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) December 10, 1999
Performance Technologies, Incorporated
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-27460 16-1158413
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
315 Science Parkway, Rochester, New York 14620
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (716) 256-0200
N.A.
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other
On December 10, 1999, the Registrant, through its wholly-owned Canadian
subsidiary, 3688283 Canada Inc. ("Sub"), acquired MicroLegend Telecom Systems
Inc., a corporation existing under the laws of Canada ("MicroLegend"), by the
acquisition of all of the outstanding shares of capital stock of MicroLegend
(the "Acquisition"). The Acquisition was accomplished pursuant to that certain
Share Acquisition Agreement, dated as of December 2, 1999, by and among the
Registrant, Sub, MicroLegend, Thomas Blain and Reginald T. Cable (the principal
shareholders of MicroLegend) and the transactions contemplated thereunder
(collectively, the "MicroLegend Acquisition Agreements"). As a result of the
Acquisition, Sub became the owner of 100% of the issued and outstanding shares
of capital stock of MicroLegend in exchange for 2,165,732 exchangeable shares of
Sub (the "Exchangeable Shares"), each of which is exchangeable for one share of
the Registrant's Common Stock. As of the closing date, the shares of the
Registrant's Common Stock to be delivered to former MicroLegend shareholders in
exchange for the Exchangeable Shares were valued at approximately $43.6 million.
MicroLegend became a wholly-owned subsidiary of Sub as a result of the
Acquisition. The terms of the MicroLegend Acquisition Agreements were the result
of arm's-length negotiations among the parties. The Acquisition will be
accounted for as a "pooling of interests."
A total of 2,165,732 shares of the Registrant's Common Stock will
ultimately be issued to former MicroLegend shareholders in exchange for the
acquisition by Sub of all of the issued and outstanding shares of MicroLegend
capital stock. The Exchangeable Shares issued to the MicroLegend shareholders,
and the shares of the Registrant's Common Stock ultimately to be issued to the
MicroLegend shareholders, were and will be issued pursuant to an exemption from
registration provided by Section 4(2) of the Securities Act of 1933, as amended.
The Acquisition capitalizes on the expertise and unique capabilities of
both organizations in the rapidly growing market for interconnecting public
switched telephone networks and Internet Protocol (IP) networks. The Registrant
is recognized as a premier supplier of wide area networking hardware and
protocol software solutions used by telecom/datacom integrators and original
equipment manufacturers worldwide. Additionally, its enterprise switching
products provide non-stop LAN switching capabilities in mission-critical
application environments demanding "round-the-clock" 24x7 operation.
MicroLegend is a leading global SS7 internetworking provider focusing on
major telecommunications carriers and "next-generation" service providers,
selling its SS7 signaling gateways, which readily accommodate custom
applications and new protocol variants. MicroLegend develops and markets
innovative products for telecommunications signaling networks. It specializes in
SS7 gateway products that resolve interworking problems between incompatible
communications networks. MicroLegend provides signaling interoperability between
ANSI SS7, ITU-T C7 and many national variants used in Japan, China, Brazil,
Mexico and Europe. MicroLegend's customers include telecom equipment
manufacturers such as Alcatel and Nortel Networks, wireless and wireline network
operating companies such as Aerial Communications, Bell Canada and GTE,
innovative IP based telecommunications solutions provider Simplified Telesys and
next generation network operators. The Registrant intends to continue the
various businesses of MicroLegend. MicroLegend's headquarters are located in
Ottawa, Ontario, with an additional development facility in Raleigh, North
Carolina.
Item 7. Financial Statements , Pro Forma Financial Information and Exhibits
(a) Financial Statements of Business Acquired
Not Applicable
(b) Pro Forma Financial Information
Not Applicable
(c) Exhibits:
(20.1) Press Release of the Registrant, dated December 2, 1999, announcing the
Registrant's agreement to acquire MicroLegend.
(20.2) Press Release of the Registrant, dated December 13, 1999, announcing the
completion of the Registrant's acquisition of MicroLegend.
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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.
Performance Technologies, Incorporated
December 10, 1999 By: /s/ Donald L. Turrell
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Donald L. Turrell
President and Chief Executive Officer
December 10, 1999 By: /s/ Dorrance W. Lamb
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Dorrance W. Lamb
Vice President of Finance
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EXHIBIT INDEX
DESCRIPTION OF DOCUMENT
Exhibit Number
(20.1) Press Release of the Registrant, dated December 2, 1999, announcing the
Registrant's agreement to acquire MicroLegend.
(20.2) Press Release of the Registrant, dated December 13, 1999, announcing the
completion of the Registrant's acquisition of MicroLegend.
