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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
August 11, 1998
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(Date of earliest event reported)
AVCO FINANCIAL SERVICES, INC.
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(Exact name of Registrant as specified in its charter)
Delaware 0-6119 13-2530491
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(State of (Commission File No.) (IRS Employer
Incorporation) Identification No.)
600 Anton Boulevard, Costa Mesa, CA 92626
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(Address of principal executive offices, including zip code)
(714) 435-1200
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(Registrant's telephone number, including area code)
N/A
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On August 11, 1998, the Registrant's parent, Textron Inc. ("Textron"),
issued a press release announcing that it has reached an agreement to sell the
business of the Registrant to Associates First Capital Corporation for $ 3.9
billion in cash. A copy of the press release is filed herewith as Exhibit 99 and
is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
Exhibit No. Exhibit
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99 Press Release issued August 11, 1998.
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.
AVCO FINANCIAL SERVICES, INC.
(Registrant)
By /s/ Herbert F. Smith
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Name: Herbert F. Smith
Title: Executive Vice President and
General Counsel
Dated: August 18, 1998
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Exhibit
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<C> <S>
99 Press Release issued August 11, 1998
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Investor Contact:
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Mary Lovejoy
401-457-6009
Media Contact:
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Susan Tardanico
401-457-2354 FOR IMMEDIATE RELEASE
TEXTRON TO SELL AVCO FINANCIAL SERVICES TO THE ASSOCIATES
PROCEEDS TO FUND ACQUISITIONS, SHARE BUYBACK;
BOARD AUTHORIZES 25-MILLION-SHARE REPURCHASE PROGRAM
PROVIDENCE, RI - AUGUST 11, 1998 - Textron Inc. today announced it has
reached an agreement to sell its Avco Financial Services unit to Dallas,
TX-based Associates First Capital Corporation for $3.9 billion in cash.
Additional terms were not disclosed. The acquisition is subject to regulatory
approvals.
Net after-tax proceeds to Textron will approximate $2.9 billion. "These
proceeds will enable us to accelerate our acquisition and share buyback
programs, consistent with our focus on maximizing value for Textron
shareholders," said Textron President and Chief Executive Officer Lewis B.
Campbell. "Our primary objective is to redeploy these funds into our existing
market-leading businesses," he added.
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TEXTRON TO SELL AVCO/P.2
Textron also announced today that its Board of Directors has authorized
a new 25-million-share repurchase program. This program supercedes the 8 million
shares that remained under its previous authorization.
"This increased authorization will enable us to be more aggressive in
repurchasing shares, beginning immediately," Campbell said. "This, coupled with
our disciplined acquisition strategy, position us to maintain our record of
consistent, double-digit earnings growth."
It is anticipated that up to 40 % of the after-tax proceeds from the
sale of Avco will be used to repurchase Textron shares, while the remaining 60 %
will fund acquisitions.
In the past five years, Textron has acquired 33 companies in the United
States and Europe. Having invested more than $500 million in five acquisitions
to date this year, the company has already exceeded last year's acquisition
activity. "With a full pipeline of opportunities, we are well-positioned to
continue our aggressive acquisition activity," Campbell continued. "However, we
remain steadfast in our commitment to our rigorous acquisition criteria."
With $1.85 billion in annual revenues, AFS comprised 18% of Textron's
total 1997 revenues. "Our financial goals are clear and have not changed," said
Campbell. "We are confident we will meet or exceed our targets of 8-11% annual
revenue growth and double-digit EPS growth, and we are targeting revenues in
excess of $14 billion by the year 2000," he added.
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TEXTRON TO SELL AVCO/P.3
In June, Textron announced it was exploring strategic alternatives for
AFS, which could include a sale, spin-off or other form of divestiture. With the
increasing consolidation of the consumer finance industry, Textron concluded the
value of AFS would be maximized by combining it with another leading financial
services company. The strategic review did not include Textron's commercial
finance subsidiary, Textron Financial Corporation (TFC) which finances the sale
of Textron and third-party products. TFC remains a part of Textron.
Textron Inc. (NYSE:TXT) is a $10.5 billion, global, multi-industry
company with market-leading operations in Aircraft, Automotive, Industrial and
Finance.
XXX
Certain statements in this news release are forward-looking statements,
including those that discuss strategies, goals, outlook or other non-historical
matters, or project revenues, income, returns or other financial measures. These
forward-looking statements are subject to risks and uncertainties that may cause
actual results to differ materially from those contained in the statements,
including the following: (i) continued market demand for the types of products
and services produced and sold by Textron, (ii) changes in worldwide economic
and political conditions and associated impact on interest and foreign exchange
rates, (iii) the level of sales by original equipment manufacturers of vehicles
for which Textron supplies parts, (iv) the successful integration of companies
acquired by Textron and (v) changes in consumer debt levels.
