SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES ACT OF 1934
Date of Report (Date of earliest event reported) October 10,1997
----------------------------------------------------------------
AMCON DISTRIBUTING COMPANY
--------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 0-24708 47-0702918
- ------------------------------------------------------------------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
10228 "L" Street, Omaha, NE 68127
---------------------------------
(Address of principal executive offices) (Zip Code)
(402) 331-3727
--------------
(Registrant's telephone number, including area code)
Not Applicable
--------------
(Former name or former address, if changed since last report)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
AMCON Distributing Company ("AMCON"), a Delaware corporation and Marcus
Distributors, Inc., a Missouri corporation ("Marcus")are parties to an
Agreement of Sale and Purchase of assets dated September 6, 1997 (the
"Purchase Agreement").
On October 10, 1997, upon terms set forth in the Purchase Agreement, AMCON
completed its purchase of all saleable inventory and certain furniture,
fixtures and equipment from Marcus for a purchase price of $2.8 million,
subject to post-Closing adjustments as defined in the Purchase Agreement.
There are no material relationships between AMCON and Marcus and the purchase
price was determined by arm's-length negotiations. Funding for the
acquisition was provided through borrowings under the Company's revolving line
of credit with a bank (the "Facility"). The maximum amount available under
the Facility was increased from $13 million to $18 million to accommodate the
acquisition.
On September 15, 1997, AMCON and Marcus issued a press release announcing that
the two parties had entered into the Purchase Agreement. On October 24, 1997,
AMCON and Marcus issued a press release announcing consummation of the
transactions contemplated by the Purchase Agreement. Both of the press
releases noted above are filed herewith as exhibits and incorporated herein by
reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORM FINANCIAL INFORMATION AND EXHIBITS
(c) The following items are filed with this report:
EXHIBIT NO. DESCRIPTION
2.1 Purchase Agreement dated September 6, 1997
by and among AMCON Distributing Company and
Marcus Distributors, Inc.
99.1 Press release dated September 15, 1997 issued
by AMCON Distributing Company and Marcus
Distributors, Inc.
99.2 Press release dated October 24, 1997 issued
by AMCON Distributing Company and Marcus
Distributors, Inc.
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMCON DISTRIBUTING COMPANY
(Registrant)
Date: October 24, 1997 By : Michael D. James
-------------------------
Name: Michael D. James
Title: Treasurer & Chief Financial
Officer
EXHIBIT INDEX
-------------
Exhibit Description
2.1 Purchase Agreement dated September 6, 1997 by and
among AMCON Distributing Company and Marcus
Distributors, Inc.
99.1 Press release dated September 15, 1997 issued by AMCON
Distributing Company and Marcus Distributors, Inc.
99.1 Press release dated October 22, 1997 issued by AMCON
Distributing Company and Marcus Distributors, Inc.
AGREEMENT OF SALE AND PURCHASE
THIS AGREEMENT made and entered into this 6th day of September, 1997, by
and between AMCON DISTRIBUTING COMPANY, a Delaware corporation, hereinafter
referred to as "Purchaser" and MARCUS DISTRIBUTORS, INC., a Missouri
corporation, hereinafter referred to as "Seller".
WITNESSETH:
The parties desire to enter into this sale and purchase of certain
assets, enter into a sublease agreement for certain premises now leased by the
Seller, take an assignment of certain leases and aid the Seller in collecting
its accounts receivable.
NOW, THEREFORE, in consideration of the premises and the mutual promises
and covenants contained herein, the parties, intending to be legally bound,
agree as follows:
1. SALE AND PURCHASE: Seller shall sell, convey, assign and deliver to
Purchaser, and Purchaser shall purchase and take from Seller, the following
Assets:
(a) All of the furniture, fixtures and equipment, including the
computer system, listed on Exhibit A attached hereto, including certain motor
vehicles used by Seller in the conduct of its business, which Seller
represents are now located at the Seller's leased premises at 4827 North
Lindbergh Blvd., St. Louis, Missouri 63044.
(b) All of the Seller's inventory of products which are held for
resale to customers, in condition for sale at the regular selling price of the
Seller and in quantities that in the past have been sold in a three to four-
month period. Private label cigarettes will not be in quantities that exceed
the amounts sold in the three month period prior to the sale.
(c) All of the supplies of the Seller, including but not limited
to stamps of states that allow the assignment of stamps to purchasers, packing
supplies, totes, cardboard shipping boxes and office supplies, including full
boxes of copy paper and full boxes of computer paper if the Purchaser can
utilize the paper.
