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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 15, 1997
KELLSTROM INDUSTRIES, INC.
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(Exact name of registrant as specified in its charter)
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Delaware 0-23764 13-3753725
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
14000 N.W. 4th Street, Sunrise, Florida 33325
_____________________________________________ ________
(Address of principal executive offices) (Zip Code)
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Registrant's telephone number, including area code: (954) 845-0427
Not Applicable
_________________________________________________________________________
(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On January 15, 1997, Kellstrom Industries, Inc. (the "Company"), through
IASI Inc., a Delaware corporation and a wholly-owned subsidiary of the Company
("Kellstrom Subsidiary"), completed the acquisition (the "Acquisition") of
substantially all of the assets of International Aircraft Support L.P., a
California limited partnership ("International Aircraft"). The consideration
paid by the Company consisted of twenty five million dollars ($25,000,000) in
cash (the "Cash Purchase Price"), warrants (the "Purchaser's Warrants") to
purchase an aggregate of Five Hundred Thousand (500,000) shares of common stock,
par value $0.001 per share of the Company (the "Common Shares"), at an exercise
price of $9.25 per share, and the assumption of certain liabilities of
International Aircraft, including indebtedness of approximately $14 million
outstanding under a credit agreement with Union Bank of California, N.A.,
dated April 29, 1996. The Purchaser's Warrants expire two years from the
closing of the Acquisition. On January 15, 1997, the last sale price of the
Common Stock, as reported on the Nasdaq SmallCap Market, was $10 5/8 per share.
In connection with the Acquisition, International Aircraft issued a promissory
note in the principal amount of $1,125,000 to the Company, payable one
year from the closing of the Acquisition either in cash or through the surrender
of the Purchaser's Warrants. The Acquisition was consummated pursuant to
the terms of the Asset Purchase Agreement, dated as of October 28, 1996, by
and among the Company, Kellstrom Subsidiary, International Aircraft and
William Lyon, a principal of each of the general partners of International
Aircraft (the "Principal").
The Company raised a portion of the financing needed to pay the Cash
Purchase Price through the private placement of $15 million aggregate principal
amount of Senior Subordinated Notes (the "Notes"), bearing interest at 11.75%
and maturing January 15, 2004, with The Equitable Life Assurance Society of the
United States ("Equitable"). In connection with the issuance of the Notes, the
Company also issued to Equitable warrants to purchase 305,660 Common Shares
at an exercise price of $10 per share, expiring on January 14,
2004. The Company raised additional financing needed for payment of the Cash
Purchase Price through the issuance of $6 million aggregate principal amount of
Senior Subordinated Bridge Notes (the "Bridge Notes"), bearing interest at 10%
to Bedford Falls Investors, L.P., Metropolitan Capital Advisors, L.P.,
Metropolitan Capital Advisors International Limited, Diversified Strategies
Fund, L.P. and Scoggin Capital Management, L.P. (collectively, the "Bridge
Lenders"). The Bridge Notes are due on April 15, 1997, but repayment may be
extended at the Company's option through January 15, 1998. In connection with
the issuance of the Bridge Notes, the Company issued to the Bridge Lenders
warrants to purchase 75,000 Common Shares at an exercise price of $10 per share,
exercisable until three years from repayment of the Bridge Notes. The Company
must issue additional warrants if it chooses to extend the repayment of the
Bridge Notes, and the aggregate maximum number of additional warrants
which may be issued if the Bridge Notes are extended through January 15, 1998
would be 375,000 warrants. The remainder of the financing needed for payment
of the Cash Purchase Price was funded through the Company's $15 million
revolving credit facility with Barnett Bank, N.A. (the "Barnett
Facility"). Borrowings under the Barnett facility bear interest at 1/8% below
the prime rate or at LIBOR plus 275 basis points and are secured by
substantially all the assets of the Company.
