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Filed Pursuant to Rule 424(b)(2)
Registration No. 333-29937
800,000 SHARES
CARAUSTAR INDUSTRIES, INC.
COMMON STOCK
This Prospectus covers the offer and sale of up to 800,000 shares of
Common Stock, par value $.10 per share (the "Common Stock"), of Caraustar
Industries, Inc. (together with its wholly owned subsidiaries, the "Company" or
"Caraustar"), which the Company may issue from time to time in connection with
the future direct and indirect acquisitions of other businesses, properties or
securities in business combination transactions in accordance with Rule
415(a)(1)(viii) of Regulation C under the Securities Act of 1933, as amended
(the "Securities Act") or as otherwise permitted under the Securities Act.
The Company expects that the terms upon which it may issue the shares in
business combination transactions will be determined through negotiations with
the securityholders or principal owners of the businesses whose securities or
assets are to be acquired. It is expected that the shares that are issued
will be valued at prices reasonably related to market prices for the Common
Stock prevailing either at the time an acquisition agreement is executed or at
the time an acquisition is consummated.
This Prospectus will be used only in connection with the acquisition of
businesses, properties or securities in business combination transactions that
would be exempt from registration but for the issuance of Common Stock and the
possibility of integration with other transactions. This Prospectus will be
furnished to security holders of the business, properties or securities to be
acquired.
Persons receiving Common Stock in connection with the acquisition may be
required to agree to hold all or some portion of the Common Stock for a period
of up to two years after the date of such acquisition. See "Plan of
Distribution."
If an acquisition has a material financial effect upon the Company, a
current report on Form 8-K will be filed subsequent to the acquisition
containing financial and other information about the acquisition that would be
material to subsequent acquirors of Common Stock offered hereby, including pro
forma information for Caraustar and historical financial information about the
company being acquired. A current report on Form 8-K will also be filed when
an acquisition does not per se have a material effect upon the Company, but if
aggregated with other acquisitions since the date of the Company's most recent
audited financial statements, would have such a material effect.
If an acquisition of a business, properties or securities in a business
combination transaction is not exempt from registration even if integration is
not taken into account, then the offerees of Common Stock in such acquisition
will be furnished with copies of this Prospectus as amended by a post-effective
amendment to the Registration Statement on Form S-4 of which this Prospectus is
a part.
The Common Stock is quoted on the NASDAQ National Market System under the
symbol "CSAR." On July 17, 1997, the closing price per share of the Common
Stock, as reported by NASDAQ, was 32 3/4.
All expenses of this offering (this "Offering") will be paid by the
Company. No underwriting discounts or commissions will be paid in connection
with the issuance of shares by the Company in business combination
transactions, although finder's fees may be paid with respect to specific
acquisitions. Any person receiving a finder's fee may be deemed to be an
Underwriter within the meaning of the Securities Act.
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AN INVESTMENT IN THE COMMON STOCK OFFERED HEREBY INVOLVES RISKS.
SEE "RISK FACTORS" COMMENCING ON PAGE 3.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THE PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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The date of this Prospectus is July 18, 1997.
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AVAILABLE INFORMATION
The Company is subject to the informational and reporting requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and in accordance therewith files reports, proxy statements and other
information with the Securities and Exchange Commission ("SEC"). The
Registration Statement and exhibits and schedules thereto, as well as such
reports, proxy statements and other information, may be inspected and copied
at the Public Reference Section of the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the regional offices of the SEC located at 7
World Trade Center, Suite 1300, New York, New York 10048 and at 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of all or any
part of such materials may be obtained from any such office upon payment of the
fees prescribed by the SEC. The SEC maintains a World Wide Web site
(http://www.sec.gov), which contains reports, proxy and information statements
and other information filed electronically through the SEC's Electronic Data
Gathering, Analysis and Retrieval System ("EDGAR"). The Common Stock is
currently quoted on the NASDAQ National Market System; such reports, statements
and other information also can be inspected at the offices of NASDAQ
Operations, 1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed with the SEC a Registration Statement on Form S-4
under the Securities Act with respect to the Shares offered hereby (the
"Registration Statement"). As permitted by the rules of the SEC, this
Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto. For further
information with respect to the Company and the Shares, reference is made to
the Registration Statement, including the exhibits and schedules filed as part
thereof. Statements contained in this Prospectus, and in any document
incorporated herein by reference, as to the contents of any contract or any
other document are not necessarily complete, and, in each instance, reference
is hereby made to the copy of the contract or document filed as an exhibit to
the Registration Statement or such document, each such statement being
qualified in all respects by this reference thereto. The Registration
Statement has been filed through EDGAR and is also publicly available through
the SEC's Web site (http://www.sec.gov).