(d) All of Seller's right to use customer lists, logos and
telephone numbers presently used by the Seller, the Seller's leasehold
improvements, and all of the software used in the computer system, provided
the Seller has the right to assign and transfer the software, together with
the right to store, keep and utilize the company records (excluding corporate
minute book, stock book and official corporate documents, software systems for
accounts receivable, General Ledger and Journal) for a period of at least two
(2) years from Date of Closing, at which time the records will be turned over
to Seller.
2. PURCHASE PRICE. The total purchase price shall be the sum of the
following:
(a) The sum of Three Hundred Thousand One Hundred Dollars
($300,100.00) for all of the items described in paragraphs 1(a) (Exhibit A)
and (d) (certain lists, etc.); plus
(b) The cost value to the Seller of those state stamps which the
Seller has the right to transfer and the Purchaser has the right to accept and
use; plus
(c) The agreed-upon value of the packing supplies, such as totes,
boxes and full boxes of computer paper and copy paper. Any of the items
mentioned in this paragraph (c) on which the price is to be agreed upon by the
parties and no agreement is reached by the parties shall be retained by the
Seller. Seller shall have reasonable time to remove these items from the
Premises; plus
(d) The sum of One Hundred Dollars ($100.00) for the items
mentioned in paragraph 1(d) above; plus
(e) The amount established for the purchased inventory: At 8:00
A.M. on the 10th day of October, 1997, representatives of Seller and Purchaser
shall take a joint count of the inventory purchased and shall price and extend
same. The inventory shall be priced at Seller's cost plus freight in, if any.
Proof of cost shall be the Seller's invoice cost for the product. A computer
printout of the list of the Seller's invoice cost of inventory items will be
furnished to Purchaser prior to closing. The cost of the stamps placed on the
cigarettes shall be included in the cost of the cigarettes. In no event shall
the total inventory price exceed Four Million Two Hundred Thousand Dollars
($4,200,000). If the inventory contains any goods that are damaged or
outdated and can be returned for credit, the Purchaser shall return such goods
for credit, giving Seller a copy of the list of returned goods. The Purchaser
shall pay the Seller the amount of the credit within five (5) days after
receipt of the credit. If the inventory contains any items that are damaged
or in a condition such that they are non-saleable at the regular selling
price, the parties shall jointly determine a fair price, and if they cannot
agree upon a fair price, the Seller shall have the right to store such goods
or any excess inventory at the Purchaser's location for two (2) weeks, during
which time Seller shall remove such goods. The Seller shall furnish to
Purchaser at least ten (10) working days before Date of Closing a list showing
the cost of every item in the inventory.
3. PAYMENT OF PURCHASE PRICE. On Closing Date the Purchaser shall pay
to the Seller the sum of Three Hundred Thousand One Hundred Dollars
($300,100.00) for the items set forth in paragraphs 2(a) and 2(d), less the
amount of Five Thousand Dollars ($5,000.00), the earnest money paid and
eighty percent (80%) of the estimated value of the items mentioned in
paragraphs 2(b), 2(c) and 2(e), but in no event more than Three Million Three
Hundred Sixty Thousand Dollars ($3,360,000.00). As soon as the inventory is
extended and agreed upon and the total dollar value of the items set forth in
paragraphs 2(b), 2(c), 2(d) and 2(e) is established, but in no event later
than ten (10) working days after Closing Date, the Purchaser shall pay the
unpaid balance of the total purchase price. Thirty (30) working days after
Closing Date, Purchaser shall pay the Seller the adjustments, if any, on
adjustable items such as utilities and rentals. The Purchaser agrees that it
shall turn over to the Seller the Seller's proportionate part of the cigarette
marketing sales rebates, if any, that were earned to the Date of Closing and
paid to Purchaser. Such funds shall be turned over to the Seller with an
accounting within five (5) days of their receipt. The Purchaser shall remit
to the Seller the dollar amount of credit for goods returned for credit by
Seller prior to Date of Closing and for which the credit can only be used by
purchasing goods. At Closing, the Purchaser shall pay the Seller the amount
of credits the Seller has on the major advertised cigarette brands. On all
other credits of the Seller the Purchaser shall pay the Seller the amount of
such credits at the end of the month in which the credits were used. A list
of credits will be furnished by the Seller to the Purchaser. The parties at
the time of taking the inventory, will determine the credited merchandise that
the buyer will accept. If there is a credit that belongs to the Seller that
the Purchaser cannot use, the Seller shall have the right to have the
Purchaser purchase goods against the credit, providing the Seller will buy the
goods purchased from the Purchaser. This sale of merchandise by the Seller
will not violate any Agreement Not To Compete by the principals of the Seller.
