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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
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Date of report (Date of earliest event reported): MAY 6, 1997
BW/IP, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 1-11897 33-0270574
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
200 OCEANGATE BOULEVARD, SUITE 900, LONG BEACH, CALIFORNIA 90802
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (562) 435-3700
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ITEM 5. OTHER EVENTS
On May 6, 1997, BW/IP, Inc. ("BW/IP") entered into an Agreement and Plan of
Merger (the "Merger") whereby it would merge in a stock-for-stock merger of
equals with Durco International Inc. ("Durco"). The Merger will be accounted for
as a pooling of interests transaction.
The agreement calls for Durco shareholders to retain their present shares and
for BW/IP shareholders to receive 0.6968 shares of Durco common stock. The
exchange ratio was based on the average ratio of closing share prices for the 15
consecutive trading days ended May 2, 1997.
Completion of the Merger is subject to approval by the shareholders of both
Durco and BW/IP and the expiration of all applicable waiting periods under the
Hart-Scott-Rodino Antitrust Improvement Act of 1976.
Durco and BW/IP have agreed to pay each other termination fees and to reimburse
certain expenses in the event the Merger is not consummated because of a
competing transaction. The companies have also granted each other options for
19.9% of each other's common stock exercisable under certain circumstances.
In connection with the Merger certain changes were made to the Rights Agreement
between BW/IP, Inc. and American Stock Transfer & Trust Company.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits:
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4 Amendment to the Rights Agreement between BW/IP, Inc. and
American Stock Transfer & Trust Company, dated as of
May 6, 1997.
99 Form of News Release, dated May 6, 1997.
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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 hereunto duly authorized.
BW/IP, Inc.
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(Registrant)
By: /s/ John D. Hannesson
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John D. Hannesson
Vice President, General Counsel
and Secretary
May 14, 1997
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EXHIBIT 4
AMENDMENT NO. 1 TO THE RIGHTS AGREEMENT
AMENDMENT NO. 1, dated as of May 6, 1997 (this "Amendment"), to the
RIGHTS AGREEMENT, dated as of July 26, 1993 (the "Rights Agreement"), between
BW/IP, Inc., a Delaware corporation (the "Company") and American Stock Transfer
& Trust Company (the "Rights Agent"). Capitalized terms used but not otherwise
defined herein have the meanings assigned to such terms in the Rights Agreement.
W I T N E S S E T H:
WHEREAS, the parties hereto are parties to the Rights Agreement;
WHEREAS, the parties hereto desire to amend Section 1(a) of the Rights
Agreement as set forth below to exempt certain parties from the definition of
Acquiring Person;
WHEREAS, the parties hereto desire to amend Section 7(a) of the Rights
Agreement to provide that the Rights shall expire upon the consummation of the
transactions contemplated by the Agreement and Plan of Merger, dated as of May
6, 1997 (the "Merger Agreement"), among Durco International, Inc., a New York
corporation, the Company, and Bruin Acquisition Corp., a Delaware corporation;
WHEREAS, the transactions contemplated by the Merger Agreement, either
singly or taken as a whole, are not events such that the provisions Section 11
or Section 13 of the Rights Agreement apply; and
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. Amendments to Rights Agreement. (a) Section 1(a) of the Rights
Agreement, is hereby amended by (A) deleting the word "or" immediately preceding
clause (ii) of the first sentence of subparagraph (a) and replacing it with the
punctuation mark "," and (B) deleting the punctuation mark "." immediately after
clause (ii) of the first sentence of subparagraph (a) and replacing it with, ",
and (iii) Durco International, Inc., a New York corporation or Bruin Acquisition
Corp., a Delaware corporation.".
(b) Section 7(a) of the Rights Agreement is hereby amended by (A)
deleting the word "or" immediately preceding subparagraph (iv), and (B) deleting
the parenthetical phrase at the end of subparagraph (iv) and replacing it with,
"or (v) immediately prior to the
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consummation of the merger contemplated by the Agreement and Plan of Merger,
dated as of May 6, 1997, among Durco International, Inc., a New York
corporation, the Company, and Bruin Acquisition Corp., a Delaware corporation
(the earliest of (i), (ii), (iii), (iv) or (v) being herein referred to as the
"Expiration Date")."
2. Effect of Amendments. Except as and to the extent expressly set
forth herein, the Rights Agreement shall remain in all respects in full force
and effect.
3. Other Sections of the Rights Agreement. The transactions
contemplated by the Merger Agreement are not, either taken singly or as a whole,
events which would trigger the application of the provisions of Section 11 or
Section 13 of the Rights Agreement.
4. Headings. The descriptive headings contained in this Amendment are
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Amendment.
5. Governing Law. This Amendment shall be governed by, and construed in
accordance with, the laws of the State of Delaware.
6. Counterparts. This Amendment may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment or
caused this Amendment to be executed by their respective officers thereunto duly
authorized as of the date first written above.
BW/IP, INC.
