ssi8k4mar08.htm
UNITED
STATES
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): February 29,
2008
ORION
MARINE GROUP, INC.
(Exact
name of Registrant as specified in its charter)
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Delaware
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333-145588
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26-0097459
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification Number)
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12550
Fuqua St.
Houston,
Texas 77034
(Address
of principal executive offices)
(713)
852-6500
(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:
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)
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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
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Entry Into a Material Definitive
Agreement
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Acquisition of Assets. On
February 29, 2008, OMGI Sub, LLC (“OMGI Sub”), a Florida limited liability
company formed to acquire and to own and to operate certain assets, and a 100%
directly-owned subsidiary of Orion Marine Group, Inc. (the “Company”) (the name of OMGI
Sub having been changed to Subaqueous Services, LLC (“SSLLC”) shortly after
closing) concurrently entered into an agreement to purchase and closed the
purchase of substantially all of the assets (with the exception of liquid
current assets) and related business (principally consisting of project
contracts) of Orlando, Florida-based Subaqueous Services, Inc., a Florida
corporation (“SSI”) for
$35 million in cash.
In
addition, SSLLC (i) paid SSI approximately $1.76 million in purchase price
adjustments for net under-billings and retained funds held under certain project
contracts and for transition support services to be provided by SSI through
September, 2008; and (ii) entered a three-year Consulting Agreement with the
sole shareholder of SSI, terminable on thirty (30) days prior written notice by
the parties thereto, for $150,000 per year payable monthly.
The
Company funded the acquisition using a portion of its term loan bank facility
for the purchase price, and cash on hand for the other payments referenced
above. SSLLC will operate the acquired assets under the name “Subaqueous
Services, LLC,” and SSLLC will be based in Jacksonville, Florida. In that
regard, SSLLC entered a lease agreement with Hill Street, LLC effective February
29, 2008, for premises and facilities constituting those formerly occupied and
used by SSI for its Jacksonville, FL operations. The terms of the purchase and a
description of the parties and the assets acquired are described in greater
detail in Item 2.01, below.
The
foregoing descriptions in this Item 1.01 and in Item 2.01 below are not complete
and are qualified in their entirety by reference to (i) the Asset Purchase
Agreement dated February 29, 2008, by and between SSLLC and the Company, on the
one hand, and SSI and Lance Young, individually and as sole shareholder of SSI,
on the other hand (“Asset Purchase Agreement”); (ii) that First Amendment to
Loan Agreement dated February 29, 2008, among, the Company, the lenders party
thereto, and Amegy Bank National Association, a national banking association, as
agent (“Amendment No. 1”); and (iii) that Lease Agreement dated February 29,
2008, between SSLLC and Hill Street, LLC (“Lease Agreement”). A copy of
the Asset Purchase Agreement is filed as an exhibit to this Form
8-K; copies of Amendment No.1 and the Lease Agreement will be filed by
amendment.
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Item
2.01
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Completion of Acquisition or Disposition of
Assets
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On
February 29, 2008, SSLLC, a 100% directly-owned subsidiary of the Company
concurrently entered into the Asset Purchase Agreement to purchase and closed
the purchase of substantially all of the assets (with the exception of liquid
current assets) and related business (principally consisting of project
contracts) of Orlando, Florida-based SSI, for $35 million in cash. In
addition, SSLLC (i) paid SSI approximately $1.76 million in purchase price
adjustments for net under-billings and retained funds held under certain project
contracts and for transition support services to be provided by SSI through
September, 2008; and (ii) entered a three-year Consulting Agreement with the
sole shareholder of SSI, terminable on thirty (30) days prior written notice by
the parties thereto, for $150,000 per year payable monthly. Each of SSI and its
sole shareholder, on the one hand, and each of the Company and SSLLC, on the
other hand, are jointly and severally liable for representations and warranties
respectively made and their respective covenants, agreements and obligations
under the Asset Purchase Agreement, including indemnification obligations
therein.
The
purchase price of $35 million was funded entirely through borrowing under the
Company’s existing acquisition term loan facility, as amended by Amendment No. 1
thereto. In addition, from cash on hand provided by the Company, SSLLC paid
$60,000 for support facilities and services to be provided by SSI through
September 30, 2008, while the Company relocates SSLLC to facilities leased by
SSLLC in Jacksonville, Florida pursuant to the Lease Agreement. Also, from such
cash on hand, SSLLC paid approximately $1.7 million for existing payment
retentions and net overbillings/underbillings under the project contracts in
progress which SSLLC acquired.
