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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, 1994
TERRA INDUSTRIES INC.
(Exact name of registrant as specified in its charter)
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MARYLAND 1-8520 52-1145429
(State or other jurisdiction of (Commission File (I.R.S. Employer incorporation or
organization) Number) Identification No.)
TERRA CENTRE
600 FOURTH STREET
P.O. BOX 6000
SIOUX CITY, IOWA 51102-6000
(Address of principal executive offices) (Zip Code)
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Registrant's telephone number, including area code: (712) 277-1340
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ITEM 5. Other Events.
On August 9, 1994, Terra Industries Inc. issued the press release
contained in Exhibit 1 hereto, which is incorporated by reference herein.
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 thereunto duly authorized.
TERRA INDUSTRIES INC.
By: /s/ GEORGE H. VALENTINE
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George H. Valentine
Vice President, General Counsel
and Corporate Secretary
Date: August 10, 1994
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EXHIBIT INDEX
Exhibit No. Description
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99.1 Press Release dated August 9, 1994
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(TERRA INDUSTRIES INC. NEWS RELEASE LETTERHEAD)
TERRA INDUSTRIES TO ACQUIRE AGRICULTURAL MINERALS AND CHEMICALS INC.
Sioux City, Iowa (August 9, 1994)--Terra Industries Inc. (NYSE symbol: TRA)
today announced that it has signed a definitive agreement to acquire
Agricultural Minerals and Chemicals Inc. (AMCI) from its shareholders who
include Morgan Stanley Leveraged Equity Fund II and Transammonia, Inc. for $400
million. AMCI is a major producer of nitrogen fertilizer products and conducts
its nitrogen operations through Agricultural Minerals Company, L.P. (AMCLP), a
60% owned, publicly traded master limited partnership. AMCI is also a major
methanol producer.
AMCI reported net income of $26.8 million for the six months ended June 30,
1994 on revenues of $231.8 million. Had Terra acquired AMCI at the beginning
of 1994 and including the effect of additional common shares expected to be
issued in connection with the acquisition, Terra's pro forma earnings are
estimated at $.63 per share for the six months ended June 30, compared with
$.55 without the acquisition.
In making the announcement, Burton M. Joyce, Terra's President and CEO, said,
"This is a great acquisition and a major step in executing Terra's long-range
strategic plan. AMCI's two nitrogen manufacturing plants in Blytheville,
Arkansas, and Verdigris, Oklahoma, are high quality plants and an excellent fit
with Terra's existing fertilizer production business. Terra's manufactured
nitrogen customer base will be expanded considerably by this acquisition, and
we look forward to continuing to serve these customers in the future. The
combination of AMCI's production facilities with Terra's doubles our nitrogen
fertilizer capacity and gives us the opportunity to reduce our outside
purchases of nitrogen fertilizer for resale through our retail network by more
than 10%."
Annually, AMCI's plants produce over 1.4 million tons of anhydrous ammonia, 1.0
million tons of which are upgraded into 2.0 million tons of nitrogen solutions
and 480,000 tons of urea. Terra manufactures 1.3 million tons of anhydrous
ammonia, upgrading 600,000 tons into 1.0 million tons of solutions, over
250,000 tons of urea, and 100,000 tons of ammonium nitrate. The combination
makes Terra one of the largest producers of nitrogen fertilizers in North
America.
Joyce also said, "AMCI's methanol production--280 million gallons a year--from
its plant in Beaumont, Texas, combined with Terra's 40 million gallons annually
of methanol produced at its Woodward, Oklahoma, plant, makes Terra a leading
methanol supplier. This major expansion of Terra's methanol capacity will
allow the company to benefit from the current strong methanol market."
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Terra will pay $400 million for the stock of AMCI whose balance sheet included
$217 million of long-term debt at June 30, 1994. In addition, AMCI expects to
have $86 million dollars of net working capital at closing. Concurrent with
the closing, AMCI's stockholders will purchase for $4.0 million a call option
from Terra at $.90 per gallon covering 130-140 million gallons of methanol per
year for three years.
To finance the acquisition, Terra plans to use approximately $50 million of its
own and AMCI's cash, issue $100 million in new common stock, and secure $250
million of additional short- and long-term debt. Terra's majority stockholder,
Minorco, has given Terra an option to sell it approximately 13.3 million shares
at $7.50 per share. This private placement would increase Minorco's ownership
stake to 50.5 million shares or 60.5% of Terra's outstanding common stock.
Citibank, N.A. has committed to provide all the debt financing to complete the
transaction. Terra anticipates that some of the short-term debt will be
replaced by permanent financing in the future. S.G. Warburg & Co. Inc. is
acting as Terra's financial advisor, and Morgan Stanley & Co. Incorporated is
acting as AMCI's financial advisor.
AMCLP's senior preference units currently trade on the New York Stock Exchange
under the symbol, AMC. They will remain outstanding following the closing of
the acquisition.
The acquisition is subject to regulatory review under the Hart-Scott-Rodino Act
and the approval of Terra's shareholders. The transaction is expected to close
by the end of October.
Terra Industries Inc., with 1993 revenues over $1.2 billion, is a leading
producer and marketer of fertilizer, crop protection products, seed and
services for agriculture.
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Contact: Paula Norton
(712) 277-5438