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International Aircraft is an international reseller of commercial jet
engines and engine parts. International Aircraft's customers include major
airlines, engine overhaul facilities including those owned by airlines,
independent overhaul and maintenance organizations and aircraft engine
manufacturers. International Aircraft's operations are located in Newport Beach,
California. The Company intends to continue the business conducted by
International Aircraft. The press release issued by the Company, dated January
15, 1997, is attached hereto as Exhibit 99.1 and incorporated herein by
reference.
ITEM 5. OTHER EVENTS.
On January 14, 1997, the Board of Directors of the Company declared a
dividend of one preferred share purchase right (a "Right") for each outstanding
share of common stock, par value $.001 per share (the "Common Shares"), of the
Company. The dividend is payable on January 26, 1997 (the "Record Date") to
the stockholders of record at the close of business on that date. Each Right
entitles the registered holder to purchase from the Company one one-hundredth
of a share of Series A Junior Participating Cumulative Preferred Stock, par
value $.01 per share (the "Preferred Shares"),of the Company at a price of $80
per one one-hundredth of a Preferred Share (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and Continental Stock
Transfer & Trust Company, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired beneficial ownership of 19% or more of the
outstanding Common Shares or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors prior to such time as any person
or group of affiliated persons becomes an Acquiring Person) following the
commencement of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 19% or more of the outstanding Common Shares
(the earlier of such dates being called the "Distribution Date"), the Rights
will be evidenced, with respect to any of the Common Share certificates
outstanding as of the Record Date, by such Common Share certificate with a copy
of a summary of rights attached thereto.
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be transferred
with and only with the Common Shares. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Share certificates issued
after the Record Date upon transfer or new issuance of Common Shares will
contain a notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Common Shares outstanding as of
the Record Date will also constitute the transfer of the Rights associated with
the Common Shares represented by such certificate. As soon as
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practicable following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of record of the
Common Shares as of the close of business on the Distribution Date and such
separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on January 14, 2007 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case, as described below.
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Right are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares with a conversion
price less than the then-current market price of the Preferred Shares or (iii)
upon the distribution to holders of the Preferred Shares of evidences of
indebtedness or assets (excluding regular periodic cash dividends paid out of
earnings or retained earnings or dividends payable in Preferred Shares) or of
subscription rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one one-hundredths of
a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1 per share but will be entitled to an aggregate
dividend of 100 times the dividend declared per Common Share. In the event of
liquidation, the holders of the Preferred Shares will be entitled to a minimum
preferential liquidation payment of $100 per share but will be entitled to an
aggregate payment of 100 times the payment made per Common Share. Each Preferred
Share will have 100 votes, voting together with the Common Shares. Finally, in
the event of any merger, consolidation or other transaction in which Common
Shares are exchanged, each Preferred Share will be entitled to receive 100 times
the amount received per Common Share. These rights are protected by customary
antidilution provisions.
Because of the nature of the Preferred Shares' dividend, liquidation and
voting rights, the value of the one one-hundredth interest in a Preferred Share
purchasable upon exercise of each Right should approximate the value of one
Common Share.
In the event that the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold after a person or group has become an Acquiring Person, proper
provision will be made so that each holder of a Right will thereafter have the
right to receive, upon the
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exercise thereof at the then current exercise price of the Right, that number of
shares of common stock of the acquiring company which at the time of such
transaction will have a market value of two times the exercise price of the
Right. In the event that any person or group of affiliated or associated persons
becomes an Acquiring Person, proper provision shall be made so that each holder
of a Right, other than Rights beneficially owned by the Acquiring Person and
transferees of the Acquiring Person (which will thereafter be void), will
thereafter have the right to receive upon exercise such number of one
one-hundredths of a Preferred Share as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the number of one one-hundredths
of a Preferred Share for which a Right is then exercisable and dividing that
product by (y) 50% of the then current per share market price of the Company's
Common Shares.
At any time after any person or group becomes an Acquiring Person and
prior to the acquisition by such person or group of 50% or more of the
outstanding Common Shares, the Board of Directors of the Company may exchange
the Rights (other than Rights owned by such person or group which will have
become void), in whole or in part, for consideration consisting of one-half the
securities of the Company that would be issuable at such time upon exercise of
one Right.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-hundredth of a Preferred
Share, which may, at the election of the Company, be evidenced by depositary
receipts) and in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.
