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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): November 1, 1996
AGCO CORPORATION
(Exact name of registrant as specified in charter)
Delaware 0-19898 58-1960019
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation) Identification No.)
4830 River Green Parkway
Duluth, Georgia 30136
(Address of principal executive offices)
(770) 813-9200
(Registrant's telephone number, including area code)
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(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets.
Effective November 1, 1996, AGCO Corporation ("the Company") entered
into an agreement with De Lage Landen International, B.V., a wholly owned
subsidiary of Cooperatieve Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland"
(together, "Rabobank") to be its joint venture partner in Agricredit Acceptance
Company ("Agricredit"), the Company's retail finance subsidiary in North America
(the "Agricredit Joint Venture"). As a result of the agreement, the Company sold
a 51% interest in Agricredit to Rabobank. The Company received total
consideration of approximately $44.3 million in the transaction. Under the
Agricredit Joint Venture, Rabobank will have a 51% interest in Agricredit and
the Company will retain a 49% interest in the finance company. Substantially all
of the net assets of Agricredit were transferred to the Agricredit Joint
Venture. At September 30, 1996, Agricredit had total assets of approximately
$646.2 million and total liabilities of approximately $577.8 million.
The Agricredit Joint Venture will continue the current business of
Agricredit and seek to build a broader asset-based finance business. The Company
has similar joint venture arrangements with Rabobank and its affiliates with
respect to its retail finance companies located in the United Kingdom, France
and Germany.
Item 7. Pro Forma Financial Statements and Exhibits
(a) Pro Forma Financial Information
The unaudited pro forma financial information required by Item 7(b)
relative to the disposition of a 51% interest in Agricredit described
in Item 2 of this Form 8-K of AGCO Corporation is attached hereto as an
exhibit and incorporated herein by this reference.
(b) Exhibits
Exhibit
No. Description
99.1 Pro Forma Financial Information required by Item 7(b)
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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 thereunto duly authorized.
AGCO CORPORATION
Registrant
Date: November 14, 1996 By: Chris E. Perkins
----------------- ------------------
Chris E. Perkins
Vice President and Chief Financial Officer
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EXHIBIT INDEX
Sequentially
Exhibit Numbered
No. Description Page
- ------- ----------------------------------------------------- -----------
99.1 Pro Forma Financial Information required by Item 7(b)
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EXHIBIT 99.1
PRO FORMA FINANCIAL INFORMATION
The Pro Forma Consolidated Statements of Income are based on the historical
Consolidated Financial Statements of the Company, adjusted to give effect to the
following as if it had occurred on January 1, 1995: (i) the disposition of a 51%
interest in Agricredit, (ii) the acquisition of certain assets and liabilities
of the agricultural and industrial equipment business of Iochpe-Maxion S.A. (the
" Maxion Acquisition") on June 28,1996, (iii) the Company's issuance in March
1996 of $250.0 million of its 8-1/2% Senior Subordinated Notes due 2006 (the
"March Offering") and the application of the net proceeds therefrom and (iv) the
Company's replacement in March 1996 of its $550.0 million secured revolving
credit facilities (the "Old Credit Facility") with a new five year $650.0
million unsecured multi-currency revolving credit facility (the "New Credit
Facility"). The Pro Forma Consolidated Balance Sheet as of September 30,1996 is
based on the historical Consolidated Financial Statement of the Company,
adjusted to give effect to the disposition of a 51% interest in Agricredit as if
the transaction had occurred on September 30, 1996.
The Maxion Acquisition was accounted for under the purchase method of
accounting. The total purchase price for the Maxion Acquisition was allocated to
tangible and identifiable intangible assets and liabilities based upon the
Company's preliminary estimates of their fair values with the excess of cost
over net assets acquired allocated to goodwill. The allocation of the purchase
price for this acquisition is subject to revision when additional information
concerning asset and liability valuations is obtained. The Company does not
believe that the asset and liability valuation for this acquisition will be
materially different from the pro forma information presented herein. For
purposes of presenting pro forma results, no changes in revenues and expenses
have been made to reflect the results of any modification to operations that
might have been made had such transactions been consummated on the assumed
effective date of the transactions. The pro forma expenses include the recurring
costs which are directly attributable to these transactions, such as interest
expense, depreciation expense and amortization of the excess of cost over net
assets acquired.
