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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
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, 1998 (JANUARY 14, 1998)
SUIZA FOODS CORPORATION
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 1-2755 75-2559681
- --------------- ------------------------ -------------------
(STATE OR OTHER (COMMISSION FILE NUMBER) (IRS EMPLOYER
JURISDICTION OF IDENTIFICATION NO.)
INCORPORATION)
3811 TURTLE CREEK BLVD., SUITE 1300
DALLAS, TEXAS 75219
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(214) 528-0939
1
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ITEM 5. OTHER EVENTS.
(a) On January 14, 1998, Suiza Foods Corporation ("Suiza") and
Continental Can Company, Inc. ("Can") signed a definitive agreement to merge
(the "Merger"). The press release, dated January 15, 1998, announcing the
signing is filed herewith as Exhibit 99.1.
(b) On January 15, 1998 Suiza and Can will hold an investor and
analyst meeting relating to the Merger. Filed herewith as Exhibit 99.2 are the
presentation materials to be used at the meeting (the "Presentation
Materials").
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
99.1 Press Release dated January 15, 1998, relating to the
Merger.
99.2 Presentation Materials to be used at an investor and analyst
meeting relating to the Merger.
2
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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.
Dated: January 15, 1998 SUIZA FOODS CORPORATION
By: /s/ Tracy L. Noll
-----------------------------
Tracy L. Noll
Vice President and Chief
Financial Officer
3
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
99.1 Press Release dated January 15, 1998, relating to the Merger.
99.2 Presentation Materials to be used at an investor and analyst
meeting relating to the Merger.
</TABLE>
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EXHIBIT 99.1
FOR: SUIZA FOODS CORPORATION
CONTACT: J. Michael Lewis
VP; Treasurer; Director Investor Relations
Tracy Noll
Chief Financial Officer
(214) 528-9922
FOR IMMEDIATE RELEASE
Morgen-Walke Associates:
June Filingeri, John Blackwell
Media contact: Miriam Adler
(212) 850-5600
FOR: CONTINENTAL CAN COMPANY, INC.
CONTACT: Abdo Yazgi
Executive Vice President
(203) 750-5903
SUIZA FOODS ANNOUNCES ACQUISITION OF
CONTINENTAL CAN COMPANY, INC.
DALLAS, TX, January 15, 1998 -- Suiza Foods Corporation (NYSE:SZA) today
announced that it has signed a definitive agreement to acquire Continental Can
Company, Inc. (NYSE:CAN) for stock and the assumption of debt in a purchase
transaction with a total value of approximately $345 million, including
transaction costs. The transaction is in furtherance of Suiza's strategy to
expand its plastic packaging operations, and gives the Company a leading
position in the high-density polyethylene (HDPE) segment of the plastic
packaging industry.
Under the terms of the agreement, shareholders of Continental Can Company
will receive .629 shares of Suiza stock for each of the approximately 3.2
million Continental Can shares outstanding. Suiza's stock closed at $64 5/8 on
Wednesday, January 14, 1998. The transaction will result in the issuance of
approximately 2.0 million shares of Suiza common stock, 0.5 million options and
warrants, and the assumption of Continental Can debt, which approximated $187.5
million at September 30, 1997. It is expected to be completed during the
second quarter of 1998 and to be accretive to earnings in 1998.
-MORE-
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SUIZA FOODS ANNOUNCES ACQUISITION OF CONTINENTAL CAN CO. -PAGE 2-
The transaction will increase Suiza's packaging revenues to approximately
$645 million annually. Approximately $400 million will be derived from domestic
plastic blow molding, with the remainder consisting of food can, and plastic
film packaging operations based in Europe. Continental Can has fifteen domestic
and nine European facilities while Suiza has sixteen U.S. plastic packaging
plants.
Gregg L. Engles, Suiza's Chairman and Chief Executive Officer, commented:
"The merger with Continental Can will more than double our domestic
blow-molding revenues, adding technically sophisticated packaging capabilities
and expanding our blue-chip customer base. Our combined operations will serve
clients in a variety of industries including dairy, bottled water, juice,
household chemicals, and automotive fluids. Internationally, Continental Can's
operations provide us with a number of opportunities to further develop our
packaging business."
