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): January 16, 1998
MARSHALL INDUSTRIES
_____________________________________________________________
(Exact name of registrant as specified in its charter)
CALIFORNIA 1-5441 95-2048764
(State or other (Commission File Number) (IRS Employer
jurisdiction Identification No.)
of incorporation)
9320 TELSTAR AVENUE, EL MONTE, CALIFORNIA 91731-2895
_____________________________________________________________
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number including area code: (626) 307-6000
(Former name or former address, if changed since last report.)
Not applicable.
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On January 16, 1998, Marshall Industries ("Marshall") completed
the previously announced acquisition of Sterling Electronics
Corporation, a Nevada corporation ("Sterling"), by merging
MI Holdings Nevada, Inc., a wholly owned subsidiary of Marshall
("MI Holdings"), with and into Sterling (the "Merger"). The Merger was
consummated pursuant to an Agreement and Plan of Merger dated as of
September 18, 1997 among Marshall, MI Holdings and Sterling
(the "Merger Agreement").
Upon the effectiveness of the Merger, each outstanding share of
common stock, $0.50 par value per share, of Sterling (the
"Sterling Common Stock") was converted into the right to receive
$21.00 in cash and each outstanding option to purchase shares of Sterling
Common Stock was converted into the right to receive the difference
between $21.00 in cash and the exercise price of such option.
At the time of the effectiveness of the Merger, there were approximately
7,798,347 shares of Sterling Common Stock outstanding. Prior to the Merger,
Sterling Common Stock was traded on the New York Stock Exchange.
The purchase price for the Merger was a result of Marshall's
successful bid in a competitive bidding process for the
acquisition of Sterling, which bidding process is described in detail in
Sterling's Definitive Proxy Statement on Schedule 14A filed with
the Securities and Exchange Commission on December 5, 1997. In
determining the price that Marshall was willing to pay for the
Merger in such bidding process, Marshall's Board of Directors
evaluated the value that Sterling contributes to Marshall based
on Sterling's net sales, Sterling's sales and marketing
capabilities, other synergies of the two companies and cost savings resulting
from the elimination of redundancies upon their combination, as
well as comparable companies' financial information, ratios and
public market multiples and prices paid in selected comparable
transactions.
To fund the purchase price of the Merger, Marshall entered into
a new credit facility with First Union National Bank, as
administrative agent, consisting of a $100 million term loan
and a $225 million revolving credit facility. In addition to
funding the purchase price of the Merger, Marshall used proceeds
from the revolving credit facility to repay approximately $21.1
million of outstanding indebtedness under its existing credit facility
and to repay approximately $55.6 million of outstanding Sterling
indebtedness.
Sterling is a broad-line electronics parts distributor with
locations, including sales branches, throughout the United States and
Canada. Sterling's customers are principally manufacturers of capital
goods containing electronic circuitry such as electronic measurement
devices, personal computers, computer workstations, computer peripherals,
process control systems, medical monitoring equipment and telecommunications
devices. Included in the assets of Sterling were service centers/warehouses,
sales offices, accounts receivable, inventory and other property which Marshall
intends to continue using in its business.
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Item 5. Other Events.
Upon the effectiveness of the Merger, Employment Agreements
between the Company and each of Ronald Spolane and David Spolane became
effective (see Exhibits 10.1 and 10.2 to Marshall's Current Report
on Form 8-K dated September 18, 1997). Pursuant thereto, each of
Ronald Spolane and David Spolane was granted options to purchase
50,000 shares of Marshall's Common Stock under the Marshall
Industries 1997 Stock Option Plan, with such options having an exercise
price equal to $29.8125 (the closing price of Marshall's common stock on the
date of grant).
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(a) Financial Information of Business Acquired.
(i) Audited financial statements of Sterling for the fiscal
years ended March 29, 1997 and March 30, 1996 and the
independent auditors' report of Ernst & Young LLP with respect
thereto (incorporated herein by reference from Sterling's
Annual Report on Form 10-K dated June 27, 1997).
(ii) Unaudited financial statements of Sterling for the
fiscal quarter ended September 27, 1997 (incorporated
herein by reference from Sterling's Quarterly Report on
Form 10-Q dated November 12, 1997).
(iii) Unaudited financial statements of Sterling for the
fiscal quarter ended June 28, 1997 (incorporated herein by
reference from Sterling's Quarterly Report on Form 10-Q
dated August 13, 1997).
(b) Pro Forma Financial Information. The following pro forma
financial information is not included herewith and will be filed by
amendment not later than 60 days after the date on which this
Current Report on Form 8-K is required to be filed:
(i) Marshall Industries pro forma statement of income for
the fiscal year ended May 31, 1996.
(ii) Marshall Industries pro forma statement of income for
the fiscal year ended May 31, 1997.
(iii) Marshall Industries pro forma statement of income
for the six months ended November 30, 1997.
(iv) Marshall Industries pro forma balance sheet as of
November 30, 1997.
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(c) Exhibits.
Exhibit
Number Description
2.1 Agreement and Plan of Merger dated as of
September 18, 1997 among Marshall Industries,
MI Holdings Nevada, Inc. and Sterling Electronics
Corporation (incorporated herein by reference
from Marshall's Current Report on Form 8-K dated
September 18, 1997).
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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.
MARSHALL INDUSTRIES
/s/ Henry W. Chin
By: Henry W. Chin
Vice President, Finance,
Chief Financial
Officer and Secretary
DATED: January 30, 1998
