SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report: December 10, 1998
HAUSER, INC.
(formerly Hauser Chemical Research, Inc.)
(Exact name of Registrant as specified in its charter)
Colorado 0-17174 84-0926801
(State or other (Commission (I.R.S.
jurisdiction of File Number) Employer
incorporation) Number)
5555 Airport Boulevard
Boulder, Colorado 80301
(Address of principal executive office)
(303) 443-4662
(Registrant's telephone number,
including area code)
<PAGE>
Item 5. Other Events
On December 9, 1998, the Company and Zuellig Group N. A., Inc.
issued a joint press release, which is attached to this Report
as Exhibit 5.1 hereto.
<PAGE>
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit 5.1 Press Release
<PAGE>
SIGNATURES
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.
DATED, this 10th day of December, 1998
HAUSER, INC.
By:
/s/David I. Rosenthal
Chief Financial Officer
Exhibit 5.1
FOR IMMEDIATE RELEASE CONTACT: Joanna Manley
Boulder, Colorado Investor Relations Manager
December 9, 1998 (303) 443-4662
HAUSER, INC. AND ZUELLIG GROUP N. A., INC. TO MERGE
OPERATIONS, CREATING LEADER IN HERBAL EXTRACTS
Hauser (NASDAQ:HAUS) and Zuellig Group N.A., Inc. (ZGNA)
announced today that they have agreed to merge certain
business operations. Hauser will merge with Zuellig Botanical
Extracts, Inc. (the extract business within Botanicals
International), Wilcox Drug Company, Inc. (known as Wilcox
Natural Products), and ZetaPharm, Inc., thereby creating the
leading U.S. supplier of herbal extracts, botanical raw
materials and related products to the fast-growing nutritional
industry. The transaction will be accounted for as a purchase,
with an approximate valuation of $66 million. Fiscal year 1998
combined companies' revenues were over $125 million. Hauser
also will have an option to acquire the powders business of
Botanicals International.
Upon closing, Hauser shareholders will own 51.0% of the
combined company, while ZGNA will own 10.05 million shares
representing 49.0%. Wells Fargo Bank, NA has issued a
commitment to provide a $35 million line of credit and a $10
million fixed asset line in support of the merged companies.
Hauser will assume approximately $19.0 million of the acquired
subsidiaries' bank debt. The agreement is subject to approval
by Hauser shareholders and customary closing conditions.
Hauser management expects the transaction to close in March
1999, during the company's fiscal 1999 fourth quarter, and
aside from transaction related charges, to be accretive to
earnings in fiscal year 2000.
The new organization will be headquartered in Boulder,
Colorado, and operate under the Hauser name. Dean P. Stull,
Ph.D., current Chairman, President and CEO of Hauser, and
Volker Wypyszyk, CEO of ZGNA, will share the office of CEO.
Dean Stull will continue as Chairman and Volker Wypyszyk will
assume the responsibilities of President.
Commenting on the merger, Dr. Stull said, "This merger will
create a significant domestic supplier to manufacturers of
dietary supplements, particularly those in the attractive
herbal segment of the "nutraceuticals" industry. Botanicals
International and Wilcox have been leading suppliers of
natural plant raw materials sourced worldwide. Zuellig
Botanical Extracts has a reputation as a leading full-service
distributor, enjoying long-standing relationships with U.S.
dietary supplement manufacturers. Zuellig Botanical Extracts'
strengths in the marketplace and Wilcox' sourcing of raw
botanicals will complement Hauser's manufacturing and
technological leadership."
Stull continued, "This merger generates both competitive
synergies and operational efficiencies. Our competitive
positions will be enhanced by offering customers an expanded,
comprehensive line of botanical extracts and herbs, in
addition to unmatched technical capabilities through Hauser
Laboratories and our subsidiary, Shuster Laboratories."
Mr. Wypyszyk stated, "I am excited about the combination of
Hauser's considerable expertise and capabilities in herbal
extraction, as evidenced by Hauser's NaturEnhance[Registered
Trademark] extracts, with our knowledge of both raw material
sourcing and quality. The sales force will market
NaturEnhance[Registered Trademark] extracts as well as the
Botanicals International's Identilok[Trademark] botanical
powders allowing us to meet our customers' needs. We
anticipate the integration of our two organizations will be
accomplished quickly and without disruption to our customers."
To focus corporate resources on its Natural Ingredients and
Technical Services business units, Hauser will discontinue its
paclitaxel business and at the end of the current fiscal
quarter will incur a one-time charge of approximately $25-30
million. Management is pursuing several alternatives to
restructure or divest the business and expects to have such a
restructuring or divestiture completed during the first half
of fiscal year 2000.
About Zuellig Botanical Extracts, Inc., Wilcox Natural
Products and ZetaPharm, Inc.
Zuellig Botanical Extracts, Inc. of Long Beach, California,
markets and distributes herbal extracts and value added
products such as its Naturspan[Trademark] time release line of
products.
Wilcox Natural Products of Boone, North Carolina, is active in
cultivation and sourcing of wild-crafted botanical raw
materials through its network of collectors and dealers.
ZetaPharm, Inc., of New York, New York, imports and
distributes bulk vitamins, nutritional supplements,
pharmaceutical ingredients and food additives for the health
food, pharmaceutical, and food / beverage industries.
About Hauser, Inc.
Hauser, a Customer Connected[Service Mark] company
headquartered in Boulder, Colorado, develops, manufactures and
markets superior natural products and offers unsurpassed
technical services. In addition to producing high-quality
extracts under the NatureEnhance[Registered Trademark]
trademark, the company also provides sophisticated product
development, research, testing and related technical services
through Hauser Laboratories and Hauser's subsidiary, Shuster
Laboratories, Inc.
# # # # #
The statements made above, which are not historical, are
forward-looking statements. The actual results of Hauser may
vary materially from the forward-looking statements made above
because of important factors such as the risk that the merger
will not be approved by the shareholders of Hauser or that any
of the other conditions to the closing of the merger will not
be met, the risk that the integration of the two organizations
will be disruptive to the operations of Hauser, the risk that
Hauser will have difficulty in eliminating its paclitaxel
business, the risk that Hauser will not be successful in
securing funding to expand operations, the risk that new
products will not be developed on time or meet market
expectations, the risk that management will not be successful
at gaining or retaining market share or controlling operating
expenses and product costs, the risk of increased governmental
regulation, and the risk that pricing and other competitive
pressures worldwide will cause margins to erode significantly.
Additional information concerning factors that could cause
actual results to differ materially from those in the
forward-looking statements made above is contained in Hauser's
disclosure documents to be on file with the U.S. Securities
and Exchange Commission, including its Form 10-K for the year
ended April 30, 1998, and its Form 10-Q for the quarter ended
October 31, 1998, to be filed.