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the SEC pursuant to
the Exchange Act are incorporated herein by reference: (i) Annual Report on
Form 10-K for the year ended December 31, 1996; (ii) Quarterly Report on
Form 10-Q for the quarter ended March 31, 1997; (iii) Current Report on
Form 8-K filed July 29, 1996, as amended by Form 8-K/A filed September 25,
1996; (iv) Amendment No. 1 on Form 10-Q/A to the Quarterly Report on Form 10-Q
for the quarter ended September 30, 1995; (v) the description of the Common
Stock contained in the Company's Registration Statement on Form 8-A filed with
the SEC pursuant to Section 12 of the Exchange Act and any amendment or report
filed by the Company for the purpose of updating such description and (vi) all
documents filed by the Company with the Commission pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the Offering of the Common Stock
offered hereby.
Any statement contained herein or in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein (or in any subsequently filed document that also is or is
deemed to be incorporated by reference herein) modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
All information appearing in this Prospectus is qualified in its entirety by
information and financial statements (including notes thereto) appearing in the
documents incorporated by reference herein, except to the extent set forth in
the immediately preceding statement.
The Company will provide, without charge, to each person to whom a copy
of this Prospectus is delivered, including any beneficial owner, upon written
or oral request of such person, a copy of any or all of the documents
incorporated by reference herein (other than exhibits to such documents, unless
such exhibits are specifically incorporated by reference into the information
that the Prospectus incorporates). Requests should be directed to Caraustar
Industries, Inc., 3100 Washington Street, Austell, Georgia 30001, Attention:
Corporate Secretary, telephone (770) 948-3101.
THE COMPANY
The Company is a major manufacturer of recycled paperboard and converted
paperboard products. The Company's executive offices are located at 3100
Washington Street, Austell, Georgia 30001, and its telephone number is (770)
948-3101.
RISK FACTORS
In addition to the other information contained in this Prospectus, the
following risk factors should be carefully considered in evaluating the Company
and its business before purchasing the Common Stock offered hereby. This
Prospectus, including information incorporated by reference herein, may contain
certain "forward-looking statements" within the meaning of the Securities Act
and the Exchange Act, which are based on the Company's expectations or beliefs,
as well as information currently available to management. When used in this
document, the words "anticipate," "estimate," "expect," and similar expressions
may identify such forward-looking statements. Although the Company believes
that the expectations reflected in any such forward-looking statements are
reasonable, it can give no assurance that such expectations will prove to be
correct. Any such statements are subject to certain risks, uncertainties and
assumptions. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results, performance or
financial condition may vary materially from those anticipated, estimated or
expected. Among the key factors that may have a direct bearing on the
Company's operating results, performance or financial condition are
fluctuations in raw material prices and the economy in general, the degree and
nature of competition, demand for the Company's products, changes in government
regulations, the Company's ability to complete
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acquisitions and integrate the operations of acquired businesses and other
matters described in this "Risk Factors" section and elsewhere in this
Prospectus.
POSSIBLE FUTURE INCREASES IN RECOVERED FIBER COSTS
Historically, the cost of recovered fiber, which is derived from recycled
paperstock and is the Company's only significant raw material, has fluctuated
significantly due to market and industry conditions. For example, the
Company's average recovered fiber cost per ton of paperboard produced increased
from $43 per ton in 1993 to $144 per ton in 1995, an increase of 235%, before
dropping to $66 in 1996. Although the Company raised its selling prices in
response to the increase in raw material costs, it was not able to maintain its
operating margins during the entire period. There can be no assurance that the
Company will be able to recoup any future increases in the cost of recovered
fiber by raising the prices of its products.
