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): April 28, 1999
____________________
LAWTER INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-07558 36-1370818
(State or other jurisdiction of (Commission File (IRS Employer
incorporation or organization) Number) Identification No.)
1 Terra Way
8601 95th Street
Pleasant Prairie, Wisconsin 53158
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 414-947-7300
____________________
<PAGE>
Item 5. Other Events.
On April 28, 1999, Lawter International, Inc. (the "Company") and Eastman
Chemical Company ("Parent") announced that they had entered into an Agreement
and Plan of Merger (the "Merger Agreement") pursuant to which Lipstick
Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of Parent
("Purchaser"), will commence a cash tender offer (the "Offer"), to purchase all
the issued and outstanding shares of common stock of the Company, $1.00 par
value per share (the "Shares"), at a price of $12.25 per Share, net to the
seller in cash, without interest thereon, subject to the terms and conditions of
the Offer. The obligation of Purchaser to accept for payment or pay for Shares
is subject to the satisfaction of the condition that there shall be validly
tendered in accordance with the terms of the Offer prior to the expiration date
of the Offer and not withdrawn a number of Shares which, together with the
Shares then owned by Parent and Purchaser, represents at least a majority of the
Shares outstanding on a fully diluted basis, and certain other conditions. The
Merger Agreement provides that, following the consummation of the Offer, upon
the satisfaction or waiver of certain conditions, Purchaser will be merged with
and into the Company (the "Merger"), with the Company continuing as the
surviving corporation (the "Surviving Corporation"). In the Merger, each Share
outstanding immediately prior to the effective time of the Merger (other than
Shares held in the treasury of the Company, Shares owned by Parent, Purchaser or
any other wholly owned subsidiary of Parent, or Shares held by stockholders who
properly perfect their dissenters' rights under the Delaware General Corporation
Law) will be converted, by virtue of the Merger and without any action by the
holder thereof, into the right to receive $12.25 per Share (or any higher price
paid per Share in the Offer) (the "Offer Price"), net to the seller in cash,
without interest thereon.
In connection with the Merger Agreement and pursuant to a Stock Option Agreement
dated as of April 28, 1999 among the Company, Parent and Purchaser, the Company
has granted Purchaser an irrevocable option to purchase up to that number of
newly issued Shares equal to the number of Shares (not to exceed 19.9% of the
number of Shares outstanding on April 28, 1999) that, when added to the number
of Shares owned by Purchaser and its affiliates immediately following
consummation of the Offer, shall constitute 90% of the Shares then outstanding
on a fully diluted basis (giving effect to the issuance of such option shares)
for a consideration per option share equal to the Offer Price.
As of April 28, 1999, there were approximately 33,000,000 Shares issued and
outstanding. The transaction is subject to various regulatory approvals,
including Hart-Scott-Rodino clearance, and to the satisfaction of certain other
conditions, and also provides for the payment of a break-up fee and
reimbursement of certain expenses under certain conditions.
The Company is a worldwide leader in the development, production and marketing
of specialty products for the inks and coatings markets. The joint press
release of the Company and Parent announcing the signing of the Merger Agreement
is filed herewith as Exhibit 99.1 and is incorporated herein by reference.
The Company's press release announcing its earnings for the quarter ended March
31, 1999 is filed herewith as Exhibit 99.2 and is incorporated herein by
reference.
<PAGE>
Item 7. Financial Statements and Exhibits.
Exhibit
Number Description of Exhibit
------- ----------------------
99.1 Press Release dated April 28, 1999, of Lawter
International, Inc. and Eastman Chemical Company
announcing the signing of the Merger Agreement.
99.2 Press Release dated April 28, 1999 of Lawter
International, Inc. announcing first quarter earnings.
<PAGE>
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.
LAWTER INTERNATIONAL, INC.
By: /s/ John P. O'Mahoney
John P. O'Mahoney
Chairman and Chief Executive Officer
Dated: April 28, 1999
Exhibit 99.1
For Release After 7:00 a.m. (EDT)
Wednesday, April 28, 1999
EASTMAN CHEMICAL COMPANY: LAWTER INTERNATIONAL, INC.
