FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 2, 1998
CALTON, INC.
(Exact name of registrant as specified in its charter)
New Jersey 1-8846 22-2433361
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification Number)
500 Craig Road
Manalapan, New Jersey 07726
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (732) 780-1800
Item 5. Other Events
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On September 2, 1998, Calton, Inc. ("Calton" or the "Company") announced that
it signed a definitive agreement to sell Calton Homes, Inc. ("Calton Homes"),
its wholly owned single family homebuilding subsidiary, to Centex Real Estate
Corporation, the homebuilding subsidiary of Centex Corporation (NYSE:CTX). The
purchase price for the stock of Calton Homes, which is subject to adjustment,
is estimated to be approximately $50 million. Centex has agreed to pay the $50
million purchase price in cash and, additionally, will pay off the existing
indebtedness at closing and will satisfy the remaining outstanding obligations
of Calton Homes, which indebtedness and obligations are estimated to total $34
million.
The proposed sale is subject to certain conditions, including approval of
Calton's shareholders, and is expected to be completed by calendar year end.
Calton plans to continue as a publicly held company after the closing and
Anthony J. Caldarone will continue in his role as its Chairman, President and
Chief Executive Officer. In addition, Calton will enter into an agreement with
Centex Homes to provide consulting services over a four year period following
the closing in exchange for $1.5 million per year (subject to potential
adjustments in the fourth quarter).
On September 21, 1998, Calton filed a preliminary proxy statement with the
Securities and Exchange Commission ("SEC") that provides the details of the
proposed sale of Calton Homes to Centex Real Estate Corporation and describes
the plans for the Company following the consummation of the sale transaction.
The preliminary proxy statement contemplates that a special meeting of
shareholders will be held later this year to consider and vote upon the sale
transaction. The sale of Calton Homes, pursuant to a stock purchase agreement,
will represent the sale of substantially all of the Company's business,
thereby, requiring the approval of a majority of the shares of the Company that
vote on the sale transaction. In addition, the preliminary proxy statement
describes the plans for the Company following the consummation of the sale
transaction as discussed in more detail below. The Company anticipates that,
among other things, upon the timely clearance by the SEC of the proxy
statement, the definitive proxy statement and proxy card will be distributed in
late October 1998 in anticipation of the special meeting of shareholders that
is expected to take place in late November. No assurance can be given that the
SEC review process will conform to the anticipated time frame described above.
The sale transaction is part of the Company's overall strategy designed to
enhance shareholder value. If the sale transaction is consummated, the Company
intends to (i) initiate a significant stock repurchase program, where the
Company will seek to repurchase up to 10 million shares of Common Stock in open
market repurchases and privately-negotiated transactions during the next twelve
months, (ii) shift the Company's business focus to providing various services
to participants in the homebuilding industry, including consulting services,
equity and debt financing and financial advisory services, and (iii) seek to
invest in, acquire or combine with one or more operating businesses within or
outside the homebuilding industry. The timing and number of shares purchased
pursuant to the stock repurchase program will depend upon a number of factors,
including market price. If, within 18 months from the date of the closing of
the sale transaction, the Company has not redeployed a substantial portion of
the sale proceeds, or developed a plan to redeploy a substantial portion of the
sale proceeds within a reasonable time frame, the Company will be liquidated
and dissolved.
The Company will enter into a consulting agreement with Centex upon the
consummation of the sale transaction that will provide for payments of
$1.5 million per year for four years (subject to potential adjustments in the
fourth year). The Company anticipates ongoing general and administrative
expenses of approximately $100,000 per month following the closing of the
transaction.
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Certain information included in this report and other Company filings
(collectively, "SEC filings") under the Securities Act of 1933, as amended, and
the Securities Exchange Act of 1934, as amended (as well as information
communicated orally or in writing between the dates of such SEC filings)
contains or may contain forward looking information that is subject to certain
risks, trends and uncertainties that could cause actual results to differ
materially from expected results.
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has fully caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Calton, Inc.
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(Registration)
By: /s/ Bradley A. Little
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Bradley A. Little
Senior Vice President-Finance
of Calton, Inc.
Date: September 23, 1998
