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): October 14, 1998
Specialty Foods Corporation
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(Exact name of registrant as specified in its charter)
State of Delaware 33-68956 75-2488181
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(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation or organization) Identification No.)
520 Lake Cook Road, Suite 550, Deerfield, IL 60015
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 405-5300
ITEM 5. OTHER EVENTS
1. On October 14, 1998, Specialty Foods Corporation (SFC)
announced that it has signed definitive agreements to
acquire two baking companies, including national cookie
maker Archway Cookies, Inc.
2. On October 14, 1998, SFC and Specialty Foods
Acquisition Corporation (SFAC) announced that they have
commenced private exchange offers for their publicly held
debt. The offers are to exchange existing debt of SFC and
SFAC held by certain holders for the debt of two new
intermediate holding companies. In addition, SFC is seeking
the consent of its term loan and revolving credit lenders to
amend existing agreements to conform to the new holding
company structure.
SFAC Exchange Offer
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SFAC is offering certain holders of its 13% Senior
Secured Discount Debentures the opportunity to exchange
their existing debt for new 13% Senior Secured Discount
Debentures (New Discount Debentures) of a new
intermediate holding company. The New Discount
Debentures include the following provisions:
An extension of the maturity date to 2008 with interest
accruing at 13% annually through 2003 and becoming payable
in cash thereafter.
An option for the company to call the debt at 50% of
accreted value through November 1999 and at increasing call
prices thereafter.
Holders of the SFAC Debentures who consent to the
exchange will receive up to an aggregate of ten percent of
the equity of the intermediate holding company.
Holders of more than 50% of the 13% Senior Secured
Discount Debentures have already indicated their
agreement to the exchange.
SFC Exchange Offer
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SFC is offering certain holders of its publicly held
debt the opportunity to exchange their existing notes
for new notes (New Notes) of another new intermediate
holding company. The New Notes have substantially the
same terms and covenants of the existing notes and will
remain structurally senior to the New Discount
Debentures. The holders of SFC's public debt are being
offered $5 per $1,000 note to consent to the
transaction.
Donaldson, Lufkin and Jenrette Securities Corporation
and Jefferies & Co., Inc. are the financial advisors
for the SFC exchange offer. Jefferies & Co. is the
financial advisor for the SFAC exchange offer.
3. On October 14, 1998, Specialty Foods Corporation issued
a press release announcing the following:
The signing of definitive agreements to acquire two
baking companies, including national cookie maker Archway
Cookies, Inc.
Exchange offers to holders of its publicly held debt
further described in Item 5 of this Form 8-K.
Consolidated net sales and earnings before interest,
taxes, depreciation and amortization (EBITDA) for SFC for
the three and nine-month periods ended September 30, 1998,
respectively.
ITEM 7. FINACIAL STATEMENTS AND EXHIBITS
Exhibits No.
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99.5* Press Release dated October 14, 1998 of SFC
SIGNATURES
Pursuant to 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.
SPECIALTY FOODS CORPORATION
(Registrant)
Date: October 14, 1998 By: /s/ Robert L. Fishbune
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Robert L. Fishbune
Vice President and Chief
Financial Officer
____________
* Filed herewith.
EXHIBIT 99.5
FOR IMMEDIATE RELEASE: October 14, 1998
SPECIALTY FOODS ANNOUNCES BAKERY ACQUISITIONS,
EARNINGS INCREASE, BOND EXCHANGE
Acquisition of Archway Cookies Will
Create Nation's Third Largest Cookie Company
DEERFIELD, ILL. -- Specialty Foods Corporation today
announced that it has signed definitive agreements to
acquire two bakery companies, including national cookie
maker Archway Cookies, Inc. The company also announced a 30
percent increase in EBITDA (earnings before interest, taxes,
depreciation and amortization) for the third quarter ended
September 30, 1998 and a 16 percent increase for the nine
month period.
In addition, the company announced that holders representing
more than 50 percent of the Senior Secured Discount
Debentures of its parent company have indicated their
agreement with a private exchange that will postpone the
cash pay interest date and extend the maturity date of the
bonds. As part of the exchange, the company is also seeking
consents from its debtholders to modify its corporate
organization.
"We believe that these acquisitions, in combination with our
improving financial results and the bond exchange, represent
a defining moment for Specialty Foods," said Lawrence
Benjamin, president and chief executive officer of Specialty
Foods.
"The acquisitions significantly strengthen our position as
one of the nation's leading branded baked goods companies,"
Benjamin noted. "The bond exchange should provide us with
the additional flexibility to continue to build value at
Specialty Foods."
-more-
SPECIALTY FOODS ANNOUNCES BAKERY ACQUISITIONS
Add One
In addition to Archway Cookies, Specialty Foods is acquiring
San Diego Bread Company of San Diego, California. Terms of
the individual agreements were not disclosed, although
Benjamin said that together the acquisitions would represent
an investment of over $100 million. Consummation of certain
of these transactions is subject to customary closing
conditions, including the obtaining of approvals from
governmental regulatory agencies.
Archway, based in Battle Creek, Michigan, produces more than
a billion cookies annually at two company-owned bakeries in
Ashland, Ohio and Boone, Iowa, and four licensed bakeries in
the U.S. and Canada. The company bakes more than 60
varieties of cookies, including homestyle, holiday and sugar
free products under the Archway brand name.
"Archway is one of America's great brands," said Benjamin.
"Since 1936, Archway has been providing unique, high quality
cookies to American families. The addition of Archway to
our Mother's cookie business will establish Specialty Foods
as the third largest cookie company in the U.S. with
significant opportunities for growth."
"We continue to pursue bread acquisitions that complement
our existing bread brands," Benjamin said. "San Diego Bread
Company, our most recent bread acquisition, solidifies the
position of our Boudin brand as the premier traditional
sourdough bread in California."
Noting the financial results of Specialty Foods for the
first nine months of 1998, Benjamin said that the company
has seen the positive effect of its increased focus on the
baking industry. Specialty Foods' EBITDA for the third
quarter of 1998 was $24.3 million compared to $18.7 million
for the third quarter of 1997. EBITDA for the nine month
period ended September 30, 1998 was $52.3 million, up from
$44.9 million for the comparable period in 1997.
-more-
SPECIALTY FOODS ANNOUNCES BAKERY ACQUISITIONS
Add Two
Sales for the third quarter of 1998 were $229.7 million
compared to $238.0 million for third quarter of 1997. Sales
for the nine month period ended September 30, 1998 were
$675.7 million compared to $679.1 million for the same
period in 1997. While revenues for the company's bakery
businesses, which account for over 80 percent of total
sales, increased by three percent for the nine month period,
lower beef and pork prices reduced the revenue of the
company's meat subsidiary, H&M Food Systems. Sales and
earnings have been adjusted to exclude the effect of
businesses divested in 1997.
Specialty Foods Corporation, one of the nation's leading
food manufacturers, is a group of companies engaged
primarily in baked goods with additional operations in
prepared meats.
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