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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
Date of Report (Date of earliest event reported): December 28, 2005
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WATTS WATER TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 001-11499 04-2916536
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
815 Chestnut Street, North Andover, Massachusetts 01845
(Address of Principal Executive Offices) (Zip Code)
(978) 688-1811
(Registrant's telephone number, including area code)
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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 (see General Instruction A.2. below):
|_| 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 December 28, 2005, Watts Water Technologies, Inc. (the "Company"),
through its wholly-owned subsidiary Watts Regulator Co. ("Watts Regulator"),
purchased all of the outstanding capital stock of Dormont Manufacturing Company
("Dormont") pursuant to the terms of a Stock Purchase Agreement dated as of
December 8, 2005 (the "Purchase Agreement"), by and among the Company, Watts
Regulator and Evan J. Segal and Stacy A. Brovitz, the stockholders of Dormont
(the "Sellers"). The aggregate consideration paid for all of the outstanding
capital stock of Dormont and the land on which Dormont's manufacturing facility
is located was $94,752,454, in cash, which amount includes an estimated working
capital adjustment of $252,454. $4,725,000 of the purchase price was placed in
escrow to secure the indemnification obligations of the Sellers pursuant to the
Purchase Agreement. To finance the acquisition, the Company borrowed $85,000,000
under its Credit Agreement dated as of September 23, 2004 among the Company and
certain of its subsidiaries, Bank of America, N.A., JP Morgan Chase Bank,
Wachovia Bank, National Association, Key Bank National Association, SunTrust
Bank and certain other lenders, as amended as of March 21, 2005 (the "Credit
Agreement"), and used $9,752,454 from cash on hand. The proceeds of the
$85,000,000 loan, which is a Eurocurrency Rate Loan (as defined in the Credit
Agreement), bear interest at 5.07% per annum.
Dormont provides flexible stainless steel connectors for natural and
liquid propane gas and fluid conveyance applications to customers in the
commercial foodservice, residential, and appliance OEM end markets. Dormont is
based in Export, Pennsylvania, where it maintains a 100,900 square foot facility
that houses all administrative, engineering, manufacturing and quality control
laboratory functions. In connection with the transaction, Dormont entered into a
Real Property Transfer Agreement with Dormont Realty Partners, L.P., a limited
partnership controlled by the Sellers, for the purchase of the land on which
Dormont's facility is located. The assets acquired in the Dormont acquisition
also include personnel, contracts, machinery, accounts receivable and other
fixed assets. No long-term debt of Dormont was assumed by the Company or Watts
Regulator.
The terms of the Purchase Agreement were determined on the basis of
arm's-length negotiations. The Company has previously derived an immaterial
amount of revenue from sales of water heater connectors to Dormont in the
ordinary course of business. Other than with respect to the transactions
contemplated by the Purchase Agreement, neither the Company nor Watts Regulator
considers its relationship with Dormont or the Sellers to be material, and, to
the Company's knowledge, no affiliates of the Company or Watts Regulator, or any
director or officer of the Company or Watts Regulator, or any associate of such
director or officer, has a material relationship with Dormont or the Sellers.
A copy of the Purchase Agreement is attached as Exhibit 2.1 to this
Current Report on Form 8-K and is incorporated herein by reference as though
fully set forth herein. The foregoing summary of the Purchase Agreement and the
transactions contemplated thereby is qualified in its entirety by the complete
text of the Purchase Agreement. The Purchase Agreement has been included to
provide information regarding its terms. It is not intended to provide any other
factual information about the Company. Such information can be found in the
public filings the Company makes with the Securities and Exchange Commisson,
which are available without charge at www.sec.gov and in the Investors section
of the Company's website at www.wattswater.com.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information contained above under Item 2.01 is incorporated herein by
reference.
On December 28, 2005, the Company borrowed $85,000,000 under the Credit
Agreement to finance in part the acquisition of Dormont. Including the amount
borrowed under the Credit Agreement in connection with the Dormont acquisition,
as of the date hereof the Company has used an aggregate of $212,741,354 of
available credit under the Credit Agreement and $87,258,646 remains unused and
potentially available.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired
Not applicable.
(b) Pro Forma Financial Information
Not applicable.
(c) Shell Company Transactions
Not applicable.
(d) Exhibits
See Exhibit Index attached hereto.
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.
Date: December 28, 2005 WATTS WATER TECHNOLOGIES, INC.
By: /s/ William C. McCartney
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William C. McCartney
By: Chief Financial Officer
EXHIBIT INDEX
Exhibit No. Description
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2.1* Stock Purchase Agreement dated as of December 8, 2005 by
and among Watts Water Technologies, Inc., Watts Regulator
Co., Evan J. Segal and Stacy A. Brovitz
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* Watts Water Technologies, Inc. hereby agrees to furnish supplementally a copy
of any omitted schedule or similar attachment to this agreement to the
Securities and Exchange Commission upon its request.