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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
Date of Report: March 30, 1999
(Date of earliest event reported)
HILB, ROGAL AND HAMILTON COMPANY
(Exact Name of Registrant as Specified in its Charter)
Virginia 0-15981 54-1194795
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
4235 Innslake Drive 23060
Glen Allen, Virginia (Zip Code)
(Address of Principal Executive Offices)
Registrant's telephone number, including area code:
(804) 747-6500
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Item 5. Other Events.
The press release issued by the Registrant on March 30, 1999 and
attached hereto as Exhibit 99 is incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
99 Press release issued by the Registrant on March 30, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
HILB, ROGAL AND HAMILTON COMPANY
(Registrant)
Date: March 31, 1999 By: /s/ Carolyn Jones
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Carolyn Jones, Senior Vice President,
Chief Financial Officer and Treasurer
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Exhibit Index
Exhibit
Number Document
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99 Press release issued by the Registrant on March 30, 1999.
Exhibit 99
Press Release
Hilb, Rogal and Hamilton Company Contact: Andrew L. Rogal
4235 Innslake Drive, P.O. Box 1220 Phone: (804) 747-6500
Glen Allen, Virginia 23060-1220 Fax: (804) 747-6046
Phoenix Contact: Alice S. Ericson
Phone: (860) 403-5946
Fax: (860) 403-7887
FOR IMMEDIATE RELEASE
March 30, 1999
HILB, ROGAL AND HAMILTON COMPANY AGREES
TO ACQUIRE AMERICAN PHOENIX CORPORATION
Richmond, Virginia--Hilb, Rogal and Hamilton Company (HRH) today announced the
signing of a definitive agreement to acquire American Phoenix Corporation
(American Phoenix), the property and casualty brokerage subsidiary of Phoenix
Home Life Mutual Insurance Company (Phoenix).
American Phoenix, based in Hartford, Connecticut, is the 14th largest property
and casualty insurance brokerage firm in the United States. With 16 offices
located primarily in the Mid-Atlantic states, New England and Florida, American
Phoenix generated approximately $73 million in revenues in 1998.
Under the terms of the proposed transaction, HRH will exchange approximately $49
million in cash, $32 million (principal amount) of convertible notes and 1.0
million shares of Common Stock for all of American Phoenix's outstanding stock.
The convertible notes, which will be subordinated to HRH's other debt, will
mature in 2014 and pay a 5.25% coupon, with a conversion price of $22.75 per
share. The acquisition, which will be accounted for as a purchase, is expected
to be accretive to HRH's earnings and cash flow per share. The transaction is
subject to regulatory, but not shareholder, approval and is targeted for
completion in May 1999.
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HILB, ROGAL AND HAMILTON COMPANY AGREES
TO ACQUIRE AMERICAN PHOENIX CORPORATION--Continued
Following the transaction, HRH and Phoenix will enter into a strategic marketing
relationship under which HRH will distribute selected financial products of
Phoenix. Initially, the companies will focus on distribution of Phoenix's group
products and services, as well as individual life insurance and annuity
products, through HRH's Employee Benefits Division.
President and Chief Executive Officer Andrew L. Rogal commented, "The proposed
acquisition of American Phoenix represents a unique opportunity to further
strengthen Hilb, Rogal and Hamilton Company. Combining with American Phoenix is
expected to increase HRH's middle market distribution capabilities, further
enhance our relationships with key insurance carriers and add specialty and
industry-specific programs and expertise--all objectives under the Company's
strategic plan. The acquisition will also offer opportunities to provide
additional services and risk management expertise to our clients with costs
spread over a broader revenue base and to accelerate revenue growth through
expanded cross-selling programs."
Mr. Rogal continued, "The many strategic advantages, the fair price and terms,
potential for cost savings and the favorable impact on our earnings and outlook
make the acquisition compelling for HRH. Although the transaction will increase
our borrowings, we are comfortable with the added financial leverage in view of
the substantial cash flows expected from the combination and the fact that a
portion of the debt is convertible. By combining the strengths of the two firms,
our confidence in HRH's ability to meet its earnings growth targets for 1999 and
beyond will be significantly enhanced."
Robert W. Fiondella, Phoenix's Chairman, President and Chief Executive Officer,
said, "This transaction is part of our strategy to focus on wealth management.
We will be better served in the pursuit of this strategy through our equity
ownership position and our strategic marketing relationship with HRH. We believe
this relationship represents significant advantages for Phoenix and HRH."
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HILB, ROGAL AND HAMILTON COMPANY AGREES
TO ACQUIRE AMERICAN PHOENIX CORPORATION--Continued
Phoenix will become a large shareholder of HRH, with ownership on a diluted
basis, assuming conversion of the notes, of approximately 16% of HRH's Common
Stock. Subsequent to the transaction, the size of the board of directors will be
increased from nine to thirteen members and American Phoenix's current President
and Chief Executive Officer, Martin L. Vaughan, III will join the Company in the
role of Chief Operating Officer. Mr. Vaughan will also join the board of
directors. Also joining the expanded board will be Mr. Fiondella, David W.
Searfoss, Phoenix's Executive Vice President and Chief Financial Officer, and
HRH's Executive Vice President, Timothy J. Korman.
The Company intends to finance the cash portion of the purchase price with a new
bank credit facility providing total debt capacity of $110 million. Bank
borrowings under existing credit facilities totaled $40 million at the end of
1998.
The Company also announced that it has scheduled its 1999 Annual Meeting of
Shareholders for June 8, 1999 to follow the expected consummation of the
acquisition in May 1999.
The Company cautions readers that the statements contained herein regarding the
Company's future operations and business prospects are forward-looking
statements made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements are based upon
management's current knowledge and assumptions about future events and involve
risks and uncertainties that could cause actual results to differ materially
from anticipated results. For more details on factors that could affect
expectations, see the Company's Annual Report on Form 10-K for the year ended
December 31, 1997, as filed with the Securities and Exchange Commission.
Hilb, Rogal and Hamilton Company provides insurance agency services to a wide
spectrum of clients through a network of 59 insurance agencies in the United
States. The Company is traded on the New York Stock Exchange, symbol HRH, and is
ranked as the 8th largest United States insurance agency.
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