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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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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 7/20/05  Alleghany Corp/DE                 8-K:2,9     7/14/05    3:342K                                   RR Donnelley/FA

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

Page (sequential) | (alphabetic) Top
 
11st Page   -   Filing Submission
2Item 2.01. Completion of Acquisition or Disposition of Assets
"Item 9.01. Financial Statements and Exhibits
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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

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This ‘8-K’ Filing    Date First  Last      Other Filings
Filed on:7/20/054
For Period End:7/14/0519
5/19/052108-K
3/31/052910-Q,  13F-HR,  4
12/31/042810-K,  13F-HR,  4,  8-K
1/1/0425
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