Donald J. Bainton, Continental Can Company's Chairman and Chief Executive
Officer, added: "Suiza Foods has consistently demonstrated its ability to
create value and accelerate growth in its operations through accretive
acquisitions in fragmented industries. There are outstanding opportunities to
pursue that strategy in the HDPE packaging market, as well as build on
Continental Can's European packaging operations. The combined operations have
the potential to advance our leadership positions in our markets and achieve
exceptional growth."
The proposed transaction is subject to customary conditions, including
approval by the shareholders of Continental Can Company, Inc. and successful
completion of regulatory review under the Hart-Scott-Rodino Act.
Donaldson, Lufkin & Jenrette Securities Corporation served as financial
advisor to Suiza Foods Corporation and Continental Can Company, Inc.
Continental Can Company, headquartered in Norwalk, CT, manufactures
plastic and metal containers for food, beverages and household products, and
is expected to report fiscal 1997 revenues of approximately $530 million.
Suiza Foods is a Dallas-based company with leading positions in the dairy,
plastic packaging and packaged ice industries. Its principal holdings are in
fluid dairy processing, refrigerated, shelf-stable and frozen food products,
packaged ice and plastic containers and include Suiza Dairy and the Garrido
Coffee Company in Puerto Rico, Morningstar Foods, Inc.,
-MORE-
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SUIZA FOODS ANNOUNCES ACQUISITION OF CONTINENTAL CAN CO. -PAGE 3-
Country Fresh, Inc. in Michigan, Velda Farms Dairy in Florida, Swiss Dairy in
California, Model Dairy in Nevada, Dairy Fresh in North Carolina, Country
Delite Farms in Tennessee, Garelick Farms in New England, Franklin Plastics,
and Reddy Ice, the largest packaged ice company in the United States.
Statements in this press release other than statements of historical fact
may constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements, as
well as Suiza's future financial condition and results, are subject to inherent
risks and uncertainties, and actual results may differ materially from the
results discussed in these forward-looking statements. Factors that might cause
such a difference include, but are not limited to: (i) a lack of suitable
acquisition candidates at acceptable prices and other limitations on Suiza's
ability to pursue its acquisition strategy, (ii) significant competition, (iii)
fluctuating raw material costs, (iv) limitations arising from Suiza's
substantial indebtedness, (v) government regulation, and (vi) various risks
related to the proposed Continental Can acquistion, including the risk that
expected cost savings cannot be fully realized, that revenues following the
mergers are lower than expected, and that costs or difficulties related to
integrating the combined businesses are greater than expected. Additional
information concerning these and other risk factors are contained in Suiza's
latest Annual Report on Form 10-K and in each of Suiza's other recent filings
with the Securities and Exchange Commission (SEC), copies of which are
available from the SEC and can be obtained from Suiza upon request.
###
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[SUIZA FOODS LOGO] [CONTINENTAL LOGO]
ANALYST AND INVESTOR PRESENTATION
January 1998
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TRANSACTION SUMMARY
- -----------------------------------------------------------------------------
Terms: 0.629 Shares of Suiza Foods for
Each Share of Continental Can
Structure: Tax-free Merger
Transaction Value: $345 million
Implied Price per Share: $40.65 (1/14/98 close)
Suiza Shares Issued: 2.0 million
Suiza Options and Warrants Issued: 0.5 million
Equity Market Capitalization (post): $2.1 billion
Expected Closing: 2nd Quarter 1998
Financial Impact: Accretive to 1998 E.P.S.
