SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------
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): November 10, 1998
ROANOKE ELECTRIC STEEL CORPORATION
(Exact name of Registrant as specified in its charter)
Virginia 0-2389 54-0585263
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
P. O. Box 13948
Roanoke, Virginia 24038-3948
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (540) 342-1831
- ------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
- 1 -
<PAGE>
Item 5. Other Events.
On November 10, 1998, Roanoke Electric Steel Corporation, a Virginia
corporation, (the "Parent") and Steel of West Virginia, Inc., a Delaware
corporation, (the "Company") issued a joint press release relating to the
execution of the Agreement and Plan of Merger, dated as of November 10, 1998, by
and among the Company, Parent and SWVA Acquisition, Inc., a Virginia
corporation, (the "Purchaser") and related documents. A copy of the joint press
release is attached hereto as Exhibit 99 and is incorporated herein by
reference.
Item 7. Financial Statements, Proforma Financial Information and Exhibits.
(c) Exhibits.
99 - Press Release dated November 10, 1998.
- 2 -
<PAGE>
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.
ROANOKE ELECTRIC STEEL CORPORATION
By s/Donald G. Smith
-----------------------------------
Donald G. Smith
Chairman and Chief Executive Officer
Date: November 10, 1998
- 3 -
Exhibit 99
NEWS RELEASE
CONTACT: RESCO - Donald G. Smith (540) 342-1831
SWVA - Timothy R. Duke (304) 696-8200
ROANOKE ELECTRIC STEEL CORPORATION
AND STEEL OF WEST VIRGINIA, INC.
ANNOUNCE AN AGREEMENT FOR RESCO
TO ACQUIRE SWVA
Roanoke, VA, November 10, 1998 - Roanoke Electric Steel Corporation
(NASDAQ- NNM-RESC) and Steel of West Virginia, Inc. (NASDAQ-NNM-SWVA) announced
that Roanoke Electric Steel Corporation ("RESCO") will, pursuant to an agreement
signed today, acquire Steel of West Virginia, Inc. ("SWVA"), a Huntington, West
Virginia, steel manufacturer. The transaction contemplates that RESCO will pay
$10.75 per share for each outstanding share of common stock of SWVA, on a
fully-diluted basis, and assume all of SWVA's indebtedness, in a transaction
worth approximately $116.7 million.
The transaction has been unanimously approved by the Boards of Directors of
both companies, and the Board of SWVA has agreed to recommend that its
shareholders accept the RESCO offer. The transaction will be concluded through a
tender offer, followed by a merger. The offer is subject to customary
conditions, including the tender of a majority of the shares of SWVA common
stock and termination of the Hart-Scott-Rodino waiting period.
Through the merger, SWVA will become a wholly-owned subsidiary of RESCO,
and each share of SWVA common stock not purchased in the offer will be converted
to the right to receive the cash price paid per share in the offer. The
obligations of RESCO are not subject to any financing condition. A bank
syndicate has been arranged for financing the transaction.
"Together we will be a much larger player in the market, with sales of
approximately $400,000,000" said Donald G. Smith, Chairman and CEO of RESCO.
"Steel of West Virginia is an excellent strategic fit with our business. We will
expand our range of products and broaden our sales." Smith added that "we
anticipate that the acquisition will result in an immediate increase in our
earnings per share."
"This transaction offers excellent value and an attractive premium for our
shareholders, and at the same time, our employees, suppliers and customers will
benefit from the strength of our combined companies," said Timothy R. Duke, CEO
and President of SWVA. Mr. Duke will
- more -
<PAGE>
remain as president of the SWVA subsidiary of RESCO and will be joining the
Board of RESCO upon the closing of the transaction.
As part of the transaction, SWVA has agreed to grant an option to RESCO to
purchase up to 1,196,748 newly issued shares of SWVA common stock, exercisable
upon the occurrence of certain events, and to pay a $5,000,000 "break-up" fee
under certain circumstances. Finally, as a part of the transaction, SWVA has
amended its Shareholder Rights Plan to provide that RESCO will not become an
"Acquiring Person" or trigger the dilution provisions of that Plan by preceding
with this transaction.
Janney Montgomery Scott is serving as financial advisor to SWVA, and Ewing
Monroe Bemiss & Co. is the financial advisor to RESCO. Both have issued fairness
opinions concerning the transaction to their respective clients.
RESCO, founded in 1955 by John W. Hancock, Jr., manufactures, fabricates
and markets merchant steel products, billets, open web steel joists and
reinforcing bars. It earned approximately $17,000,000 on sales of approximately
$265,000,000 in 1997, the second best year in the company's history. The main
plant is a mini-mill located in Roanoke, Virginia. Four subsidiaries are
involved in various steel-related activities consisting of steel scrap
processing, steel bar joist fabrication and reinforcing bar fabrication. The
company presently employs approximately 1,150 persons in Virginia, South
Carolina and Ohio.
SWVA operates a mini-mill in Huntington, West Virginia, and steel
fabrication facilities in Huntington and Memphis, Tennessee. The company earned
approximately $5,000,000 on sales of approximately $113,000,000 in 1997.
Employment is approximately 600 in West Virginia and Tennessee.
SWVA, headquartered in Huntington, West Virginia, custom designs and
manufactures special steel products principally for use in the construction of
truck trailers, industrial lift trucks, off-highway construction equipment (such
as bulldozers and graders), manufactured housing, guard rail post, and mining
equipment. RESCO and SWVA do not generally compete as regards customers and
products.
The offer will be made only pursuant to definitive offering documents,
which will be filed with the Securities and Exchange Commission and mailed to
SWVA stockholders promptly.
Statements contained in this release that are not historical facts are
forward-looking statements as that term is defined in the Private Securities
Litigation Reform Act of 1995. All forward-looking statements are subject to
risks and uncertainties which could cause actual results to differ from those
projected.
- more -
<PAGE>
Other factors that may cause actual results to differ from the
forward-looking statements contained in this release and that may affect either
company's prospects in general are described in the companies' filings with the
Securities and Exchange Commission.
# # #
- more -
