Alleghany Corp/DE – ‘8-K’ for 7/14/05

On:  Wednesday, 7/20/05, at 4:33pm ET   ·   For:  7/14/05   ·   Accession #:  950123-5-8727   ·   File #:  1-09371

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Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Alleghany Corporation                                 10     39K 
 2: EX-2.1      Stock Purchase Agreement                             105    461K 
 3: EX-99.1     Press Release                                          1      6K 

8-K   —   Alleghany Corporation
Document Table of Contents

8-K
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 UNITED STATES
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): July 14, 2005

 Alleghany Corporation
------------------------------------------------------
(Exact name of registrant as specified in its charter)

Delaware
----------------------------------------------
(State or other jurisdiction of incorporation)

1-9371                               51-0283071   
  ------------------------          ------------------------------------
  (Commission File Number)          (IRS Employer Identification Number)

7 Times Square Tower, 17th Floor
New York, New York 10036
 ---------------------------------------------------
 (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (212) 752-1356

------------------- 

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:                                                           

[ ] Written communications 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 240.14a-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 13e-4(c) under the         
Exchange Act (17 CFR 240.13e-4(c))                                      

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Item 2.01 Completion of Acquisition or Disposition of Assets.                   

    On July 14, 2005, Alleghany Corporation ("Alleghany") completed the sale
of its world-wide industrial minerals business, World Minerals Inc., to Imerys  
USA, Inc., a wholly owned subsidiary of Imerys, S.A., pursuant to a Stock       
Purchase Agreement dated as of May 19, 2005 by and among Imerys USA, Inc.,      
Imerys, S.A. and Alleghany (the "Stock Purchase Agreement"). Under the terms of 
the Stock Purchase Agreement, the purchase price was $230.0 million, which was  
reduced by $13.2 million reflecting contractual obligations to be paid by the   
purchaser after the closing, resulting in an adjusted purchase price of $216.8  
million (the "Adjusted Purchase Price"). $206.8 million of the Adjusted Purchase
Price was paid in cash by the purchaser to Alleghany on the closing date, with  
the remaining $10.0 million being held by the purchaser as security for certain 
indemnification obligations undertaken by Alleghany pursuant to the Stock       
Purchase Agreement. The $10.0 million hold back amount will bear interest at the
U.S. Treasury 10-year note rate and is scheduled to be released to Alleghany (to
the extent not applied toward such indemnification obligations) during the      
period covering the fifth through the tenth anniversaries of the closing date.  

The foregoing description of the transaction does not purport to be 
complete and is qualified in its entirety by reference to the Stock Purchase    
Agreement, a copy of which is filed as Exhibit 2.1 hereto and is incorporated   
herein by reference.                                                            

A copy of the press release issued by Alleghany on July 14, 2005    
announcing the completion of the sale of World Minerals Inc. is attached hereto 
as Exhibit 99.1.                                                                

Item 9.01 Financial Statements and Exhibits.                                    

(b) Pro forma financial information.                                

  The following unaudited pro forma financial information is attached as
Annex A hereto:                                                                 

    (i) Alleghany Corporation Unaudited Pro Forma Consolidated Balance Sheet
as of March 31, 2005.                                                           

    (ii) Alleghany Corporation Unaudited Pro Forma Consolidated Statement of
Earnings for the three months ended March 31, 2005.                             

     (iii) Alleghany Corporation Unaudited Pro Forma Consolidated Statement of
Earnings for the year ended December 31, 2004.                                  

   The unaudited pro forma consolidated balance sheet as of March 31, 2005
included in Annex A attached hereto gives effect to the sale of Alleghany's     
wholly-owned subsidiary World Minerals Inc. to Imerys USA, Inc. as if the sale  
had occurred on March 31, 2005, and the unaudited pro forma consolidated        
statements of earnings for the three months ended March 31, 2005 and for the    
year ended December 31, 2004 included in Annex A attached hereto give effect to 
such sale as if it had occurred on January 1, 2004. The unaudited pro forma     
balance sheet as of March 31, 2005 reflects an after-tax gain on the transaction
of approximately $14.8 million. Unaudited pro forma financial information does  
not purport to be indicative of either the results of future operations or      

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the results of operations that would have occurred had the transaction been     
consummated on the dates indicated.                                             

     The unaudited pro forma financial statements included in Annex A attached
hereto should be read in conjunction with Alleghany's historical consolidated   
financial statements and notes thereto previously filed in Alleghany's Annual   
Report on Form 10-K for the year ended December 31, 2004 and Quarterly Report on
Form 10-Q for the period ended March 31, 2005.                                  

