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UNITED STATES
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) December 11, 1996
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SunSource L. P.
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(Exact name of registrant as specified in its charter)
Delaware 1-9375 23-2439550
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification
organization) Number)
2600 One Logan Square
Philadelphia, Pennsylvania 19103
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (215) 665-3650
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Page 1 of 8
Exhibit Index on page 4
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Item 5. Other Events
On December 11, 1996, the Registrant announced that the Board of
Directors of its General Partner had approved the terms upon which it is
proposed to convert the master limited partnership to corporate form. In
addition, the company announced plans to restructure its Technology Services
divisions (formerly Fluid Power divisions) and its Retail Glass business.
The public announcements are attached as Exhibits 99.1 and 99.2 to this
document and are incorporated herein by reference.
Page 2 of 8
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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.
SUNSOURCE L.P.
By
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Joseph M. Corvino
Vice President and
Chief Financial Officer
DATE: December 19, 1996
Page 3 of 8
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EXHIBIT INDEX
Exhibit
Number Page
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99.1 Registrant's press release announcing
terms regarding corporate conversion 5-6
99.2 Registrant's press release announcing
restructuring and charges related to
proposed corporate conversion. 7-8
Page 4 of 8
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KCSA News
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Public & Investor Relations, Corporate & Marketing Communications
FOR: SUNSOURCE L.P.
One Logan Square
Philadelphia, PA 19103
CONTACT: Joseph M. Corvino
(215) 665-3650
KCSA: Leslie A. Schupak/Joseph A. Mansi
CONTACT: (212) 682-6300 ext. 207/205
FOR IMMEDIATE RELEASE
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SUNSOURCE ANNOUNCES TERMS
REGARDING CORPORATE CONVERSION
PHILADELPHIA, PA., December 11, 1996--SunSource L.P. (NYSE: SDP & SDPB)
announced today that the board of directors of its general partner had approved
the terms upon which it is proposed to convert the master limited partnership
to corporate form.
Pursuant to a proposed merger, each Class A limited partnership
interest will be converted into $1.30 in cash and 0.38 share of 11.6% Trust
Preferred Securities with a liquidation preference of $25. The Trust Preferred
Securities will mature in 30 years subject to optional redemption after five
years by the Company. Holders of the Preferred Securities will be entitled to
cumulative distributions of $2.90 per annum payable monthly, which under the
exchange ratio is equivalent to the $1.10 per annum payable monthly per current
Class A interest. Under the exchange ratio, the liquidation preference will be
$9.50 compared to the current Class A liquidation preference of $10. Each Class
B limited partnership interest will be converted into 0.25 share of Common
Stock or one share of Common Stock for each four Class B limited partnership
interests. The general partner will receive 1,000,000 shares of Common Stock in
exchange for its general partnership interests in SunSource L.P. and its
subsidiary operating partnership.
Page 5 of 8
(more)
Kanan, Corbin, 820 Second Avenue Tel 212 682 6300
Schupak & Aronow, Inc. New York, NY 10017 Fax 212 697 0910
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SUNSOURCE/2
The conversion is subject to the approval of a majority of the holders
of the Class A and Class B interests unaffiliated with the general partner, each
voting separately as a class. Proxies for approval will be solicited only by
means of a proxy statement/prospectus which is expected to be mailed to the
limited partners in late January or early February 1997. The conversion is
planned to become effective on or about March 31, 1997.
SunSource L.P. is one of the nation's leading suppliers of value-added
services to industrial and retail customers throughout North America. Its
Industrial Services Company provides maintenance and engineered products as well
as a nationwide system of support services for industry, including in-plant
inventory management and engineering design and equipment repair. Through its
merchandising service businesses, SunSource offers hardware and glass products
with packaging, merchandising, and point-of-sale programs.
###
For more information on the Company, please visit our website at
WWW.PRnewswire.com.
Page 6 of 8
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KCSA News
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Public & Investor Relations, Corporate & Marketing Communications
FOR: SUNSOURCE L.P.
One Logan Square
Philadelphia, PA 19103
CONTACT: Joseph M. Corvino
(215) 665-3650
KCSA: Leslie A. Schupak/Joseph A. Mansi
CONTACT: (212) 682-6300 ext. 207/205
FOR IMMEDIATE RELEASE
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SUNSOURCE ANNOUNCES RESTRUCTURING
AND CHARGES RELATED TO PROPOSED CORPORATE CONVERSION
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Plans to Extinguish Long Term Debt
PHILADELPHIA, PA., December 11, 1996--SunSource L.P. (formerly Sun Distributors)
(NYSE: SDP & SDPB) announced today plans to restructure its Technology Services
divisions (formerly Fluid Power divisions) and Retail Glass Business.
Donald T. Marshall, Chairman and Chief Executive Officer of SunSource
said that the Company will integrate and consolidate the support functions of
its five domestic Technology Services divisions: Activation of Birmingham,
Alabama; Air-Dreco of Houston, Texas; J.N. Fauver Company of Madison Heights,
Michigan; Walter Norris Company of Rosemont, Illinois; and Warren Fluid Power
of Denver, Colorado and will redeploy certain assets in its Harding Glass
division resulting in a fourth quarter 1996 restructuring charge of
approximately $6.0 million in the aggregate before taxes, or $.28 per Class B
interest.
The Company will integrate the finance, administration, purchasing,
warehousing and service center functions of its Technology Services divisions
Page 7 of 8
(more)
Kanan, Corbin, 820 Second Avenue Tel 212 682 6300
Schupak & Aronow, Inc. New York, NY 10017 Fax 212 697 0910
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SUNSOURCE ANNOUNCES/2
resulting in a net reduction of about 175 employees by December 31, 1998, and
expects annualized net cost savings of approximately $5.0 million or $.23 per
Class B interest before taxes thereafter.
Mr. Marshall said that "the consolidation effort will enable SunSource
to more effectively provide our industrial customers with a broad range of value
added services, such as integrated supply and inventory management systems,
through its existing sales organizations within the Sun Industrial Services
Company." Restructuring of the Company's Retail Glass business will result in
the writedown of certain assets related to facility closings. The redeployment
of assets at Harding Glass will focus management's attention on strategic growth
in the retail sector.
Mr. Marshall also announced that the fees and expenses related to its
proposed conversion from a limited partnership to corporate form, announced
today, are expected to aggregate $12.0 million before taxes, of which
approximately $2.0 million, or $0.09 per Class B interest, will be charged to
operations in the fourth quarter 1996. $4.9 million of additional conversion
costs will be charged to operations in 1997 prior to the effective date of the
proposed conversion. The balance of $5.1 million provides for an expected
prepayment penalty associated with extinguishment of the Company's long-term
debt in connection with the corporate conversion and will be recorded in the
1997 post-conversion period.
SunSource L.P. is one of the nation's leading suppliers of value added
services to industrial and retail customers throughout North America. Its
Industrial Services Company provides maintenance and engineered products as well
as a nationwide system of support services for industry, including in-plant
inventory management and engineering design and equipment repair. Through its
merchandising service businesses, SunSource offers hardware and glass products
with packaging, merchandising, and point-of-sale programs.
###
For more information on the Company, please visit our website at
WWW.PRNewswire.com.
Page 8 of 8
