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): June 30, 2017

 

 

NEWMARKET CORPORATION

(Exact name of registrant as specified in its charter)

 

 

Commission File No. 1-32190

 

Virginia   20-0812170
(State or other jurisdiction of incorporation)   (IRS Employer Identification No.)
330 South Fourth Street, Richmond, Virginia   23219
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code: (804) 788-5000

 

 

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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 

Item 8.01 Other Events.

As previously announced, on December 16, 2016, Afton Chemical de México, S.A. de C.V., a sociedad anónima de capital variable organized under the laws of the United Mexican States (“Afton Mexico”) and an indirect, wholly owned subsidiary of NewMarket Corporation (the “Company”), entered into a Share Sale Agreement (the “Agreement”) to acquire approximately 99.5% of the outstanding capital stock (the “Acquisition”) of Aditivos Mexicanos, S.A. de C.V., a sociedad anónima de capital variable organized under the laws of the United Mexican States (“AMSA”). The Agreement was previously filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on December 19, 2016.

As of June 30, 2017, the parties amended the Agreement to account for the election by an additional AMSA shareholder to participate in the transaction, to revise certain ancillary agreements and to amend certain indemnification and working capital provisions to account for AMSA’s adoption of a new private pension plan as well as the retirement of certain AMSA executives.

On July 3, 2017, the Company issued a press release announcing the closing of the Acquisition. A copy of this press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

  2.1    First Amendment to Share Sale Agreement, dated as of June 30, 2017, by and among Afton Chemical de México, S.A. de C.V., Chevron Oronite Company LLC, the individual Local Sellers referred to therein, the Local Sellers’ Representative referred to therein, Aditivos Mexicanos, S.A. de C.V., NewMarket Corporation, as Buyer Guarantor, and Afton Chemical Corporation*
99.1    Press release dated July 3, 2017

 

* Certain schedules and exhibits to this agreement have been omitted in accordance with Item 601(b)(2) of Regulation S-K. A copy of any omitted schedules and/or exhibits will be furnished to the Securities and Exchange Commission upon request.

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: July 3, 2017

 

NEWMARKET CORPORATION
By:  

/s/ Brian D. Paliotti

  Brian D. Paliotti
  Vice President and Chief Financial Officer

Exhibit Index

 

Exhibit
No.

  

Description

  2.1    First Amendment to Share Sale Agreement, dated as of June 30, 2017, by and among Afton Chemical de México, S.A. de C.V., Chevron Oronite Company LLC, the individual Local Sellers referred to therein, the Local Sellers’ Representative referred to therein, Aditivos Mexicanos, S.A. de C.V., NewMarket Corporation, as Buyer Guarantor, and Afton Chemical Corporation
99.1    Press release dated July 3, 2017

Exhibit 2.1

FIRST AMENDMENT TO SHARE SALE AGREEMENT

This FIRST AMENDMENT TO SHARE SALE AGREEMENT (“ First Amendment ”) dated as of June 30, 2017 is made by and among CHEVRON ORONITE COMPANY LLC , a Delaware limited liability company, with offices at 6001 Bollinger Canyon Road, San Ramon, California 94583 (“ Oronite ”), LUIS AVELINO MOLINA MONTES , an individual resident of Mexico, individually and in his capacity as agent and attorney-in-fact (“ Local Sellers’ Representative ”) for and on behalf of each of the persons other than Mr. Molina listed in Annex A attached hereto (Mr. Molina together with such other persons listed on Annex A , individually a “ Local Seller ” and collectively the “ Local Sellers ”, and the Local Sellers together with Oronite, individually a “ Seller ” and collectively “ Sellers ”), under and in accordance with the Power of Attorney and Appointment of Local Sellers’ Representative set forth on Exhibit B to the Agreement (as defined in the Recitals below), AFTON CHEMICAL DE MÉXICO S.A. DE C.V. , a sociedad anónima de capital variable organized under the laws of the United Mexican States, with offices at Av. Insurgentes Sur No. 826, Piso 7, Col. Del Valle Centro, Ciudad de México, C.P. 03100 México (“ Buyer ”), NEWMARKET CORPORATION , a Virginia corporation with offices at 330 South Fourth Street, Richmond, Virginia 23219 (“ Buyer Guarantor ”), ADITIVOS MEXICANOS, S.A. DE C.V , a sociedad anónima de capital variable organized under the laws of the United Mexican States, with offices at Corporativo MCS, Piso 14 Oficina 1401, Av. Miguel de Cervantes Saavedra 193, Col. Granada, 11520 México City, México (the “ Company ”), and AFTON CHEMICAL CORPORATION , a Delaware corporation, with offices at 500 Spring Street, Richmond, Virginia 23219 (“ Afton Chemical ”). “ Party ” means the Company, Buyer, Buyer Guarantor, Oronite, each Local Seller (represented by the Local Sellers’ Representative) and Afton Chemical, and “ Parties ” means two or more of any of them (as the context requires). Capitalized words used but not defined herein shall have the respective meanings assigned to such terms in the Agreement.