The Pro Forma Financial Information does not purport to represent what the
Company's results of operations or financial position would actually have been
had such transactions actually occurred on any of the dates set forth above or
to project the Company's results of operations for any future period.
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Pro Forma Statement of Income
Year Ended December 31, 1995
(in thousands, except per share data)
Consolidated
Revenues: Operations (1)Agricredit (2) Maxion (3) Adjustments Pro Forma
--------------- ----------- ------------ ------------- ------------
Net sales . . . . . . . . . . . . . . . . $ 2,068,427 $ - $ 265,208 $ (19,587) (4) $ 2,316,019
1,971 (5)
Finance income . . . . . . . . . . . . . 56,621 (56,621) - - -
--------------- ----------- ------------ ----------- ------------
2,125,048 (56,621) 265,208 (17,616) 2,316,019
--------------- ----------- ------------ ----------- ------------
Costs and Expenses:
Cost of goods sold . . . . . . . . . . . 1,627,716 - 237,562 (19,587) (4) 1,853,066
6,048 (6)
1,327 (7)
Selling, general and administrative expenses 200,588 (13,836) 60,903 1,971 (5) 248,922
(704) (8)
Engineering expenses. . . . . . . . . . . 27,350 - 4,869 - 32,219
Interest expense (income), net. . . . . . 63,211 (31,721) 33,503 (3,366) (9) 84,898
23,271 (10)
Other expense (income), net . . . . . . . 9,602 52 685 (5,000)(11) 8,886
704 (8)
2,843 (12)
Nonrecurring expenses . . . . . . . . . . 6,000 - - - 6,000
Corporate overhead allocation from
Iochpe-Maxion . . . . . . . . . . . . . - - 10,429 - 10,429
Foreign exchange losses . . . . . . . . . - - 9,952 - 9,952
--------------- ----------- ------------ ----------- -----------
1,934,467 (45,505) 357,903 7,507 2,254,372
--------------- ----------- ------------ ----------- -----------
Income (loss) before income taxes, equity in
net earnings of unconsolidated subsidiary
and affiliates . . . . . . . . . . . . . 190,581 (11,116) (92,695) (25,123) 61,647
Provision (benefit) for income taxes . . . . 65,897 (4,334) (20,281) 3,263 (13) 34,297
(10,248)(14)
--------------- ----------- ------------ ------------ -----------
Income (loss) before equity in net earnings of
unconsolidated subsidiary and affiliates. 124,684 (6,782) (72,414) (18,138) 27,350
Equity in net earnings of unconsolidated
subsidiary and affiliates . . . . . . . . 4,458 - - 3,323 (15) 7,781
--------------- ----------- ------------ ----------- -----------
Net income (loss). . . . . . . . . . . . . . 129,142 (6,782) (72,414) (14,815) 35,131
Preferred stock dividends. . . . . . . . . . 2,012 - - - 2,012
--------------- ----------- ------------ ----------- -----------
Net income (loss) available for common
stockholders. . . . . . . . . . . . . . . $ 127,130 $ (6,782) $ (72,414) $ (14,815) $ 33,119
=============== =========== ============ =========== ===========
Income per Common Share:
Primary . . . . . . . . . . . . . . . . . $ 2.76 $ 0.72
=============== ===========
Fully diluted . . . . . . . . . . . . . . $ 2.30 $ 0.64
=============== ===========
Weighted Average Number of Common and
Common Equivalent Shares Outstanding:
Primary . . . . . . . . . . . . . . . . . 46,126 46,126
=============== ===========
Fully diluted . . . . . . . . . . . . . . 56,684 56,684
=============== ===========
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Pro Forma Statement of Income
Nine Months Ended September 30, 1996
