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 27, 2005 (July 21, 2005)
--------------------------------------------------------------------------------
Brown-Forman Corporation
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 002-26821 61-0143150
--------------------------------------------------------------------------------
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
850 Dixie Highway, Louisville, Kentucky 40210
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (502) 585-1100
-----------------------------
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On July 21, 2005, Brown-Forman Corporation (the "Company") announced that it
entered into a definitive agreement (the "Stock Purchase Agreement") to sell its
wholly-owned subsidiary Lenox, Incorporated ("Lenox") to Department 56, Inc.
("Department 56"). Under the terms of the Stock Purchase Agreement, Department
56 will pay a cash purchase price of $190 million, subject to a post-closing
working capital purchase price adjustment, in consideration for all of the
outstanding shares of Lenox. The execution of the Stock Purchase Agreement
follows the Company's announcement in February 2005 that it was exploring
strategic alternatives for Lenox, including a sale of Lenox.
The proposed transaction, which is expected to close in the Company's second
fiscal quarter of 2005, is subject to the receipt of financing by Department 56
and other customary conditions, including the expiration or termination of the
applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act, of 1976, as amended. The Stock Purchase Agreement provides that the Company
will retain ownership of the Lenox headquarters building and property in
Lawrenceville, New Jersey and Lenox's Brooks & Bentley subsidiary in the United
Kingdom as well as certain of Lenox's environmental liabilities for previously
closed sites. The Stock Purchase Agreement contains customary representations,
warranties, covenants and indemnities made by the parties to each other.
The description of the Stock Purchase Agreement above does not purport to be
complete and is qualified in its entirety by reference to the Stock Purchase
Agreement attached hereto as Exhibit 2.1 and incorporated herein by reference.
ITEM 2.05 COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES
The description set forth in Item 1.01 is hereby incorporated by reference into
this Item 2.05.
In connection with the sale of Lenox, the Company estimates that it will incur
approximately $5 million to $6 million in total cash costs, net of tax, for
transaction expenses, including legal, tax and actuarial expenses, transaction
success payments, and investment banking fees.
ITEM 2.06 MATERIAL IMPAIRMENTS
The description set forth in Item 1.01 is hereby incorporated by reference into
this Item 2.06.
In connection with the sale of Lenox, the Company estimates that it will
recognize a non-cash impairment charge of approximately $30 million during the
Company's fiscal quarter ending July 31, 2005. The impairment charge represents
the excess of the book value of the net assets being sold over the proceeds
expected to be received from Department 56.
ITEM 7.01 REGULATION FD DISCLOSURE
On July 21, 2005, the Company issued a press release announcing the agreement to
sell Lenox to Department 56. A copy of this press release is furnished herewith
as Exhibit 99.1.
The Items in this report contain statements that constitute "forward-looking
statements" as defined under U.S. federal securities laws. Generally, words such
as "will" and similar expressions identify a forward-looking statement, which
speaks only as of the date the statement is made. Except as required by law, we
do not intend to update or revise any forward-looking statements, whether as a
result of new information, future events, or otherwise. We believe that the
expectations and assumptions with respect to our forward-looking statements are
reasonable. But by their nature, forward-looking statements involve known and
unknown risks, uncertainties and other factors that in some cases are out of our
control. These factors could cause our actual results to differ materially from
Brown-Forman's historical experience or our present expectations or projections.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(a) Not applicable.
(b) Not applicable.
(c) Exhibits
2.1 Stock Purchase Agreement, dated as of July 21, 2005, by and
between Brown-Forman Corporation and Department 56, Inc.
99.1 Press release issued by the Company on July 21, 2005,
furnished herewith.
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.
Brown-Forman Corporation
--------------------------------
(Registrant)
July 27, 2005 /s/ Nelea A. Absher
--------------------------------
Nelea A. Absher
Vice President and Assistant
Corporate Secretary
Exhibit Index
2.1 Stock Purchase Agreement, dated as of July 21, 2005, by and between
Brown-Forman Corporation and Department 56, Inc.
99.1 Press Release, dated July 21, 2005, issued by Brown-Forman Corporation.