Exhibit 20.1 Press Release of the Registrant, dated December 2, 1999, announcing
the Registrant's agreement to acquire MicroLegend
Performance Technologies to Acquire MicroLegend Telecom Systems
Accelerates PTI's strategy to capitalize on explosive opportunities
in the Internet driven telecommunications marketplace
ROCHESTER, New York -- December 2, 1999 -- Performance Technologies, Inc.
(NASDAQ:PTIX) today announced it has entered into a definitive agreement to
acquire privately held MicroLegend Telecom Systems Inc., an Ottawa, Ontario,
Canada-based innovator of advanced signaling system 7 (SS7) telecommunications
gateway products. SS7 is the technological basis for such common functions as
caller ID, 800/900 service and cellular roaming. Performance Technologies will
issue approximately 2,166,000 shares of its common stock to acquire MicroLegend.
Based on today's closing price, the transaction is valued at approximately $43.6
million.
The acquisition leverages the expertise and core competencies of both companies
in the rapidly growing market for interconnecting SS7 and Internet protocol (IP)
telephony networks. SS7/IP interoperability is a critical requirement for
next-generation Voice-over-IP networks and existing public-switched telephone
networks to manage voice calls and access value-added services across networks.
The acquisition also broadens PTI's SS7 product portfolio and strengthens its
popular Channel7 SS7 platform by adding support for higher-level applications
delivered by PTI customers, including original equipment manufacturers and
value-added resellers.
Accounting for the acquisition of MicroLegend as a "pooling of interests,"
Performance Technologies expects to record a one-time after-tax charge for the
expenses associated with the transaction of approximately $1.9 million, or $.14
per share in the fourth quarter. The transaction is subject to various closing
conditions and is expected to close on or before December 31, 1999.
"This agreement represents another major step in PTI's strategy to address
opportunities in the exploding Internet-driven telecommunications marketplace,"
said Donald Turrell, president and CEO of Performance Technologies. "PTI and
MicroLegend currently have no overlapping customers or technologies, and this
acquisition will significantly enhance our collective capabilities. Together, we
now have the opportunity to provide our customers with innovative solutions that
capitalize on the switching and signaling technologies of both companies."
"We are very excited about this new relationship. It provides expanded services
to our customers and affords growth opportunities for both our employees and
investors," said Reg Cable, president of MicroLegend. "Our SS7 and IP software
products are an excellent fit with PTI's hardware platforms, creating
significant targeted opportunities in the SS7 marketplace."
Performance Technologies, spanning the enterprise and telecommunications
integrator markets, is recognized as the premier supplier of wide area
networking hardware and protocol-software solutions used by telecom/datacom
integrators and original equipment manufacturers worldwide. Its enterprise
switching products also provide non-stop LAN switching capabilities in
mission-critical application environments, especially for the emerging Internet
service providers (ISPs) who demand "'round-the-clock," 24x7 operation.
MicroLegend is the leading global SS7 internetworking provider focusing on major
telecommunications carriers and "next-generation" service providers, selling its
SS7 signaling gateways, which readily accommodate custom applications and new
protocol variants. MicroLegend currently has 44 employees. In its fiscal year
ended July 31, 1999, MicroLegend recorded revenue of approximately $5 million,
an increase of 88% over its fiscal 1998 revenue.
"As we enter the new millennium, traditional circuit-switched equipment in
public telephone networks needs to communicate effectively with packet-switched
equipment in data networks worldwide," said Turrell. "As the transition to an
`all-packet' network unfolds, the SS7 signaling protocol will be heavily relied
upon. PTI and MicroLegend are well prepared for this convergence of traditional
voice networks and IP-based data networks, ready to capitalize on the growth of
new service-provider offerings such as Voice-over-IP and virtual private
networks."
In March 1998, PTI announced a stock repurchase program pursuant to which it
allocated up to $5 million to reacquire shares of its common stock. To date, PTI
has repurchased approximately 120,000 shares at a cost of $760,000. In
connection with the acquisition of MicroLegend and prior to the closing of that
transaction, PTI will be repurchasing up to an additional 55,000 shares of its
common stock in the open market. After completing that repurchase, PTI will
discontinue its current stock repurchase program.
Performance Technologies, Inc. is headquartered in Rochester, N.Y., with
regional sales and support facilities near Hartford, Connecticut, Chicago and
the United Kingdom, as well as co-located sales and communications software
development operations in San Diego, California. PTI designs, manufactures and
markets a wide variety of high-performance networking and communications
solutions. The company's products target high-performance, mission-critical
networking solutions in industries such as telecommunications, data
communications, financial services, defense and transportation. PTI is a
publicly traded company (NASDAQ: PTIX). Visit PTI's Web site at www.pt.com.