ABILITY TO CONTROL GROWTH; EXPANSION AND ACQUISITION RISKS
The Company intends to continue increasing its production capacity in the
next several years. Such expansion entails operating, marketing and financial
risks, and its success is largely dependent upon the availability of working
capital to permit the Company to complete its capital expenditures program and
identify and consummate selected acquisitions. The Company has consummated
numerous acquisitions in recent years and actively seeks acquisition
opportunities. Once integrated, acquisitions may not achieve levels of
revenue, profitability or productivity comparable to those of the Company's
existing locations or may not otherwise perform as expected. The consummation
of acquisitions could result in the incurrence of additional indebtedness, the
issuance of additional capital stock having a dilutive effect on the Company's
shareholders, or both. Acquisitions also involve special risks, including
risks associated with unanticipated liabilities and contingencies, diversion of
management attention and possible adverse effects on earnings resulting from
increased goodwill amortization, increased interest costs, the issuance of
additional securities and difficulties related to the integration of the
acquired business. There can be no assurance that the Company will be able to
utilize increased production capacity at its existing facilities, to
successfully identify additional suitable acquisition candidates, complete
additional acquisitions or integrate acquired businesses into its operations.
UNFORESEEN ENVIRONMENTAL LIABILITIES OR COSTS
Compliance with federal, state and local governmental requirements,
particularly relating to wastewater discharge and air quality, is a significant
factor in the Company's business. Among other things, these laws and
regulations regulate the discharge of materials into the water, air and land
and govern the use and disposal of hazardous substances. The most significant
federal laws are the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA"), the Clean Air Act, the Clean Water Act, the Toxic
Substances Control Act and the Resource Conservation and Recovery Act ("RCRA").
These laws are administered by the United States Environmental Protection
Agency, and in some cases by state and local agencies. In addition, states in
which the Company operates have adopted supplemental environmental laws and
regulations, or have enacted their own parallel environmental programs, which
are enforced through various state and local administrative agencies. Under
CERCLA and other laws and regulations, the Company can be held strictly liable
if hazardous substances are found on real property owned or operated by the
Company or used by the Company as a disposal site. In recent years, the
Company has adopted a policy of assessing real property for environmental risks
prior to purchase. The Company is aware of issues regarding hazardous
substances at some of its facilities and one of its disposal sites, but in each
case a remedial plan is in place where necessary in the Company's opinion, and
the Company has reason to believe that any possible liabilities will not be
material, although there can be no assurance that such liabilities will not be
material. The Company regularly makes capital and operating expenditures to
stay in compliance with applicable environmental laws. Despite these compliance
efforts, risk of environmental liability is inherent in the operation of the
Company's businesses, as it is with other companies engaged in similar
businesses, and there can be no assurance that environmental liabilities,
including compliance and remediation costs, will not have a material adverse
effect on the Company in the future. In addition, future events, such as
changes in or modified interpretations of existing laws or regulations or
enforcement policies, or further investigation or evaluation of the potential
health hazards of certain products or business activities, may give rise to
additional compliance and other costs that could have a material adverse effect
on the Company.
HIGHLY COMPETITIVE MARKETS
The manufacture and sale of recycled paperboard and converted paperboard
products are highly competitive. The Company competes with a variety of
companies, some of which are larger and have greater resources than the
Company. In most of its markets the Company's competitors are capable of
supplying products that would meet customer needs. There can be no assurance
that the Company will be able to continue competing successfully.
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POTENTIAL ANTI-TAKEOVER EFFECT OF CERTAIN ARTICLES OF INCORPORATION AND BYLAW
PROVISIONS; POSSIBLE ISSUANCES OF PREFERRED STOCK; SHAREHOLDER RIGHTS PLAN
Certain provisions of the Company's articles of incorporation and bylaws,
as well as a shareholder rights plan, could have the effect of making it more
difficult for a third party to acquire, or of discouraging a third party from
acquiring, a majority of the outstanding voting stock of the Company and, as a
result, have the effect of discouraging bids for the Company's Common Stock at
a premium and adversely affecting the market price of the Common Stock. The
Company's articles of incorporation authorize 5,000,000 shares of preferred
stock (the "Preferred Stock"), which may be issued in the future without
further shareholder approval upon such terms and conditions, and having such
rights, privileges and preferences, as the Board of Directors may determine.
The rights of the holders of Common Stock will be subject to, and may be
adversely affected by, the rights of the holders of any Preferred Stock that
may be issued in the future. The Company's Board of Directors is divided into
three classes with staggered terms, and the Company's articles of incorporation
provide that directors may be removed only for cause. The shareholder rights
plan generally provides a mechanism by which the Board of Directors and
shareholders may act to substantially dilute the share position of any takeover
bidder who acquires 20% or more of the Common Stock.