By /s/ BERNARD G. RETHORE
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Name: Bernard G. Rethore
Title: Chairman, President and CEO
AMERICAN STOCK TRANSFER &
TRUST COMPANY
By /s/ HERBERT J. LEMMER
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Name: Herbert J. Lemmer
Title: Vice President
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CERTIFICATE OF AMENDMENT
I hereby certify that Amendment No. 1, dated as of May 6, 1997, to the
Rights Agreement, dated as of July 26, 1993, between BW/IP, Inc. and American
Stock Transfer & Trust Company is in compliance with the terms of Section 26 of
such Rights Agreement.
BW/IP, INC.
By: /s/ JOHN D. HANNESSON
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Name: John D. Hannesson
Title: Vice President, General
Counsel and Secretary
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EXHIBIT 99
[BW/IP LETTERHEAD]
News Release
May 6, 1997
NEWS FROM: BW/IP, INC.
SUBJECT: BW/IP, INC. AND DURCO INTERNATIONAL INC.
ANNOUNCE MERGER AGREEMENT
FOR INFORMATION: Dan Peoples (562) 491-5086 or (619) 552-1456
Cheryl McNeal, Durco International (513) 476-6106
LONG BEACH, CA AND DAYTON, OH - Durco International Inc. (NASD: DURI) and BW/IP,
Inc. (NYSE: BWF) announced today that the two industrial manufacturing companies
have agreed to merge in a stock-for-stock merger of equals that will be
accounted for as a pooling of interests transaction. Post-merger, the company
will operate under a new name, which will be announced before the transaction
closes. BW/IP and Durco are two of the leading manufacturers and distributors of
pumps, seals, valves and control valves in the U.S., and the strategic
combination will create a leading global supplier of fluid handling and control
equipment.
The agreement calls for Durco shareholders to retain their present shares,
and for BW/IP shareholders to receive 0.6968 shares of Durco common stock.
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2 - BW/IP, Inc. and DURCO International Inc. Announce Merger Agreement
The exchange ratio was based on the average ratio of closing share prices
for the 15 consecutive trading days ended May 2, 1997.
Bernard G. Rethore, BW/IP's chairman, president, and chief executive
officer, will become chairman and chief executive officer of the new company.
William M. Jordan, Durco's chairman, president and chief executive officer, will
become president and chief operating officer of the new company.
Following the merger, Durco's Board of Directors will consist of 11 people,
five designated by Durco (including Mr. Jordan), four designated by BW/IP
(including Mr. Rethore), and two new Directors unaffiliated with either company.
Mr. Rethore said, "This merger provides critical mass and creates a company
that is stronger and better able to service our customers. By merging our two
companies, we are creating the most cost-effective organization possible and
adding value for shareholders of both companies. We expect as a result of this
merger to achieve sales increases in excess of current growth rates and an
expected run rate of total synergies - including cost savings - of between $35
and $45 million over the next three years."
Mr. Jordan said, "Our customers will now enjoy the convenience and cost
efficiency of `one-stop shopping' in expanded areas of the world. The merger
will allow us to become a true global supplier of a larger array of
complementary products, including sophisticated pumps, valves and seals, than
either company did individually. Our customers will benefit from enhanced
customer service as we are able to offer broader product lines and more
localized sales and service
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3 - BW/IP, Inc. and DURCO International Inc. Announce Merger Agreement
capabilities. And our employees will benefit from working for one of the leaders
in a changing industry."
The new company also will be financially stronger. It will have significant
operating cash flows and a solidly capitalized balance sheet, enabling it to be
very competitive in pursuing new business opportunities. Based on yesterday's
closing share prices, the combined companies will have a market capitalization
in excess of $1.2 billion. In 1996, the combined company would have had
pro-forma sales of approximately $1.1 billion, and earnings from continuing
operations of $71 million with total assets of $830 million.
The combined company is expected to pay dividends consistent with the
recent dividends paid by Durco (approximately $0.56 per share/year).
Completion of the merger is subject to approval by the shareholders of both
Durco and BW/IP at meetings that are expected to be held over the summer, and
the expiration of all applicable waiting periods under the Hart-Scott-Rodino
Antitrust Improvement Act of 1976.
Durco and BW/IP have agreed to pay each other termination fees and to
reimburse certain expenses in the event the merger is not consummated because of
a competing transaction. The companies have also granted each other options for
19.9% of each other's common stock exerciseable under certain circumstances.
BW/IP is a worldwide supplier of advanced-technology fluid transfer and
control equipment, systems and services. Its principal products are pumps,
mechanical seals and valves. BW/IP designs, manufactures, distributes and
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4 - BW/IP, Inc. and DURCO International Inc. Announce Merger Agreement
services throughout the world both highly engineered and standard centrifugal
pumps primarily for use in the power and petroleum industries, mechanical seals
and seal support systems primarily for use in the petroleum and chemical
industries and valves for use in the power, process and marine industries. BW/IP
has manufacturing facilities in seven countries and service centers in 20
countries.
Durco is principally engaged in the design, manufacture and marketing of
fluid handling equipment, primarily pumps, valves, control valves and mechanical
seals, for the global process industry. Durco specializes in the development of
precision-engineered equipment that is capable of withstanding the severely
deteriorating effects associated with the flow of acids, chemical solutions,
slurries and gases.
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