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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 29, 1996
______________
W.H. Brady Co.
(Exact name of registrant as specified in its charter)
Wisconsin 0-12730 39-0178960
(State or other jurisdiction (Commission File (IRS Employer
of incorporation Number) Identification
Number)
6555 West Good Hope Road, P.O. Box 571
Milwaukee, WI 53201-0571
(Address of principal executive offices)
(414) 358-6600
(Registrant's telephone number, including area code)
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Item 5. Other Events.
On January 29, 1996, W.H. Brady Co. ("Brady") addressed a letter to the
Board of Directors of Varitronic Systems, Inc. ("Varitronic"), proposing a
business combination acquisition of Varitronic by Brady at $14 per share in
cash, stock or a combination. The acquisition would be subject to customary
terms and conditions of an acquisition agreement. Brady's letter to the
Varitronic Directors is attached as Exhibit 1.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly authorized this report to be signed on its behalf by
the undersigned hereunto duly authorized.
W.H. BRADY CO.
January 29, 1996 /s/ Donald P. DeLuca
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Date by: Donald P. DeLuca
Senior Vice President
and Chief Financial
Officer
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EXHIBIT 1 (Page 1 of 2)
[W.H. BRADY LETTERHEAD]
KATHERINE M. HUDSON
PRESIDENT & CEO
January 29, 1996
Board of Directors
Varitronic Systems, Inc.
300 Interchange North
300 Highway 169 South
Minneapolis, MN 55426
Attention: Scott M. Drill, President
Gentlemen:
As discussed in the attached letter, we previously requested an opportunity to
meet with the Varitronic Board to present our thoughts on a potential
acquisition of Varitronic by Brady. It is our belief that a combination of the
businesses of Varitronic and Brady would serve the interests of both companies;
that Brady is the logical company to acquire Varitronic; and that there is both
logic and a business fit to such a combination at an appropriate price. We
appreciated the opportunity at your suggestion for our respective financial
advisors to meet recently to consider issues related to a business combination
of Brady and Varitronic.
Together with our advisors, we have carefully reviewed publicly available
information with respect to Varitronic and have also considered its likely
short term operating results. Based upon this analysis, Brady is prepared to
effect a business combination of the companies at $14.00 per share in cash,
stock or a combination. Such price is a substantial premium from the current
and recent market price of Varitronic's stock.
As I have previously indicated in discussions with Scott Drill, Brady believes
that an acquisition of Varitronic is in the best interests of both companies.
Our second alternative is the development of our own internal and/or external
sources of supply for competing products. We are pursuing that alternative and
also our claim for damages. If we are unable to reach an agreement with
Varitronic regarding an acquisition,
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EXHIBIT 1 (Page 2 of 2)
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Varitronic Systems, Inc. January 29, 1996
we will soon be at the point where our other options are our only practical
ones. Therefore, we would ask for a formal response from you by February 6,
1996. Any agreement would, of course, be subject to our further due diligence
of Varitronic and customary terms and conditions of an acquisition agreement.
Sincerely,
/s/ Katherine M. Hudson
KMH:br
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ENCLOSURE 1 (Page 1 of 1) to EXHIBIT 1
[W.H. BRADY CO. LETTERHEAD]
December 22, 1995
KATHERINE M. HUDSON
PRESIDENT & CEO
Mr. Scott Drill, President
Varitronic Systems, Inc.
300 Interchange North
300 Highway 169 South
Minneapolis, MN 55426
Dear Scott:
It was a pleasure to meet with you last week, and we appreciate your candidness
and the spirit of cooperation you extended.
I do want to follow up on our meeting of December 11, 1995, at which we
discussed the possible acquisition of Varitronic Systems, Inc. ("VSI") by the
W. H. Brady Co. ("Brady"), and your question of this morning as to whether
Brady would seek a meeting directly with VSI's Board. We agree with your
assessment that Brady is the logical company to acquire VSI. As we discussed,
Brady is the largest customer of VSI, and constitutes a substantial portion of
its business.
It is also our belief that a combination of the businesses of VSI and Brady
would serve the interests of both companies and their respective customers,
employees and shareholders, as well as the communities in which they are
located. In short, there is both logic and a business fit to such a
combination.
On further consideration of your question of this morning, we also believe that
now is the time for us to meet with you and VSI's Board. We appreciated your
offer to have Norb Nipcon provide further information to Don DeLuca. However,
before an exchange of information which might preclude other corporate actions,
we believe we should meet with VSI's Board of Directors to discuss our
thoughts with respect to a potential acquisition. Although we are not prepared
at this time to make an offer for VSI's stock, we believe, based solely upon
our present knowledge of VSI and its publicly available information, that a
price in the range of $13.50 per share would be fair to VSI's Shareholders.
This price would represent a significant premium from VSI's current market
price. Any discussions at this point will be held, of course, in confidence by
Brady.
We would request that you bring this matter to the prompt attention of your
Board. In view of the importance of this transaction to your shareholders,
we would like to meet with you and the VSI Board during the first week of
January. I would request that you let me know by December 29, 1995, as to the
availability of your Board for such a meeting.
Sincerely,