4. THE LEASES ASSUMED. Attached to this Agreement of Sale and Purchase
is a list of Leased Assets (Exhibit B) showing the description of each leased
asset, the name of the Lessor, the beginning and ending date of the lease, the
rental due dates and the amount of the monthly or other periodic rental
payment. On Closing Date, the parties shall compute the amount, if any, of
prepaid rentals and this sum shall be paid by the Purchaser to the Seller.
After Closing Date the Purchaser shall be solely responsible for all payments
due or becoming due on the leases.
5. ACCOUNTS RECEIVABLE. The Purchaser grants to the Seller the use of
office space for a period of ninety (90) days after Closing so the Seller may
effectively collects its accounts receivable. The Seller will be allowed to
use the computers to generate billings and invoices with Seller's employees.
The Seller shall have the sole right to adjust any claims made against the
Seller by Seller's customers. The Purchaser shall reasonably cooperate with
the Seller to aid it in the collection of its accounts receivable.
6. LIABILITIES. Purchaser shall not assume nor otherwise be
responsible for any liabilities or obligations of Seller, other than the
obligations arising from the assignment of the Leases and other obligations
set forth in this Agreement.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER. The following
conditions shall be precedent to the obligations of the Purchaser on Closing
Date:
(a) All representations and warranties made in this Agreement
shall be correct in all material respects as of the date hereof and Closing
Date.
(b) Purchaser shall obtain at its cost, at least on or before ten
(10) days prior to Closing, all necessary licenses, permits, certificates and
approvals by governmental authorities necessary to operate the business as
presently conducted by Seller. In the event Seller has any licenses and
permits which can be transferred, Seller shall transfer and assign such
licenses and permits to Purchaser.
(c) All actions, proceedings, instruments and documents required
to carry out the terms and provisions of this Agreement and all other related
legal matters shall have been approved by Purchaser and its counsel as of
Closing Date.
(d) Between the date of this Agreement and Closing Date, no event
shall have occurred which materially or adversely affects the Assets or the
business of Seller, and the Seller shall have carried on its business in the
usual and customary manner.
(e) From the date of the signing of this Agreement through Closing
Date, Seller shall make available to Purchaser for inspection the sales
records of Seller and Assets to be sold, so that Purchaser can satisfy itself
that the sales records and Assets are as described and represented by Seller.
(f) On or before ten (10) days prior to Closing Date, the
Purchaser shall take such actions as may be necessary in order for it to enter
into a sublease of the premises now occupied by the Seller. The lease shall
be in the form attached hereto and marked Exhibit C and made a part hereof.
The sublease shall become effective on Closing Date and is a net, net lease.
(g) Purchaser and Nick Karakas and Tony Karakas shall enter into a
non-compete agreement in the form as set forth in Exhibits D and E attached
hereto.
(h) The Purchaser shall have the sole right to hire or not to hire
the employees of the Seller.
(i) On or before Closing Date, Purchaser shall receive approval
for assignments of all leases listed on Exhibit B. Purchaser, after
assignment, shall hold the Seller harmless from any and all leases assigned to
it by Seller.
If any of the aforesaid conditions are not satisfied or do not occur on
or before Closing Date, or have not been waived in writing by Purchaser, this
Agreement shall be null and void.
8. CASUALTY. In the event that prior to Closing a casualty shall cause
damage or destruction to any portion of the Assets sold, then the Seller
shall, at its sole cost and prior to Closing, repair or restore the Assets to
substantially the same condition that the Assets were in on the date of this
Agreement, and the Closing shall take place as provided herein. However, if
the cost to repair or restore such damage or destruction is in excess of
$10,000, the Purchaser shall have the option either to declare this Agreement
null and void or to accept a reduction in the price being paid to Seller.
9. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents,
warrants and covenants as of the date hereof and/or as of Closing Date, the
following:
(a) Seller, at the time of signing this Agreement, is a
corporation organized, validly existing, and in good standing under the laws
of the State of Missouri and has all corporate charter and other power and
requisite permits, licenses and other authorizations required to carry on and
conduct its business and to own, lease or operate its property in the manner
as such business is presently being conducted and as such properties are now
being owned, leased or operated.
(b) This Agreement and the consummation of the transactions
contemplated hereby have been duly authorized and approved by the shareholders
and directors of Seller and are not prohibited by any provision in the
corporate charter or By-Laws of Seller.
(c) Seller is the sole owner of and will have on Closing good fee
simple title to all the Assets, free and clear of all liens, claims,
restrictions and encumbrances of whatever kind and nature (except as may be
specifically provided in this Agreement) and is under no restrictions or
limitations to sell all the Assets to be sold and to enter into all agreements
called for in this instrument.
