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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
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Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported) August 31, 1998
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Semele Group Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-16886 36-3465422
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(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification Number)
One Canterbury Green, Stamford, Connecticut 06901
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (203) 363-0849
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(Former name or former address, if changed since last report.)
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Semele Group Inc.
Form 8-K
Page 2 of 5
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
This report on Form 8-K provides information concerning the acquisition of
Ariston Corporation ("Ariston") by Semele Group Inc. (the "Company" or the
"Registrant").
Summary
On August 31, 1998, the Company executed an agreement to acquire all of the
common stock of Ariston for a total purchase price of $12,450,000. Ariston is a
holding company having two investments: (i) a 99% limited partnership interest
in AFG Eireann Limited Partnership ("AFG Eireann"), a Massachusetts limited
partnership having investments in a diversified pool of direct-finance lease
contracts and (ii) a 98% limited partnership interest in Old North Capital
Limited Partnership ("ONC"), a Massachusetts limited partnership with
investments in cash and notes, equipment leases, and limited partnerships that
are engaged in either equipment leasing or real estate. Gary D. Engle, Chairman,
Chief Executive Officer and a director of the Company and James A. Coyne,
President, Chief Operating Officer and a director of the Company both are
affiliated with ONC and Gary D. Engle is affiliated with AFG Eireann. (See
"Related Party Considerations" herein.)
The acquisition of Ariston was approved by the Company's independent directors.
(Both Messrs. Engle and Coyne elected to abstain from any votes conducted by the
Company's Board of Directors in connection with this acquisition.) In addition,
the Company, through its independent directors, has engaged an independent
investment banking firm (the "Investment Banker"), to evaluate the transaction
and express its opinion as to whether the acquisition is fair to the Company's
shareholders from a financial point of view. In the event that the Investment
Banker is unable to conclude that the terms of the acquisition are fair to
shareholders, the Company may rescind the purchase of Ariston on or before
October 30, 1998.
Transaction Terms
The Company purchased all of the common stock of Ariston from Equis Financial
Group Limited Partnership ("Equis") for cash of $2 million and a purchase-money
note of $10,450,000 (the "Note"). The Note bears interest at the annualized rate
of 7%, payable quarterly in arrears, and requires principal reductions based
upon the cash flows generated by the limited partnership interests owned by
Ariston. The Note matures on August 31, 2003 and is recourse only to the common
stock of Ariston. Equis is controlled by Gary D. Engle.
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Semele Group Inc.
Form 8-K
Page 3 of 5
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS (Continued).
Related Party Considerations
Ariston Corporation
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Ariston was organized on July 31, 1998 as a Delaware corporation. On August 3,
1998, Equis contributed its limited partnership interests in AFG Eireann and ONC
to Ariston in exchange for Ariston common stock. Ariston was a wholly-owned
subsidiary of Equis until its acquisition by the Company and was formed
principally to facilitate the transfer of limited partnership interests held by
Equis in AFG Eireann and ONC. The sole director of Ariston is Gary D. Engle.
AFG Eireann Limited Partnership
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AFG Eireann is a special purpose limited partnership created in 1994 having an
interest in a diversified pool of direct finance lease contracts which are
expected to generate taxable income to the Company. It is anticipated that upon
liquidation of its net assets, AFG Eireann will generate losses for income tax
reporting purposes that may be carried forward and used by the Company for a
period of up to 15 years, based upon current federal income tax regulations.
Gary D. Engle is a 50% owner and a director of the general partner of AFG
Eireann.
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Semele Group Inc.
Form 8-K
Page 4 of 5
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS (Continued).
Related Party Considerations (Continued)
Old North Capital Limited Partnership
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ONC is a Massachusetts limited partnership established in 1995. ONC has
investments in (i) cash of approximately $2.9 million, (ii) a portfolio of
equipment leases, (iii) limited partnership units of several
direct-participation equipment leasing programs sponsored and managed by
Equis,(1) (iv) general and limited partnership interests in a real estate
partnership sponsored by Equis that owns two commercial buildings leased to
an investment-grade educational institution, and (v) a note receivable having
a principal balance of approximately $2.7 million that was due originally
from Equis II Corporation ("Equis II"); however, such debt obligation was
assumed by Messrs. Engle and Coyne in 1997. Equis II owns (i) the controlling
interests of four direct-participation equipment leasing programs sponsored
by Equis (the "Trusts") and (ii) substantially all of the outstanding Class B
Beneficiary Interests in the Trusts. Equis II is owned by Gary D. Engle and
James A. Coyne and is controlled by Gary D. Engle. The Company's Board of
Directors is considering the potential acquisition of Equis II at a future
date and has engaged the Investment Banker to evaluate the fairness of such
an acquisition to the Company's shareholders. Gary D. Engle owns all of the
voting stock, and has a one-third equity interest in, and is a director of
the general partner of ONC. James A. Coyne owns non-voting stock, and has a
one-third equity interest in, and is a director of the general partner of ONC.
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(1) ONC owns limited partnership units in the direct-participation programs
listed below. Certain of these programs, as indicated, own stock in the
Registrant.
<TABLE>
<CAPTION>
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Limited Partner Shares of Common
Units owned by Stock owned by
ONC in each each Program in
Direct-Participation Program Sponsored by Equis Program the Registrant
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<S> <C> <C>
American Income Partners V-A Limited Partnership 4,452.00 34,144
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American Income Partners V-B Limited Partnership 17,594.00 39,339
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American Income Partners V-C Limited Partnership 7,850.00 --
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American Income Partners V-D Limited Partnership 1,240.00 --
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American Income Fund I-B, a Massachusetts Limited Partnership 990.00 --
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American Income Fund I-C, a Massachusetts Limited Partnership 124,851.23 20,876
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American Income Fund I-D, a Massachusetts Limited Partnership 1,511.00 40,797
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American Income Fund I-E, a Massachusetts Limited Partnership 87,118.15 42,574
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AIRFUND International Limited Partnership 205,040.00 --
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AIRFUND II International Limited Partnership 40,000.00 --
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AFG Investment Trust A -- 20,969
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Semele Group Inc.
Form 8-K
Page 5 of 5
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
The Registrant expects to file the financial statements required by Item 7 by
November 15, 1998.
Exhibits filed herewith pursuant to Item 601 of Regulation S-K.
Exhibit
Number
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Exhibits required to be filed pursuant to Item 601 of Regulation S-K will be
filed by November 15, 1998.
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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 hereunto duly authorized.
SEMELE GROUP INC.
(Registrant)
By: /s/ James A. Coyne Date: September 15, 1998
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James A. Coyne
President and Chief Operating
Officer and a Director
