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: July 9, 1999
(date of earliest event reported)
LG&E ENERGY CORP.
(Exact name of registrant as specified in its charter)
Kentucky 1-10568 61 - 1174555
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
220 West Main Street
P.O. Box 32030
Louisville, KY 40232
(Address of principal executive offices)
(502) 627-2000
(Registrant's telephone number)
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Item 5. Other Events.
On July 8, 1999, LG&E Energy Corp. ("LG&E Energy") announced it has
acquired CRC Holdings Corp., the parent company of CRC-Evans Pipeline
International Inc. ("CRC-Evans"), a provider of specialized equipment and
services used in the construction and rehabilitation of gas and oil
transmission pipelines.
LG&E Energy purchased the Houston-based company for aggregate initial
consideration of approximately $45.6 million plus retirement of
approximately $37.9 million in CRC-Evans debt. The purchase consideration,
including potential earn out installments, the latter capped at $31.0
million over three years, will be paid 55 percent in cash and 45 percent in
LG&E Energy common stock. LG&E Energy will repurchase common stock from
time to time in open market or through privately negotiated transactions in
amounts equal to the stock portions of the initial and subsequent earn out
purchase installments.
A news release of LG&E Energy describing the above matter is filed with
this report as Exhibit 99.01 and is incorporated herein by reference.
Item 7(c). Exhibits Filed.
Exhibit
Number Description
99.01 News Release dated as of July 9, 1999.
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 thereunto duly authorized.
LG&E ENERGY CORP.
Registrant
/s/ John R. McCall
John R. McCall
Executive Vice President, General
Counsel and Corporate Secretary
Date: July 12, 1999
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<PAGE>
EXHIBIT INDEX
LG&E ENERGY CORP.
Current Report on Form 8-K
Dated July 9, 1999
Exhibits
Exhibit No. Description
99.01 News Release dated as of July 9, 1999.
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Exhibit 99.01
LG&E Energy Corp. Acquires CRC-Evans Pipeline International,
the World's Leading Pipeline Construction Equipment Company
Strategic Energy-Related Investment to Provide Immediate Earnings
LOUISVILLE, Ky., July 9 /PRNewswire/ -- LG&E Energy Corp. (NYSE: LGE) today
announced it has acquired CRC Holdings Corp., the parent company of CRC-
Evans Pipeline International, Inc. (CRC-Evans), the world's leading
provider of specialized equipment and services used in the construction and
rehabilitation of gas and oil transmission pipelines.
CRC-Evans' product line includes pipeline equipment and services, automatic
welding systems and services, pipe coating equipment and services, pipeline
weighting products and services, and rehabilitation equipment and services.
"Acquiring CRC-Evans is consistent with our strategic goal of acquiring
energy-related companies that add value to our shareholders. LG&E Energy
will realize immediate earnings accretion in 1999 from the transaction and
CRC-Evans should continue growing as the demand for new and rebuilt
pipelines around the world escalates," said Roger W. Hale, LG&E Energy's
chairman and chief executive officer. "CRC-Evans will continue to execute
its strategy of expanding the business through growth of existing services
and acquisitions in
related fields."
LG&E Energy purchased the entire Houston-based company for initial
consideration of $45.6 million and retirement of approximately $37.9
million in CRC-Evans debt. The transaction also provides for future
payments based on CRC-Evans meeting certain financial targets.
The initial purchase consideration plus the potential earn out
installments, capped at $31.0 million over three years, will be paid
approximately 55 percent in cash, 45 percent in LG&E Energy common stock.
LG&E Energy will repurchase company common stock on the open market or
through privately negotiated transactions to fund the stock portion of the
purchase and for other corporate purposes.
CRC-Evans and affiliated companies were owned by management and venture
capital investment funds, Equus II Inc. and Natural Gas Partners IV L.P.
Key members of the management team and others will continue operating the
company as CRC-Evans International, Inc., operating under LG&E Energy's
subsidiary, LG&E Capital Corp.
"The CRC-Evans team sees the combination with LG&E Energy as an opportunity
to take our company to the next level," said M. Timothy Carey, chief
executive officer of CRC-Evans. "LG&E Energy is a dynamic and aggressive
energy company our team views as the right partner to help us expand our
operation and build on the worldwide CRC-Evans franchise."
CRC-Evans supplies equipment for purchase and rental, and other services to
major pipeline construction contractors, but it does not perform actual
pipeline construction. The company and its predecessors have been leaders
in the specialized pipeline construction equipment industry since 1933.
The growth of natural gas as a fuel of choice for new power generation
projects worldwide has resulted in a 58 percent increase in pipeline miles
constructed from 1995 to 1998. Continued projected world growth of new
pipeline and rehabilitation of existing pipeline infrastructure is
anticipated to increase the global demand for pipeline construction
activities.
With CRC-Evans' 500 employees worldwide, LG&E Energy expects to utilize the
businesses' personnel, expertise and considerable proprietary equipment to
continue expanding the business in new and existing markets. CRC-Evans'
headquarters will remain in Houston, with manufacturing and maintenance
operations in Tulsa, Okla., and sales and administrative offices in the
United Kingdom, the Netherlands and Canada.
"CRC-Evans has an excellent reputation with the world's leading pipeline
contractors. We will continue providing high quality customer service and
personal involvement with our key customers," said Victor A. Staffieri,
LG&E Energy's president and chief operating officer. "In addition,
leveraging CRC-Evans' expertise with LG&E Energy's international experience
will allow us to develop an even wider network of products and services."
LG&E Energy Corp., headquartered in Louisville, Ky., is a Fortune 500
diversified energy services company with businesses in power generation and
project development, retail gas and electric utility services, and asset-
based energy marketing. The company owns and operates Louisville Gas and
Electric Company, a regulated electric and gas utility and Kentucky
Utilities Company, a regulated electric utility, based in Lexington, Ky.,
which serves 77 Kentucky counties and five counties in Virginia. LG&E
Energy also owns interests in and operates power plants in six states as
well as in Spain, and owns interests in three natural gas distribution
companies in Argentina.
Statements in this news release that state the Company's or management's
intentions, expectations or predictions of the future are forward-looking
statements. The Company's actual results could differ materially from
those projected in the forward-looking statements, and there can be no
assurance that estimates of future results will be achieved. The Company's
SEC filings contain additional information concerning factors that could
cause actual results to differ materially from those in the forward-looking
statements.
