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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) August 29, 1996
THE LOEWEN GROUP INC.
(Exact name of registrant as specified in its charter)
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British Columbia, Canada 0-18429 98-0121376
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(State or other jurisdiction of (Commission File Number) (IRS Employer Identification No.)
incorporation)
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4126 Norland Avenue, Burnaby, British Columbia V5G 3S8
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code 604-299-9321
N/A
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(Former name or former address, if changed since last report)
Exhibit Index is on page 3
Page 1 of 5
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ITEM 5. OTHER EVENTS.
Pursuant to Form 8-K, General Instructions F, registrant hereby incorporates by
reference the press release attached hereto as Exhibit 99.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
Exhibit No. Description
Exhibit 99 The Loewen Group Inc. Press Release dated
August 29, 1996
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.
Dated: August 29, 1996
THE LOEWEN GROUP INC.
By: /s/ PETER S. HYNDMAN
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Name: Peter S. Hyndman
Title: Corporate Secretary
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EXHIBIT INDEX
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Sequential
Number Exhibit Page Number
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99 The Loewen Group Inc. 4
Press Release dated August 29, 1996
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The Loewen Group Inc.
August 29, 1996 Investor Contacts: Paul Wagler, Senior VP, Finance
Dwight Hawes, VP, Finance
(800)-347-7010
Media Contact: Dave Laundy, VP, Corporate
Communications
(604)-293-7857
Contact at Blackstone: Chinh Chu
(212)-836-9872
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FOR IMMEDIATE RELEASE
THE LOEWEN GROUP AND BLACKSTONE CAPITAL PARTNERS
COMPLETE PRIME SUCCESSION TRANSACTION
BURNABY, BC-The Loewen Group Inc. of Burnaby, B.C. and Blackstone Capital
Partners II Merchant Banking Fund L.P. of New York announced today the
successful completion of an innovative transaction to acquire Prime Succession
Inc. of Batesville, Indiana, North America's fourth largest supplier of funeral
services.
A new company in which Loewen will initially have a 24 per cent equity
interest, with Blackstone holding the remainder, was formed to acquire Prime
Succession for $320 million including transaction and financing costs. With 146
funeral homes and 16 cemeteries in 20 states, Prime Succession has annual
revenues of over $90 million and performs approximately 21,000 services a year.
The transaction is part of The Loewen Group's long term strategy of maintaining
a high growth rate through steadily improving internal efficiencies and the
acquisition of premier organizations in the industry.
Chairman and Chief Executive Officer Ray Loewen described the transaction as
"of major strategic benefit to the Loewen Group. This transaction is expected
to be accretive, retains maximum financial flexibility for Loewen and allows
Loewen to secure an option on a major strategic asset."
Stephen A. Schwarzman, Blackstone's president and chief executive officer,
said, "investing in promising situations in partnership with major corporations
is a cornerstone of Blackstone's investment philosophy. We are pleased to make
this investment in partnership with the Loewen Group."
The transaction secures an option for Loewen to acquire Blackstone's interest
in Prime Succession at a later date. Loewen can "call" or purchase Blackstone's
share in Prime Succession after four years and, after six years, Blackstone
can "put" or require Loewen to purchase its investment at a formula price. This
structure avoids the need for Loewen to issue
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shares now, at a price the Company considers undervalued, in order to acquire a
100 percent interest in Prime.
Mr. Loewen said the Company's objective is "to exercise this option and achieve
a 15 per cent return in the first year thereafter, with further improvements
expected."
The board of directors will be controlled by Blackstone but with appointments
made by both partners. Two former senior executives from Loewen have joined
Prime Succession to manage the new company on a full-time basis. Gary Wright
has been named Chief Executive Officer and Myles Cairns Chief Financial
Officer.
The sources of funding include a $78 million investment by Loewen in both
common and preferred shares and a $52 million investment by Blackstone in
common shares of the new entity. A group led by Goldman, Sachs & Co. provided a
$90 million bank term loan. Smith Barney Inc. of New York was sole manager of a
$100 million issue of 10.75 per cent senior subordinated notes. In addition,
the Bank of Nova Scotia provided a $25 million revolving credit facility.
"The notes were well oversubscribed," said Sean Crowley, Smith Barney managing
director of high yield capital markets. "The strong response reflects market
confidence in the transaction and in the funeral and cemetery services industry
generally."
Prime Succession, which has been largely focused on acquisitions, will now
concentrate on operations. Its founder and president, Tom Johnson, will, after
a period of transition, join Loewen's corporate development team in Cincinnati.
"Tom's reputation and contacts within the funeral service industry will be a
great asset to our succession planning activities and to our company as a
whole," said Mr. Loewen.
With corporate offices in Burnaby, Cincinnati and Philadelphia, the Loewen
Group is the second largest funeral and cemetery services company in North
America, employing some 13,000 people and operating 909 funeral homes and 253
cemeteries across the United States and Canada. More than 90 per cent of the
Company's revenue is generated in the U.S.
The Blackstone Group is a private investment bank founded in 1985 by Peter G.
Peterson, its current Chairman, and Stephen A. Schwarzman. The Blackstone
Group's main businesses include strictly friendly principal investments, real
estate investing and asset management, restructuring and merger & acquisition
advisory services. Blackstone Capital Partners II Merchant Banking Fund L.P.,
the firm's principal investment vehicle, has approximately $1.3 billion of
committed equity capital.
A primary thrust of Blackstone's investment strategy is to invest in promising
situations together with major corporations. Several of Blackstone's most
successful investments have been in the corporate partnership form. Previous
Blackstone corporate partnership investments have been with Aon, CNA, EDS,
Mitsubishi, Time Warner, Union Carbide, Union Pacific and USX.
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