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UNITED STATES
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 (DATE OF EARLIEST EVENT REPORTED): DECEMBER 22, 1997
IMPERIAL HOLLY CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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TEXAS 001-10307 74-0704500
(STATE OR OTHER JURISDICTION OF (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER IDENTIFICATION
INCORPORATION OR ORGANIZATION) NO.)
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ONE IMPERIAL SQUARE, SUITE 200, P.O. BOX 9
SUGAR LAND, TEXAS 77487
(ADDRESS OF PRINCIPAL
EXECUTIVE OFFICES
AND ZIP CODE)
(281) 491-9181
(REGISTRANT'S TELEPHONE NUMBER,
INCLUDING AREA CODE)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
The Merger
On December 22, 1997 (the "Effective Date"), IHK Merger Sub
Corporation, a Delaware corporation (the "IHK Sub") and a wholly owned
subsidiary of Imperial Holly Corporation, a Texas corporation (the "Company"),
consummated the merger (the "Merger") of IHK Sub with and into Savannah Foods &
Industries, Inc., a Delaware corporation ("Savannah Foods") by acquiring all of
the outstanding shares of Common Stock, par value $0.25 per share ("Savannah
Common Stock"), of Savannah Foods that it did not already own. The Merger was
effected pursuant to the Agreement and Plan of Merger (the "Merger Agreement"),
dated September 12, 1997, among the Company, IHK Sub and Savannah Foods. IHK
Sub had previously acquired 14,397,836 shares of Savannah Common Stock (which
constituted 50.1% of the outstanding shares on a fully diluted basis) for
$20.25 per share in cash in a tender offer (the "Tender Offer") successfully
completed on October 17, 1997. In the Merger, the stockholders of Savannah
Foods received, subject to stockholder election and proration, (i) $20.25 in
cash, without interest thereon (the "Cash Consideration"), or (ii) a number of
shares of common stock, no par value ("Company Common Stock"), of the Company
equal to the quotient of $20.25 divided by $13.25 (the "Stock Consideration").
The total value of the consideration paid in the Merger and the Tender Offer
was approximately $582 million. Pursuant to the Merger Agreement, the number
of shares of Savannah Common Stock converted in to the right to receive Cash
Consideration in the Merger was (x) 70% of the number of shares of Savannah
Common Stock outstanding immediately prior to the Effective Date (which
included shares of Savannah Common Stock purchased in the Tender Offer) less
(y) the sum of (A) the shares of Savannah Common Stock held by IHK Sub (which
included shares of Savannah Common Stock purchased in the Tender Offer), the
Company or any of its subsidiaries or held in the treasury of Savannah Foods
and (B) the shares of Savannah Common Stock held by stockholders who perfected
their appraisal rights under Delaware law. Attached as Exhibit 99.1 and
incorporated herein by reference, is a press release by the Company announcing
the consummation of the Merger.
The Financing
In order to finance a portion of the cash consideration paid in the
Merger, to pay certain related expenses and to provide for the Company's future
working capital and other general corporate purposes, the Company amended and
restated the senior secured credit facility (the "Credit Facility") arranged by
Lehman Brothers Inc. (which served as a financial advisor to the Company in
connection with the Merger) in connection with the Tender Offer. The amended
and restated Credit Facility is comprised of a term loan facility aggregating
$255 million (the "Term Loans") and a revolving credit facility in the amount
of $200 million (the "Revolver"). The Credit Facility is guaranteed by
substantially all of the Company's domestic direct and indirect subsidiaries
(including Savannah Foods and its subsidiaries, collectively, the
"Guarantors"), and is secured by substantially all the assets of the Company
and each of the Guarantors. The Term Loans consist of two tranches in the
aggregate principal amounts of $150 and $105 million, respectively, and will
fully amortize over a period of six and eight years, respectively. The
Revolver is available on a revolving basis commencing on the Effective Date and
ending five years after such date. The Term Loans and the Revolver will bear
interest, at the Company's election, at either (i) the highest of (A) the prime
rate of the administrative agent selected in the syndication process, (B) the
secondary market rate for certificates of deposit plus 1%, or (C) the federal
funds effective rate plus 0.50%, in each case plus a margin ranging from 0.25%
to 1.00% or (ii) the rate for Eurodollar deposits in the interbank Eurodollar
market plus a margin ranging from 1.25% to 2.00%.