[SUIZA FOODS LOGO] [CONTINENTAL LOGO]
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SUIZA ORGANIZATIONAL STRUCTURE
- -------------------------------------------------------------------------------
[CHART]
SUIZA FOODS
-------------------------
- -
SUIZA DAIRY GROUP -
------------------- ----------------
- - - -
EIGHT REDDY MORNINGSTAR FRANKLIN
REGIONAL ICE PLASTICS
DAIRY
OPERATIONS
[SUIZA FOODS LOGO] [CONTINENTAL LOGO]
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SUIZA PACKAGING STRATEGY
===============================================================================
- - Participate in the Consolidation of the Highly Fragmented Consumer Goods
Packaging industry
- - Quickly Establish Significant Packaging Industry Presence
- - Pursue Consolidating or Add-on Acquisitions in Existing Markets
- - Acquire Operations and Product Lines in New Markets
- - Develop Sufficient Scale to Achieve Efficiencies in:
- Purchasing
- Manufacturing and distribution
- Research & Development
- - Increase Volume Through New and Existing Customers
[SUIZA FOODS LOGO] [CONTINENTAL LOGO]
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ACQUISITION CREATES PLATFORM TO IMPLEMENT PACKAGING GROWTH STRATEGY
===============================================================================
- - Combination Provides Suiza with a Platform and Significant Presence in the
Consumer Goods Packaging Industry
- Places Suiza Among The Top HDPE Packaging Companies
- - Leading Market Positions with Diverse, Blue-Chip Customer Base
- - Significantly Expands Manufacturing and Distribution Network
- - Strong Internal Growth Prospects and Accretive Acquisition Opportunities
- - Increases Financial Strength and Earnings Power
- -----------------
[SUIZA FOODS LOGO] [CONTINENTAL LOGO]
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ATTRACTIVE INDUSTRY DYNAMICS AND TRENDS
================================================================================
- - Consolidating $20 Billion(1), Highly Fragmented U.S. Plastic Packaging Market
- - Scale Provides Efficiencies and Benefits
- - Industry Growth Driven By:
- Fundamental Shift from Approximate $45 Billion(1) Traditional Packaging
Forms Market (Paper, Metal, Glass) to Plastics
- Increased Trends Toward Outsourcing
- Strong Underlying Growth in Food & Beverage and Household Segments
- - Packaging Market in Europe is also Consolidating
- Shift to Plastic Packaging lags U.S. Market
- ----------------
(1) Source: Merrill Lynch Research
[SUIZA FOODS LOGO] [CONTINENTAL LOGO]
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ACQUISITION FITS WITH SUIZA CONSOLIDATION STRATEGY
===============================================================================
- - Consolidation Taking Place in Highly Fragmented U.S. Bottle Blowmolding
Industry
[GRAPH]
OVER $400 MILLION - 6 COMPANIES
$75 - $400 MILLION - 18 COMPANIES
UNDER $75 MILLION - 145 COMPANIES
- ----------------------
Source: Plastic News and Management Estimates.
[SUIZA FOODS LOGO] [CONTINENTAL LOGO]
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PLASTIC PACKAGING IS FASTEST GROWING SEGMENT
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U.S. Packaging Market(1)
------------------------------------------
[GRAPH] [GRAPH]
$48.7B (3.7% CAGR) $65.1B
Other Other
Glass Glass
Metals Metals
Plastics (8.2% CAGR) Plastics
1988 1996
- -------------------------
(1) Source: Merrill Lynch
Research
[SUIZA FOODS LOGO] [CONTINENTAL LOGO]
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ACQUISITION PROVIDES SIGNIFICANT SYNERGISTIC OPPORTUNITIES WITH SUIZA
- -----------------------------------------------------------------------------
* Strategic Fit with Franklin Plastics
* Enhances Suiza's Packaging Innovation Efforts
* Packaging Innovation Will Benefit Dairy Sector
* Suiza's Dairy Growth Will Create Internal Growth in Plastic Packaging
* Combined Entity Strengthens Relationships with Suppliers and Customers
[SUIZA FOODS LOGO] [CONTINENTAL LOGO]
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ACQUISITION ENHANCES EXISTING PACKAGING BUSINESS
- -----------------------------------------------------------------------------
Franklin Plastics Continental Can