At any time prior to the tenth day following the acquisition by a person
or group of affiliated or associated persons of beneficial ownership of 19% or
more of the outstanding Common Shares, the Board of Directors of the Company may
redeem the Rights in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"); provided, however, that, for the 120-day period after any
date of a change (resulting from a proxy or consent solicitation) in a majority
of the Board of Directors of the Company in office at the commencement of such
solicitation, the Rights may only be redeemed if (A) there are directors then in
office who were in office at the commencement of such solicitation and (B) the
Board of Directors of the Company, with the concurrence of a majority of such
directors then in office, determines that such redemption is, in their judgment,
in the best interests of the Company and its stockholders. The Redemption of the
Rights may be made effective at such time on such basis with such conditions as
the Board of Directors in its sole discretion may establish. Immediately upon
any redemption of the Rights, the right to exercise the Rights will terminate
and the only right of the holders of Rights will be to receive the Redemption
Price.
The Rights will not become exercisable in connection with a "Qualifying
Offer," which is an all-cash tender offer for all outstanding Common Shares that
is fully financed, remains open for a period of at least 45 business days,
assures a prompt
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second-step acquisition of shares not purchased in the initial offer at the same
price as the initial offer and meets certain other requirements.
The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, except that from and
after a Distribution Date no such amendment may adversely affect the interests
of the holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
As of January 16, 1997, there were 3,753,396 Common Shares outstanding
(as well as a further 6,257,082 shares reserved for issuance upon exercise of
outstanding warrants and stock options). Each outstanding Common Share at the
close of business on the Record Date will receive one Right. As long as the
Rights are attached to the Common Shares, the Company will issue one Right with
each new Common Share so that all such shares will have attached rights.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
without conditioning the offer on the Rights being redeemed or a substantial
number of Rights being acquired. However, the Rights should not interfere with
any tender offer or merger approved by the Company because the Rights may be
redeemed by the Company's Board in order to permit such tender offer or merger,
subject to certain limitations.
Attached hereto as Exhibit 4 and incorporated herein by reference are
copies of the Rights Agreement and the exhibits thereto, as follows: Exhibit A
- -- Certificate of Designations of the Series A Junior Participating Cumulative
Preferred Stock; Exhibit B -- Form of Rights Certificate; and Exhibit C --
Summary of Rights to Purchase Preferred Shares. THE FOREGOING DESCRIPTION OF THE
RIGHTS IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE RIGHTS AGREEMENT AND
SUCH EXHIBITS THERETO.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
a. FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
It is impracticable for the Company to provide the required Consolidated
Financial Statements of International Aircraft on the date this report is being
filed. The Company intends to file the required Interim Consolidated Financial
Statements under cover of Form 8-K/A as soon as practicable; but not later than
60 days after the date this report must have been filed.
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b. PRO FORMA FINANCIAL INFORMATION.
It is impracticable for the Company to provide the required pro
forma financial information on the date this report is being filed. The Company
intends to file the required Financial Statements under cover of Form 8-K/A as
soon as practicable; but not later than 60 days after the date this report must
have been filed.
c. EXHIBITS.
2. The Acquisition Agreement by and among the Company, Kellstrom
Subsidiary, International Aircraft and the Principal
(incorporated by reference from the Company's Form 10-Q for
fiscal quarter ended September 30, 1996, as filed with the
Securities and Exchange Commission).
4. Rights Agreement, dated as of January 14, 1997, by and between
Kellstrom Industries, Inc. and Continental Stock Transfer & Trust
Company as Rights Agent, which includes the form of Certificate
of Designations setting forth the terms of the Series A Junior
Participating Cumulative Preferred Stock, par value $0.01 per
share, as Exhibit A, the form of Right Certificate as Exhibit B
and the Summary of Rights to Purchase Preferred Shares as Exhibit
C (incorporated by reference from the Company's Form 8-A as filed
with the Securities and Exchange Commission on January 17, 1997).
