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 the earliest event reported)
December 31, 1995
____________________
The Stephan Co.
Florida 1-4436 59-0676812
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification
incorporation) Number)
1850 W. McNab Road
Fort Lauderdale, Florida 33309
(Address of principal executive offices) (Zip Code)
(954) 971-0600
(Registrant's telephone number, including area code)
ITEM 2. ACQUISITION or DISPOSITION of ASSETS
On December 31, 1995, the Registrant entered into asset
purchase agreements with Colgate-Palmolive Company and its
subsidiary, The Mennen Company, for the acquisition of
certain consumer product brands, as well as a licensing
agreement for the domestic distribution of the Cashmere
Bouquet Talc product line. The combined purchase price for
the brands and licensing agreement was a minimum of
$12,000,000, comprised of a $2,000,000 cash down payment
(utilizing current working capital funds), 5 year, 8% notes
in an aggregate amount of $6,000,000 and an 8% royalty
payment based upon net sales for a period of 8 years, with a
minimum royalty payment of $4,000,000.
The Registrant purchased the Wildroot product line of
men's hair care products and signed a licensing agreement
for the manufacture and domestic distribution of the
Cashmere Bouquet Talc line for women, from the Colgate-
Palmolive Company. Protein 29 and Protein 21, both men's
hair grooming preparations; Balm Barr, a hand and body
lotion and creme product for women; Stretch Mark, a massage
creme for women; and Quinsana, a medicated anti-fungal talc
were purchased from The Mennen Company, a subsidiary of
Colgate-Palmolive.
Based upon information currently available to the
Registrant, it is estimated that approximately $1,000,000 of
the aggregate purchase price will be allocated to inventory
and equipment with the balance being allocated to trademarks
and other intangible assets. The Registrant has the right
to prepay the above mentioned notes within 179 days without
incurring any interest expense. Terms of the notes also
include semi-annual payments of interest through the five
year period.
Concurrent with the acquisition of the brands and the
licensing agreement, the Registrant entered into a six-month
transition agreement with Colgate-Palmolive to facilitate
the orderly transition of sales, production and distribution
functions. Inasmuch as all the acquired brands can be
manufactured by the Registrant, this six month period allows
the Registrant lead time to order packaging and components,
establish a distribution network, evaluate the customer base
and shipping points, and otherwise assume production and
distribution of the brands. Based upon information
currently available, the Registrant believes that the
acquisition of these product lines may initially increase
its sales by over $6,000,000 on an annual basis.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
INFORMATION AND
EXHIBITS
(a) Financial Statements of Business Acquired.
The Registrant believes that the brands acquired do not
constitute a "business" in accordance with Rule 11-01(d) of
Regulation S-X, and as such, financial statements otherwise
required to be provided by Rule 3-05(a) and (b) of such
Regulation are not necessary for this Item 7(a).
(b) Pro Forma Financial Information.
The Registrant believes that the brands acquired do not
constitute a "business" in accordance with Rule 11-01(d) of
Regulation S-X, and as such, pro forma financial statements
are not necessary for this Item 7(b).
(c) Exhibits.
10.1 - Acquisition Agreement dated December 31, 1995,
between Colgate-Palmolive Company and The Stephan Co., with
exhibits, including the Transition Agreement.
10.2 - Acquisition Agreement dated December 31, 1995,
between The Mennen Company and The Stephan Co., with
exhibits.
10.3 - Letter agreement dated December 31, 1995, between
Colgate-Palmolive Company, The Mennen Company and The
Stephan Co.
The above referenced contracts and letter agreement
will be provided as soon as practicable.
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, in the State of Florida on January 16, 1996.
The Stephan Co.
By:
David Spiegel
Chief Financial Officer