MicroLegend's headquarters is located in Ottawa, with an additional development
facility in Raleigh, North Carolina. MicroLegend develops and markets innovative
products for telecommunications signaling networks. It specializes in SS7
gateway products that resolve interworking problems between incompatible
communications networks. MicroLegend provides signaling interoperability between
ANSI SS7, ITU-T C7 and many national variants used in Japan, China, Brazil,
Mexico and Europe. The company's customers include telecom equipment
manufacturers such as Alcatel and Nortel Networks, wireless and wireline network
operating companies such as Aerial Communications, Bell Canada and GTE,
innovative IP based telecommunications solutions provider Simplified Telesys and
next generation network operators. Visit MicroLegend's Web site at
www.microlegend.com.
The statements contained in this press release that are not purely historical
are forward-looking statements within the meaning of Section 21E of the
Securities and Exchange Act of 1934, as amended, including statements regarding
Performance Technologies' expectations, beliefs, intentions or strategies
regarding the future. Forward-looking statements include statements regarding
the completion of the acquisition of MicroLegend Telecom Systems, the benefits
to be derived from the merger of the two companies, the integration of their
technologies and product offerings, and future sales to customers. All
forward-looking statements included in this document are based upon information
available to Performance Technologies as of the date herein, and Performance
Technologies assumes no obligation to update any such forward-looking
statements. Forward-looking statements involve risks and uncertainties, which
could cause actual results to differ materially from those projected. These, and
other risks relating to Performance Technologies' business, are set forth in the
documents filed by Performance Technologies with the Securities and Exchange
Commission, including the Annual Report on Form 10-K, as of December 31, 1998,
and the more recent reports on Form 10-Q, and the other reports filed from time
to time with the Securities and Exchange Commission.
Exhibit 20.2 Press Release of the Registrant, dated December 13, 1999,
announcing the completion of the Registrant's acquisition MicroLegend
Performance Technologies Completes MicroLegend Telecom Systems Purchase
Acquisition Capitalizes on Complementary Expertise and Capabilities of Both
Companies in the Exploding Internet-driven Marketplace
ROCHESTER, New York -- December 13, 1999 -- Performance Technologies, Inc.
(NASDAQ:PTIX) today announced it has completed the purchase of MicroLegend
Telecom Systems Inc., an Ottawa, Ontario-based provider of advanced
telecommunications gateway products, finalizing the various closing conditions
of the definitive agreement announced by the Company on December 2, 1999. Under
the terms of the all-equity acquisition, PTI has issued approximately 2,166,000
shares of its common stock currently valued at approximately $43.6 million.
"With the consummation of this acquisition, Performance Technologies, in
conjunction with the MicroLegend organization, can aggressively proceed on a
variety of exciting new opportunities and projects that address the requirements
of the exploding telecommunications marketplace, including wireless roaming and
Voice over IP," said Donald Turrell, president and CEO of Performance
Technologies.
This acquisition capitalizes on the expertise and unique capabilities of
both organizations in the rapidly growing market for interconnecting public
switched telephone networks and Internet Protocol (IP) networks.
Interoperability is a critical requirement for next-generation Voice-over-IP
networks and existing telephone systems to manage voice calls and access
value-added services across the combined networks.
Performance Technologies is recognized as the premier supplier of wide
area networking hardware and protocol software solutions used by telecom/datacom
integrators and original equipment manufacturers worldwide. Additionally, its
enterprise switching products provide non-stop LAN switching capabilities in
mission-critical application environments demanding "'round-the-clock" 24x7
operation.
Performance Technologies, Inc. is headquartered in Rochester, N.Y., with
regional sales and support facilities near Hartford, Connecticut, Chicago and
the United Kingdom, as well as co-located sales and communications software
development operations in San Diego, California. PTI designs, manufactures and
markets a wide variety of high-performance networking and communications
solutions. The company's products target high-performance, mission-critical
networking solutions in industries such as telecommunications, data
communications, financial services, defense and transportation. PTI is a
publicly traded company (NASDAQ: PTIX). Visit PTI's Web site at www.pt.com.
MicroLegend is the leading global SS7 internetworking provider
focusing on major telecommunications carriers and "next-generation" service
providers. MicroLegend's headquarters is located in Ottawa, Ontario, with an
additional development facility in Raleigh, North Carolina. Visit MicroLegend's
Web site at www.microlegend.com.