RECITALS

 

A. The Parties hereto are also all of the Parties to that certain Share Sale Agreement, dated December 16, 2016 (“ Agreement ”), pursuant to which, among other things, Sellers have agreed to sell to Buyer, and Buyer has agreed to purchase from Sellers, the Shares owned by Sellers on the terms and conditions set out therein.

 

B. The Parties wish to amend the Agreement as provided herein.

 

C. Pursuant to Section  18.3 of the Agreement, no amendment thereto shall be effective unless made in writing and signed by authorized representatives of all Parties.

 

D. In consideration of the foregoing premises (which are incorporated and made part of this First Amendment by this reference) and the mutual promises set out herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound, agree as follows:

AGREEMENT

 

1. AMENDMENTS

 

  1.1 Modification of Recitals . Recital “A” of the Agreement is hereby amended and restated to be and read in its entirety as follows:

“The Local Sellers collectively own 554,758 common shares of the Company’s capital stock, and Oronite owns 379,436 common shares of the Company’s capital stock. Accordingly, Sellers collectively own

 

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934,194 common shares of the Company representing in excess of 99% of the issued and outstanding common shares of the Company’s capital stock (the “ Shares ”).”

 

  1.2 Expanded and Amended List of Local Sellers . The list of Local Sellers set out as Exhibit A to each of the Agreement, the Buyer Guaranty, the Local Sellers’ Escrow Agreement and the Purchase Price Adjustment Escrow Agreement is hereby amended and restated to be and read in its entirety as set out in Annex A attached hereto.

 

  1.3 Additional Power of Attorney and Appointment of Local Seller’s Representative . The Power of Attorney and Appointment of Local Seller’s Representative in the form set out as Exhibit B to each of the Agreement, the Buyer Guaranty, the Local Sellers’ Escrow Agreement and the Purchase Price Adjustment Escrow Agreement is hereby supplemented by including therein the additional Power of Attorney and Appointment set out in Annex B attached hereto.

 

  1.4 Modified Form of Amendment to Contract dated September  1, 2012 . The form of Amendment to Contract dated September 1, 2012 in the form set out as Exhibit F to the Agreement is hereby amended and restated to be and read in its entirety as set out in Annex C attached hereto.

 

  1.5 Modified Form of Technology License Agreement . The form of Technology License Agreement in the form set out as Exhibit H to the Agreement is hereby amended and restated to be and read in its entirety as set out in Annex D attached hereto.

 

  1.6 Modification of “Local Sellers’ Trustee” . The definition of “Local Sellers’ Trustee” set forth in Section  1.1(A)(80) of the Agreement is hereby amended and restated to be and read in its entirety as follows:

“ “ Local Sellers’ Trustee ” means Banco Invex, S.A., Institución de Banca Múltiple, Invex Grupo Financiero.”

 

  1.7 Modification of Currency Conversion Convention . Section  2.5(A) of the Agreement is hereby amended and restated to be and read in its entirety as follows:

“All payments hereunder and all determinations of Losses and other amounts required or calculated pursuant to this Agreement, including all calculations made pursuant to Exhibit  C , shall be denominated in U.S. Dollars, and if any amounts used to calculate any such payments or other determinations of amounts are denominated in MXN Pesos, such amounts shall be converted to U.S. Dollars (rounded to two decimal places) using the average (rounded to four decimal places) currency exchange rate published by the Central Bank of Mexico ( Banco de M é xico ) in the Federal Official Gazette ( Diario Oficial de la Federaci ó n ) for the Business Days in the period beginning on May 19, 2017 and ending on June 21, 2017.”

