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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
SEPTEMBER 27, 2000
Date of Filing of Form 8-k
SEPTEMBER 20, 2000
Date of Report (Date of Earliest Event Reported)
KELLSTROM INDUSTRIES, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 0-23764 13-3753725
(State or Other Jurisdiction of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
1100 INTERNATIONAL PARKWAY
SUNRISE, FLORIDA 33323
(Address of Principal Executive Offices)
(954) 845-0427
(Registrant's Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed since Last Report)
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ITEM 5. OTHER EVENTS.
On September 20, 2000, Kellstrom Industries, Inc. ("Kellstrom") entered
into a definitive agreement to acquire the aircraft and engine parts resale
business of Aviation Sales Company ("AVS"), which is operated through its
Aviation Sales Distribution Services Company ("AVSDC") subsidiary. Specifically,
Kellstrom will acquire select AVSDC non-inventory assets and assume a portion of
AVSDC's accounts payable and accrued expenses. Kellstrom expects to consolidate
the operations of AVSDC with its Solair and Commercial Engine Divisions. AVSDC's
sales on a stand-alone basis were approximately $125 million and its gross
margin was 19% for the six-months ended June 30, 2000. In connection with the
acquisition, Kellstrom intends to lease a new 545,000 square foot AVSDC facility
in Miramar, Florida, where it will relocate and consolidate its Commercial
Engine and Solair Divisions, purchase AVS's parts distribution facility in
Pearland, TX and assume AVSDC's worldwide sales offices.
In connection with this agreement, Kellstrom and AVS will establish an
off-balance sheet joint venture ("JV") that will acquire the inventory of AVSDC,
having a book value, as of August 31, 2000, of approximately $185 million, and
enter into an exclusive arrangement with Kellstrom to sell the inventory through
its inventory management business (together the "Transaction"). The JV will be
funded by investments and loans from both AVS and Kellstrom and by an
approximately $120 million senior debt facility from Bank of America.
Kellstrom expects to invest approximately $50 million in the
Transaction, including its investment in the JV, financing and other related
costs. Kellstrom plans to finance the Transaction with a combination of funding
from its current revolving credit facility and a new $30 million, 7-year
mezzanine debt financing with Key Principal Partners, LLC, an affiliate of Key
Corporation of Cleveland, Ohio. Consummation of the Transaction is contingent
upon Hart-Scott-Rodino approval, completion of required financing and approval
by the parties' existing lenders. Assuming receipt of necessary approvals,
closing is expected to take place in mid-to-late October 2000.
In connection with the Transaction, Kellstrom has also entered into a
long-term supply agreement with AVS to deliver parts and provide comprehensive
inventory management services to AVS's Maintenance Repair and Overhaul
operations.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
Exhibit No. Description
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99.1 Press release issued by Kellstrom on
September 20, 2000
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
KELLSTROM INDUSTRIES, INC.
/s/ Zivi R. Nedivi
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Name: Zivi R. Nedivi
Title: President
Date: September 27, 2000
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