DEPENDENCE ON KEY PERSONNEL
The Company's operations are dependent on the continued efforts of its
executive officers and senior management. In addition, the Company is
dependent on the performance and productivity of its local managers. The loss
of some of the Company's key managers could have an adverse effect on the
Company's operations, including the Company's ability to establish and maintain
customer relationships. The Company maintains no key person insurance policies
on any of its executive officers or other senior managers. If the Company is
unable to attract and retain key employees to perform these services, the
Company's business could be adversely affected.
STOCK PRICE VOLATILITY
From time to time, there may be significant volatility in the market
price of the Common Stock. Factors such as announcements of fluctuations in
the Company's or its competitors' operating results, recovered fiber costs,
market conditions for paper industry stocks or manufacturing stocks in general,
changes in general conditions in the economy or financial markets, natural
disasters or other developments could cause the market price of the Common
Stock to fluctuate substantially. In addition, the stock market in recent
years has experienced extreme price and volume fluctuations that often have
been unrelated or disproportionate to the operating performance of affected
companies. These broad fluctuations may adversely affect the market price of
the Common Stock.
PLAN OF DISTRIBUTION
This Prospectus covers the offer and sale of up to 800,000 shares which
the Company may issue from time to time in connection with the future direct
and indirect acquisitions of other businesses, properties or securities in
business combination transactions in accordance with Rule 415(a)(1)(viii) of
Regulation C under the Securities Act.
The Company expects that the terms upon which it may issue the shares
will be determined through negotiations with the securityholders or principal
owners of the businesses whose securities or assets are acquired. It is
expected that the shares that are issued will be valued at prices reasonably
related to market prices for the Common Stock prevailing either at the time an
acquisition agreement is executed or at the time an acquisition is consummated.
All expenses of this Offering will be paid by the Company. No
underwriting discounts or commissions will be paid in connection with the
issuance of shares by the Company in business combination transactions,
although finder's fees may be paid with respect to specific acquisitions. Any
person receiving a finder's fee may be deemed to be an Underwriter within the
meaning of the Securities Act.
The Company's Common Stock will be quoted on the NASDAQ national market
system, but the shares offered hereunder may be subject to certain contractual
holding period requirements.
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REGISTRAR AND TRANSFER AGENT
The registrar and transfer agent for the Common Stock is First Union
National Bank of North Carolina, Charlotte, North Carolina.
LEGAL MATTERS
Certain legal matters in connection with the shares of Common Stock
offered hereby will be passed on for the Company by Robinson, Bradshaw &
Hinson, P.A., Charlotte, North Carolina. Russell M. Robinson, II, a
shareholder in the firm of Robinson, Bradshaw & Hinson, P.A., is Chairman of
the Board of Directors of the Company. Robinson, Bradshaw & Hinson, P.A. is
the Company's principal outside legal counsel. Certain members of such firm
beneficially owned approximately 118,355 shares of the Company's Common Stock
as of the date of this Prospectus.
EXPERTS
The consolidated financial statements and schedule incorporated by
reference in this Prospectus and elsewhere in the registration statement have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto, and are incorporated by
reference in reliance upon the authority of said firm as experts.
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__________________________
No dealer, salesperson or other person has been authorized to give any
information or to make any representations other than those contained
in this Prospectus, and, if given or made, such information or representations
must not be relied upon as having been authorized by the Company. This
Prospectus does not constitute an offer to sell, or a solicitation of an offer
to buy, to any person in any jurisdiction in which such offer or solicitation
is not authorized, or in which the person making such offer or solicitation is
not qualified to do so, or to any person to whom it is unlawful to make such
offer or solicitation. Neither the delivery of this Prospectus nor any sale
made hereunder shall, under any circumstances, create any implication that the
information contained herein is correct as of any date subsequent to the date
hereof.
TABLE OF CONTENTS
<TABLE>
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Page
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AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
REGISTRAR AND TRANSFER AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
</TABLE>
800,000 SHARES
CARAUSTAR INDUSTRIES, INC.
COMMON STOCK
============
PROSPECTUS
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July 18, 1997