(in thousands, except per share data)
Consolidated
Revenues: Operations (1) Agricredit (2) Maxion (3) Adjustments Pro Forma
--------------- --------------- ---------------- --------------- --------------
Net sales. . . . . . . . . . . . . . . . . $ 1,627,424 $ - $ 96,409 $ (4,001) (4) $ 1,720,559
727 (5)
Finance income . . . . . . . . . . . . . . 51,404 (51,404) - - -
--------------- --------------- ---------------- --------------- --------------
1,678,828 (51,404) 96,409 (3,274) 1,720,559
--------------- --------------- ---------------- --------------- --------------
Costs and Expenses:
Cost of goods sold . . . . . . . . . . . . 1,294,350 - 108,727 (4,001) (4) 1,400,162
422 (6)
664 (7)
Selling, general and administrative expenses 161,000 (9,886) 24,647 727 (5) 176,369
(119) (8)
Engineering expenses . . . . . . . . . . . 20,805 - 1,022 - 21,827
Interest expense (income), net . . . . . . 51,677 (27,959) 11,215 (2,093) (9) 43,217
10,377 (10)
Other expense (income), net. . . . . . . . 8,003 2 (1,430) (5,000) (11) 3,116
119 (8)
1,422 (12)
Nonrecurring expenses. . . . . . . . . . . 12,878 - - - 12,878
Corporate overhead allocated from
Iochpe-Maxion. . . . . . . . . . . . . . - - 4,201 - 4,201
Foreign exchange losses. . . . . . . . . . - - (77) - (77)
--------------- --------------- ---------------- --------------- -------------
1,548,713 (37,843) 148,305 2,518 1,661,693
--------------- --------------- ---------------- --------------- -------------
Income (loss) before income taxes, equity in net
earnings of unconsolidated subsidiary
and affiliates and extraordinary loss. . . 130,115 (13,561) (51,896) (5,792) 58,866
Provision (benefit) for income taxes. . . . . 45,570 (5,082) (15,859) 2,766 (13) 23,457
(3,938) (14)
--------------- --------------- ---------------- --------------- -------------
Income (loss) before equity in net earnings
of unconsolidated subsidiary and affiliates
and extraordinary loss . . . . . . . . . . 84,545 (8,479) (36,037) (4,620) 35,409
Equity in net earnings of unconsolidated
subsidiary and affiliates. . . . . . . . . 4,857 - - 4,155 (15) 9,012
--------------- --------------- ---------------- --------------- -------------
Income (loss) before extraordinary loss . . . $ 89,402 $ (8,479) $ (36,037) $ (465) $ 44,421
=============== =============== ================ =============== =============
Income before Extraordinary Loss
per Common Share:
Primary. . . . . . . . . . . . . . . . . . $ 1.64 $ 0.82
=============== =============
Fully diluted. . . . . . . . . . . . . . . $ 1.57 $ 0.78
=============== =============
Weighted Average Number of Common and
Common Equivalent Shares Outstanding:
Primary. . . . . . . . . . . . . . . . . . 54,374 54,374
=============== =============
Fully diluted. . . . . . . . . . . . . . . 57,341 57,341
=============== =============
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NOTES TO PRO FORMA STATEMENTS OF INCOME
(1) The Pro Forma Income Statement Data under the caption "Consolidated
Operations" reflects the consolidation of all operations of the Company and
its subsidiaries, including Agricredit.
(2) Represents the actual results of operations of Agricredit for the year
ended December 31, 1995 and the nine months ended September 30, 1996.
(3) Represents the actual results of the agricultural and industrial equipment
business acquired in the Maxion Acquisition ("Maxion") for the year ended
December 31, 1995 and the six months ended June 30, 1996.
