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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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 2, 1999
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THE GEON COMPANY
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(Exact name of registrant as specified in charter)
Delaware 1-11804 34-1730488
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
One Geon Center, Avon Lake, Ohio 44012
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 440-930-1001
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Not Applicable
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(Former name or former address, if changed since last report.)
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Item 5. Other Events
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The Geon Company and O'Sullivan Corporation jointly announced today an agreement
by Geon to acquire O'Sullivan, a leading producer of engineered polymer films
for the automotive and industrial markets. The two companies have signed a
definitive merger agreement under which Geon will commence a cash tender offer
to acquire all of the outstanding shares of O'Sullivan for $12.25 per share. The
merger agreement has been unanimously approved by the boards of directors of
both companies. In addition, members of the Bryant family who control more than
26 percent of the O'Sullivan shares have committed themselves to tender their
shares to Geon as contemplated by the definitive agreement.
Item 7(c). Financial Statements, Pro Forma Financial Information and Exhibits
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Exhibit 99.1 Press Release of June 2, 1999 announcing an agreement by Geon to
acquire O'Sullivan Corporation.
SIGNATURE
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.
THE GEON COMPANY
By \s\ Gregory L. Rutman
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Secretary
Dated June 2, 1999
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EXHIBIT 99.1
GEON ESTABLISHES NEW GROWTH PLATFORM
WITH ACQUISITION OF O'SULLIVAN CORPORATION
CLEVELAND, Ohio, and WINCHESTER, Virginia - June 2, 1999 - The Geon Company
(NYSE: GON) and O'Sullivan Corporation (AMEX: OSL) jointly announced today an
agreement by Geon to acquire O'Sullivan, a leading producer of engineered
polymer films for the automotive and industrial markets. The two companies have
signed a definitive merger agreement under which Geon will commence a cash
tender offer to acquire all of the outstanding shares of O'Sullivan for $12.25
per share. The merger agreement has been unanimously approved by the boards of
directors of both companies. In addition, members of the Bryant family who
control more than 26 percent of the O'Sullivan shares have committed themselves
to tender their shares to Geon as contemplated by the definitive agreement.
The tender offer of $12.25 in cash for each O'Sullivan share represents a total
transaction value of approximately $191 million. The objective of both companies
is to complete the acquisition of shares by Geon by the middle of July. The
tender offer is subject to normal regulatory review and satisfaction of
customary closing conditions, including the acquisition by Geon of at least 70
percent of the outstanding O'Sullivan stock. The tender offer is not conditioned
upon financing.
Geon plans to fund the purchase initially through existing lines of credit and
available cash. Geon expects this acquisition to be immediately accretive to
earnings by approximately $0.20 per share annually, before synergies and after
goodwill. O'Sullivan's cash balance of approximately $30 million will be used to
reduce the cost of the transaction.
O'Sullivan, with 1998 sales totaling $163 million, has developed particular
strength in vinyl film products and is recognized as the technology and quality
leader in the markets it serves.
"Our strategy is to become the leader in the value-added polymer services and
technology industry," said Thomas A. Waltermire, Geon president and chief
executive officer. "Acquiring O'Sullivan marks a milestone in positioning Geon
as a key player in the engineered film market and establishes a new growth
platform for us. The combination will create earnings leverage through raw
material, operating, and sales and marketing synergies."
Geon projects revenues in excess of $1 billion in 1999, before acquisitions, and
is committed to doubling its size during the next two years through a
combination of organic growth and acquisition.
"We have made it quite clear that we intend to create a multi-billion-dollar,
closely linked network of performance polymer businesses," Waltermire said.
"O'Sullivan is an excellent fit with Geon's recently acquired Burlington, New
Jersey, calendered film business. The two businesses, which serve complementary
markets, together will rank as the North American leader in value-added,
flexible vinyl films. Combining O'Sullivan's strengths in film technology with
Geon's strengths in polymer compounding and operations will create a stronger
company with enhanced value and growth opportunities."
The agreement by O'Sullivan Corporation to enter into the transaction with Geon
is the culmination of a detailed process, started by O'Sullivan's board of
directors in August 1998, to explore the full range of strategic alternatives to
enhance shareholder value. An independent financial advisor provided
O'Sullivan's board with a fairness opinion in conjunction with the transaction.
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"O'Sullivan's board believes that the transaction is in the best interest of its
stockholders, as it provides them with an attractive value and immediate
liquidity for their shares, while positioning our company with a strong base for
future growth," said J. Shep Campbell, O'Sullivan president and chief executive
officer. "Geon has been one of our most valued raw material suppliers over the
years. Its technology has enabled us to provide our customers world-class
products for their markets. Combining Geon's and O'Sullivan's technical and
operating strengths will create unique opportunities that will benefit our
customers."
Headquartered in Winchester, Virginia, O'Sullivan has approximately 940
employees and four manufacturing sites, located in Lebanon, Pennsylvania; Newton
Upper Falls, Massachusetts; Winchester; and Yerington, Nevada.
O'Sullivan has averaged 9.3 percent operating income to sales in the three-year
period from 1996 through 1998. The company had sales of $163.2 million and net
income of $11.6 million in 1998. Last month, O'Sullivan reported first-quarter
net sales of $42.9 million and net income of $3.1 million.
Calendering, the heart of O'Sullivan's business, is the process for creating
thin-gauge films. O'Sullivan uses the calendering process in conjunction with
painting and laminating to provide premium-quality sheeting that covers
dashboards and door panels on many of today's best-selling passenger cars, light
trucks, sport utility vehicles and minivans. O'Sullivan ranks as North America's
leading supplier to the automotive industry of single-ply vinyl sheeting for
vacuum-formed instrument panels. Customers include Ford, Chrysler, General
Motors, Honda, Toyota, Mazda and Saturn.
In the industrial and consumer segments, O'Sullivan serves a wide range of
markets including stationery/office products, home furnishings, geomembrane,
medical bags and pouches, pool liners, vinyl flooring and many others.
The Geon Company is a leading North American-based polymer services and
technology company with operations in vinyl compounds, specialty vinyl resins
and formulations and other value-added products and services. Headquartered in
Avon Lake, Ohio, The Geon Company and its subsidiaries employ nearly 2,000
people and have 19 manufacturing plants in the United States, Canada, England
and Australia, and joint ventures in the United States, Canada, England,
Australia and Singapore. Information on the Company's products and services, as
well as news releases, EDGAR filings, Form 10-K, 10-Q, etc. is available on the
Internet at http://www.geon.com.