99.1 Press Release issued by the Company dated January 15, 1997,
regarding the Company's acquisition of International Aircraft
Support, L.P.
99.2 Press Release issued by the Company dated January 16, 1997,
regarding the Company's distribution of preferred stock purchase
rights.
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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.
KELLSTROM INDUSTRIES, INC.
Date: January 24, 1997 By /s/ Zivi R. Nedivi
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Zivi R. Nedivi
President and Chief Executive Officer
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EXHIBIT INDEX
No. Description
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2. The Acquisition Agreement by and among the Company, Kellstrom
Subsidiary, International Aircraft and the Principal
(incorporated by reference from the Company's Form 10-Q for
fiscal quarter ended September 30, 1996 as filed with the
Securities and Exchange Commission).
4. Rights Agreement, dated as of January 14, 1997, by and between
Kellstrom Industries, Inc. and Continental Stock Transfer and
Trust Company as Rights Agent, which includes the form of
Certificate of Designations setting forth the terms of the Series
A Junior Participating Cumulative Preferred Stock, par value
$0.01 per share, as Exhibit A, the form of Right Certificate as
Exhibit B and the Summary of Rights to Purchase Preferred Shares
as Exhibit C (incorporated by reference from the Company's Form
8-A as filed with the Securities and Exchange Commission on
January 17, 1997).
99.1 Press Release issued by the Company dated January 15, 1997,
regarding the Company's acquisition of International Aircraft
Support, L.P.
99.2 Press Release issued by the Company dated January 16, 1997,
regarding the Company's distribution of preferred stock purchase
rights.
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FOR IMMEDIATE RELEASE
KELLSTROM INDUSTRIES COMPLETES ACQUISITION
OF INTERNATIONAL AIRCRAFT SUPPORT, L.P.
Also Announces Private Placement
of $15 Million Senior Subordinated Debt
with The Equitable Life Assurance Society of the United States
New Banking Relationship with Barnett Bank, N.A.
and Union Bank of California Expands Credit Facilities
to $35 Million
Sunrise, FL - January 15, 1997 -- Kellstrom Industries, Inc. [NASDAQ:KELL] today
announced that it has completed the purchase of substantially all of the assets
and has assumed certain liabilities of International Aircraft Support, L.P.
("IASI") for $26.5 million in cash plus warrants ("Seller's Warrants") to
purchase 500,000 shares Kellstrom Common Stock at $9.25 per share. The Seller's
Warrants expire two years from closing.
In a joint announcement, Kellstrom President & CEO, Zivi R. Nedivi and
Co-Chairman, Yoav Stern, stated, "This acquisition positions Kellstrom as a
major player in the international commercial jet engine market. The combined pro
forma results for the twelve months ended September 30, 1996 of approximately
$46 million in revenues and operating profits (EBIT) of approximately $11
million will fuel our growth plans supported by strong performance."
To finance the cash portion of the purchase price, Kellstrom retained Alex.
Brown & Sons as placement agent, and completed a private placement of $15
million principal amount of Senior Subordinated Notes with The Equitable Life
Assurance Society of the United States, as sole lender. The notes bear interest
at 11.75%, and mature January 15, 2004. In connection with the issuance of the
Senior Subordinated Notes, Kellstrom also issued to Equitable warrants to
purchase 305,660 shares of Kellstrom Common Stock at an exercise price of $10
per share expiring on January 15, 2004. A portion of the Notes may be repaid at
Kellstom's option under certain circumstances prior to the dates the Notes
mature.
Kellstrom also arranged part of the cash portion of the purchase price through
the issuance of $6 million aggregate principal amount of Senior Subordinated
Bridge Notes bearing interest at 10%. The Bridge Notes are due on April 15,
1997, but repayment may be extended through January 15, 1998. In connection with
the issuance of the Bridge Notes, Kellstrom issued warrants to purchase 75,000
shares of Kellstrom's Common Stock at an exercise price of $10 per share,
exercisable until three years from
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the repayment of the Bridge Notes. The Company must issue additional warrants if
it chooses to extend the repayment of the Bridge Notes.
