UNITED STATES 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): April 10, 1997
ERO, Inc.
(Exact name of registrant as specified in its charter)
0-19942
Commission File Number
Delaware 36-3573286
(State or other jurisdiction of incorporation (IRS Employer
or organization) Identification Number)
585 Slawin Court, Mount Prospect, Illinois 60056-2183
(Address of principal executive offices, including zip code)
(847) 803-9200
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events
On April 10, 1997, ERO, Inc. (the "Company") executed a definitive merger
agreement with Hedstrom Corporation ("Hedstrom") and HC Acquisition Corp.
Under the terms of the merger agreement, Hedstrom agreed to promptly commence
a cash tender offer (the "Offer") for all of the outstanding shares of the
Company's common stock for $11.25 per share. The Company has approximately
11.7 million fully diluted shares outstanding. The merger agreement also
required Hedstrom to complete a second-step merger in which remaining shares
not acquired in the Offer will be converted into the right to receive $11.25
per share in cash subject to certain conditions.
On April 11, 1997, the Company issued a press release announcing the above
described event. The text of the attached release is incorporated herein by
reference. Further information concerning the Offer and the merger will be
contained in Hedstrom's Offer to Purchase, which is expected to be filed
with the Securities and Exchange Commission on April 17, 1997, and the
Company's Schedule 14D-9 Solicitation/Recommendation Statement, which
will be filed promptly after the time the Offer to Purchase is filed.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ERO, Inc.
Date: April 16, 1997 By:/S/ Mark D. Renfree
_________________________________
Name: Mark D. Renfree
Title: Senior Vice President and
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Document
99.1 Press Release dated April 11, 1997
(Press Release)
April 11, 1997
ERO, INC. AND HEDSTROM CORPORATION
ENTER INTO DEFINITIVE MERGER AGREEMENT
Mount Prospect, IL (PRNewswire) -- ERO, Inc. (NASDAQ: EROI) and Hedstrom
Corporation announced today that they have entered into a definitive merger
agreement. The agreement calls for Hedstrom to acquire ERO, a leading
consolidator and marketer of children's leisure products.
Under the merger agreement, Hedstrom will promptly commence a cash tender
offer for all of the outstanding shares of ERO common stock for $11.25 per
share. ERO has approximately 11.7 million fully diluted shares outstanding.
Including funded debt, the transaction is valued at approximately $203 million.
D. Richard Ryan, Jr., Chairman, President and CEO of ERO stated, "We clearly
think this transaction is in the best interest of ERO shareholders. The
merger also represents a great opportunity for both companies to become a more
important factor in children's leisure products. ERO has been growing about
20% per year over the last three years by acquiring businesses with dominant
positions in their respective markets. Adding ERO's slumber, back-to-school,
arts & crafts, water sports and children's room decor business to Hedstrom's
play balls and outdoor play equipment businesses should create an even
stronger company, better able to serve its customers and provide new
opportunities for employees."
ERO's largest investor, a private equity fund of Golder, Thoma, Cressey,
Rauner, Inc., holds approximately 38 percent of the total outstanding shares
of the Company and has agreed to tender its shares into the tender offer.
Hedstrom's controlling shareholder is Hicks, Muse, Tate & Furst, Inc. The
Boards of Directors of both ERO and Hedstrom have given approval to the
acquisition and the Board of ERO recommends that ERO stockholders accept
Hedstrom's cash tender offer.
Consummation of the acquisition is contingent upon the tender of a majority
of ERO's outstanding shares on a fully diluted basis, the expiration or
termination of any applicable waiting periods under the federal
Hart-Scott-Rodino Antitrust Act, the funding of committed debt financing
which has been obtained by Hedstrom, and other customary conditions.
As a result of this transaction, ERO also announced that it was postponing its
Annual Meeting of Stockholders that had been previously scheduled for
April 17, 1997.
ERO has grown significantly through acquisitions in the last five years. The
company now is a leading marketer of children's leisure products in multiple
market segments through its four operating subsidiaries. ERO Industries sells
licensed Slumber Shoppe and children's water sports products through sporting
goods and toy channels. Amav Industries sells its art, craft and activity
products in toy and craft departments. Impact sells licensed and branded
back-to-school products to stationery buyers. Priss Prints markets a range
of children's room decor products through juvenile, paint and wallpaper and
domestic departments.
Contact: Mark D. Renfree
Chief Financial Officer
847/803-9200 ext. 315