 

  1.8 Clarification of Meaning of “Oronite Indemnitees” . The words “the Oronite Indemnitees” in the proviso to Section  11.4 of the Agreement are hereby amended and restated to be and read “Oronite and its Affiliates”.

 

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  1.9 Special Payments to Luis Fernando Molina Casas . Compliance with the Agreement (including Section  4.1(I) thereof) is hereby waived in respect of each of the following, it being understood and agreed by all Parties that the execution and delivery or effectiveness of neither of the following shall be a Condition Precedent to any Party’s obligations to sell and purchase the Shares pursuant to the Agreement:

 

  (A) Any payments to Luis Fernando Molina Casas (“ LFM ”), Director General of the Company, pursuant to a proposed Confidentiality and Non-Compete Agreement, contemplated to be entered into prior to the Closing by and among the Company, Oronite, Afton Chemical, Buyer and LFM, in substantially the form set out in Annex E attached hereto (the “ Confidentiality and Non-Compete Agreement ”); and

 

  (B) Any payments to LFM pursuant to a Shareholder Allocation Agreement, contemplated to be entered into prior to the Closing by and among Oronite, the Local Sellers’ Representative and LFM, in substantially the form set out in Annex F attached hereto (the “ Shareholder Agreement ”).

Buyer acknowledges and agrees, for itself and all Buyer Indemnitees, that Sellers and their respective Affiliates shall have no liability whatsoever under Section  11 of the Agreement for any Losses incurred or sustained by, or imposed upon, any of the Buyer Indemnitees resulting from or attributable to the Confidentiality and Non-Compete Agreement or any transactions or events contemplated thereby.

Sellers acknowledge and agree, for themselves and all Seller Indemnitees, that Buyer and its Affiliates shall have no liability whatsoever under Section  11 of the Agreement for any Losses incurred or sustained by, or imposed upon, any of the Seller Indemnitees resulting from or attributable to the Shareholder Agreement or any transactions or events contemplated thereby.

 

  1.10 Pension Plan Matters .

 

  (A)

All Parties acknowledge that, effective as of February 1, 2017, the Company adopted a new private pension plan (the “ Company ’ s Pension Plan ”) which is now operative allowing eligible participants to retire and qualify for benefits thereunder and replacing the Company’s prior private pension plan (the “ 2012 Pension Plan ”). All Parties also acknowledge that each of LFM and Rafael Luis Suárez Sánchez (“ RLS ”), Financial and Administrative Manager of the Company, has indicated that he will resign from employment by the Company effective on or prior to June 30, 2017 and retire under the Company’s Pension Plan and elect at that time to receive a lump sum payment of pension benefits (rather than monthly payments of pension benefits) as follows: (1) to LFM, 38,659,313 MXN Pesos due as part of the Defined Benefit ( Componente de Beneficio Definido ); and (2) to RLS, 10,413,177 MXN Pesos due as part of the Defined Benefit ( Componente de Beneficio Definido ) (with respect to LFM and RLS, the amounts due as Defined Benefit ( Componente de Beneficio Definido ) together, the “ Lump Sum Payments ”). Buyer Guarantor and the other parties to the Buyer Guaranty hereby agree, for the benefit of LFM and RLS, that the Buyer Guaranty shall cover and be applicable to any failure of the Company to make the Lump Sum Payments due to each of LFM and RLS pursuant to the terms and conditions of the Company’s Pension Plan. LFM and RLS are intended

 

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  third party beneficiaries of this Section  1.10(A) . With respect to the Defined Contribution for Company Contributions ( Componente de Contribución Definida por las Aportaciones de la Empresa ) for each of LFM and RLS, the Company will distribute the applicable amounts in MXN Pesos (based on the documentation of the Company’s Pension Plan) to LFM and RLS in a manner consistent with the Company’s Pension Plan and applicable Law.

 

  (B) In view of the foregoing:

 

  (1) Compliance with the Agreement (including Section  4.1(I) thereof) is hereby waived in respect of the adoption of the Company’s Pension Plan, subject to the remaining provisions of this Section  1.10(B) .

