<PAGE> 1
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): June 17, 1996
THE LOEWEN GROUP INC.
(Exact Name of Registrant as Specified in Charter)
British Columbia, Canada 0-18429 98-0121376
------------------------ ------- ----------
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)
4126 Norland Avenue, Burnaby, British Columbia, CANADA V5G 3S8
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code 604-299-9321
---------------------------
N/A
- --------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE> 2
ITEM 5. OTHER EVENTS.
On June 17, 1996, Loewen and Blackstone Capital Partners II
Merchant Banking Fund L.P. ("Blackstone") announced the signing of an agreement
(the "Agreement") to acquire the shares of Prime Succession, Inc. ("Prime").
Prime is the largest privately-held funeral services company in North America,
with 146 funeral homes and 16 cemeteries across the United States.
A new entity formed by Loewen and Blackstone ("Newco") will
acquire Prime for approximately $295 million. Blackstone will contribute
approximately $48 million, for which it will receive common equity in Newco.
Blackstone also will control the Board of Directors of Newco. Loewen will
contribute approximately $72 million (a portion of which was paid at signing)
and will receive $10 million of common equity and approximately $62 million of
preferred stock with an annual payment-in-kind dividend of 10%.
The Agreement also provides that Loewen has a call option that
can be exercised on the fourth anniversary of the closing date and for two years
thereafter, during which Loewen can acquire Blackstone's interest in Newco. In
addition, Blackstone has a put option that can be exercised beginning on the
sixth anniversary of the closing date and for two years thereafter, during which
Blackstone can require Loewen to acquire its interest in Newco. The option
price, in either case, will be based on a formula involving cash flow from
operations.
The acquisition, which is expected to be completed by
mid-September 1996, is subject to a number of conditions, including regulatory
approval and the ability of Newco to obtain financing. Until August 31, 1996,
Newco can elect not to proceed with the transaction if Newco determines that
financing cannot be obtained. In such event, Loewen has the sole option to (i)
forfeit to Prime amounts previously paid or (ii) make an additional payment to
Prime and complete the Prime acquisition directly for its own benefit by
November 15, 1996 (and forfeit amounts previously paid if the acquisition is not
consummated). If Loewen ultimately forfeits amounts previously paid, Loewen
would be required to write off such amounts and related costs and expenses. Any
such write-offs would have a material adverse effect on Loewen's financial
results for the period and year in which such write-off occurs.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
Exhibit No. Description
----------- -----------
Exhibit 99 The Loewen Group Inc. Press Release dated June 17,
1996
<PAGE> 3
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: June 21, 1996
THE LOEWEN GROUP INC.
By: /s/ Dwight K. Hawes
------------------------------
Name: Dwight K. Hawes
Title: Vice-President, Finance
<PAGE> 4
INDEX TO EXHIBITS
Exhibit No. Description
- ----------- -----------
99 The Loewen Group Inc. Press Release dated June 17, 1996
<PAGE> 1
June 17, 1996 For more information contact at Loewen:
Paul Wagler, Senior Vice President, Finance
Dwight Hawes, Vice President, Finance
The Loewen Group Inc.
Tel: (800) 347-7010
Contact at Blackstone:
Howard Lipson
Tel: (212) 836-9844
FOR IMMEDIATE RELEASE
THE LOEWEN GROUP INC. AND BLACKSTONE CAPITAL PARTNERS FORM CORPORATE VENTURE TO
ACQUIRE PRIME SUCCESSION, INC.
Blackstone Capital Partners II Merchant Banking Fund L.P. and The Loewen Group
Inc. announced today that a new company formed by them has entered into a
definitive agreement to acquire Prime Succession, Inc. for approximately $295
million. Prime Succession was formed with management in 1991 by Golder, Thoma,
Cressey, Rauner, a Chicago based private equity investment group, and currently
operates 146 funeral homes and 16 cemeteries across the United States. Prime
Succession is the largest privately-held funeral home operator in North America.
Blackstone Capital Partners II Merchant Banking Fund L.P. and its affiliates
will be the controlling stockholder in the new venture and will control the
Board of Directors. Loewen will have an equity interest in the company.
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 have the
opportunity to make this investment in partnership with Loewen."
Ray Loewen, Chairman and CEO of The Loewen Group, said "We are excited to be
investing in Prime Succession with Blackstone and view this new venture as an
important milestone in our industry. 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."
The acquisition of Prime Succession is expected to close by mid-September and is
subject to a number of conditions, including regulatory approvals and financing.
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
<PAGE> 2
The Loewen Group Inc. June 17, 1996 Page 2
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.
With corporate offices in Burnaby, British Columbia, Cincinnati and
Philadelphia, The Loewen Group is the second largest funeral home and cemetery
operator in North America. The Company employs approximately 12,000 people and
owns and operates 883 funeral homes and 230 cemeteries across the United States
and Canada. Over 90 percent of the Company's revenue is derived from the Untied
States.
Smith Barney Inc. is serving as financial advisor to The Blackstone Group, The
Loewen Group and the acquiring venture. Morgan Stanley & Co. Incorporated has
represented The Loewen Group in this transaction.