(c) Exhibits. The following are filed as exhibits to this report:   

                                                                [Download Table]

Exhibit Number         Exhibit Description                           
--------------         -------------------                           
                                                                     
      2.1              Stock Purchase Agreement dated as of May 19,  
                       2005 by and among Imerys USA, Inc., Imerys,   
                       S.A. and Alleghany.                           

      99.1             Press Release announcing the completion of the
                       sale by Alleghany of World Minerals Inc. to   
                       Imerys USA, Inc.                              

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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.                                           

                           ALLEGHANY CORPORATION

Date:  July 20, 2005                       By: /s/ Peter R. Sismondo            
                                        --------------------------
                                     Name: Peter R. Sismondo
                                    Title: Vice President,
                                                   Controller, Treasurer
                                                     and Assistant Secretary

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                                                                         ANNEX A

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION                          

    The following unaudited pro forma consolidated balance sheet as of March
31, 2005 gives effect to the sale of Alleghany's wholly-owned subsidiary World  
Minerals Inc. to Imerys USA, Inc. as if the sale had occurred on March 31, 2005,
and the unaudited pro forma consolidated statements of earnings for the three   
months ended March 31, 2005 and for the year ended December 31, 2004 give effect
to such sale as if it had occurred on January 1, 2004. The unaudited pro forma  
balance sheet as of March 31, 2005 reflects an after-tax gain on the transaction
of approximately $14.8 million. Unaudited pro forma financial information does  
not purport to be indicative of either the results of future operations or the  
results of operations that would have occurred had the transaction been         
consummated on the dates indicated.                                             

      The unaudited pro forma financial statements should be read in conjunction
with Alleghany's historical consolidated financial statements and notes thereto 
previously filed in Alleghany's Annual Report on Form 10-K for the year ended   
December 31, 2004 and Quarterly Report on Form 10-Q for the period ended March  
31, 2005.                                                                       

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 ALLEGHANY CORPORATION
PRO FORMA CONSOLIDATED BALANCE SHEET
MARCH 31, 2005
(dollars in thousands)
 (unaudited)

                                                        [Enlarge/Download Table]

                                                                      World                              
                                                                     Minerals      Pro Forma   Pro Forma 
                                                                    Adjustments   Adjustments   Balance  
                                                     As of 3/31/05  inc / (dec)   inc / (dec)    Sheet   
                                                     -------------  -----------   -----------  ----------
                                                                                                         
ASSETS                                                                                                   
Available for sale securities at fair value:                                                             
    Equity securities (cost: 2005 $276,370)             $  637,291  $         0   $         0  $  637,291
    Debt securities (cost: 2005 $1,481,008)              1,466,558            0             0   1,466,558
Short-term investments                                     265,733       (6,907)      202,219     461,045
                                                        ----------  -----------   -----------  ----------
                                                         2,369,582       (6,907)      202,219   2,564,894

Cash                                                       240,729      (17,879)            0     222,850
Notes receivable                                            91,665            0         9,130     100,795
Accounts receivable, net                                    63,008      (55,946)            0       7,062
Premium balances receivable                                181,466            0             0     181,466
Reinsurance recoverables                                   648,922            0             0     648,922
Ceded unearned premium reserves                            275,131            0             0     275,131
Deferred acquisition costs                                  55,514            0             0      55,514
Property and equipment at cost, net of                                                                   
    accumulated depreciation and amortization              164,976     (148,625)            0      16,351
Inventory                                                   39,950      (39,950)            0           0
Goodwill and other intangibles, net of amortization        221,339      (50,451)            0     170,888
Deferred tax assets                                        110,738       (7,137)        3,010     106,611
Other assets                                               121,131       (7,171)            0     113,960
                                                        ----------  -----------   -----------  ----------

                                                        $4,584,151  $  (334,066)  $   214,359  $4,464,444
                                                        ==========  ===========   ===========  ==========

LIABILITIES AND COMMON STOCKHOLDERS' EQUITY                                                              
Losses and loss adjustment expenses                     $1,266,411  $         0   $         0  $1,266,411
Unearned premiums                                          729,517            0             0     729,517
Reinsurance payable                                        121,794            0             0     121,794
Deferred tax liabilities                                   225,384      (19,131)            0     206,253
Subsidiaries' debt                                         138,860      (58,860)            0      80,000
Current taxes payable                                       46,008       (2,511)        2,181      45,678
Other liabilities                                          228,389      (56,777)          600     172,212
                                                        ----------  -----------   -----------  ----------
    Total liabilities                                    2,756,363     (137,279)        2,781   2,621,865
Common stockholders' equity                              1,827,788     (196,787)      211,578   1,842,579
                                                        ----------  -----------   -----------  ----------