The Asset
Purchase Agreement restricts SSI and its sole shareholder, Mr. Young, for a
period of three (3) years after closing of the acquisition, from competing with
SSLLC or the Company (including other subsidiaries of the Company) with respect
to heavy civil marine construction and related activities in Florida or the
Caribbean Region, and from soliciting customers or employees of SSLLC, the
Company or its other subsidiaries, for the same period of three (3) years from
the closing of the acquisition.
SSLLC
will operate the acquired assets under the name “Subaqueous Services, LLC,” and
SSLC will be based in Jacksonville, Florida. In that regard, SSLLC entered the
Lease Agreement with Hill Street, LLC, effective February 29, 2008, for premises
and facilities constituting those formerly occupied and used by SSI for its
Jacksonville, FL operations. The Lease is for a term of approximately three (3)
years (terminable by either party on six (6) months prior written notice), with
aggregate rental and other charges and fees of approximately $19,000 per
month.
SSI
is a specialty dredging services provider that focuses on shallow water dredging
projects in Florida and along the Atlantic Seaboard utilizing both mechanical
and hydraulic cutter suction pipeline dredging. The assets acquired
consist primarily of marine construction equipment, which includes several
dredges. The Company also purchased construction contracts in
progress and the right to the name “Subaqueous Services” and derivatives
thereof. In addition, SSLLC has hired certain senior managers of SSI
and most of SSI’s field personnel.
Prior to
this acquisition, no relationship outside the ordinary course of business
existed between SSI and the Company or SSI and SSLLC.
The
foregoing descriptions in this Item 1.01 and in Item 2.01 below are not complete
and are qualified in their entirety by reference to (i) the Asset Purchase
Agreement dated February 29, 2008, by and between SSLLC and the Company, on the
one hand, and SSI and Lance Young, individually and as sole shareholder of SSI,
on the other hand (“Asset Purchase Agreement”); (ii) that First Amendment to
Loan Agreement dated February 29, 2008, among, the Company, the lenders party
thereto, and Amegy Bank National Association, a national banking association, as
agent; and (iii) that Lease Agreement dated February 29, 2008, between SSLLC and
Hill Street, LLC (“Lease Agreement”). A copy of the Asset Purchase
Agreement is filed as an exhibit to this Form 8-K; copies of Amendment No.
1 and the Lease Agreement will be filed by amendment.
Item
8.01 Other Events
On
February 29, 2008, the Company issued a press release announcing the acquisition
of substantially all of the assets of Subacqueous Services, Inc. A
copy of the press release is provided as Exhibit 99.1 to this Form
8-K.
In
accordance with General Instruction B.2 of Form 8-K, the press release shall not
be deemed “filed” for the purposes of Section 18 of the Exchange Act of 1934 or
otherwise subject to the liabilities of that section, nor shall such information
and exhibit be deemed incorporated by reference into any filing under the
Securities Act or the Securities Exchange Act except as shall be expressly set
forth by specific reference in such a filing.
(a) Financial
statements of business acquired
The
financial statements required by Item 9.01 will be filed by an amendment to this
Form 8-K on or before May 13, 2008
(b) Pro
forma financial information
The pro
forma financial information required by Item 9.01 will be filed by an amendment
to this Form 8-K on or before May 13, 2008
(c) Exhibits
Exhibit
No. Description
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2.01*
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Asset
Purchase Agreement dated February 29, 2008, by and between SSLLC and the
Company, on the one hand, and SSI and Lance Young, individually and as
sole shareholder of SSI, on the other hand.
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10.1.1
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First
Amendment to Loan Agreement dated February 29, 2008, among, the Company,
the lenders party thereto, and Amegy Bank National Association, a national
banking association, as agent. To
be filed by amendment
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10.22
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Lease
Agreement dated February 29, 2008, between SSLLC and Hill Street,
LLC To be filed by
amendment
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99.1*
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Orion
Marine Group, Inc. press release dated February 29, 2008 announcing the
acquisition of substantially all of the assets of Subaqueous Services,
Inc.
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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 hereunto
duly authorized.
ORION MARINE GROUP, INC.
____/s/ Mark R.
Stauffer____________
By: Mark
R. Stauffer
Title: Chief
Financial Officer