(d) Seller shall pay, or have paid, or have made provisions to pay
all taxes, fees and licenses, including but not limited to sales taxes, fees
or penalties which may affect the Assets to be sold.
(e) Seller shall maintain insurance on the Assets and for
liability against such hazards and risks of loss through Closing Date and in
such amounts as are customarily insured against by reasonably prudent
businessmen conducting a similar business.
(f) There is no action, suit or proceeding pending or to Seller's
knowledge threatened against Seller, at law or in equity, or before or by any
governmental board, agency or instrumentality that would affect the Seller's
ability to carry out the terms of this Agreement or to carry on its business
and operate in the manner it has in the past two years, or which would affect
the Assets, or which might affect Purchaser's ability to carry on Purchaser's
business after Closing.
(g) Seller is not in violation or in default with respect to any
term, provision or covenant of any contract, promissory note, lease, agreement
or other instrument under which any of the Assets sold hereunder may be bound,
or which Purchaser is assuming herein.
(h) The Assets being sold are and shall, as of Closing Date, be in
good working order.
(i) To the best of Seller's knowledge, after reasonable
investigation, Seller is not in violation in any material respect of any
federal, state or local law, ordinance, rule or regulation.
(j) The records, documents and financial data furnished Purchaser
by Seller are true and accurate. Seller has furnished Purchaser the compiled
financial statements prepared by Richard E. Wolf C.P.A. for the years ending
December 31, 1994, 1995 and 1996. The Seller's sales during the first six (6)
months were Thirty-Five Million Nine Hundred Eighty Thousand Dollars
($35,980,000.00) including Four Million Two Hundred Nine Thousand Dollars
($4,209,000.00) of sales to Site Oil, Flash Oil and CFM.
(k) Seller shall terminate all its employees and pay to them all
wages and benefits due and owing its employees through Closing Date, including
accrued vacation pay. Purchaser shall not assume any obligations for
employees of Seller existing prior to Closing Date.
(l) Listed on Exhibit F is a list and description of all contracts
for services that the Purchaser agrees to take over by assignment from the
Seller to the Purchaser. Prior to Closing, Seller shall furnish the Purchaser
copies of all such contracts. Purchaser shall hold the Seller harmless from
all payments due on such contracts for services after Closing Date.
(m) Seller and Purchaser agree to waive the requirements of the
Bulk Sales Law of Missouri.
(n) Seller warrants that it shall pay all of its debts as the same
come due and shall hold the Purchaser harmless from any claims, lawsuits and
demands made against the Purchaser which accrued or are due because of actions
of the Seller prior to Date of Closing, provided, that, prompt notice of any
such claims are given to the Seller by the Purchaser prior to the Purchaser
expending any funds in defense of such claim. If the Seller does not promptly
defend such claim, the Seller shall be liable to the Purchaser for all
expenses rightfully incurred by Purchaser in defense of such claim. To the
best of Seller's knowledge, the sales figures given to the Purchaser regarding
sales during the first six (6) months of 1997 are true and correct.
(o) Seller is not aware of any disputes with customers.
(p) Seller has no subsidiaries.
(q) Seller is current in the payment of all taxes, licenses and
fees, including state and federal taxes.
All the representations, warranties, covenants and agreements of Seller
set forth in this Agreement will be correct in all material respects as of
Closing with the same force and effect as if they had been made on and as of
the Closing Date and shall survive the Closing.
10. NOTICE OF CLAIMS AND LITIGATION. The Seller until the Closing Date
will promptly notify Purchaser in writing of any suits, actions, claims or
administrative proceedings instituted, threatened or asserted by or against
Seller with respect to the Assets sold hereunder, including without limitation
any claims for unpaid taxes.
Purchaser hereby indemnifies Seller against any and all actions, causes,
claims or suits which may be brought against Seller in connection with the
assets by reason of an action or failure to act which takes place on or after
the Date of Closing.
Seller hereby indemnifies Purchaser against any and all actions, causes,
claims or suits which may be brought against Purchaser in connection with the
assets by reason of an action or failure to act which takes place prior to the
Date of Closing.
This section shall survive Closing and shall remain in effect for a
period of two (2) years after Closing.
11. EXPENSES. Each of the parties hereto shall assume and bear its own
expenses, costs and fees incurred or assumed by such party in connection with
the negotiation, preparation, approval and consummation of this Agreement,
whether or not the transaction provided for by this Agreement shall be
consummated; and each party hereto, by its execution and delivery of this
Agreement, agrees to, and shall indemnify and hold harmless the other party
hereto from and against any and all liabilities or claims in respect to any
such expenses, costs or fees.