                                                        $4,584,151  $  (334,066)  $   214,359  $4,464,444
                                                        ==========  ===========   ===========  ==========

See accompanying footnotes.                                                     

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 ALLEGHANY CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
MARCH 31, 2005
(dollars in thousands, except share and per share amounts)
 (unaudited)

                                                        [Enlarge/Download Table]

                                                                          World                               
                                                            For the      Minerals     Pro Forma    Pro Forma  
                                                          period ended  Adjustments  Adjustments  Statement of
                                                             3/31/05    inc / (dec)  inc / (dec)    Earnings  
                                                          ------------  -----------  -----------  ------------
                                                                                                              
REVENUES                                                                                                      
    Net premiums earned                                   $    213,552  $         0  $         0  $    213,552
    Net mineral and filtration sales                            69,738      (69,738)           0             0
    Interest, dividend and other income                         17,562          162            0        17,724
    Net gain on investment transactions                         47,227            0            0        47,227
                                                          ------------  -----------  -----------  ------------
    Total revenues                                             348,079      (69,576)           0       278,503
                                                          ------------  -----------  -----------  ------------

COSTS AND EXPENSES                                                                                            
    Loss and loss adjustment expenses                          115,277            0            0       115,277
    Commissions and brokerage                                   53,044            0            0        53,044
    Cost of mineral and filtration sales                        56,954      (56,954)           0             0
    Salaries, administrative and other                                                                        
        operating expenses                                      18,563      (10,410)           0         8,153
    Corporate administration                                     9,081            0            0         9,081
    Interest expense                                             1,352         (687)           0           665
                                                          ------------  -----------  -----------  ------------
    Total costs and expenses                                   254,271      (68,051)           0       186,220
                                                          ------------  -----------  -----------  ------------

Earnings from continuing operations, before income taxes        93,808       (1,525)           0        92,283

Income taxes                                                    32,937       (1,877)           0        31,060
                                                          ------------  -----------  -----------  ------------

Earnings from continuing operations                             60,871          352            0        61,223

Discontinued operations                                                                                       
    Operations                                                       -            -            -             -
    Income taxes                                                     -            -            -             -
                                                          ------------  -----------  -----------  ------------

Earnings from discontinued operations, net                           -            -            -             -
                                                          ------------  -----------  -----------  ------------

Net earnings                                              $     60,871  $       352  $         0  $     61,223
                                                          ------------  -----------  -----------  ------------

Basic earnings per share of common stock                                                                      
    Continuing operations                                 $       7.74                            $       7.78
    Discontinued operations                                          -                                       -
                                                          ------------                            ------------
                                                          $       7.74                            $       7.78
                                                          ------------                            ------------

Diluted earnings per share of common stock                                                                    
    Continuing operations                                 $       7.72                            $       7.75
    Discontinued operations                                          -                                       -
                                                          ------------                            ------------
                                                          $       7.72                            $       7.75
                                                          ------------                            ------------

Average number of outstanding shares of common stock         7,896,309                               7,896,309
                                                          ------------                            ------------

See accompanying footnotes.                                                     

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 ALLEGHANY CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
 DECEMBER 31, 2004
(dollars in thousands, except share and per share amounts)
 (unaudited)

                                                        [Enlarge/Download Table]

                                                                           World                                
                                                          For the year     Minerals     Pro Forma   Pro Forma   
                                                             ended       Adjustments   Adjustments  Statement   
                                                            12/31/04     inc / (dec)   inc / (dec)  of Earnings 
                                                          ------------   -----------   -----------  ----------- 
                                                                                                                
REVENUES                                                                                                        
    Net premiums earned                                   $    805,417   $         0   $         0  $   805,417 
    Net mineral and filtration sales                           285,587      (285,587)            0            0 
    Interest, dividend and other income                         63,053           235             0       63,288 
    Net gain on investment transactions                         86,870             0             0       86,870 
                                                          ------------   -----------   -----------  ----------- 
    Total revenues                                           1,240,927      (285,352)            0      955,575 
                                                          ------------   -----------   -----------  ----------- 

