UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 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)
August 5, 2005
Schnitzer
Steel Industries, Inc.
(Exact
Name of Registrant as Specified in Its Charter)
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Oregon
(State
or Other
Jurisdiction
of
Incorporation)
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0-22496
(Commission
File
Number)
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93-0341923
(IRS
Employer
Identification
No.)
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3200
N.W. Yeon Ave.
P.O.
Box 10047
Portland,
OR
(Address
of Principal Executive Offices)
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97296-0047
(Zip
Code)
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(Registrant’s
Telephone Number, Including Area Code)
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):
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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o |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR
240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR
240.13e-4(c))
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Item
1.01. Entry
into a Material Definitive Agreement.
On
August
5, 2005, two wholly-owned subsidiaries of Schnitzer Steel Industries, Inc.
(“SSI”), Pick-N-Pull Auto Dismantlers, a California general partnership (“PNP”),
and PNP Commercial Acquisition, LLC, a Delaware limited liability company
(“PNP
Commercial”), entered into a Unit Purchase Agreement (the “Greenleaf Purchase
Agreement”) with Tree Acquisition, L.P., a Delaware limited partnership
(“Tree”), pursuant to which PNP Commercial agreed to acquire from Tree (the
“Greenleaf Transaction”) all of the issued and outstanding units of membership
interests of Greenleaf Auto Recyclers, LLC, a Delaware limited liability
company
(“Greenleaf”). Greenleaf is engaged in the business of auto dismantling and
recycling and sells its products primarily to collision and mechanical repair
shops. Greenleaf currently operates in 22 locations throughout the United
States. The total consideration to be paid by PNP Commercial to Tree in
connection with the Greenleaf Transaction is $23,500,000, subject to a
post-closing working capital adjustment. The Greenleaf Purchase Agreement
contains customary representations, warranties and covenants on the part
of
Tree, PNP and PNP Commercial.
The
consummation of the Greenleaf Transaction by PNP and PNP Commercial is subject
to a number of closing conditions, including, among other things, (i) the
completion by PNP and PNP Commercial of their due diligence investigation
of
Greenleaf and the transactions contemplated by the Ford Purchase Agreement
(defined below), the results of which are satisfactory to PNP and PNP Commercial
in their sole discretion, (ii) the contemporaneous closing of the Ford
Transaction, as described below and (iii) other closing conditions customary
for
a transaction of this nature. There is a significant amount of due diligence
to
be completed and there are no assurances that the results of which will be
deemed satisfactory to PNP and PNP Commercial. PNP and PNP Commercial paid
an
“earnest money deposit” in escrow in connection with entering into the
transaction; in certain circumstances, including if PNP and PNP Commercial
terminate the Greenleaf Purchase Agreement because the due diligence closing
condition has not been met, the earnest money deposit will convert into a
loan
to Greenleaf. Either party may terminate the Greenleaf Purchase Agreement
if the
transactions are not consummated on or before September 30, 2005.
Also
on
August 5, 2005, PNP Commercial entered into an Agreement of Purchase and
Sale
(the “Ford Purchase Agreement” and, together with the Greenleaf Purchase
Agreement, the “Purchase Agreements”) with Ford Motor Company, a Delaware
corporation (“Ford”), pursuant to which PNP Commercial agreed to acquire from
Ford (i) all of the issued and outstanding membership interests of GLA Real
Estate Holdings, LLC, a Delaware limited liability company (“GLARE”), which owns
five parcels of real estate currently leased by Greenleaf in connection with
its
business (the “Real Property”), and (ii) two promissory notes (the “Notes”)
executed by Tree and Greenleaf and payable to Ford (collectively, the “Ford
Transaction” and, together with the Greenleaf Transaction, the “Transactions”).
The total consideration to be paid by PNP Commercial, should the Ford
Transaction be consummated, is $21,500,000. The Ford Purchase Agreement contains
customary representations, warranties and covenants on the part of Ford and
PNP
Commercial.
The
consummation of the Ford Transaction by PNP Commercial is subject to a number
of
closing conditions, including, among other things, (i) the simultaneous
consummation of the Greenleaf Transaction, (ii) the completion by PNP Commercial
of its due diligence review of GLARE and the Real Property, including without
limitation, environmental due diligence, and (iii) other closing conditions
customary for a transaction of this nature. In addition, prior to the closing of the Ford Transaction, Ford is
required to enter into a note modification agreement with Tree and Greenleaf.
The
parties currently expect the closing of the Transactions to occur on or before
September 30, 2005. However, a number of uncertainties remain, including
the
completion of extensive due diligence. Accordingly, there is no assurance
the
Transactions will be consummated.
Certain statements in
this Form 8-K are "forward-looking statements"
within the meaning of U.S. federal securities laws. The Company intends that
these statements be covered by the safe harbors created under these laws. These
forward-looking statements include, but are not limited to, statements about the
Company’s expectation that the Transactions will close on or before
September 30, 2005. These forward-looking statements are subject to risks,
uncertainties, and other factors that could cause actual results to differ
materially from future results expressed or implied by the forward-looking
statements. Important factors that could cause actual results to differ
materially from the information set forth in these forward-looking statements
include the satisfaction of the closing conditions for each of the Transactions,
including the satisfactory completion by PNP and PNP Commercial of their due
diligence investigations of Greenleaf and the transactions contemplated by the
Ford Purchase Agreement, and other factors and events, some of which are
discussed in the Company’s most recent annual report on Form 10-K and its
most recent quarterly report on Form 10-Q. Many of these factors and events are
beyond the Company’s ability to control or predict. Given these
uncertainties, readers are cautioned not to place undue reliance on the
forward-looking statements, which only speak as of the date of this Form 8-K.
The Company does not undertake any obligation to release publicly any revisions
to these forward-looking statements to reflect events or circumstances after the
date of this Form 8-K or to reflect the occurrence of unanticipated events,
except as may be required under applicable securities laws.
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.
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Schnitzer
Steel Industries, Inc.
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| Date: August
11, 2005 |
By: |
/s/ Kelly
Lang |
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Name:
Kelly Lang |
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Title:
Acting Chief Financial Officer |