12. THE CLOSING. The consummation of the sale and purchase provided in
this Agreement (referred to herein as the "Closing Date" or "Closing") shall
take place at the offices of Susman, Schermer, Rimmel & Shifrin, 7711
Carondelet, Suite 1000, St. Louis, Missouri on October 10, 1997 at 10:00 A.M.,
or at such other time or upon such other date as may be mutually agreed upon
by the Seller and Purchaser.
13. EVENTS ON CLOSING.
(1) On Closing Date, Seller shall deliver to Purchaser:
(a) A Bill of Sale conveying all of Seller's right, title and
interest in the Assets to Purchaser, warranting the Assets to be free and
clear of all liens, claims, restrictions and encumbrances, except as may be
specifically provided for in this Agreement.
(b) Such other documents as may be necessary to transfer title to
the Assets free and clear of any and all liens, claims, restrictions and
encumbrances, including but not limited to, motor vehicle titles.
(2) At Closing, Purchaser shall deliver to Seller:
(a) Checks of Purchaser for the purchase price as calculated in
paragraphs 2 and 3 above.
(3) At Closing, Purchaser and Seller shall enter into the following
agreements:
(a) Commercial Lease attached hereto as Exhibit C; and
(b) Agreements Not To Compete attached hereto as Exhibits D and E.
(c) For Seller to furnish to Purchaser prior to November 1, 1997
financial statements for the year through September, 1997.
14. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the assigns and successors of the parties hereto.
15. EARNEST MONEY. Purchaser, upon signing this Agreement, shall pay
to the Seller the sum of Five Thousand Dollars ($5,000.00) as earnest money
and as part purchase money. This sum shall be credited on the payment due ten
(10) days after Closing.
16. ENTIRE AGREEMENT. This Agreement contains the entire understanding
of the parties hereto with respect to the subject matter hereof and there are
no other agreements, either written or oral, regarding the subject matter
hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written.
SELLER: PURCHASER:
MARCUS DISTRIBUTORS, INC. AMCON DISTRIBUTING COMPANY
By: Tony Karakas By: Kathleen M. Evans
--------------------- ----------------------
Its President Its President
EXHIBIT 99.1
NEWS RELEASE
FOR FURTHER INFORMATION CONTACT:
Michael D. James FOR IMMEDIATE RELEASE
Tel 402-331-3727
Fax 402-331-4834
AMCON AND MARCUS REACH AGREEMENT
Omaha, NE, September 15, 1997 -- AMCON Distributing Company (NASDAQ: DIST)
and Marcus Distributors, Inc. of St. Louis, Missouri announced today that the
two companies have reached an agreement to combine their respective
distribution businesses into AMCON. The arrangement is scheduled to close in
October 1997. Terms of the arrangement were not disclosed.
Marcus operates as a wholesale distributor of consumer products consisting
primarily of cigarettes, tobacco and candy products. Marcus's sales territory
includes Illinois, Indiana, Kansas, Kentucky, Missouri and Tennessee. The
annual sales of the Marcus operation will boost AMCON's annual revenues to
over $200 million.
Kathleen Evans, president of AMCON, said "The addition of the St. Louis branch
expands our service area and represents a tremendous opportunity for AMCON to
introduce an expanded product mix and service to a new group of customers."
Omaha-based AMCON is a leading wholesale distributor of consumer products
including beverages, candy, cigarettes, food service, groceries and health and
beauty care products through eight distribution centers in Kansas, Missouri,
Nebraska, North Dakota, South Dakota and Wyoming.
- End -
EXHIBIT 99.2
NEWS RELEASE
FOR FURTHER INFORMATION CONTACT:
Michael D. James FOR IMMEDIATE RELEASE
Tel 402-331-3727
Fax 402-331-4834
AMCON CLOSES PURCHASE OF MARCUS
Omaha, NE, October 24, 1997 -- AMCON Distributing Company (NASDAQ: DIST) and
Marcus Distributors, Inc. of St. Louis, Missouri announced the closing of
their previously announced agreement for AMCON to purchase the distribution
business of Marcus. Terms of the purchase arrangement were not disclosed.
Marcus previously operated as a wholesale distributor of consumer products
consisting primarily of candy and tobacco products. Marcus's sales territory
includes Illinois, Indiana, Missouri and Tennessee. The addition of the
Marcus operation is expected to boost AMCON's annual revenues to over $200
million.
Omaha-based AMCON is a leading wholesale distributor of consumer products
including beverages, candy, cigarettes, food service, groceries and health and
beauty care products through eight distribution centers located in Kansas,
Missouri, Nebraska, North Dakota, South Dakota and Wyoming.
- End -