COSTS AND EXPENSES                                                                                              
    Loss and loss adjustment expenses                          540,569             0             0      540,569 
    Commissions and brokerage                                  190,657             0             0      190,657 
    Cost of mineral and filtration sales                       217,546      (217,546)            0            0 
    Salaries, administrative and other                                                                          
        operating expenses                                      75,950       (44,194)            0       31,756 
    Corporate administration                                    41,278             0             0       41,278 
    Interest expense                                             4,800        (2,383)            0        2,417 
                                                          ------------   -----------   -----------  ----------- 
    Total costs and expenses                                 1,070,800      (264,123)            0      806,677 
                                                          ------------   -----------   -----------  ----------- 

Earnings from continuing operations, before income taxes       170,127       (21,229)            0      148,898 

Income taxes                                                    52,179        (5,979)            0       46,200 
                                                          ------------   -----------   -----------  ----------- 

Earnings from continuing operations                            117,948       (15,250)            0      102,698 

Discontinued operations                                                                                         
    Operations                                                  (1,033)            -             -       (1,033)
    Income taxes                                                  (781)            -             -         (781)
                                                          ------------   -----------   -----------  ----------- 

Earnings from discontinued operations, net                        (252)            -             -         (252)
                                                          ------------   -----------   -----------  ----------- 

Net earnings                                              $    117,696   $   (15,250)  $         0  $   102,446 
                                                          ------------   -----------   -----------  ----------- 

Basic earnings per share of common stock                                                                        
    Continuing operations                                 $      15.38                              $     13.13 
    Discontinued operations                                      (0.03)                                   (0.03)
                                                          ------------                              ----------- 
                                                          $      15.35                              $     13.10 
                                                          ------------                              ----------- 
Diluted earnings per share of common stock                                                                      
    Continuing operations                                 $      15.34                              $     13.07 
    Discontinued operations                                      (0.03)                                   (0.03)
                                                          ------------                              ----------- 
                                                          $      15.31                              $     13.04 
                                                          ------------                              ----------- 

Average number of outstanding shares of common stock         7,853,981                                7,853,981 
                                                          ------------                              ----------- 

See accompanying footnotes.                                                     

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FOOTNOTES                                                           

1.  The sale was completed on July 14, 2005.                                    

2.  Under the terms of the Stock Purchase Agreement, the purchase price was     
 $230.0 million, which was reduced by $13.2 million reflecting contractual
  obligations to be paid by the purchaser after the closing, resulting in an
  adjusted purchase price of $216.8 million (the "Adjusted Purchase Price").
$206.8 million of the Adjusted Purchase Price was paid in cash by the   
    purchaser to Alleghany on the closing date, with the remaining $10.0 million
being held by the purchaser as security for certain indemnification     
obligations undertaken by Alleghany pursuant to the Stock Purchase      
    Agreement. The $10.0 million hold back amount will bear interest at the U.S.
   Treasury 10-year note rate and is scheduled to be released to Alleghany (to
  the extent not applied toward such indemnification obligations) during the
period covering the fifth through the tenth anniversaries of the closing
date.                                                                   

  Pro forma adjustments include (i) an increase in short-term investments of
  $202.2 million reflecting the Adjusted Purchase Price less $4.5 million of
  transaction expenses; (ii) a note receivable of $9.1 million, comprised of
the $10.0 million hold back amount less a $0.9 million interest rate    
discount; (iii) a deferred tax asset of $3.0 million; (iv) current taxes
payable of approximately $2.2 million; and (v) another liability in the 
amount of $0.6 million for product liability indemnification.           

  The net increase in common stockholders' equity is $14.8 million, which is
the gain on sale had the sale occurred on March 31, 2005.               

1 

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 Index to Exhibits

                                                                [Download Table]

Exhibit Number        Exhibit Description                                     
--------------        -------------------                                     
                                                                              
2.1                   Stock Purchase Agreement dated as of May 19, 2005 by and
                      among Imerys USA, Inc., Imerys, S.A. and Alleghany.     

99.1                  Press Release announcing the completion of the sale by  
                      Alleghany of World Minerals Inc. to Imerys USA, Inc.    

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘8-K’ Filing		Date		First		Last			Other Filings
Filed on:		7/20/05		4
For Period End:		7/14/05		1		9
		5/19/05		2		10			8-K
		3/31/05		2		9			10-Q,  13F-HR,  4
		12/31/04		2		8			10-K,  13F-HR,  4,  8-K
		1/1/04		2		5
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