 

  (2) The definition of “Target Working Capital” set forth in Section  1.1(A)(122) of the Agreement is hereby amended and restated to be and read in its entirety as follows:

““ Target Working Capital ” means the sum of:

 

  (a) US$13,454,000 multiplied by a fraction the numerator of which is the total number of Shares held by all Sellers and the denominator is the total number of outstanding shares of capital stock of the Company as of the Closing; plus

 

  (b) US$2,670,698.91 in respect of the resignations of LFM and RLS and their retirement under the Company’s Pension Plan effective prior to Closing and their election at that time to receive the Lump Sum Payments.”

 

  (3) Section  11.2 of the Agreement is hereby amended by inserting the following text as new Section  11.2(F) :

 

  “(F) any increase in the benefits payable under the Company’s Pension Plan (exclusively as those terms are in effect as of the Closing) to any eligible plan participant who retires after the Closing, compared to the benefits that would have been payable to that employee (based on the same retirement date) if the 2012 Pension Plan was still operative at the time of that employee’s retirement and had not been replaced by the Company’s Pension Plan.”

 

  (4) Exhibit C to the Agreement (Working Capital, Closing Payment and Final Closing Payment Calculation Procedure) is hereby amended by:

 

  (a) inserting the following text as a new Section  1.3(B) thereto:

 

  “(B) exclude the effects of the Lump Sum Payments;”

 

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  (b) renumbering the existing Sections 1.3(B) , 1.3(C) and 1.3(D) thereto as Sections 1.3(C) , 1.3(D) and 1.3(E) , respectively; and

 

  (c) amending the reference to “ Section  1.3(A) ” in renumbered Section1.3(D) to be and read as follows:

“ Sections 1.3(A) , 1.3(B) and 1.3(C) ”.

 

  (C) Except with respect to the indemnity obligations set forth in Section  1.10(B)(3) of this First Amendment and/or any indemnity obligations arising under Section  11.2(A) of the Agreement, Sellers shall have no liability under Section  11 of the Agreement for any Losses incurred or sustained by, or imposed upon, any of the Buyer Indemnitees resulting from or attributable to the adoption of the Company’s Pension Plan, the funding status of the Company’s Pension Plan, the pre-Closing retirement of either or both of LFM and RLS and either or both of such individual’s election, with the Company’s approval, to receive a lump sum payment of pension benefits, or any post-Closing retirement by any Company employee.

 

2. MISCELLANEOUS

 

  2.1 Integration . Except to the extent modified by this First Amendment, the Agreement shall continue in full force and effect, and the Agreement (including the Exhibits and Schedules thereto), as amended hereby (including the Annexes hereto), comprises the complete and exclusive agreement between the Parties regarding the subject matter of this Agreement and this First Amendment, and supersedes all oral and written communications, negotiations, representations or agreements in relation to that subject matter made or entered into before the Effective Date.

 

  2.2 Binding Effect . This First Amendment, when executed by authorized representatives of all Parties, shall have been effected in accordance with Section  18.3 of the Agreement and accordingly shall be binding on each of the Parties.

 

  2.3 Governing Law . This First Amendment is governed by and interpreted under the laws of the State of Delaware, without regard to its choice of law rules.

 

  2.4 Counterparts . This First Amendment may be executed in any number of counterparts, each of which will be deemed an original of this Agreement, and which together will constitute one and the same instrument; provided , that no Party shall be bound to this First Amendment unless and until all Parties have executed a counterpart. Signatures delivered via facsimile or other electronic transmission (including PDF) shall be binding.

The remainder of this page is intentionally left blank.

 

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The Parties have executed this First Amendment as evidenced by the following signatures by the authorized representatives of the Parties:

 

CHEVRON ORONITE COMPANY LLC     AFTON CHEMICAL DE MÉXICO S.A. DE C.V.
Signature:     Signature:

/s/ Ian R. Daniel

   

/s/ Robert A. Shama

Name:   Ian R. Daniel     Name:   Robert A. Shama
Title:   Attorney-In-Fact     Title:   Attorney-In-Fact

LOCAL SELLERS’ REPRESENTATIVE,

individually and for and on behalf of each of the other Local Sellers

    NEWMARKET CORPORATION
Signature:     Signature:

/s/ Luis Avelino Molina Montes

   

/s/ Brian D. Paliotti

Name:   Luis Avelino Molina Montes     Name:   Brian D. Paliotti
      Title:   Vice President & Chief Financial Officer
ADITIVOS MEXICANOS, S.A. DE C.V.     AFTON CHEMICAL CORPORATION
Signature:     Signature:

/s/ Gabriel Perez Aguiar Arcco

   

/s/ Robert A. Shama

Name:   Gabriel Perez Aguiar Arcco     Name:   Robert A. Shama
Title:   Attorney-In-Fact     Title:   President

 

[ Signature Page to First Amendment to Share Sale Agreement ]

Exhibit 99.1

AFTON CHEMICAL COMPLETES ACQUISITION OF ADITIVOS MEXICANOS, S.A. DE C.V.

