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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A/2
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 5, 2000
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LERNOUT & HAUSPIE SPEECH PRODUCTS N.V.
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(Exact Name Of Registrant As Specified In Its Charter)
The Kingdom of Belgium
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(State or Other Jurisdiction of Incorporation)
0-27296 N/A
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(Commission File Number) (I.R.S. Employer Identification No.)
52 Third Avenue, Burlington, Massachusetts 01803
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(Address of Principal Executive Offices in the U.S.) (Zip Code)
(781) 203-5000
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
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Item 2. Acquisition or Disposition of Assets.
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On May 5, 2000, we acquired all of the outstanding capital stock of
Dictaphone Corporation ("Dictaphone") through a merger of Dictaphone into one of
our wholly-owned subsidiaries. In connection with the merger we issued a total
of approximately 9.4 million shares of our common stock (adjusted for our
recent stock split) in exchange for all of the outstanding shares of Dictaphone
common stock. We were also required to assume or refinance approximately $430
million of Dictaphone's debt and other obligations. We determined this
consideration through arm's length negotiation with Dictaphone and the
stockholders of Dictaphone. We will use the purchase method to account for this
acquisition.
Dictaphone is a leader in selected vertical markets in the development,
manufacture, marketing, service and support of integrated voice and data
management systems and software, including dictation, voice processing, voice
response, unified messaging, records management, call center monitoring systems
and communications recording. Dictaphone has two operating segments, System
Products and Services and Contract Manufacturing. The System Products and
Services segment consists of the sale and service of system-related products to
dictation and voice management and communications recording system customers in
selected vertical markets. The Contract Manufacturing segment consists of the
manufacturing operations which provides outside electronics manufacturing
services to original equipment manufacturers in the telecommunication, data
management, computer and electronics industries. Except as set forth below, we
intend to continue to operate the business of Dictaphone. We intend to sell
Dictaphone's manufacturing business. Until such disposition, however, we intend
to operate the manufacturing business as currently operated.
The shares to be issued in the merger initially have not been registered
under the Securities Act of 1933, as amended, and will be subject to
restrictions on transfer as set forth in that Act and the rules and regulations
of the Securities and Exchange Commission. We have granted the stockholders of
Dictaphone registration rights for the shares of our common stock which they
received in the merger. Stonington Capital Appreciation Fund 1994, L.P., which
owned approximately 96% of the issued and outstanding Dictaphone common stock,
has agreed to hold approximately 1.8 million shares of our common stock which it
received in the Merger for a period of two years.
During the two year period following the Merger, Stonington has assigned
certain voting rights to all the shares it acquired in the Merger, for so long
as it holds the shares, to an entity controlled by Messrs. Jo Lernout and Pol
Hauspie. In addition, subject to conditions, we have agreed to nominate a
designee of Stonington for election as one of our directors, and entities
controlled by Messrs. Lernout and Hauspie have agreed to vote their shares to
elect that nominee.
Dresdner Bank Luxembourg S.A., Deutsche Bank N.V., Artesia Banking
Corporation N.V., KBC Bank N.V. and Fortis Bank N.V., collectively, provided
financing arrangements for the acquisition consisting of a $200 million short-
term debt facility and a $230 million five year declining balance facility. In
addition, we have obtained an ongoing $20 million revolving
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facility loan for Dictaphone. We have accessed all of the short-term facility
and approximately $30 million under the declining balance facility in order to
satisfy approximately $230 million in Dictaphone's debt and other obligations in
connection with the closing of the merger, as well as to cover costs of the
transaction. The remaining committed amount will be available to repay $200
million of Dictaphone's senior subordinated notes, should they be put to the
company within 90 days of the closing by the noteholders at 101% of par, as
permitted by the terms of the notes. These notes are also redeemable by
Dictaphone at a declining rate beginning at 105.875% of par, commencing in
August 2000.
Prior to the transaction described above, neither Dictaphone nor the
stockholders of Dictaphone had any material relationship with us or any of our
affiliates, directors or officers or any associate of any such director or
officer.
Item 7. Financial Statements and Exhibits.
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(a) Financial Statements of business acquired:
* Audited consolidated balance sheets of Dictaphone Corporation and
Subsidiaries as of December 31, 1999 and 1998, and the related
consolidated statements of operations, stockholders' equity (deficit)
and cash flows for each of the three years in the period ended
December 31, 1999 (Incorporated herein by reference to the Annual
Report on Form 10-K of Dictaphone Corporation and subsidiaries for
the fiscal year ended December 31, 1999.)
(b) Pro Forma financial information:
**99 Unaudited pro forma condensed consolidated financial information of
Lernout & Hauspie Speech Products N.V. for the year ended December
31, 1999 and the three months ended March 31, 2000 giving effect to
the acquisition of Brussels Translation Group N.V. and Dictaphone
Corporation.
(c) Exhibits:
*2 Agreement and Plan of Merger, dated as of March 7, 2000, by and among
the Registrant, Dark Acquisition Corp., a Delaware corporation and a
direct, wholly owned subsidiary of the Registrant and Dictaphone
Corporation, a Delaware corporation (Incorporated herein by reference
to the Current Report on Form 8-K of the Registrant filed on May 22,
2000).
*4.1 Registration Rights Agreement, dated as of May 5, 2000, by and among
the Registrant, Stonington Holdings, LLC, Mellon Bank, N. A., as
Trustee for the Bell Atlantic Master Trust, Merrill Lynch KECALP,
L.P. 1994, John Duerden, Robert G. Schwager, Joseph Skrzypczak,
Ronald Elwell, Thomas Hodge, Daniel Hart and Egon Jungheim
(Incorporated herein by
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reference to the Current Report on Form 8-K/A of the Registrant filed
on May 24, 2000).
*4.2 Stockholders' Agreement, dated as of May 5, 2000, by and among the
Registrant, Stonington Holdings, LLC, LEHA, L&H Holding N.V., L&H
Holding III, OLDCO N.V. and L&H Investment Company (Incorporated
herein by reference to the Current Report on Form 8-K of the
Registrant filed on May 22, 2000).
*23.1 Consent of Deloitte & Touche LLP (Incorporated herein by reference to
the Current Report on Form 8-K/A of the Registrant filed on May 24,
2000).
**99 Unaudited pro forma condensed consolidated financial information of
Lernout & Hauspie Speech Products N.V. for the year ended December
31, 1999 and the three months ended March 31, 2000 giving effect to
the acquisition of Brussels Translation Group N.V. and Dictaphone
Corporation.
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* In accordance with Rule 12b-32 of the Securities Exchange Act of 1934, as
amended, reference is made to the document previously filed with the Commission.
** Filed herewith.
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SIGNATURE
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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, thereunto duly authorized.
LERNOUT & HAUSPIE SPEECH
PRODUCTS N.V.
Dated: June 30, 2000
By: /s/ Carl Dammekens
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Carl Dammekens, Chief Financial Officer
and Senior Vice President of Finance
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