Kellstrom funded the remaining cash portion of the purchase price from available
bank lines and from funds generated from the recent exercise of the publicly
traded warrants (described below).
IASI, founded in 1979 and privately owned, is a leading international reseller
of commercial jet engines and engine parts. Its customers include major
airlines, engine overhaul facilities including those operated by airlines,
independent overhaul and maintenance organizations and aircraft engine
manufacturers. For the most part, IASI's customer base does not overlap with
that of Kellstrom, and the addition of IASI's distribution network will
substantially enhance Kellstrom's customer base, especially in Europe.
IASI's main product lines are complementary to those in Kellstrom. While
Kellstom emphasizes the Pratt & Whitney JT9D family of engines, IASI's strength
is in Pratt & Whitney JT9D family of engines, IASI's strength is in Pratt &
Whitney JT8D, PW 2000, PW4000 as well as CFM56 (made by CFM International).
Together, these engine models power more than 65% of the world aircraft fleet.
In addition, the acquisition will more than double Kellstrom's short-term engine
lease portfolio.
This transaction also brings to Kellstrom the talents and experience of IASI's
senior management who have entered into long-term employment agreements with
Kellstrom. Fred von Husen, who served as President & CEO of IASI since 1987 and
a 31-year industry veteran, has been named Executive Vice President of
Kellstrom. Adding his 35 years of aviation industry know-how, Don Reynolds,
IASI's VP-Technical Operations since 1985, has been named Kellstrom's
VP-Technical Operations. Also joining Kellstrom are IASI's highly experienced
team of engine sales and services specialists who will provide the combined
Company's products and services to the newly broadened customer base.
Commenting, Zivi R. Nedivi, Kellstrom's President & CEO stated, "In the three
months since the acquisition agreement was signed, we have been working with our
West Coast colleagues to develop a plan of integration that capitalizes upon
Kellstom's and IASI's unique strengths while facilitating savings in overhead,
economies of scale, and purchasing efficiencies. We are more than satisfied with
the progress to date. Additionally, with Kellstrom's ISO 9000 certification, we
believe that our Company is emerging as the industry leader in quality and
accountability."
Increases in Credit Facilities to a total of $35 Million
Kellstrom announced that it has secured a total of $15 million in credit
facilities under a new banking relationship with Barnett Bank, N.A. at 1/8%
below prime or at the Company's option LIBOR plus 275 basis points. In addition,
Union Bank of California has recently increased IASI's borrowing base to
approximately $20 million, resulting in total combined senior borrowing capacity
of $35 million.
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Approximately $5 Million Cash Infusion From Warrant Exercise
Kellstrom announced that as a result of the voluntary exercise by investors of
its publicly traded warrants (NASDAQ:KELLW) to purchase common shares,
approximately 1 million shares have already been purchased and the Company
received approximately $5 million.
Yoav Stern, Kellstrom's Co-Chairman commented, "We are gratified both by the
banks' votes of confidence and as always, having sufficient working capital
enables us to continue our rapid rate of growth and corresponding
profitability." Mr. Stern went on to say. "The voluntary exercise of warrants
also represents the confidence our investors have placed in Kellstrom's
leadership and direction. We are well along in planning the effective and
focused deployment of these proceeds and any future cash infusion arising from
warrant exercises."
Certain matters discussed in this press release contain forward looking
statements that involve risk and uncertainties, including but not limited to the
transaction's impact on earnings. Although Kellstrom believes that its
expectations are based on reasonable assumptions, it can give no assurance that
anticipated results will occur. Parties receiving this release are encouraged to
review all filings made by the Company with the Securities and Exchange
Commission.
Kellstrom is engaged in the purchasing, refurbishing (through subcontractors),
leasing, marketing and reselling of commercial jet engines and jet engine parts.
A leader in the industry, Kellstrom is the first to be awarded the ISO 9000
quality assurance certification. The Company has an approved supplier status by
a broad customer base including major domestic and international airlines,
engine parts distributors and dealers, and overhaul service facilities
throughout the world.
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CONTACT: Kellstrom Industries, Inc.