Richmond, VA, July 3, 2017 – Afton Chemical Corporation is pleased to announce the completion of its previously announced acquisition of Aditivos Mexicanos, S.A. de C.V. (AMSA), a petroleum additives manufacturing, sales and distribution company based in Mexico City, Mexico. The transaction closed on July 3, 2017, following the approval by the Mexican Federal Economic Competition Commission (Comisión Federal de Competencia Económica, COFECE).

“We are excited to welcome the AMSA team into the Afton family. Adding AMSA to Afton’s global operations will help us bring new value added solutions to our customers worldwide,” said Rob Shama, Afton Chemical’s President. “We plan to manufacture a complete range of petroleum additives for our customers in Mexico and throughout Latin America. We will also supply our other blending locations with components from the AMSA site,” said Shama.

The transition of AMSA into Afton will begin immediately. Customers in Mexico will shortly receive details explaining how the integration efforts will improve the service they can expect from Afton.

The acquisition complements and expands Afton’s current footprint in Latin America, which includes subsidiaries in Brazil, Mexico, Argentina and Venezuela.

About Afton Chemical Corporation

Afton Chemical Corporation is part of the NewMarket Corporation (NYSE: NEU) family of companies. Afton Chemical Corporation uses its formulation, engineering and marketing expertise to help their customers develop and market fuels and lubricants that reduce emissions, improve fuel economy, extend equipment life, improve operator satisfaction and lower the total cost of vehicle and equipment operation. Afton Chemical Corporation develops and sells an extensive line of unique additives for gasoline and distillate fuels, driveline fluids, engine oils and industrial lubricants. Afton Chemical Corporation supports global operations through regional headquarters located in Asia Pacific, EMEAI, Latin America and North America. Afton Chemical Corporation is headquartered in Richmond, Virginia. For more information, visit www.aftonchemical.com.

 

 

Cautionary Note Regarding Forward-Looking Statements:

Some of the information contained in this press release constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although NewMarket’s management believes its expectations are based on reasonable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that actual results will not differ materially from expectations.

Factors that could cause actual results to differ materially from expectations include, but are not limited to, the availability of raw materials and distribution systems; disruptions at manufacturing facilities, including single-sourced facilities; the ability to respond effectively to technological changes in our industry; failure to protect our intellectual property rights;

failure to attract and retain a highly-qualified workforce; hazards common to chemical businesses; competition from other manufacturers; sudden or sharp raw material price increases; the gain or loss of significant customers; the occurrence or threat of extraordinary events, including natural disasters and terrorist attacks; risks related to operating outside of the United States; the impact of fluctuations in foreign exchange rates; an information technology system failure; political, economic, and regulatory factors concerning our products; future governmental regulation; resolution of environmental liabilities or legal proceedings; our inability to realize expected benefits from investment in our infrastructure or from recent or future acquisitions or our inability to successfully integrate recent or future acquisitions into our business; and other factors detailed from time to time in the reports that NewMarket files with the Securities and Exchange Commission, including the risk factors in Item 1A. “Risk Factors” of our 2016 Annual Report on Form 10-K, which is available to shareholders upon request.

You should keep in mind that any forward-looking statement made by NewMarket in the foregoing discussion speaks only as of the date on which such forward-looking statement is made. New risks and uncertainties come up from time to time, and it is impossible for us to predict these events or how they may affect the Company. We have no duty to, and do not intend to, update or revise the forward-looking statements in this discussion after the date hereof, except as may be required by law. In light of these risks and uncertainties, you should keep in mind that the events described in any forward-looking statement made in this discussion, or elsewhere, might not occur.

Media Contact:

Lauren Packard, Marketing Communications

Afton Chemical Corporation

Phone: (804) 788-5800

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