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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 17, 1998
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APPLIED GRAPHICS TECHNOLOGIES, INC.
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(Exact Name of Registrant as Specified in its Charter)
DELAWARE
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(State or Other Jurisdiction of Incorporation)
2-14850 13-3864004
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(Commission File Number) (I.R.S. Employer Identification No.)
28 WEST 23RD STREET, NEW YORK, N.Y. 10010
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(Address of Principal Executive Offices) (Zip Code)
(212) 929-4111
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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 5. Other Events
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The information set forth in the press release issued by Applied
Graphics Technologies, Inc., attached hereto as Exhibit 99.1, is incorporated
herein by reference.
Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits
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(c) Exhibits
99.1 Press release of Applied Graphics Technologies, Inc. dated
February 17, 1998.
NYFS01...:\07\16307\0009\1916\FRM2138P.550
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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.
APPLIED GRAPHICS TECHNOLOGIES, INC.
By: /s/ Fred Drasner
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Fred Drasner
Chairman and Chief Executive Officer
Date: February 17, 1998
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EXHIBIT INDEX
Item No.
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99.1 Press release of Applied Graphics Technologies, Inc. dated
February 17, 1998.
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NEWS RELEASE APPLIED GRAPHICS DEVON GROUP, INC.
T E C H N O L O G I E S
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Contacts:
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Jason Lynch Louis Salamone, Jr.
Jim Fingeroth Applied Graphics Technologies
Kekst and Company (212) 929-7275
(212) 521-4800 Bruce Koch
Devon Group, Inc.
(203) 964-1444
FOR IMMEDIATE RELEASE
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APPLIED GRAPHICS TECHNOLOGIES AND DEVON GROUP SIGN
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AGREEMENT AND PLAN OF MERGER
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NEW YORK, Feb. 17, 1998 -- Applied Graphics Technologies, Inc. (Nasdaq:AGTX)
("AGT") and Devon Group, Inc. (Nasdaq:DEVN) ("Devon") announced today that they
had signed a definitive agreement and plan of merger. Under the agreement,
holders of Devon common stock will receive, for each Devon share, $30 in cash
and a tax-free distribution of 0.6 share of AGT common stock. Assuming a market
price of $50 per share for AGT stock, which approximates its average market
price since the beginning of the year, the transaction equates to a total value
of approximately $440 million, or $60 per Devon share. AGT's stock closed on
Friday, February 13, at $50 1/8.
The transaction is subject to the approval of both companies' shareholders and
the satisfaction of other customary closing conditions, including compliance
with the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The transaction
is expected to be completed in the second calendar
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quarter of 1998.
After the transaction, Devon will operate as a wholly owned subsidiary of AGT,
and Devon's principal subsidiaries will continue to operate in their present
form. The transaction will be accounted for as a purchase. Marne Obernauer, Jr.,
Devon's current Chairman and CEO and the holder of close to 12% of Devon's
shares, will become Vice Chairman of AGT, a Director and a key member of its
management team. One other designee of Devon will also join AGT's Board. Mr.
Obernauer and other members of Devon's management and Board of Directors, who
hold in the aggregate approximately 24% of the outstanding Devon shares, have
agreed to vote their shares in favor of the merger.
AGT is the nation's leading provider of outsourced digital image management and
digital prepress services, with total 1997 revenues of approximately $185
million. Devon, through its Black Dot subsidiary, is one of the country's
largest digital prepress companies. Black Dot's revenues for its fiscal year
ended March 31, 1997 were approximately $133 million and its revenues for the
nine months ended December 31, 1997 approximated $115 million.
Black Dot specializes in providing outsourced facilities management services to
major retailers and has substantial long-term contracts with Sears and Kmart.
The combination with Devon will continue AGT's strategy of expanding its
nationwide facilities' management business. As a result of this combination,
AGT's own internal growth, and other acquisitions it has recently made, AGT will
be the country's largest provider of outsourced digital image management and
digital prepress services to publishers, retailers, catalogers, advertising
agencies, entertainment
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companies, automobile manufacturers, and other large corporate clients.
Devon also operates a publishing business which publishes and distributes images
in a variety of formats, such as greeting and note cards, posters, matted
prints, art reproductions, calendars and related products. Its revenues for the
fiscal year ended March 31, 1997 were approximately $77 million and its revenues
for the nine months ended December 31, 1997 approximated $76 million.
Fred Drasner, Chief Executive Officer of AGT, said, "The combination with Devon
will clearly establish AGT as the industry leader, and the largest company, in
the outsourced digital image management and digital prepress areas. This
combination is convincing proof of our ability to acquire top flight companies
with solid management and strong customer relationships that we can grow by
providing a wide range of services and state of the art technology. The combined
entity will give us a solid platform for further high quality acquisitions as we
continue to consolidate this fragmented industry and provides a tremendous
opportunity for us to fuel continued rapid organic growth."
"This combination will provide a unique opportunity for our shareholders both to
realize current value and to participate in the dynamic growth story of AGT,"
said Marne Obernauer, Jr., Chairman and Chief Executive Officer of Devon. "It
has always been our goal to bring the highest level of service and technology to
our customers and to continually enhance our ability to meet our customers'
needs. This combination will make our combined entity the country's premier
provider of outsourced digital image management and digital prepress services,
offering
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the broadest array of creative, image management, and digital distribution
services available. I am excited about becoming a senior member of AGT's
management and a substantial investor in AGT."
Applied Graphics Technologies, Inc. is a major provider of outsourced advanced
digital image- management and archiving services, through its proprietary
Digital Link System, to publishers, advertisers and their agencies,
entertainment companies, catalogers and retailers, automobile companies and
other large corporations.
From more than 35 locations across the country, AGT supplies a complete range of
digital and traditional processes for images, including scanning, color
enhancement, image editing, archiving and electronic distribution. AGT tailors
these services to fit specific customer needs, from conventional project and
contract vendor relationships to today's more progressive arrangements
consisting of outsourced, on-site facilities management and complete turnkey
operations. Through its Broadcast Media Distribution Group, AGT also provides
content management and the volume reproduction and distribution of television
and radio commercials to broadcast and cable media for ad agencies and their
clients.
Note: Applied Graphics Technologies, AGT, and Digital Link System are
registered trademarks of Applied Graphics Technologies, Inc. Other trademarks
used in this document are the property of their respective owners.
This press release contains certain forward-looking statements which involve
risks and
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uncertainties. There can be no assurance that the merger will be consummated or
that, if consummated, the combined company's actual results will not differ
materially from the results anticipated in such forward-looking statements.
