SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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): July 25, 2003
SYNALLOY CORPORATION
Incorporated under the Commission File No. 000-19687 I.R.S. Employer
laws of Delaware Identification No.
57-0426694
2155 West Croft Circle
Spartanburg, South Carolina 29302
Telephone: 864-585-3005
Item 2. Acquisition or Disposition of Assets.
On July 22, 2003, Synalloy Corporation ("Synalloy") signed an Asset Purchase
Agreement with Rite Industries, Inc. ("Rite")(the "Purchase Agreement"). Under
the Purchase Agreement, Synalloy agreed to purchase certain assets of Rite which
Rite used in its business of the manufacture and sale of dyestuff and related
chemicals in High Point, North Carolina and in Clifton, New Jersey. The Purchase
Agreement covered substantially all of the operating assets of Rite.
The transactions under the Purchase Agreement were structured as follows: (x)
Synalloy purchased certain "Surplus Assets", including surplus and idle
production and laboratory equipment (as listed in the Purchase Agreement), from
Rite for $35,000 on the signing of the Purchase Agreement; (y) at "Closing" on
July 25, 2003, Synalloy purchased certain remaining production and laboratory
equipment from Rite for $165,000; and (z) Synalloy agreed to purchase after
Closing, for use or resale, Rite's salable inventory as Synalloy has need of it
(this is in essence a supply agreement for inventory).
Closing of the above transactions was contingent on a number of factors
including the following: (1) consent to the transaction by Synalloy's primary
lender; and (2) Rite, with Rite's consent, being placed in receivership under
North Carolina law by its primary lender. Rite was placed in receivership on
July 23, 2003.
On July 24, 2003, Synalloy completed the organization of Blackman Uhler, LLC
("BU") as a Delaware limited liability company. Synalloy contributed all of
Synalloy's assets, except real estate, used in Synalloy's dyestuff business to
BU in exchange for an 80% ownership interest in BU, a capital account of
$800,000 and a note payable to Synalloy in an amount equal to the book value of
the assets contributed reduced by $800,000. Northern Dye Equities, LLC
(Delaware), whose members are comprised of a former principal and former
employees of Rite, contributed $200,000 to acquire the other 20% ownership
interest in BU. BU entered into a lease agreement, a trademark license agreement
and a services agreement with Synalloy for space in Synalloy's Spartanburg plant
and management and other services for a fee. Synalloy currently intends in the
near future to transfer to another former principal of Rite a 5% interest in BU,
thereby reducing Synalloy's interest to 75%.
On July 25, 2003, Synalloy assigned its rights under the Purchase Agreement to
BU and BU and Rite closed the transactions contemplated under the Purchase
Agreement upon transfer of Rite's assets to BU by the receiver. BU is expected
to continue to use the assets purchased from Rite for substantially the purposes
for which Rite used them.
As an ancillary part of the foregoing transactions, on July 24, 2003, Synalloy
refinanced its loans with Wells Fargo Foothill, its primary lender, extending
the maturity date to July 26, 2006, increasing its available borrowing capacity
from $19,000,000 to $23,000,000 and adding BU as a borrower under the loan
agreements. There were no material changes to the other terms and conditions of
the agreement. Synalloy funded the foregoing transactions under this borrowing.
Item 7. Financial Statements and Exhibits
(a) and (b). Pursuant to subparagraphs (a)(4) and (b)(2) of Item 7 of
Form 8-K, any required financial statements and pro forma financial information
will be filed by amendment within 60 days of the date this form must be filed.
(c) Exhibits.
2.1 Purchase Agreement between Synalloy Corporation and Rite
Industries, Inc., as amended
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SIGNATURE
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.
SYNALLOY CORPORATION
(Registrant)
Date: August 8, 2003 By: /s/ Gregory M. Bowie
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Gregory M. Bowie
Vice President and Chief Financial
Officer
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EXHIBIT INDEX
Exhibit 2.1 Purchase Agreement between Synalloy Corporation and Rite
Industries, Inc., as amended
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