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): August 26, 2011
A. O. Smith Corporation
(Exact name of registrant as specified in its charter)
| Delaware | 1-475 | 39-0619790 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
11270 West Park Place, Milwaukee, Wisconsin 53224-9508
(Address of principal executive offices, including zip code)
(414) 359-4000
(Registrant’s telephone number)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 204.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13-e4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.01. | Completion of Acquisition or Disposition of Assets. |
On August 26, 2011, A. O. Smith Corporation (“A. O. Smith” or the “Company”) consummated the acquisition of Lochinvar Corporation of Lebanon, Tennessee (“Lochinvar”). Lochinvar is a leading manufacturer of high-efficiency boilers used in commercial and residential hydronic heating and hot water applications. Under the terms of the Stock Purchase Agreement, dated as of July 18, 2011 (the “Purchase Agreement”), among A. O. Smith, the shareholders of Lochinvar and Lochinvar Limited, and William L. Vallett, Jr., as Sellers’ Representative, A. O. Smith purchased all of the issued and outstanding stock of Lochinvar and its U.K. sales affiliate, Lochinvar Limited, from the shareholders of such entities and, under a related agreement, A. O. Smith purchased Lochinvar’s headquarters and manufacturing facility located in Lebanon, Tennessee from a related party of such shareholders, Knight Leasing Company, LLC. A. O. Smith paid an aggregate purchase price of $418 million in cash at closing for these transactions, consisting of $390 million for the stock of Lochinvar and Lochinvar Limited and $28 million for Lochinvar’s headquarters and manufacturing facility. Under the Purchase Agreement, the purchase price is subject to a customary post-closing working capital adjustment, and A. O. Smith is also obligated to make an earnout payment of up to an additional $35 million in cash if certain revenue goals are met between December 1, 2011 and November 30, 2012.
The description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Purchase Agreement, a copy of which is filed herewith as Exhibit 2.1 is incorporated herein by reference. The Purchase Agreement has been included to provide investors and stockholders with information regarding its terms. It is not intended to provide any other factual information about the Company. The Purchase Agreement contains representations and warranties that the parties to the Purchase Agreement made to and solely for the benefit of each other. The assertions embodied in such representations and warranties are qualified by information contained in confidential disclosure schedules that the parties exchanged in connection with signing the Purchase Agreement. Accordingly, investors and stockholders should not rely on such representations and warranties as characterizations of the actual state of facts or circumstances, since they were only made as of the date of the Purchase Agreement and are modified in important part by the underlying disclosure schedules. Moreover, information concerning the subject matter of such representations and warranties may change after the date of the Purchase Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.
A copy of the Company’s news release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.
| Item 9.01. | Financial Statements and Exhibits |
Financial Statements of Acquired Businesses
The required financial statements of Lochinvar are not filed with this Current Report on Form 8-K, but will be filed in an amendment to this Current Report on Form 8-K not later than November 11, 2011.
Pro Forma Financial Information
The required pro forma financial information of the Company for the acquisition of Lochinvar is not filed with this Current Report on Form 8-K, but will be filed in an amendment to this Current Report on Form 8-K not later than November 11, 2011.
Exhibits
The following exhibits are being filed herewith:
| 2.1 | Stock Purchase Agreement, dated as of July 18, 2011, by and among A. O. Smith Corporation, the shareholders of Lochinvar Corporation and Lochinvar Limited, and William L. Vallett, Jr. as Sellers’ Representative (incorporated by reference to the Company’s Current Report on Form 8-K dated July 18, 2011 (Commission File No. 1-475)).* |
| 99.1 | A. O. Smith Corporation News Release, dated August 26, 2011. |
| * | Certain schedules are omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally a copy of any omitted schedule to the Securities and Exchange Commission upon request. |
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.
| A. O. SMITH CORPORATION | ||||
| Date: August 30, 2011 | By: | /s/ James F. Stern | ||
| James F. Stern | ||||
| Executive Vice President, General Counsel and Secretary | ||||
A. O. SMITH CORPORATION
Exhibit Index to Current Report on Form 8-K Dated August 26, 2011
| Exhibit |
Description | |
| 2.1 | Stock Purchase Agreement, dated as of July 18, 2011, by and among A. O. Smith Corporation, the shareholders of Lochinvar Corporation and Lochinvar Limited, and William L. Vallett, Jr., as Sellers’ Representative (incorporated by reference to the Company’s Current Report on Form 8-K dated July 18, 2011 (Commission File No. 1-475)). * | |
| 99.1 | A. O. Smith Corporation News Release, dated August 26, 2011. | |
| * | Certain schedules are omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally a copy of any omitted schedule to the Securities and Exchange Commission upon request. |
Exhibit 99.1
August 26, 2011
A. O. Smith completes acquisition of Lochinvar Corporation
Milwaukee, Wis.—A. O. Smith Corporation (NYSE:AOS) today announced the completion of its acquisition of Lochinvar Corporation. The purchase price of the acquisition was approximately $418 million which was funded from A. O. Smith’s cash and revolving credit facility.
A. O. Smith received notification earlier today from the Federal Trade Commission that it had terminated the Hart-Scott-Rodino waiting period pertaining to the transaction.
Privately held Lochinvar is a leading manufacturer of high-efficiency boilers used in commercial and residential hydronic heating and hot water applications. A. O. Smith expects the acquisition to be accretive to earnings per share in the amount of approximately $.10 in the fourth quarter of 2011, excluding one-time purchase accounting charges and professional fees related to the acquisition, and in the range of $.40 to $.50 per share in 2012.
“The addition of Lochinvar represents an excellent fit with our strategy to become a leading global water technology company,” Paul Jones, chairman and chief executive officer of A. O. Smith Corporation, said in announcing the completion of the sale transaction.
“Lochinvar is a well-known and widely respected brand in our industry, and their emphasis on energy efficient products, world-class quality, and outstanding customer service fit well with our existing water heater business.”
“We’re excited about the opportunity to grow the Lochinvar business, both domestically and outside of the U. S.,” he continued.
Forward-looking statements
This release contains statements that the company believes are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements
generally can be identified by the use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “forecast,” “guidance” or words of similar meaning. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this release. Important factors that could cause actual results to differ materially from these expectations include, among other things, the following: difficulties in integrating the Lochinvar acquisition or achieving the stated accretion, cost synergies and/or global expansion opportunities; weakening in the high efficiency boiler market or slowdown in the transition from non-condensing to condensing boilers; the ability to execute our acquisition strategy; significant volatility in raw material prices; competitive pressures on the company’s businesses; inability to implement pricing actions; instability in the company’s water products markets; further weakening in housing construction; further weakening in commercial construction; timing of any recoveries in housing or commercial construction; a slowdown in the Chinese economy; adverse general economic conditions and capital market deterioration; and the impact of accounting for acquisitions on the company’s financial statements. Forward-looking statements included in this press release are made only as of the date of this release, and the company is under no obligation to update these statements to reflect subsequent events or circumstances. All subsequent written and oral forward-looking statements attributed to the company, or persons acting on its behalf, are qualified entirely by these cautionary statements.
A. O. Smith Corporation, with 2010 sales of nearly $1.5 billion, is one of the world’s leading manufacturers of residential and commercial water heating equipment, offering a comprehensive line featuring the best-known brands in North America and China, as well as water purification products for residential and light commercial applications. A. O. Smith, headquartered in Milwaukee, Wis., employs approximately 10,500 people at operations in the U. S., Canada, Mexico, India, China, and the Netherlands.