Document/Exhibit Description Pages Size
1: 8-K Form 8-K for the Report Date of March 1, 1999 6 28K
2: EX-2 Aggreement and Plan of Reorganization and Merger 73 315K
3: EX-99.1 Financial Statements of Modtech,Inc, and Spi 77 344K
4: EX-99.2 Unaudited Pro Forma 13 53K
5: EX-99.3 Press Release 1 7K
FORM 8-K
Securities and Exchange Commission
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: March 1, 1999
MODTECH HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-25161 33-0825386
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
2830 Barrett Avenue
Perris, California 92571
(Address of principal executive offices)
Registrant's telephone number, including area code:
(909) 943-4014
Not Applicable
(Former name or former address, if changed since last report)
Item 1. Changes in Control of Registrant.
None.
Item 2. Acquisition or Disposition of Assets.
On February 16, 1999, Modtech Holdings, Inc. (the "Company")
acquired 100% of the outstanding stock of Modtech, Inc., a California
corporation ("Modtech") and 100% of the outstanding stock of SPI Holdings, Inc.,
a Colorado corporation ("SPI"). The acquisition was consummated pursuant to the
terms of the Agreement and Plan of Reorganization and Merger between SPI and
Modtech, dated September 28, 1998 (the "Merger Agreement").
Pursuant to the Merger Agreement, subsidiaries of the Company,
Modtech Merger Sub, Inc., and SPI Merger Sub, Inc., merged with and into Modtech
and SPI, respectively, resulting in Modtech and SPI becoming wholly-owned
subsidiaries of the Company. For each share of Modtech Common Stock, Modtech
stockholders received $3.7293 cash and 0.8508 of a share of the Company's Common
Stock. For each share of SPI Common Stock or SPI Preferred Stock, SPI
stockholders received 1.8785 shares of the Company's Common Stock. Modtech
stockholders had the right to exchange up to 3.94% of their Common Stock for the
Company's Series A Preferred Stock in place of the Company's Common Stock, at
the same 0.8508 exchange ratio, and SPI stockholders had the right to elect to
receive, in place of the Company's Common Stock, $49.4097 cash per share of SPI
Common Stock or SPI Preferred Stock for up to 5.9176% of such Common Stock or
Preferred Stock. Modtech option holders received $25.00 cash per share, less the
applicable per share exercise price of their options, for 14.6709% of the shares
covered by the vested portion of their options.
A total of 12,622,158 shares of the Company's Common Stock, 388,939
shares of the Company's Series A Preferred Stock, and $39,923,472 cash was
issued and paid by the Company to the stockholders and option holders of SPI and
Modtech in connection with the mergers.
The mergers were funded from Modtech's cash and the proceeds of a
Credit Agreement with NationsBank, N.A. as the agent for several lenders, dated
February 16, 1999.
The assets acquired in the mergers include manufacturing facilities
located at nine production facilities, inventory, machinery, raw materials, and
cash. The manufacturing facilities were used by Modtech and SPI to produce
modular classrooms and commercial and light industrial buildings. The Company
intends to continue the same line of business through Modtech and SPI as
operating subsidiaries.
The Company's Board of Directors consists of Evan M. Gruber, Charles
C. McGettigan, Myron A. Wick III, Daniel J. Donahoe III and Robert W. Campbell
(each of whom was a director of Modtech at the time of the merger); and Patrick
Van Den Bossche, Charles A. Hamilton and Charles R. Gwirtsman (each of whom was
a director of SPI at the time of the merger). Evan M. Gruber, Chief Executive
Officer of Modtech serves as the Chief Executive Officer of the Company, and
Michael G. Rhodes, Chief Operating Officer of Modtech, serves as the Chief
Operating Officer and Chief Financial Officer of the Company. SPI's President,
Patrick Van Den Bossche, serves as the President of the Company.
Modtech leases its two facilities located in Perris, California, and
the land on which the manufacturing facility is located in Lathrop, California
from general partnerships in which Mr. Gruber, an officer and director of both
Modtech and the Company, is a partner. The leases are standard industrial leases
which expire in 2014 and 2019. The current aggregate monthly rent is $36,000 and
is subject to upward adjustment each year to market rates based on annual market
surveys conducted by the parties.
KRG Capital Partners, LLC ("KRG"), Infrastructure and Environmental
Private Equity Private Management III, LLC ("IEPEM"), The Argentum Group
("Argentum") and NationsCredit Commercial Corporation ("NationsCredit") will
receive a total of $1,250,000 in transaction fees in connection with the
mergers. Mr. Gwirtsman, a director of both SPI and the Company, is a principal
of KRG. At the closing of the merger, $750,000
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of the transaction fees were paid as follows: KRG--$573,170; IEPEM--$126,525;
Argentum--$25,305; and NationsCredit--$25,000. The remaining balance of the fees
will be paid to KRG over two years in equal monthly installments. Upon the
closing of a business acquisition by the Company during each of the first and
second years after the closing of the mergers, all remaining monthly payments of
the transactions fee for that year will become immediately due and payable. KRG
will also be retained by the Company for a period of three years to provide
transaction advisory services in connection with any future acquisitions by the
Company following completion of the mergers. This agreement may be renewed by
the parties on a year-to-year basis for a maximum of two additional years. The
Company may terminate the transaction advisory services agreement at any time
after its second anniversary upon 90 days' prior written notice. Under the
transaction advisory agreement, KRG will receive a fee of $75,000 for
acquisitions under $5 million, a fee of $100,000 for acquisitions greater than
$5 million but less than $15 million, and a fee of not less than $100,000 for
acquisitions in excess of $15 million. During the third year of the agreement
and any subsequent extension, KRG will receive an annual base advisory fee of
$250,000.
