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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
COMMISSION FILE NUMBER 33-67854
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DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) MAY 15, 1998
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CMI INDUSTRIES, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 57-0836097
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
1301 GERVAIS STREET, SUITE 920, COLUMBIA, SOUTH CAROLINA 29201
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) (803) 771-4434
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NOT APPLICABLE
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(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR,
IF CHANGED SINCE LAST REPORT)
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ITEM 5. OTHER EVENT.
On May 15, 1998, CMI Industries, Inc. ("CMI") entered into a merger
agreement (the "Merger Agreement") with CMI Management, Inc. ("CMI
Management"), a company organized by its senior management and CMI
Acquisitions, Inc. ("CMI Acquisitions"), a wholly-owned subsidiary of CMI
Management, pursuant to which CMI Acquisitions will merge with and into CMI,
and CMI will be the surviving corporation in the Merger. As a result of the
Merger, CMI will become a wholly-owned subsidiary of CMI Management with
current stockholders of CMI receiving $43.00 in cash and 2/45's of a share of
CMI Management Common Stock as merger consideration (the "Merger
Consideration"). Immediately prior to the Merger, it is anticipated that each
of the stockholders of CMI other than Merrill Lynch Capital Partners, Inc.
("MLCP") will participate in an exchange (the "Exchange") pursuant to an
exchange agreement (the "Exchange Agreement") whereby such stockholders will
exchange a pre-determined number of their shares of Company Common Stock (and
options to purchase Company Common Stock, if applicable) for an equal number of
shares of CMI Management Common Stock. Upon consummation of the Merger and the
Exchange, affiliates of MLCP, which now own 58.7% of the outstanding CMI Common
Stock, will no longer have a controlling interest in CMI or its new parent, CMI
Management. Rather, members of management and other stockholders with
historical ties to CMI Industries will own approximately 63.9% of the fully
diluted CMI Management Common Stock.
The aggregate cash portion of the Merger Consideration will be
approximately $65.3 million. The Merger will be funded by (i) equity financing
from BancBoston Ventures, Inc. ("BBV") in an aggregate amount of $9.0 million;
(ii) borrowings under a new $75.0 million senior secured credit facility (the
"New Credit Facility"); and (iii) the issuance of senior subordinated notes by
CMIA.
Consummation of the Merger is subject to a number of conditions including
approval by the CMI stockholders, the receipt of anticipated equity financing
from existing stockholders of CMI and BBV and the receipt of satisfactory debt
financing.
The press release announcing the Merger Agreement is incorporated herein
by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) and (b) Not Applicable.
(c) Exhibits.
99.1 Press Release of CMI Industries, Inc. dated May 18, 1998.
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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.
Date: May 28, 1998 By:/s/ James A. Ovenden
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James A. Ovenden
Executive Vice President and
Chief Financial Officer
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Date: May 18, 1998
Contact: Michael Hopp
(803) 748-1721, Fax: (803) 748-1738
MANAGEMENT ACQUISITION PROPOSAL
Columbia, South Carolina - CMI Industries, Inc. announced today that its Board
of Directors has approved, and CMI Industries has entered into, a merger
agreement with a company organized by its senior management, CMI Management,
Inc. In the proposed transaction, CMI Industries would become a wholly-owned
subsidiary of CMI Management with current stockholders of CMI Industries
receiving as merger consideration, cash and a fractional interest in CMI
Management stock. CMI Industries stock is not publicly traded. As a result of
the merger and related transactions, affiliates of Merrill Lynch Capital
Partners, Inc., which now own more than 58% of the outstanding CMI Industries
Stock, will no longer have a controlling interest in CMI Industries or its new
parent, CMI Management. Members of management and other stockholders with
historical ties to CMI Industries will own a majority of the fully diluted CMI
Management stock, and additional equity financing is anticipated from BancBoston
Ventures, Inc. ("BBV").
CMI Industries has outstanding $125 million 9-1/2% Senior Subordinated Notes due
2003, which are publicly traded. The Notes are subject to redemption at the
option of CMI Industries commencing October 1, 1998, at a redemption price of
104.75% plus accrued interest. The parties are considering the alternatives
available for repayment of the Notes in connection with the consummation of the
transaction.
Consummation of the transaction is subject to a number of conditions including
approval by the CMI Industries stockholders, receipt of anticipated equity
financing from existing stockholders of CMI Industries and BBV, and receipt of
satisfactory debt financing.
CMI Industries is a diversified manufacturer of textile products serving a
variety of markets, including the home furnishings, woven apparel, elasticized
knit apparel, automotive upholstery, furniture upholstery, consumer products and
industrial/medical markets. CMI Industries had net sales of $422.7 million in
1997. The Company employs 4,000 associates with manufacturing operations in
Alabama, Georgia, South Carolina, North Carolina and Virginia. CMI Industries
has three operating divisions and sells products under the trade names of
Clinton Fabrics, Chatham and Elastic Fabrics of America.
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