Rod Irvin, APR Mark Joslin
Director, Corporate Communications CFO
PHONE: (423) 229-4008 PHONE: (414) 947-7300
EMAIL: [email protected] EMAIL: [email protected]
Eastman to acquire Lawter International, Inc. for $12.25 per share
KINGSPORT, Tenn. and PLEASANT PRAIRIE, Wis.--April 28, 1999--Eastman Chemical
Company (NYSE-EMN) and Lawter International, Inc. (NYSE-LAW) today announced
that their boards of directors have approved a definitive merger agreement under
which Eastman will acquire the shares of Lawter for approximately $400 million
in cash. Including debt, the transaction is valued at approximately $500
million.
Under the terms of the agreement, Eastman will commence a tender offer to
purchase all outstanding shares of Lawter common stock for $12.25 per share in
cash. Lawter's board of directors has approved the merger agreement and
recommended that Lawter stockholders tender their shares. Following completion
of the tender offer, Eastman intends to consummate a cash merger to acquire any
shares not previously tendered. Lawter has approximately 33 million shares
outstanding on a diluted basis.
The transaction, which will be accounted for as a purchase, is anticipated to be
accretive to Eastman's earnings in the first full year after the merger. The
transaction increases Eastman's presence in the coatings, inks, resins and
adhesives market s to approximately one billion dollars in annual revenues.
"This transaction represents a significant step in Eastman's strategy of
pursuing growth opportunities in specialty chemicals, which are characterized by
higher earnings and lower cyclicality," said Earnest W. Deavenport, Jr.,
Eastman's Chairman and CEO.
"Lawter has 59 years of experience focusing on satisfying customers in the inks
market," Deavenport said. "We are very excited about this acquisition and look
forward to welcoming Lawter employees to Eastman."
-More-
<PAGE>
Eastman to acquire Lawter International, Inc. for $12.25 per share
Page Two
Bruce Moore, Vice President and General Manager of Coatings, Inks & Resins at
Eastman, said, "This acquisition creates value by leveraging our combined
strengths in customer relationships, global manufacturing and new product
development. We expect the combined business to grow at a significantly faster
rate than either business could on a stand-alone basis, offering our customers a
multitude of products and technology from a single source," he said.
John O'Mahoney, Chairman and CEO of Lawter International, said, "This agreement
is in line with our strategic goals and philosophy. It benefits our
shareholders, our employees and our customers. Our customers will benefit from
the combination of Lawter's and Eastman's technical and operating capabilities,
a renewed commitment to research supporting a broader product line and
strengthening our ability to be the supplier of choice in an evolving industry."
The tender offer is conditioned, among other things, upon a minimum tender of
50.1 percent of the outstanding Lawter shares on a fully diluted basis and
receipt of regulatory approvals. Merrill Lynch & Co. acted as the financial
advisor to Eastman in connection with this transaction. ABN AMRO Inc. served
as financial advisor to Lawter.
Headquartered in Pleasant Prairie, Wis., Lawter International, Inc. is a
worldwide leader in the development, production and marketing of specialty
products for the inks and coatings markets. Lawter, which employs approximately
600 people, reported sales of US$213 million in 1998.
Headquartered in Kingsport, Tenn., Eastman manufactures and markets plastics,
chemicals and fibers. The company employs 16,000 people in more than 30
countries and had 1998 sales of US$4.48 billion.
Additional information is available at eastman.com and lawter.com.
# # #
FORWARD-LOOKING STATEMENT
This release contains forward-looking statements within the definition of the
Securities Act of 1933 and the Securities Exchange Act of 1934. Although the
companies believe that these statements are based on reasonable assumptions,
they can give no assurance that their goals will be achieved. The words
"estimates," "believes," "expects," "anticipates," "plans," and "intends,"
variations of such words, and similar expressions are intended to identify
forward-looking statements that involve risk and uncertainty. These statements
are necessarily based upon various assumptions involving judgements with respect
to the future including, among others, the ability to achieve synergies and
revenue enhancements; national, international, regional a nd local economic,
competitive and regulatory conditions and developments; technological
developments; and other uncertainties, all of which are difficult to predict and
many of which are beyond the control of the companies. Accordingly, while the
companies believe that the assumptions are reasonable, there can be no assurance
that they will approximate actual experience, or that the expectations will be
realized. Other risk factors are detailed from time to time in the two
companies' SEC reports.
