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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported): April 15, 1996
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MERRILL CORPORATION
(Exact name of registrant as specified in its charter)
MINNESOTA 0-14082 41-0946258
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
ONE MERRILL CIRCLE, ST. PAUL, MINNESOTA 55108
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (612) 646-4501
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS.
On April 15, 1996, Merrill Corporation, a Minnesota corporation (the
"Registrant"), through its wholly owned subsidiary Merrill/New York Company, a
Minnesota corporation (the "Purchaser"), acquired substantially all of the
assets (the "Assets") of The Corporate Printing Company, Inc., a New York
corporation ("Corporate"), CPC Communications, Inc., a New York corporation
("CPC Communications"), CPC Reprographics, Inc., a New York corporation
("Reprographics"), The Corporate Printing Company International, Ltd., a New
York corporation ("CPC International"), CP International Holdings, Inc., a
Delaware corporation ("CP Holdings") CPC Management Services, Inc., a New York
corporation ("CPC Management"), The Corporate Printing Company International
SNC, a partnership organized under the laws of the Republic of France ("CPC
International SNC"), The Corporate Printing Company International PTE Ltd., a
Singapore corporation ("CPC International PTE") and Oakland Composition Limited
Partnership, a limited partnership organized under the laws of the State of
Maryland ("Oakland")(Corporate, CPC Communications, Reprographics, CPC
International, CP Holdings, CPC Management, CPC International SNC, CPC
International PTE, and Oakland are collectively referred to as the "Affiliated
Companies"), pursuant to an Asset Purchase Agreement, dated April 15, 1996 (the
"Purchase Agreement") among the Registrant, the Purchaser, the Affiliated
Companies and all of the shareholders (the "Shareholders") of the Affiliated
Companies (the "Acquisition"). The Purchaser did not purchase any assets
relating to the Affiliated Companies' pressroom and shipping businesses located
at the Affiliated Companies' New York City facility.
The purchase price for the Assets was Twenty-Two Million Six Hundred
Thousand Four Hundred Dollars ($22,600,400) less the amount by which certain
liabilities as of January 31, 1996 exceeded Ten Million Dollars ($10,000,000)
and less the amount by which the book value of the Assets as of January 31,
1996 less the liabilities assumed by the Purchaser was less than Thirteen
Million Two Hundred Thousand Dollars ($13,200,000) (the "Purchase Price").
Of the total Purchase Price, Nineteen Million Six Hundred Thousand Four
Hundred Dollars ($19,600,400) was paid in cash at closing and $3,000,000 was
paid into an escrow account. In addition, the Purchaser assumed debt of the
Affiliated Companies in the amount of approximately $10 million.
The Purchase Price is subject to a reduction after the closing for (i) the
collection of certain accounts receivables; (ii) any net loss of the Affiliated
Companies from the period January 1, 1996 to April 15, 1996; and (iii) expenses
for closing the Affiliated Companies' Paris, France and Hong Kong offices. The
Purchase Price is also subject to increase by an amount equal to 11% of the net
income from February 1, 1996 to April 15, 1996 of the Affiliated Companies that
are S corporations.
As additional consideration for the purchase of the Assets, at any time
during the five-year period beginning April 15, 1996, the Affiliated Companies
have the right to receive a cash payment from the Purchaser in an amount equal
to 800,000 multiplied by the increase in the average stock price of the
Registrant's Common Stock over the base price of the Registrant's Common Stock,
as measured on April 12, 1996 (the "Participation Payment"). The Purchaser is
not, however, required to make a cash payment in excess of $8 million during the
period beginning April 15, 1996 and ending April 15, 1999; $10 million the
period commencing on April 16, 1999 and ending on April 15, 2000; and $12
million during the period beginning on April 16, 2000 and ending on April 15,
2001. In lieu of making the above referenced payments, the Purchaser has the
right, at any time during this period, to make cash payments of $8 million from
the period beginning April 15, 1996 and ending April 15, 1999; $10 million
during the period commencing on April 16, 1999 and ending on April 15, 2000; and
$12 million during the period beginning on April 16, 2000 and ending on
April 15, 2001.
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The Purchaser also entered into a Non-Competition Agreement, effective
April 15, 1996, with George Shifrin, a director and the principal shareholder
and officer of the Affiliated Companies. For five years, Mr. Shifrin has agreed
not to compete with any "business" which manufactures, produces, sells or
distributes any products or services which have been manufactured, produced,
sold or distributed by the Affiliated Companies during the three years prior to
April 15, 1996. As compensation for this agreement, Mr. Shifrin is entitled to
receive cash payments of $339,583.44 on April 15, 1997, $800,000 on each of
April 15, 1998, 1998 and 2000 and $700,000 on April 15, 2001. In addition, Mr.
Shifrin is also entitled to up to an additional $500,000 from April 15, 1996 to
March 31, 1997 and $500,000 for each of the four years ending March 31, 2001,
provided that certain minimum amounts of printing business is maintained by the
Purchaser from a specific customer.
Also in connection with the Acquisition, Merrill agreed to provide to
Printcom, Inc. (formerly known as The Corporate Printing Company, Inc.)
("Printcom") certain minimum levels of printing services for a specified
period of time.
The above-described consideration was arrived at through arm's-length
negotiations with the Affiliated Companies. There were no prior material
relationships between the Registrant or any of the Registrant's affiliates, any
director or officer of Registrant, or any associate of any such director or
officer, on the one hand, and the Affiliated Companies or the Shareholders, on
the other hand. All of the funds for the Acquisition was provided through the
Registrant's revolving credit facility with First Bank System, N.A. The
Purchaser anticipates that any Participation Payments and payments under the
Non-Competition Agreement will be paid out of the operating account and through
the Registrant's revolving credit arrangement.
