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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Filed pursuant to Section 12, 13, or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 30, 1998
OWOSSO CORPORATION
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(Exact name of issuer as specified in charter)
PENNSYLVANIA 0-25066 23-2756709
(State or Other Jurisdiction Commission (I.R.S. Employer
of Incorporation or Organization) file number Identification Number)
The Triad Building, 2200 Renaissance Boulevard, Suite 150,
King of Prussia, PA 19406
(Address of principal executive offices)
(610) 275-4500
(Registrant's telephone number, including area code)
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Item 5. Other Events
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Owosso Corporation (the "Company") announced that it has completed
the acquisition of all of the outstanding stock of M. H. Rhodes, Inc.
("Rhodes"), a publicly-held manufacturer of mechanical timers and
photoelectric controls located in Avon, Connecticut, for a purchase price of
$2.9 million, or $14.51 per Rhodes share, paid in cash. The Company will
consolidate the operations of its subsidiary, Cramer Company, into Rhodes
during the next few months. Joseph L. Morelli, Rhodes' president, will be
president of the combined operation, which will operate under the Rhodes name.
The funds used to complete this acquisition were supplied by the Company's
revolving line of credit.
Prior to the acquisition, neither Rhodes nor any executive or
employee of Rhodes was an officer, director or principal shareholder of the
Company. The acquisition was negotiated on an arms-length basis.
The Company also announced that it has signed a definitive agreement
to sell substantially all of the assets of its DewEze Manufacturing, Inc.
("DewEze") subsidiary to Harper Industries, Inc., a company formed by the
president of DewEze. The disposition is subject to the fulfillment of various
conditions, some of which are outside of the Company's control. Accordingly,
there can be no assurance that the sale will be completed.
Item 7. Financial Statements, Pro Forma
Financial Information and Exhibits
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(c) Exhibits
99.1 Press release dated June 30, 1998 re: acquisition of M. H. Rhodes, Inc.
and agreement to sell DewEze Manufacturing, Inc.
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SIGNATURE
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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.
OWOSSO CORPORATION
Date: June 30, 1998 By: /s/ John H. Wert, Jr.
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John H. Wert, Jr., Senior Vice President - Finance
and Chief Financial Officer
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EXHIBIT INDEX
Exhibit
No. Description
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99.1 Press release dated June 30, 1998 re: acquisition of M. H.
Rhodes, Inc. and agreement to sell DewEze Manufacturing, Inc.
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FOR IMMEDIATE RELEASE:
June 30, 1998
OWOSSO CORPORATION ANNOUNCES COMPLETION OF
ACQUISITION OF M. H. RHODES, INC.
ANNOUNCES DEFINITIVE AGREEMENT TO SELL DEWEZE
June 30, 1998 - King of Prussia, PA -- Owosso Corporation (Nasdaq: OWOS) today
announced that it has completed the previously announced acquisition of M.H.
Rhodes, Inc. ("Rhodes") for $2.9 million, or $14.51 per share, cash. Rhodes is
a manufacturer of mechanical timers and photoelectric controls located in
Avon, Connecticut. In its fiscal year ended December 31, 1997, Rhodes reported
net sales of $8.5 million and EBITDA of $0.5 million. Owosso will merge the
operations of its Connecticut-based Cramer Company subsidiary into Rhodes'
facility over the next few months. Joseph L. Morelli, Rhodes' president, will
be president of the combined operation.
George B. Lemmon, Jr., Owosso's president and chief executive officer,
commented, "We are pleased to have M.H. Rhodes join Owosso's group of
companies. We see an excellent opportunity to combine the resources of Rhodes
and Cramer into one operation that is more efficient and profitable than the
two companies were on a separate basis. We believe this will position the
combined company for a better future. Although Cramer and Rhodes make
different products, their manufacturing processes are similar, and we expect
significant cost savings through manufacturing efficiencies and reduced
overhead.
"As we have mentioned, there will be some one-time charges taken in the first
months following the merger related to duplicate overhead, severance costs and
other expenses, which we expect to be approximately $1.5 - $2.0 million on a
pretax basis."
Separately, Owosso announced that it has signed a definitive agreement to sell
the assets of its DewEze Manufacturing business to Harper Industries, Inc., a
company formed by the president of the subsidiary. As previously announced,
the selling price will be determined based on a premium of $200,000 over the
net book value of the net assets acquired. Owosso expects to receive
approximately $4.4 million in cash and a note for $0.7 million in payment for
DewEze's assets.
Owosso Corporation is a diversified manufacturer of engineered component
products and specialized equipment. By operating in narrowly defined niche
markets, Owosso seeks to achieve revenue growth through market penetration and
new product development, while maximizing profit margins. Owosso currently has
manufacturing facilities in nine states and sells its products nationwide.
To receive additional information on Owosso Corporation, call Owosso's
toll-free investor services line at 1-888-OWOS-010, or visit Owosso's web
site, owosso.com.
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This press release contains forward-looking statements that involve a number
of risks and uncertainties. The sale of DewEze is subject to the satisfaction
of customary conditions, some of which are outside the Company's control.
Accordingly, there can be no assurance that the sale will be completed.
Factors that could cause actual results to differ materially from those
reflected in the forward-looking statements include, but are not limited to,
the ultimate cost and timing of moving Cramer's business and realization of
anticipated cost savings in the merger, as well as the additional factors
discussed in the Company's Annual Report on Form 10-K for the year ended
October 26, 1997 and Forms 10-Q for the quarters ended January 25, 1998 and
April 26, 1998 in the section captioned "Management's Discussion and Analysis
of Financial Condition and Results of Operations."
