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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): April 3, 1998
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M. H. RHODES, INC.
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(Exact Name of Registrant as Specified in its Charter)
Delaware 0-1412 06-0509270
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(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
99 Thompson Road, Avon, Connecticut 06001
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(Address of Principal Executive Offices) (Zip Code)
(860) 673-3281
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(Registrant's Telephone Number, Including Area Code)
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Item 5. Other Events
On April 6, 1998, M.H. Rhodes, Inc. (the "Company") announced that
it had entered into a merger agreement (the "Merger Agreement") with Owosso
Corporation ("Owosso") providing for the merger of Cramer Company, a
wholly-owned subsidiary of Owosso ("Cramer"), with and into the Company (the
"Merger").
Under the terms of the Merger Agreement, each outstanding share of
common stock, par value $1.00 per share, of the Company, other than shares to be
cancelled pursuant to the Merger Agreement and shares held by Dissenting
Shareholders (as defined in the Merger Agreement), will be converted into the
right to receive, without interest, $14.51 per share. The transaction is subject
to various closing conditions including the approval of the Company's
stockholders. Accordingly, there is no assurance that the Merger will be
completed.
A copy of the joint press release issued by the Company and Owosso
announcing the execution of the Merger Agreement is attached hereto as Exhibit
99A and is incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits
(a) Financial statements of business acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits
Exhibit No. Description
(99A) Joint press release of Owosso Corporation and M.H. Rhodes,
Inc. dated April 6, 1998.
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SIGNATURE
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.
M.H. RHODES, INC.
By: /s/ Joseph L. Morelli
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Joseph L. Morelli
Chairman and President
Date: April 17, 1998
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EXHIBIT INDEX
Sequential Numbering
System, Page Number or
Item No. Description Cross Reference Information
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99A Joint press release of Owosso
Corporation and M.H. Rhodes, Inc.,
dated April 6, 1998.
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EXHIBIT 99A
FOR IMMEDIATE RELEASE:
April 6, 1998
OWOSSO CORPORATION TO ACQUIRE M. H. RHODES, INC.
AND CONSOLIDATE SUBSIDIARY
April 6, 1998 - King of Prussia, PA and Avon, CT - Owosso Corporation (Nasdaq:
OWOS) and M. H. Rhodes, Inc. announced today that they have signed a definitive
agreement in which Owosso will acquire all of the outstanding stock of M. H.
Rhodes, Inc. Rhodes is a publicly-held manufacturer of mechanical timers and
photoelectric controls, located in Avon, Connecticut. The purchase price of
$14.51 per Rhodes share equates to $2.9 million, and Owosso will assume or repay
debt of approximately $1.3 million. In its fiscal year ended December 31, 1997,
Rhodes reported net sales of $8.5 million and EBITDA of $0.5 million. The
transaction, expected to be completed in Owosso's fiscal third quarter, is
subject to certain conditions, including approval by Rhodes' shareholders.
Owosso also announced that it intends to consolidate the operations of its
Cramer subsidiary, located in Old Saybrook, Connecticut, into Rhodes'
manufacturing facility as soon as possible after closing. Cramer will be merged
into Rhodes and will operate as a division of Rhodes. Owosso estimates that it
will incur pre-tax expenses of $1.5 to $2.0 million for the costs of closing its
Old Saybrook facility and moving Cramer's operations to Avon, the majority of
which would be recognized at closing. These expenses are expected to consist
primarily of duplicate lease expenses, severance costs and the cost of moving
the physical assets.
Joseph Morelli, Rhodes' president, will run the combined entity, while Jim
Pogmore, Cramer's president will be executive vice president of Rhodes and
president of the Cramer division. Mr. Morelli commented, "This merger represents
an excellent opportunity for our company and our employees. By combining with
Cramer and Owosso, M. H. Rhodes will have a larger base of business, and we feel
that our company will be in an improved position to prosper going forward."
George B. Lemmon, Jr., Owosso's president and chief executive officer,
commented, "The sale of our agricultural equipment businesses, combined with the
purchase of Astro Air, announced last week, and today's announcement represent a
strategic redeployment of our capital into components businesses. These
operations fit within Owosso's core competencies in managing manufacturing
processes and serving our OEM customers through on-time delivery of high quality
engineered components."
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"Cramer has been struggling with a declining market, and its fixed costs in Old
Saybrook are too high for the company to compete successfully. We believe that
the combined company can show cost savings in excess of $1 million per year
compared to operating separately. By moving to Avon, we hope to bring Cramer's
cost structure into line and make its products more competitive. At the same
time, spreading Rhodes' overhead over higher volume should benefit its
profitability as well. We do not anticipate the need to expand Rhodes' facility
in the near future to accommodate the addition of Cramer's operations."
Owosso Corporation is a diversified manufacturer of engineered component
products and specialized equipment. By operating in narrowly defined niche
markets, Owosso seeks to achieve revenue growth through market penetration and
new product development, while maximizing profit margins. Owosso currently has
manufacturing facilities in nine states and sells its products nationwide.
This press release contains forward-looking statements that involve a number of
risks and uncertainties. The purchase of Rhodes is subject to approval by
Rhodes' shareholders as well as the satisfaction of customary conditions, some
of which are outside of the Company's control. Accordingly, there can be no
assurance that the purchase will be completed. Factors that could cause actual
results to differ materially from those reflected in the forward-looking
statements include, but are not limited to, the ultimate cost and timing of
moving Cramer's business, realization of anticipated cost savings in the merger,
adverse developments in economic factors influencing the manufacturing sector of
the economy, lack of availability or price increases of certain commodities, as
well as the additional factors discussed in the Company's Annual Report on Form
10-K for the year ended October 26, 1997 and Form 10-Q for the quarter ended
January 25, 1998 in the section captioned "Management's Discussion and Analysis
of Financial Condition and Results of Operations."
To receive additional information on Owosso Corporation, via fax at no charge,
dial 1-888-OWOS-010 or visit our web site at www.owosso.com
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