The assets purchased in connection with the Acquisition were previously
used by the Affiliated Companies in their financial printing and reprographics
services business. The Registrant intends to continue to use these assets in
this manner and to integrate such assets with those of the Registrant as soon as
reasonably practicable.
Additional information concerning the Acquisition is also contained in the
Purchase Agreement, a copy of which is an exhibit to this Report and which is
incorporated herein by reference.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
a. FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
The Registrant has determined that it is impracticable at this time to
provide the financial statements of the Affiliated Companies that are required.
The Registrant will file such financial statements under cover of an amendment
to this Form 8-K as soon as practicable, but in any event within 60 days from
the date hereof.
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b. PRO FORMA FINANCIAL INFORMATION.
The Registrant has determined that it is impracticable at this time to
provide the pro forma financial information that is required. The Registrant
will file such pro forma financial information under cover of an amendment to
this Form 8-K as soon as practicable, but in any event within 60 days from the
date hereof.
c. EXHIBITS.
2.1 Asset Purchase Agreement, dated April 15, 1996, by and among Merrill
Corporation, a Minnesota corporation, Merrill/New York Company, a Minnesota
corporation, The Corporate Printing Company, Inc., a New York corporation, CPC
Communications, Inc., a New York corporation, CPC Reprographics, Inc., a New
York corporation, The Corporate Printing Company International, Ltd., a New York
corporation, CP International Holdings, Inc., a Delaware corporation, CPC
Management Services, Inc., a New York corporation, The Corporate Printing
Company International SNC, a partnership organized under the laws of the
Republic of France, The Corporate Printing Company International PTE Ltd., a
Singapore corporation, and Oakland Composition Limited Partnership, a limited
partnership organized under the laws of the State of Maryland, George Shifrin,
John Doherty, Joel E. Glick, and Harold A. Cooney (incorporated by reference to
Exhibit 10.22 to the Registrant's Annual Report on Form 10-K for the year ended
January 31, 1996 (File No. 0-14082)). Omitted from this Agreement, as
filed, are the exhibits listed in the "List of Exhibits" included at the
beginnng of the Agreement. The Company will furnish supplementally a copy of
any such omitted exhibits to the Commission upon request.
99.1 Press Release of Registrant, dated April 15, 1996.
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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: April 30, 1996 MERRILL CORPORATION
(Registrant)
By /s/ Steven J. Machov
_____________________________________
Steven J. Machov
Vice President and General Counsel
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INDEX TO EXHIBITS
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Exhibit Method of Filing
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2.1 Asset Purchase Agreement, dated April 15, Incorporated by reference to
1996, by and among Merrill Corporation, a Exhibit 10.22 to the Company's
Minnesota corporation, Merrill/New York Annual Report on Form 10-K
Company, a Minnesota corporation, The Corporate for the fiscal year ended
Printing Company, Inc., a New York corporation, January 31, 1996 (File No. 0-14082).
CPC Communications, Inc., a New York corporation,
CPC Reprographics, Inc., a New York corporation,
The Corporate Printing Company International, Ltd.,
a New York corporation, CP International Holdings,
Inc., a Delaware corporation, CPC Management Services,
Inc., a New York corporation, The Corporate Printing
Company International SNC, a partnership organized
under the laws of the Republic of France, The
Corporate Printing Company International PTE Ltd., a
Singapore corporation, and Oakland Composition
Limited Partnership, a limited partnership organized
under the laws of the State of Maryland, George Shifrin,
John Doherty, Joel E. Glick, and Harold A. Cooney.
Omitted from this Agreement, as filed, are the exhibits
listed in the "List of Exhibits" included at the beginning
of the Agreement. The Company will furnish supplementally
a copy of any such omitted exhibits to the Commission
upon request.
99.1 Press Release of Registrant, dated April 15, 1996 Filed electronically
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DATE: April 15, 1996
FROM: FOR:
Padilla Speer Beardsley Merrill Corporation
224 Franklin Avenue West One Merrill Circle
Minneapolis, MN 55404 St. Paul, MN 55108
FOR IMMEDIATE RELEASE
MERRILL CORPORATION ANNOUNCES ACQUISITION OF CORPORATE PRINTING COMPANY
ST. PAUL, Minn, April 15, 1996 -- Merrill Corporation (NASDAQ:MRLL) today
announced that it has acquired certain assets of Corporate Printing Company in
New York. Twenty-three year old Corporate Printing is the leading regional
financial printer in the Northeast area with offices in New York and Washington,
D.C., and services clients throughout the world. The top sales and service team
from Corporate Printing will be joining Merrill's New York operation. Merrill
will market in New York and Washington, D.C. under the name Merrill/Corporate.
This was a cash transaction. Further terms of the acquisition were not
disclosed. Michael James, vice president of Merrill's Eastern region will
oversee the new organization. Hal Cooney, former president of Corporate Printing
will continue as Executive Vice President and Chief Operating Officer of
Merrill/Corporate.
John Castro, president and CEO of Merrill said of the acquisition, "This
acquisition positions us as a leader in financial printing in New York. The
combined strength of these two companies will benefit our clients greatly. We
now offer the most experienced organization in New York for all types of
financial printing, from registration work to reporting and mutual fund
printing.
(more)
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George Shifrin, chairman and largest stockholder of Corporate Printing
said, "Corporate will be a valuable asset to Merrill. The depth of our client
relationships and reputation for excellent service will blend well with
Merrill's strengths as a technology leader, and their worldwide service network.
Merrill/Corporate clients and employees will both benefit from the opportunities
presented by our joining the greater Merrill organization."
Merrill Corporation is a leading provider of on-demand, 24-hour-per-day
typesetting, printing, document reproduction, imaging and distribution services
to financial, legal, corporate and commercial markets, worldwide.
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