- ------------------------------------- --------------------------------------
* Approximately $115 Million 1997 * Approximately $530 Million 1997
Estimated Revenues Estimated Revenues
* 5-Year Historical Revenue CAGR * Leading Manufacturer of Plastic
of 45% Containers in the U.S. (100% of
U.S. Plastic Packaging Revenues)
* Significant Near-Term Internal * Nationwide Manufacturing Network
Growth
* Expanding Geographic Market * Strong Positions in Key Markets
Coverage (Food & Juice, Household Chemicals)
* Strong Supplier Relationships * Diverse, Blue-Chip Customer Base
* Significant Acquisition Pipeline * Track Record of Innovative Product
Development
* Primarily Dairy and Water Focus * Technologically Advanced Equipment
and Facilities
[SUIZA FOODS LOGO] [CONTINENTAL LOGO]
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COMBINATION DIVERSIFIES SUIZA PACKAGING REVENUE BASE
- -----------------------------------------------------------------------------
Franklin Plastics Stand-Alone - 1997E
---------------------------------------
[PIE CHART] [PIE CHART] [PIE CHART]
Other - 2% Plastic - 100% United States - 100%
Food & Juice(1) - 98%
Franklin Plastics Pro Forma for Continental Can - 1997E
-------------------------------------------------------------
[PIE CHART] [PIE CHART] [PIE CHART]
Hair Care, - 9% Flexible/ - 12% Europe - 37%
Industrial Other
and Other United States - 63%
Plastic - 60%
Food & - 50%
Juice(1) Metal - 28%
Household - 21%
Chemicals
Auto. & - 20%
Motor Oil
- ---------------------
(1) Includes Dairy and Water
[SUIZA FOODS LOGO] [CONTINENTAL LOGO]
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COMBINED ENTITY PROVIDES BROAD GEOGRAPHIC MARKET COVERAGE
- -----------------------------------------------------------------------------
[MAP]
[SUIZA FOODS LOGO] [CONTINENTAL LOGO]
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COMBINED ENTITY PROVIDES DIVERSIFIED PRODUCTS AND CUSTOMER BASE
- -----------------------------------------------------------------------------
[PHOTO]
[SUIZA FOODS LOGO] [CONTINENTAL LOGO]
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ACQUISITION ENHANCES GROWTH STRATEGY
- -----------------------------------------------------------------------------
* With 45% Historical CAGR, Suiza Packaging's Goal Is to Become a Leading
Manufacturer/Distributor of Plastic Consumer Goods Packaging Products in the
U.S.
* Combination Enhances Opportunities for:
- Plastics Acquisitions in New Markets and Product Lines
- Consolidating or Add-on Acquisitions in Existing Markets
- Expansion with Greenfield Opportunities and "In-house" Concept
- Low-Cost, Efficient Operations and Cost Savings
- Increased Presence with Significant Customers, National Accounts
[SUIZA FOODS LOGO] [CONTINENTAL LOGO]
<PAGE> 15
RAPID REVENUE AND EBITDA GROWTH
- -----------------------------------------------------------------------------
($ in millions)
[GRAPH] [GRAPH]
REVENUE EBITDA
- -----------------------
(1) Fiscal year ended September 30.
[SUIZA FOODS LOGO] [CONTINENTAL LOGO]
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ACQUISITION IS ACCRETIVE TO E.P.S. IN 1998
==============================================================================
- - Transaction is Accretive to 1998 E.P.S. Assuming No Synergies
- - Account for as a Purchase
- Goodwill Impact Not Substantial
- Flexibility to Dispose of Assets if Appropriate
- - Potential Synergies
- Elimination of Public Company Costs
- Redundant Administrative Costs
- Consolidation of Insurance Costs
- Rationalization of Operations
[SUIZA FOODS LOGO] [CONTINENTAL LOGO]
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POWERFUL PLATFORM TO CREATE LEADING CONSUMER PRODUCTS PACKAGING COMPANY
- -----------------------------------------------------------------------------
* Accretive Transaction
* Complements Suiza's Successful Growth Strategy in Highly Fragmented
Distribution-Oriented Dairy Business
* Leading Market Positions with Diverse, Blue-Chip Customer Base
* Attractive Industry Fundamentals Providing Significant Growth Opportunities
* Extensive Manufacturing and Distribution Network
[SUIZA FOODS LOGO] [CONTINENTAL LOGO]