Pursuant to the terms of a financial advisory services agreement
entered into in June 1998 and approved by Modtech's Board, McGettigan, Wick &
Co., Inc. will receive a $1,250,000 fee for financial advisory services rendered
in connection with the mergers. The fee is payable over not more than two years,
with $750,000 paid at the completion of the mergers, $250,000 paid upon the
earlier of the closing of the first business acquisition following the mergers
or the first anniversary of the mergers, and $250,000 paid upon the earlier of
the closing of the second business acquisition following the mergers or the
second anniversary of the mergers.
The principals of McGettigan, Wick & Co., Inc. are Charles C.
McGettigan and Myron A. Wick III, who are also principals of Proactive Partners,
L.P., which beneficially controlled about 23.6% of the voting power of Modtech
prior to the merger and beneficially controls about 13% of the voting power of
the Company. Mr. McGettigan and Mr. Wick were directors of Modtech prior to the
merger and are currently directors of the Company.
The officers and directors of Modtech and SPI at the time of the
merger, and the holders of 5% or more of the equity securities of each company
at that time, are entitled to have their shares of the Company's Common Stock
registered for resale to the public under certain circumstances pursuant to a
Registration Rights Agreement.
The Company entered into employment agreements, effective on the
closing date of the mergers, with Evan M. Gruber, an officer and director of
Modtech, Patrick Van Den Bossche, an officer and director of SPI, and Michael G.
Rhodes, an officer of Modtech. These agreements are for five years, provide for
early severance payments of between one and two years and include, among other
provisions, base annual salary of $300,000 for Mr. Gruber, $250,000 for Mr. Van
Den Bossche, and $200,000 for Mr. Rhodes. The base salaries are subject to
annual percentage increases and each individual is entitled to earn bonuses of
up to 100% of annual base salary. The bonuses are based on performance and
include a cash component and a stock option component based on performance.
Concurrently with the closing of the merger, Mr. Gruber received an option to
purchase 50,000 shares of the Company's Common Stock at the closing price of
Modtech Common Stock on the day prior to the closing of the mergers. The option
is immediately vested for 10,000 shares and will continue to vest at the rate of
10,000 shares per year. The option will be credited against the stock option
component of any bonuses earned by Mr. Gruber in the first year of the
employment agreement. Mr. Gruber's new employment agreement also includes a
buy-out of his prior employment agreement with Modtech. Messrs. Gruber, Van Den
Bossche and Rhodes are officers of the Company. Messrs. Gruber and Van Den
Bossche are also directors of the Company.
Item 3. Bankruptcy or Receivership.
None.
Item 4. Changes in Registrant's Certifying Accountant.
None.
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Item 5. Other Events.
None.
Item 6. Resignations of Registrant's Directors.
None.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements. The financial statements of Modtech, Inc.,
SPI Holdings, Inc. and the indirect subsidiaries of SPI Holdings, Inc., Office
Master of Texas, Inc. and Rosewood Enterprises, Inc. Modular Manufacturing,
included in Amendment No. 2 to the Company's Registration Statement on Form S-4,
dated January 11, 1999 (Commission File No. 333-69033), are incorporated herein
by reference.
(b) Unaudited Pro Forma Combined Condensed Financial Statements. The
unaudited pro forma combined condensed financial statements of Modtech, Inc. and
SPI Holdings, Inc., included in Amendment No. 2 to the Company's Registration
Statement on Form S-4, dated January 11, 1999 (Commission File No. 333-69033),
are incorporated herein by reference.
(c) Exhibits.
[Enlarge/Download Table]
Number Name of Exhibit
------ ---------------
2 Agreement and Plan of Reorganization and Merger, dated as of September 28, 1998, by and
between Modtech, Inc. and SPI Holdings, Inc.
99.1 Financial Statements of Modtech, Inc., SPI Holdings, Inc., Office Master of Texas, Inc. and
Rosewood Enterprises, Inc. Modular Manufacturing.
99.2 Unaudited Pro Forma Combined Condensed Financial Statements of Modtech, Inc. and SPI
Holdings, Inc.
99.3 Press Release dated February 17, 1999.
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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 hereunto duly authorized.
MODTECH HOLDINGS, INC.
By: /s/ Evan M. Gruber
-----------------------------
Evan M. Gruber,
Chief Executive Officer
Date: March 1, 1999.
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EXHIBIT INDEX
[Enlarge/Download Table]
Number Name of Exhibit
------ ---------------
2 Agreement and Plan of Reorganization and Merger, dated as of September 28, 1998, by and
between Modtech, Inc. and SPI Holdings, Inc.
99.1 Financial Statements of Modtech, Inc., SPI Holdings, Inc., Office Master of Texas, Inc. and
Rosewood Enterprises, Inc. Modular Manufacturing.
99.2 Unaudited Pro Forma Combined Condensed Financial Statements of Modtech, Inc. and SPI
Holdings, Inc.
99.3 Press Release dated February 17, 1999.
Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
|---|
| This ‘8-K’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| Filed on / For Period End: | | 3/1/99 | | 1 | | 5 |
| | 2/17/99 | | 4 | | 6 |
| | 2/16/99 | | 2 |
| | 1/11/99 | | 4 | | | | | 10-K/A |
| | 9/28/98 | | 2 | | 6 |
| List all Filings |
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