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):
August 9, 1999
INTERNATIONAL MULTIFOODS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-6699 41-0871880
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
200 East Lake Street, Wayzata, Minnesota 55391
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (612) 594-3300
Not applicable
(Former name or former address, if changed since last report)
Item 5. Other Events.
On August 9, 1999, International Multifoods Corporation (the
"Company") announced that it has entered into a definitive agreement to
sell it's discontinued Venezuelan consumer and commercial foods
operation to Gruma, S.A. de C.V. See the Company's press release dated
August 9, 1999, attached hereto as Exhibit 99.1, which is incorporated
by reference in this Current Report on Form 8-K.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
99.1 Press release of International Multifoods
Corporation dated August 9, 1999.
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.
INTERNATIONAL MULTIFOODS CORPORATION
Date: August 9, 1999 By /s/ William L. Trubeck
William L. Trubeck
Senior Vice President, Finance
and Chief Financial Officer and
President, Latin America
Operations
EXHIBIT INDEX
99.1 Press release of International Multifoods Corporation dated
August 9, 1999.
Exhibit 99.1
[INTERNATIONAL MULTIFOODS CORPORATION LETTERHEAD]
NEWS RELEASE
FOR IMMEDIATE RELEASE Contact: Jill Schmidt, (612) 594-3320, or
Tony Brausen, (612) 594-3385
International Multifoods Corporation
Javier Velez or Rogelio Sanchez,
52-8-399-3310
Gruma, S.A. de C.V.
INTERNATIONAL MULTIFOODS COMPLETES DIVESTITURE
OF VENEZUELA FOODS BUSINESS
Gruma buys Venezuelan consumer and commercial operation
Multifoods focuses on building its foodservice
distribution and manufacturing presence
WAYZATA, Minn., Aug. 9 - International Multifoods Corp. (NYSE: IMC)
today announced that it has entered into a definitive agreement to sell
its discontinued Venezuelan consumer and commercial foods operation to
Gruma, S.A. de C.V. (NYSE: GMK) for approximately $76.5 million. The
transaction is subject to U.S. government regulatory approval and is
expected to close by the end of August.
Under terms of the agreement, International Multifoods will receive
a note from Gruma in the amount of approximately $18.5 million, payable
over five years at an annual interest rate of 7-1/2 percent, in exchange
for the stock in International Multifoods' wholly owned subsidiary. The
$18.5 million is subject to closing adjustments, if any. Gruma also
will pay off about $58 million in debt, which represents all of the
company's outstanding Venezuelan debt.
Today's transaction completes the divestiture of International
Multifoods' former Venezuela Foods businesses.
"This action is another important step in International Multifoods'
transformation as we focus on becoming a leading distributor and
manufacturer to the foodservice industry in North America," said Gary E.
Costley, chairman, president and chief executive officer. "With the
sale of Venezuela Foods, we can now turn our full attention to
accelerating performance, strengthening and growing our core businesses,
and broadening our capabilities to better meet the needs of foodservice
operators."
Costley noted that the sale of the Venezuelan operation will
generate a $12 million to $14 million improvement in the company's
Economic Value Added over the next 12 months.
"The acquisition is an excellent strategic fit for Gruma, enabling
us to build on our current position in grain-based products and
enhancing our ability to serve the Latin American marketplace," said
Javier Velez, Gruma's chief financial officer. "MONACA has a reputation
for quality products and good employees. We look forward to working
with them and growing the business."
The book value of the Venezuelan consumer and commercial foods
business's net operating assets is approximately $83 million, before
debt. In addition, International Multifoods is retaining about $12
million in Venezuelan assets, which are comprised primarily of certain
properties and accounts receivable that are expected to be divested or
collected over the next 12 to 18 months.
As a result of the sale, International Multifoods said that it
expects to record an after-tax discontinued operations charge of $11
million to $12 million, or 58 cents to 64 cents per share, in the second
quarter ending Aug. 31. This charge includes a discount from the book
value of the Venezuelan business, a write-down of the retained assets,
expenses associated with the sale and net losses up to the closing date.
In August 1998, International Multifoods announced that it intended
to divest the Venezuela Foods business. In June, International
Multifoods completed the sale of the Venezuelan agriculture and animal
feeds business, Alimentos Super-S, C.A., to La Caridad Group, a
privately held integrated poultry producer based in Venezuela, for $27.5
million in cash.
In total, the company expects to realize more than $115 million,
including the reduction of debt, from the two Venezuelan transactions
and the disposition of retained assets.
Gruma, headquartered in Nuevo Leon, Mexico, is the largest
manufacturer of corn flour in the world, and the largest manufacturer
and marketer of tortillas in the United States. The company has annual
revenues of approximately $1.5 billion. It operates subsidiaries in the
United States, Mexico, Central America and Venezuela, and employs more
than 12,800 people.
MONACA, International Multifoods' discontinued Venezuelan consumer
and commercial foods operation, is a leading manufacturer and marketer
of grain-based products in Venezuela. Its product line includes
consumer wheat flour under the Robin Hood brand, consumer corn flour
under the Juana brand and oat cereal under the Lassie brand. The
company also supplies flour and commercial baking mixes under the Robin
Hood brand to foodservice operators and in-store, retail and wholesale
bakeries in Venezuela.
Headquartered in Caracas, the consumer and commercial foods business had
fiscal 1999 sales of $230 million. The operation employs approximately
2,000 people in Venezuela and has 16 mills and other processing
facilities and 11 warehouses throughout the country.
International Multifoods is strategically focused on serving the
foodservice industry in North America as a distributor and manufacturer.
The company also is a manufacturer and marketer of consumer foods in
Canada.
This news release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are based on current expectations or beliefs,
including, but not limited to, statements concerning the company's
operations and financial performance and condition. For this purpose,
statements that are not statements of historical fact may be deemed to
be forward-looking statements. The company cautions that these
statements by their nature involve risks and uncertainties, and actual
results may differ materially depending on a variety of important
factors, including, among others, the impact of competitive products and
pricing; market conditions and weather patterns that may affect the
costs of grain and other raw materials; changes in laws and regulations;
economic and political conditions in Venezuela, including inflation,
currency volatility, possible limitations on foreign investment,
exchangeability of currency, dividend repatriation and changes in
existing tax laws; the company's ability to complete the sale of the
Venezuela Foods business; fluctuations in foreign exchange rates; the
company's ability to realize the earnings benefits from the integration
of its distribution businesses; and other factors as may be discussed in
the company's Report on Form 10-K for the year ended Feb. 28, 1999, and
other reports filed with the Securities and Exchange Commission.