(4) To reflect the elimination of sales of machinery and equipment from the
Company to Maxion of $5,032 and from Maxion to the Company of $14,555 for
the year ended December 31, 1995 and from the Company to Maxion of $269 and
from Maxion to the Company of $3,732 for the six months ended June 30,
1996.
(5) To reflect the elimination of sales commissions paid by Maxion to the
Company which Maxion recorded as a reduction to net sales and the Company
recorded as a reduction to selling, general and administrative expenses.
(6) To reflect a write-up in the cost of engines purchased from the
Iochpe-Maxion S.A. engine division based on an imputed profit margin on the
interdivisional transfers. Maxion's historical financial statements under
the heading "Maxion" in the Pro Forma Consolidated Statements of Income
included herein reflect the engine prices at the cost to Iochpe-Maxion S.A.
without such imputed profit margin.
(7) To reflect increased depreciation expense related to the write-up over book
value of the acquired fixed assets based on management's preliminary
estimates of the fair value.
(8) To reflect the elimination of royalties paid by Maxion to the Company which
Maxion recorded as selling, general and administrative expenses and the
Company recorded as other income.
(9) To reflect the decrease in interest expense with respect to the following:
Year Ended Nine Months Ended
December 31, 1995 September 30, 1996
----------------- ------------------
Reduced interest expense on the
Company's Revolving Credit Facility
in connection with the use of
$44.3 million in proceeds from the
disposition of a 51% interest
in Agricredit for payment on the
Revolving Credit Facility at an
interest rate of 7.6% and 6.3%
for the year ended December 31,
1995 and the nine months ended
September 30, 1996, respectively.. $3,366 $2,093
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NOTES TO PRO FORMA STATEMENT OF INCOME (Continued)
(10) To reflect the increase in interest expense with respect to the following:
Year Ended Nine Months Ended
December 31, 1995 September 30, 1996
----------------- -----------------
Interest and fees incurred on the
Company's Revolving Credit Facility
in connection with the financing
of the Maxion Acquisition in the
principal amount of $260 million
at an interest rate of 7.6% for
the year ended December 31, 1995
and 6.7% for the six months ended
June 30, 1996...................... $19,760 $8,710
Increase in interest expense and
fees on borrowings incurred in
connection with the March Offering
and the replacement of the Old Credit
Facility with the New Credit
Facility. Excludes the write-off of
capitalized fees and expenses
associated with the refinancing
of the Old Credit Facility, which
were $3.5 million, net of taxes,
and which were recorded as an
extraordinary loss in the first
quarter of 1996............... 3,511 1,667
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$ 23,271 $10,377
========== =======
(11) To reflect the gain on the disposition of a 51% interest in
Agricredit.
(12) To reflect amortization of the preliminary estimate of the excess of cost
over net assets acquired related to the Maxion Acquisition.
(13) To reflect the additional tax provision related to the net effect of the
pro forma adjustments for Agricredit recorded at the statutory rate of
39.0% in effect at December 31, 1995 and September 30, 1996.
(14) To reflect the additional tax benefit related to the net effect of the pro
forma adjustments for Maxion recorded at the statutory rate of 30.6% in
effect at December 31, 1995 and June 30, 1996.
(15) To reflect the Company's 49.0% interest in the equity in net earnings of
Agricredit.