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In order to finance a portion of the cash consideration paid in the
Merger, to pay certain related expenses and to provide for the Company's future
working capital and other general corporate purposes, the Company also issued
$250 million principal amount of 9 3/4% Senior Subordinated Notes due 2007 (the
"Notes"). The Notes are unsecured but are guaranteed by each of the
Guarantors to the Credit Facility.
Savannah Foods
Savannah Foods is engaged in the production, marketing and
distribution of food products, principally refined sugar, and is based in
Savannah, Georgia.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(A-B) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED AND PRO FORMA
FINANCIAL INFORMATION
The financial statements and pro forma financial information required
pursuant to this Item 7 with respect to the consummation of the Merger as
described in Item 2 above will be filed by amendment hereto within the time
period required.
(C) EXHIBITS
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Exhibit 99.1 -- Press Release issued by Imperial Holly Corporation on December 22, 1997.
Exhibit 99.2 -- Agreement and Plan of Merger, dated September 12, 1997 among Imperial Holly
Corporation, IHK Merger Sub Corporation and Savannah Foods & Industries, Inc.
(Incorporated by reference to the Company's Current Report on Form 8-K, dated as of
October 17, 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.
IMPERIAL HOLLY CORPORATION
Date: January 5, 1998
By: H. P. MECHLER
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H. P. Mechler
Vice President -- Accounting
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EXHIBIT INDEX
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Exhibit No. Page No.
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Exhibit 99.1 -- Press Release issued by Imperial Holly Corporation on
December 22, 1997.
Exhibit 99.2 -- Agreement and Plan of Merger, dated September 12, 1997
among Imperial Holly Corporation, IHK Merger Sub
Corporation and Savannah Foods & Industries, Inc.
(Incorporated by reference to the Company's Current Report
on Form 8-K, dated as of October 17, 1997).
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EXHIBIT 99.1
IMPERIAL HOLLY CORPORATION
COMPLETES ACQUISITION OF
SAVANNAH FOODS & INDUSTRIES, INC.
AND ISSUES SENIOR SUBORDINATED NOTES
Sugar Land, Texas -- December 22, 1997 -- Imperial Holly Corporation (AMEX:
IHK) today completed its acquisition of Savannah Foods & Industries, Inc. (NYSE:
SFI) when Savannah was merged with a wholly-owned subsidiary of Imperial Holly.
The merger, which was approved by each company's stockholders at special
meetings held December 19, 1997, is the second and final step in the acquisition
of Savannah by Imperial Holly pursuant to an Agreement and Plan of Merger dated
September 12, 1997. In the first step, Imperial Holly completed a tender offer
for 50.1% of the outstanding shares of Savannah's common stock at a price of
$20.25 per share on October 16, 1997. In the merger, 19.9% of the outstanding
shares of Savannah's common stock were converted into the right to receive
$20.25 in cash, and the remaining 30% of the outstanding shares were converted
into the right to receive $20.25 of Imperial Holly common stock, valued in the
exchange at $13.25 per share.
In connection with the acquisition of Savannah Foods, Imperial Holly issued
$250,000,000 of 9 3/4% Senior Subordinated Notes due 2007 and entered into a
$455,000,000 Senior Secured Credit Facility. The Senior Secured Credit Facility
is comprised of a term loan facility aggregating $255,000,000 and a $200,000,000
revolving credit facility. The proceeds from the sale of the Senior Subordinated
Notes and the term loans under the Senior Secured Credit Facility were used to
finance the acquisition of Savannah Foods.
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Imperial Holly is the largest and most geographically diverse producer and
marketer of refined sugar in the United States. Imperial Holly refines raw cane
sugar at four refineries located in Texas, Georgia, Florida and Louisiana and
produces beet sugar at 12 beet factories located in California, Wyoming,
Montana, Texas and Michigan.
Contact: Karen Mercer at Imperial Holly Corporation
(281-491-9181)
The statements regarding future market prices and the other statements which
are not historical facts contained in this release are forward-looking
statements that involve risks, uncertainties and assumptions, including, but
not limited to, market factors, the effect of weather and economic conditions,
farm and trade policy, the available supply of sugar, available quantity and
quality of sugar beets and other factors detailed in the Company's Securities
and Exchange Commission filings. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual outcomes may vary materially from those indicated.
