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
April 30, 1998 0-24850
Date of Report (Date of earliest event reported) Commission File Number
Giant Cement Holding, Inc.
(Exact name of registrant as specified in its charter)
Delaware 57-0997411
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation)
320-D Midland Parkway,Summerville, SC 29485
(Address of principle executive offices) (Zip Code)
(843) 851-9898
Registrant's telephone number, including area code
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Item 2. Acquisition or Disposition of Assets.
Pursuant to an Agreement and Plan of Merger dated September 10,
1997, as amended, GCHI Acquisition Corporation, a wholly-owned subsidiary of
Giant Cement Holding, Inc. (the "Company") was merged with and into Solite
Corporation, a Virginia corporation ("Solite") effective on April 30, 1998 (the
"Merger"). As a result of the Merger, Solite is a wholly-owned subsidiary of the
Company.
Solite, a vertically integrated company based in Richmond, Virginia,
is a leading lightweight aggregate producer, block producer and resource
recovery company. The transaction included three lightweight aggregate
manufacturing facilities and five concrete block facilities located in Virginia
and North Carolina, and a hazardous waste drum processing and fuel blending
facility in Alabama.
Under the Agreement and Plan of Merger, each share of Solite common
stock, par value $2.00 per share (the "Solite Common Stock"), that was
outstanding immediately prior to the effective time of the Merger will be
converted into shares of the Company's common stock, par value $.01 per share
(the "Giant Common Stock") based on a conversion ratio, subject to payment in
cash for fractional shares.
The conversion ratio of 0.2298 shares of Giant Common Stock for each
share of Solite Common Stock was determined by dividing 175,000 shares of Giant
Common Stock by the total number of shares of Solite Common Stock outstanding as
of the effective time. Pursuant to the Agreement and Plan of Merger, an
additional 150,000 shares of Giant Common Stock were placed in escrow upon the
consummation of the Merger. All, part, or none of 75,000 of such 150,000 shares
shall be distributed to the persons who were holders of Solite Common Stock
immediately prior to the Merger, depending on whether, and the extent by which,
as of the effective date, Solite's consolidated net book value (as defined in
the Agreement and Plan of Merger) exceeds $2.8 million and its net current
assets (as defined in the Agreement and Plan of Merger) exceeds $3.3 million.
The other 75,000 shares of Giant Common Stock shall be held in escrow to satisfy
indemnification claims, if any. Unless a claim or claims by Giant are then
pending in amounts in excess of the then value of 37,500 shares of Giant Common
Stock, 37,500 shares of Giant Common Stock held in escrow shall be released on
the second anniversary of the effective date, and unless any claim or claims by
Giant are then pending, the balance of the shares of Giant Common Stock held in
escrow shall be released on the third anniversary of the effective time. In
addition, to the issuance of Giant Common Stock, the Company assumed
approximately $19.2 million of Solite's long-term debt.
The purchase price was negotiated by the Company's board of directors
and Solite's board of directors on an arm's length basis. A letter of intent was
executed on December 20, 1996 contemplating a stock-for-stock merger providing
for the issuance to Solite shareholders of an aggregate of 1,300,000 shares of
Giant Common Stock, and potentially, additional shares of Giant Common Stock in
the event certain post-merger financial benchmarks were achieved. Subsequent to
the completion of due diligence, the Company proposed a reduction in the
consideration to be paid in the Merger due to lower than expected operating
results for Solite's 1997 fiscal year, reductions in the value of Solite's
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current assets and the need for larger than anticipated capital expenditures on
plant and equipment. Following further negotiations, Solite and the Company
agreed to a reduction in the number of shares of Giant Common Stock to be issued
in the Merger to 750,000 and the elimination of the contingent earnout. The
Company also agreed to increase the maximum amount of the debt to be assumed in
the Merger from $18 million to $20 million. In September 1997, the Company
proposed to further reduce the consideration received in the Merger to 650,000
shares of Giant Common Stock due to lower than anticipated operating results for
Solite's quarter ended June 30, 1997. After several additional conference calls
and phone conversations in late August and early September of 1997, the
definitive terms of the Merger were agreed upon. In February 1998, the Company
proposed a further reduction in the consideration to be received in the Merger
to 325,000 shares of Giant Common Stock due to the Company's lower expectations
for Solite's operating results, the increase in the Company's stock price and
the increased transaction costs associated with the Antitrust Divisions' review
of the Merger. After several conference calls and meetings an amendment to the
terms of the Merger was agreed upon.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired. The following
financial statements of Solite are filed as part of this report:
(i) The financial statements of Solite Corporation and
Subsidiaries included under the caption "Solite Financial
Statements" on pages F-1 through F-41 of the Registration
Statement of Giant Cement Holding, Inc. on Post-Effective
Amendment No. 1 to Form S-4 ( Registration No. 333-36783)
filed with the Securities and Exchange Commission on
April 1, 1998 are hereby incorporated by reference.
(b) Pro Forma Financial Information. The following pro forma
financial statements of Solite are filed as part of this report:
(i)The Unaudited Pro Forma Combined Condensed Financial
Statements included under the caption "Unaudited Pro
Forma Combined Condensed Financial Statements" on pages
56 through 59 of the Registration Statement of Giant
Cement Holding, Inc. on Post-Effective Amendment No. 1
to Form S-4 (Registration No. 333-36783) filed with
the Securities and Exchange Commission on April 1, 1998
are hereby incorporated by reference.
(c) Exhibits:
2.1Agreement and Plan of Merger, dated September 10, 1997,
as amended, among Giant Cement Holding, Inc., GCHI
Acquisition Corporation and Solite Corporation included as
Annex IV to the Prospectus Statement/Prospectus filed as
part of the Registration Statement of Giant Cement
Holding, Inc. on Post-Effective Amendment No. 1 to Form
S-4 (Registration No. 333-36783) filed with the Securities
and Exchange Commission on April 1, 1998 is hereby
incorporated by reference.
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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 hereunto duly authorized.
GIANT CEMENT HOLDING INC.
By: /s/ Terry L. Kinder
Terry L. Kinder
Vice President and Chief Financial Officer
Date: May 14, 1998
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