis and expectations, based on reasonable assumptions.
Results could differ materially depending on such factors as business
climate, economic and competitive uncertainties, higher manufacturing
costs, reduced level of customer orders, risks in developing new products
and technologies, environmental and safety regulations and clean-up costs,
foreign exchange rates, and adverse changes in economic and political
climates around the world. As appropriate, additional factors are
contained in reports filed with the Securities and Exchange Commission.
This paragraph is included to provide safe harbor for forwarding-looking
statements, which are not required to be publicly revised as circumstances
change.