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Pro Forma Consolidated Balance Sheet
As of September 30, 1996
(In thousands)
Consolidated
Operations (1) Agricredit (2) Adjustments Pro Forma
---------------- ---------------- ---------------- -----------------
ASSETS
Current Assets:
Cash and cash equivalents . . . . . . . . . . $ 28,331 $ (1,572) $ - $ 26,759
Accounts and notes receivable, net of
allowances . . . . . . . . . . . . . . . . 805,218 - - 805,218
Receivables from unconsolidated subsidiary and
affiliates . . . . . . . . . . . . . . . . 4,527 - 2,780 (3) 7,307
Credit receivables, net . . . . . . . . . . . 210,409 (210,409) - -
Inventories, net. . . . . . . . . . . . . . . 481,603 - - 481,603
Other current assets. . . . . . . . . . . . . 60,894 (3,334) - 57,560
---------------- ---------------- ---------------- -----------------
Total current assets . . . . . . . . . . . . 1,590,982 (215,315) 2,780 1,378,447
Noncurrent credit receivables, net . . . . . . 430,534 (430,534) - -
Property, plant and equipment, net . . . . . . 247,564 (307) - 247,257
Investments in unconsolidated subsidary
and affiliates . . . . . . . . . . . . . . 48,629 - 29,114 (4) 77,743
Other assets . . . . . . . . . . . . . . . . . 56,506 - - 56,506
Intangible assets, net . . . . . . . . . . . . 218,727 - - 218,727
---------------- ---------------- ---------------- -----------------
Total assets. . . . . . . . . . . . . . . . . . $ 2,592,942 $ (646,156) $ 31,894 $ 1,978,680
================ ================ ================ =================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt. . . . . . . $ 455,702 $ (455,702) $ - $ -
Accounts payable . . . . . . . . . . . . . . . 284,899 (3,456) - 281,443
Payables to unconsolidated subsidiary and
affiliates . . . . . . . . . . . . . . . . 16,248 (2,780) 2,780 (3) 16,248
Accrued expenses . . . . . . . . . . . . . . . 266,363 (11,458) - 254,905
Other current liabilities. . . . . . . . . . . 11,928 - 1,950 (5) 13,878
---------------- ---------------- ---------------- -----------------
Total current liabilities . . . . . . . . . . . 1,035,140 (473,396) 4,730 566,474
---------------- ---------------- ---------------- -----------------
Long-term debt. . . . . . . . . . . . . . . . . . 778,753 (94,500) (44,290) (6) 639,963
Convertible subordinated debentures . . . . . . . - - - -
Postretirement health care benefits . . . . . . . 24,229 - - 24,229
Other noncurrent liabilities. . . . . . . . . . . 38,910 (9,856) - 29,054
---------------- ---------------- ---------------- -----------------
Total liabilities . . . . . . . . . . . . . . . 1,877,032 (577,752) (39,560) 1,259,720
Stockholders' Equity:
Common stock . . . . . . . . . . . . . . . . . 572 (1) 1 (4) 572
Additional paid-in capital . . . . . . . . . . 360,057 (48,834) 48,834 (4) 360,057
Retained earnings. . . . . . . . . . . . . . . 372,006 (19,629) 22,679 (4) 375,056
Unearned compensation. . . . . . . . . . . . . (24,301) - - (24,301)
Additional minimum pension liability . . . . . (2,619) - - (2,619)
Cumulative translation adjustment. . . . . . . 10,195 60 (60) (4) 10,195
---------------- ---------------- ---------------- -----------------
Total stockholders' equity. . . . . . . . . . . 715,910 (68,404) 71,454 718,960
---------------- ---------------- ---------------- -----------------
Total liabilities and stockholders' equity. . . $ 2,592,942 $ (646,156) $ 31,894 $ 1,978,680
================ ================ ================ =================
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NOTES TO PRO FORMA BALANCE SHEET
1. The Balance Sheet Data captioned "Consolidated Operations" reflects the
consolidation of all operations of the Company and its subsidiaries,
including Agricredit.
2. Represents the Balance Sheet of Agricredit as of September 30, 1996.
3. To reflect certain intercompany balances between Agricredit and the
Company.
4. To reflect the Company's 49% investment in Agricredit, under the equity
method of accounting, subsequent to the disposition of a 51% interest in
Agricredit.
5. To reflect a tax liability for the gain on the disposition of a 51%
interest in Agricredit recorded at the statutory rate of 39.0% in effect at
September 30, 1996.
6. To reflect the use of proceeds from the disposition of a 51% interest in
Agricredit for repayment on the Company's Revolving Credit Facility. The
proceeds of $44.3 million include a dividend paid by Agricredit to the
Company of $11.9 million immediately prior to the sale transaction.
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