Zivi R. Nedivi, Pres. & CEO
(954) 845-0427
Yoav Stern, Co-Chairman
(415) 956-9949
OR KELL's INVESTOR RELATIONS COUNSEL:
The Equity Group Inc.
Linda Latman (212) 836-9609
Bob Goldstein (212) 371-8660
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FOR IMMEDIATE RELEASE
KELLSTROM INDUSTRIES DECLARES DIVIDEND DISTRIBUTION
OF PREFERRED STOCK PURCHASE RIGHTS
Sunrise, FL - January 16, 1997 -- The Board of Directors of Kellstrom
Industries, Inc. [NASDAQ:KELL] declared a dividend distribution of one Preferred
Share Purchase Right on each outstanding share of Kellstrom common stock.
Yoav Stern, Co-Chairman and Zivi R. Nedivi, President and Chief Executive
Officer of Kellstrom, stated: "With the recently completed acquisition by
Kellstrom of the business of San Francisco-based International Aircraft Support
and the anticipated exercise of Kellstrom's publicly traded warrants, the Board
of Directors felt that it would be beneficial for stockholders to implement a
Stockholders' Rights Plan at this time. The Rights are designed to assure that
all of Kellstrom's stockholders receive fair and equal treatment in the event of
any proposed takeover of the Company and to guard against partial tender offers,
squeeze-outs, open market accumulations and other abusive tactics to gain
control of Kellstrom without paying all stockholders a control premium."
The Rights will be exercisable only if a person or group acquires 19% or more of
Kellstrom's common stock or announces a tender offer the consummation of which
would result in ownership by a person or group of 19% or more of the common
stock. Each Right will entitle stockholders to buy one one-hundredth of a share
of a new series of junior participating cumulative preferred stock at an
exercise price of $80.
If Kellstrom is acquired in a merger or other business combination transaction
after a person has acquired 19% or more of the Company's outstanding common
stock, each Right will entitle its holder to purchase, at the Right's then
current exercise price, a number of the acquiring company's common shares having
a market value of twice such price. In addition, if a person or group acquires
19% or more of Kellstrom's outstanding common stock, each Right will entitle its
holder (other than such person or members of such group) to purchase, at the
Right's then current exercise price, a number of Kellstrom's common shares
having a market value of twice such price.
Following the acquisition by a person or group of beneficial ownership of 19% or
more of Kellstrom's common stock and prior to an acquisition of 50% or more of
the common stock, the Board of Directors may exchange the Rights (other than
Rights owned by such person or group), in whole or in part, at an exchange ratio
of one-half the number of shares of common stock (or one one-hundredth of a
share of the new series of junior participating preferred stock) issuable upon
exercise of each Right.
Prior to the tenth day following the acquisition by a person or group of
beneficial ownership of 19% or more of Kellstrom's common stock, the Rights are
redeemable for one cent per Right at the option of the Board of Directors.
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The Rights are intended to enable all Kellstrom stockholders to realize the
long-term value of their investment in the Company. They will not prevent a
takeover, but should encourage anyone seeking to acquire the Company to
negotiate with the Board prior to attempting a takeover.
The dividend distribution will be made on January 26, 1997, payable to
stockholders of record at the close of business on that date. The Rights will
expire on January 14, 2007. The Rights distribution is not taxable to
stockholders.
Kellstrom is engaged in the purchasing, refurbishing (through subcontractors),
leasing, marketing and reselling of commercial jet engines and jet engine parts.
A leader in the industry, Kellstrom is the first to be awarded the ISO 9000
quality assurance certification. The Company has an approved supplier status by
a broad customer base including major domestic and international airlines,
engine parts distributors and dealers, and overhaul service facilities
throughout the world.
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CONTACT: Kellstrom Industries, Inc.
Zivi R. Nedivi, Pres. & CEO
(954) 845-0427
Yoav Stern, Co-Chairman
(415) 956-9949
OR KELL's INVESTOR RELATIONS COUNSEL:
The Equity Group Inc.
Linda Latman (212) 836-9609
Bob Goldstein (212) 371-8660
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