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
Date of Report (Date of earliest event reported) February 14, 1997
DIMON Incorporated
(Exact name of registrant as specified in its charter)
Virginia 0-25734; 1-13684 54-1746567
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
512 Bridge Street, Danville, Virginia 24543-0681
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (804) 792-7511
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Item 5. Other Events
On February 14, 1997, the Company announced that it had signed a
definitive agreement to acquire 100 percent ownership of Intabex
Holdings S.A. The press release is filed herewith as Exhibit 99.
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SIGNATURE
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.
DIMON INCORPORATED
(Registrant)
Date: February 21, 1997 By: /s/ Jerry L. Parker
Jerry L. Parker
Vice President and Controller
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DIMON Incorporated Tel: 804 792 7511
512 Bridge Street Telex: 6730255 DBRL UW
Post Office Box 681
Danville, VA 24543-0681
USA
Exhibit 99
FOR IMMEDIATE RELEASE CONTACT: Paul W. Ashworth
February 14, 1997 (804) 791-6985
DIMON ANNOUNCES ACQUISITION OF INTABEX
DIMON Incorporated announced today that it has signed a definitive
agreement to acquire 100 percent ownership of Intabex Holdings
Worldwide S.A. (Intabex), the world's fourth largest leaf tobacco
dealer with annual sales of approximately $700 million.
Intabex is a privately-owned Luxembourg holding company with coordination
and service offices in Wokingham, England, near London. It owns and
operates leaf tobacco buying, processing and exporting operations in
principal tobacco markets around the world including the United States,
Brazil, Argentina, Malawi, Italy and Thailand. Additionally, through an
affiliated company in Zimbabwe whose tobacco interests DIMON is acquiring
separately, Intabex is a major supplier of Zimbabwean and other African
grown tobacco to the cigarette industry. An Intabex subsidiary, Compania
de Filipinas (CdF), is one of the major suppliers of premium cigar leaf
and other dark air-cured tobaccos to the resurgent cigar industry in the
United States and Europe.
The aggregate purchase price for Intabex, the Zimbabwe assets and other
rights being acquired will consist of two million shares of DIMON common
stock, $140 million in 10-year, 6.25 percent subordinated debentures
convertible into 4.866 million DIMON shares at $28.77 per share, and
$79.25 million in cash.
Intabex is principally owned by Folium, Inc., an investment company, and
Tabacalera S.A., the Spanish cigarette company. In addition to becoming
a DIMON shareholder, Tabacalera will continue with its existing supply
agreement to obtain its leaf tobacco requirements through DIMON.
Mr. A. C. B. "Tony" Taberer, the current Chairman of Intabex and an
affiliate of Folium, Inc., will become a director of and consultant to
DIMON and will continue as a non-executive Chairman of Intabex.
Mr. Taberer is a former Tobacco Internationalman of the year who has
nearly 40 years of experience in the tobacco industry.
Claude B. Owen, Jr., DIMON's Chairman and Chief Executive Officer, said
his company's board and management group was "very pleased and
enthusiastic over the opportunities which the Intabex acquisition
brings to DIMON. We proved to ourselves with the merger of Dibrell
and Monk-Austin which created DIMON in 1995 that tremendous cost savings
and synergies can be obtained by consolidation within the leaf tobacco
industry. The fact that Intabex became available at this time offered
DIMON a unique and unprecedented opportunity to repeat the same sort
of cost cutting exercise which DIMON itself just completed this year."
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"While we are generally reluctant to use equity in an acquisition,"
Owen continued, "we believe that the significant and immediate benefits
from this transaction will cause earnings per share to increase rather
than being dilutive. Having just completed a restructuring of DIMON's
capital structure, we also did not want to add significant new senior
debt to our balance sheet at this time. We are confident that the free
cash flow to be generated by DIMON and its new Intabex subsidiary will
from day one justify this investment decision."
In addition to increasing significantly DIMON's presence in certain key
tobacco sourcing areas such as Argentina, Brazil, Malawi, Zimbabwe and the
U.S., this acquisition will add new sources for cigarette leaf for DIMON
such as Thailand, Sri Lanka and the emerging areas within Africa. The
CdF entities in Latin America and Asia which supply cigar leaf tobacco
also represent new sources of supply for DIMON.
Mr. Owen also stated that "while elimination of redundancies in overhead
and in certain overlapping operations will be a major benefit from this
acquisition, Intabex has a talented and entrepreneurial management team
which has made it the fastest growing company in the leaf tobacco industry
over the last few years. The addition of Intabex's significant
international management presence to DIMON's existing worldwide group
will enhance DIMON's efforts to create a truly global management
organization."
The definitive agreement has been approved by the DIMON board of directors
and by Intabex's shareholders. DIMON expects to consummate the acquisition
on April 1, 1997. The parties have received early termination of the
waiting period under the Hart-Scott-Rodino Antitrust Improvement Act,
although the transaction remains subject to anti-trust clearance in
certain other countries.
The forward-looking information contained in this release is included
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 and is subject to risks and uncertainties.
Achievement of anticipated earnings per share and free cash flow increases
relating to the acquisition are dependent upon the timely realization of
cost savings and synergies and the maintenance of Intabex's
relationships with customers and suppliers. Delays or unanticipated
obstacles in rationalizing operations or loss of significant customer
orders or suppliers support may significantly slow or reduce the
amount of any earnings benefit. For additional information regarding
factors that could affect DIMON's financial condition and results of
operations generally, see "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Factors that May Affect
Future Results" in DIMON's Annual Report on Form 10-K for the year
ended June 30, 1996.
DIMON is an international company engaged in two business segments -
purchasing, processing, storing and selling leaf tobacco and importing
and distributing fresh cut flowers. With sales in excess of $2.1 billion
in 1996, DIMON is the second largest leaf tobacco dealer as well as the
largest importer and exporter of fresh cut flowers in the world.
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