# # #
Exhibit 99.2
NEWS RELEASE
For further information, please contact:
Mr. John O'Mahoney, Chairman/CEO, or Mr. Mark Joslin, CFO & Treasurer
LAWTER INTERNATIONAL FIRST QUARTER EPS INCREASES 21%
Pleasant Prairie, Wisconsin - April 28, 1999 -- Lawter International,
Inc. announced today fully diluted earnings per share of $0.17 for the quarter
ended March 31, 1999 compared to $0.14 for the first quarter of 1998.
Sales revenue for the first quarter of 1999 was $55,102,000, an improvement of
4% over first quarter 1998 sales revenue of $52,755,000. Sales volumes were up
9% for the quarter including the business purchased on December 31, 1998 from
Robert Kraeme r. Excluding this acquisition, worldwide sales volumes would have
been up 1%. Sales gains in North America were largely offset by lower volumes
in Europe, where difficult economic conditions adversely impacted the European
graphic arts market, part icularly in January.
Gross margins for the first quarter of 1999 improved to 31% of sales compared to
30% of sales for the 1998 period. Margins in 1999 benefited from cost reduction
programs initiated in Europe in 1998 and from strategic purchases of raw
materials. By holding growth in selling, administration, research and
distribution expenses to 3%, income from operations of $9,859,000 for the first
quarter of 1999 was 12% ahead of 1998 first quarter income from operations.
Despite the improvement in operating earnings, interest expense incurred on
borrowings to repurchase 11.5 million shares of the company stock on April 1,
1998, resulted in lower net earnings of $5,468,000 for the first quarter of
1999,14% below 1998 first quarter net earnings. With fewer shares outstanding
in 1999 however, earnings per share increased 21% over the comparable 1998
period.
Lawter is a specialty chemical company, with 17 facilities in 11 countries
throughout the world. It is a major manufacturer and distributor of printing
ink vehicles, wax compounds and powders, and synthetic and hydrocarbon resins
to the graphic arts industry. Lawter also serves the industrial coatings,
adhesives and rubber industries.
This press release contains forward-looking statements which are not historical
facts. These statements involve risks and uncertainties that could cause actual
results to differ materially, including, but not limited to, certain global and
regional economic conditions and factors detailed in the Company's Securities
and Exchange Commission filings.
<PAGE>
News Release - continued:
CONDENSED CONSOLIDATED REPORT OF EARNINGS
(In thousands, except per share figures)
(Unaudited)
Three Months Ended
March 31
------------------ % Inc.
1999 1998 (Dec.)
-------- -------- ------
Net Sales $ 55,102 $ 52,755 4
Cost of Goods Sold 38,014 36,935 3
-------- --------
Gross Margin $ 17,088 $ 15,820 8
Selling, Admin., Research
and Distribution Exps. 7,229 7,017 3
-------- --------
Income from Operations $ 9,859 $ 8,803 12
Investment Income 360 1,072 (66)
Interest Expense (2,408) (745) 223
-------- --------
Earnings before Tax $ 7,811 $ 9,130 (14)
Income Taxes 2,343 2,739 (14)
-------- --------
Net Earnings $ 5,468 $ 6,391 (14)
======== ========
Earnings Per Share $ 0.17 $ 0.14
Average Shares Outstanding 33,068 45,533
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
Mar. 31 Dec. 31
1999 1998
-------- --------
Cash and Equivalents $ 43,825 $ 40,078
Other Current Assets 87,127 92,964
Net PP&E 88,203 92,142
Other Assets 27,367 29,066
-------- --------
$246,522 $254,250
======== ========
Current Liabilities $ 51,974 $ 56,332
Deferred Income Taxes 35,816 35,344
Long-Term Obligations 129,050 129,050
Stockholders' Equity 29,682 33,524
-------- --------
$246,522 $254,250
======== ========
