<PAGE> 1
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): June 9, 1995
Donnelly Corporation
(Exact name of registrant as specified in its charter)
Michigan 1-9716 38-0493110
(State or other jurisdiction (Commission (IRS Employer
of incorporation File Number) Identification No.)
414 East Fortieth Street, Holland, Michigan 49423
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(616) 786-7000
<PAGE> 2
Item 2. Acquisition or Disposition of Assets
------------------------------------
On June 5, 1995, the Registrant acquired a majority
interest in Hohe GmbH & Company K.G. ("Hohe"), a German limited
partnership. The Registrant acquired 66 2/3 percent of the limited
partnership interests in Hohe from the limited partnership and 48
percent of the general partner from the Hohe family. The
Registrant does not directly control Hohe but, as the holder of
the majority of the limited partnership interests and as the
largest holder of interests in the general partner, the
Registrant will be an active partner. The terms of the
acquisition were arrived at as a result of arm's length
negotiations between the management of the Registrant and the
partners and creditors of Hohe. The Registrant will invest
approximately $32 million in equity and subordinated loans in
Hohe, financed with cash and the Registrant's U.S. bank line of
credit through NBD Bank, N.A. Of this $32 million investment,
approximately $3,600,000 was paid for the limited partnership
interests and approximately $17,000 was paid for the interest in
the general partner. Approximately $14.3 million has been and an
additional approximately $14.3 million will be invested as
subordinated debt. The initial debt carries interest at 10
percent per annum with no principal payments due until maturity
on April 1, 1998. Payment thereafter is subordinated to other
bank debt and interest is adjusted to the Bundesbank discount
rate plus 700 basis points. Additional loans to Hohe of
approximately $70 million are being provided by several banks
through refinanced and new debt.
The terms of the transaction allow the Registrant to
increase its ownership stake in Hohe through various options.
The Registrant has options to increase its ownership to 80
percent of the limited partnership interests and 100 percent of
the general partner, exercisable at any time. The price to
exercise these options will be a total of about DM 767,000. The
Registrant also has an option to buy the remainder of the limited
partnership interests, exercisable after March 1998. The
exercise price for this additional 20 percent is based on a
formula of approximately five time earnings before interest and
taxes. The minimum price is DM 7,500,000 and the maximum price
is DM 15,000,000, subject to certain offsets for breaches of
warranties and representations. The payment for the limited
partnership interests taking the Registrant to 80 percent would
be set off against the price for this later option. Finally, the
owners of the remaining limited partnership interests have an
option to require the Registrant to buy their limited partnership
interests at any time based upon the above formula, but with a
minimum of DM 2,500,000.
<PAGE> 3
Hohe, based in Collenberg, Germany, serves many of the
main auto producers in Europe in exterior automotive mirrors,
interior mirrors, door handles, automotive tooling, and
electronic components related to mirror systems. With operations
in Germany, Spain, and Portugal, Hohe's sales for the fiscal year
ending March 31, 1995, were approximately $220 million. Hohe
will continue to operate as a separate entity and use its assets
primarily for the purposes for which they have previously been
used, although it is currently anticipated that one galvanizing
facility will be closed in fiscal 1996. In the future, certain
other Hohe facilities may be closed or consolidated into other
Hohe facilities.
<PAGE> 4
Item 7. Financial Statements, Pro Forma Financial Information
-----------------------------------------------------
and Exhibits
- ------------
(a) Financial Statements of Businesses Acquired
-------------------------------------------
At the time of this report, it is not practicable to
provide audited financial statements for HOHE (the business
acquired) for its fiscal year ended March 31, 1995, which are the
required financial statements for this report. Such statements
will be filed under cover of Form 8 as soon as practicable and
not later than August 8, 1995.
(b) Pro Forma Financial Information
-------------------------------
At the time of this report, it is not practicable to
provide pro forma financial statements. Such statements will be
filed under cover of Form 8 as soon as practicable and not later
than August 8, 1995.
(c) Exhibits
--------
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.
DONNELLY CORPORATION
Registrant
/S/ J. Dwane Baumgardner
J. Dwane Baumgardner
(Chairman, Chief Executive Officer,
and President)
/S/ William R. Jellison
William R. Jellison
(Vice President, Chief Financial
Officer, and Treasurer)
Date: June 9, 1995
