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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): September 26, 1997
DAOU SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
0-22073 330284454
(Commission File Number) (IRS Employer Identification No.)
5120 Shoreham Place, San Diego, California 92122
(Address of principal executive offices, including zip code)
(619) 452-2221
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
The registrant incorporates by reference herein the press release dated
September 26, 1997, attached hereto as Exhibit 99.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
(i) Exhibit 99
Press Release dated September 26, 1997.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: September 26, 1997 DAOU SYSTEMS, INC.
By: /s/ DANIEL J. DAOU
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Daniel J. Daou, President
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CONTACT:
Craig K. Collins
DAOU Systems, Inc.
(619) 646-2857
[email protected]
WWW.DAOU.COM
DAOU SYSTEMS MERGES WITH ON-LINE NETWORKING, INC.
SAN DIEGO, Sept. 26, 1997 -- DAOU Systems, Inc. (Nasdaq: DAOU) announced
today that it had entered into a merger agreement with On-Line Networking, Inc.,
a Saddle Brook, N.J.-based provider of communications infrastructure. Like DAOU,
On-Line Networking is focused within the healthcare information technology
market.
Under the terms of the agreement, DAOU will exchange 150,000 shares of
common stock for all authorized common shares of On-Line Networking. The equity
value of the acquisition is approximately $5 million, based on the exchange
terms and will be accounted for as a pooling of interests. Following the
completion of the merger, On-Line Networking will become a wholly owned
subsidiary of DAOU.
As a result of the transaction, DAOU will broaden its service offerings to
include infrastructure installations for advanced computer networks.
Infrastructure management is a service that DAOU hasn't previously offered. With
the addition of On-Line Networking, DAOU will provide healthcare clients with a
complete network solution that comprises voice, video, data, operational and
Internet services.
"This is a positive event for both our clients and our company," said
Daniel Daou, President of DAOU Systems. "By adding communications infrastructure
management to our line of services, DAOU will become a sole-source provider of
computer network solutions for healthcare organizations. We'll be able to
provide an entire spectrum of services -- from network design to
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network management to complete network installation. In addition, our
expertise in infrastructure management will enable us to complete large
projects faster and to offer more competitive overall pricing. On a financial
note, apart from transaction costs, we believe the merger will be accretive
to our earnings per share."
Steven Dickson, President of On-Line Networking, said, "This merger will
create synergy between the two firms. DAOU will now be able to offer a total
quality turnkey solution on a national basis to its clientele."
Following the merger, Dickson will become Vice President of Infrastructure
Services for DAOU. No layoffs are expected as the result of the transaction.
The combined company will operate five regional offices and four operations
centers, with headquarters in San Diego. The firm will employ a staff of over
300 and will have provided services to more than 600 organizations throughout
the U.S.
On-Line Networking, Inc., is a communications contractor that designs,
installs and provides servicing of local area computer and voice network
systems. The company also provides other telecommunications infrastructure
applications, and sells network services related to these activities. The firm
posted 1996 revenues of $4.6 million. Clients include such healthcare
organizations as Mount Sinai Medical Center, Atlantic Health Systems, Hackensack
University Medical Center, and Northwest Covenant Medical Center.
DAOU Systems, Inc., designs, implements, and manages computer networks for
the healthcare industry. The company offers solutions for voice, video and data
networking, combining its technological expertise with its knowledge of the
healthcare industry's specialized needs. In addition, DAOU offers an array of
operational and Internet solutions. DAOU's clients comprise more than half of
the nation's top 50 integrated healthcare delivery networks and include such
organizations as Centura Health, North Shore Health System, Mercy Health
Services, Harris Methodist Health System, and Catholic Medical Center of
Brooklyn and Queens.
Statements in this press release concerning DAOU Systems' and On-Line
Networking's separate or combined business outlook or future economic
performances, revenues, or other financial items, anticipated synergies and
product or service line growth, together with other statements that are not
historical facts, are forward-looking statements. Any such statements are only
predictions, reflecting the best judgment of DAOU Systems and On-Line Networking
based upon currently available information and involve numerous risks and
uncertainties that could cause actual results to differ
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materially from those stated in such statements. Such factors include the
company and industry risks described in DAOU's SEC filings and the risks
associated with acquisitions generally, including difficulties in the
assimilation of the operations and personnel of an acquired business, the
diversion of management's attention from other business concerns, risks of
entering markets in which DAOU has limited direct prior experience, and the
potential loss of key employees of an acquired business. The forward-looking
statements contained in this press release or in other public statements of
DAOU Systems and On-Line Networking should be considered in light of those
factors.
