<PAGE> 1
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 4, 1999 (May 21, 1999)
APPLIED GRAPHICS TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 0-28208 13-3864004
(State or other jurisdiction (Commission File Number) (I.R.S. Employer Identification No.)
of incorporation)
450 WEST 33RD STREET, NEW YORK, NY 10001
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code: 212-716-6600
<PAGE> 2
Item 2. Acquisition or Disposition of Assets
On May 21, 1999, the cash offer of Applied Graphics Technologies, Inc. (the
"Company") to purchase all of the outstanding ordinary shares of Wace Group Plc
("Wace") was declared unconditional in all respects. The assets of Wace relate
to the digital prepress, color management, interactive multimedia, and print
procurement businesses operated by Wace in the United States, the United
Kingdom, France, and Australia. The Company currently intends to use the
acquired assets as part of its ongoing business. The total cash consideration,
based on the total number of Wace's ordinary shares outstanding as of June 3,
1999, exclusive of unexercised options, is L72.5 million, or approximately
$117.2 million. To finance the offer, the Company has entered into an amended
and restated credit agreement with its lending institution that will replace
the Company's existing credit facilities (see Exhibit 99.3). Further details of
this acquisition are contained in the press release of the Company dated May
21, 1999, and attached hereto as Exhibit 99.1.
Item 5. Other Events
On May 26, 1999, the Company announced its intention to offer each holder of
Wace's 8% Cumulative Convertible Redeemable Preference Shares (the "Preference
Shares") the right to exchange such Preference Shares for subordinated notes to
be issued by the Company (the "Subordinated Notes"). Wace currently has L39.2
million or approximately $63.5 million of Preference Shares outstanding.
Further details of this announcement are contained in the press release of the
Company dated May 26, 1999, and attached hereto as Exhibit 99.2.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired.
Historic financial statements of Wace will be filed with the Securities and
Exchange Commission as soon as practicable, but in any event on or prior to
August 4, 1999.
(b) Pro forma financial information
Unaudited pro forma information relating to the acquisition will be filed
with the Securities and Exchange Commission as soon as practicable, but in
any event on or prior to August 4, 1999.
(c) Exhibits
99.1 Press release issued by the Company on May 21, 1999.
99.2 Press release issued by the Company on May 26, 1999.
99.3 Amended and Restated Credit Agreement dated as of March 10, 1999,
among Applied Graphics Technologies, Inc., Other Institutional
Lenders as Initial Lenders, and Fleet Bank, N.A. (Incorporated by
reference to Exhibit No. 99.2 forming part of the Registrant's Report
on Form 8-K (File No. 0-28208) filed with the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as
amended, on March 22, 1999).
<PAGE> 3
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 thereunto duly authorized.
Dated: June 4, 1999 By: /s/ Louis Salamone, Jr.
--------------------------
Louis Salamone, Jr.
Senior Vice President and
Chief Financial Officer
<PAGE> 4
EXHIBIT INDEX
Exhibit No. Description
- ----------- ------------------------------------------
99.1 Press release issued by the Company on May 21, 1999.
99.2 Press release issued by the Company on May 26, 1999.
<PAGE> 1
Exhibit 99.1
APPLIED GRAPHICS TECHNOLOGIES ANNOUNCES
OFFER FOR WACE GROUP PLC DECLARED
UNCONDITIONAL IN ALL RESPECTS
NEW YORK, MAY 21, 1999 - Applied Graphics Technologies, Inc. (NASDAQ:
AGTX), a leading provider of outsourced digital media asset management services
in the United States, today announced in London that its cash offer to purchase
all of the outstanding ordinary shares of Wace Group Plc has been declared
unconditional in all respects. Under UK law, Wace is now effectively controlled
by the Company. The consideration due under the offer will be posted to
accepting shareholders no later than June 4, 1999. As previously announced,
Derek Ashley, Wace's Chief Executive Officer, will become Chief Operating
Officer of the Company.
Fred Drasner, Chief Executive Officer of the Company, said, "We are excited
that the acquisition of Wace is nearing completion. This acquisition will make
AGT the largest independent digital media asset management company in the world
with pro forma 1998 revenues of approximately $700 million. The acquisition of
Wace gives AGT a strong European presence which certain of our international
customers desire, makes AGT a major player in providing digital media asset
management services to the packaging industry and strengthens our position with
advertising agencies in New York, as well as the important Midwest and Western
regions of the U.S. Additionally, we have very complementary businesses that
present significant opportunities for integration in several geographic areas of
the U.S. The integration should result in cost savings to the combined
organization."
Wace Group Plc operates an international network of digital imaging
businesses and is a provider of digital services in the areas of pre-press,
color management, interactive multimedia services and print procurement.
Applied Graphics Technologies, Inc. is a leading provider of outsourced
advanced digital media asset management and archiving services, through its
proprietary Digital Link(R) System, to magazine and newspaper publishers,
advertisers and their agencies, entertainment companies, catalogers and
retailers, as well as major corporations. From more than 30 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 outsourcing on-site facilities
management and complete turnkey operations. Additionally, AGT provides a wide
range of advertising and marketing related creative services for customers
primarily in retailing. These services include assistance in creation of
newspaper advertising campaigns, development of in-store and collateral media
and photographic services. 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. Finally, through its Devon
Publishing Group, AGT is a publisher of alternative greeting cards, calendars
and fine art and other prints and wall decor items.
This release may contain "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Such statements are
inherently subject to known and unknown risks, uncertainties and other factors
that may cause actual achievements to be materially different from those
anticipated in the forward-looking statements. Readers are referred to AGT's SEC
filings, including its quarterly reports on Form 10-Q and Annual
<PAGE> 2
Report on Form 10-K, for a discussion of such factors. The Company has no
responsibility to update forward-looking statements contained herein to reflect
events or circumstances occurring after the date of this release.
Additional information about Applied Graphics Technologies can be obtained
by visiting the AGT website: http://www.agt.com.
<PAGE> 1
Exhibit 99.2
APPLIED GRAPHICS TECHNOLOGIES ANNOUNCES OFFER FOR
WACE GROUP PLC PREFERENCE SHARES
NEW YORK, MAY 26, 1999 - Applied Graphics Technologies, Inc. (NASDAQ):
AGTX), a leading provider of outsourced digital media asset management services
in the United States, today announced in London its intention to offer to each
holder of Wace Group Plc's Preference Shares the right to exchange such shares
for AGT Subordinated Notes. Wace currently has about Pound Sterling39.2 million
(approximately $63.5 million at current exchange rates) of Preference Shares
outstanding. They entitle their holders to a net annual dividend of 8% and
become redeemable on July 31, 2005. They will be exchanged into Subordinated
Notes, at an equivalent nominal value, which will bear interest at the rate of
10% annually and mature on October 30, 2005. The Notes will be subject to
redemption by AGT at any time after July 31, 2000. The initial redemption
premium is 4%, which decreases in 0.5% increments every six months until July
31, 2005, at which time the notes are redeemable at par.
The Board of Wace, which has been so advised by SG Hambros, considers
the terms of the Preference Offer to be fair and reasonable. In providing
financial advice to the Board of Wace, SG Hambros has taken into account Wace's
Directors' commercial assessments. Accordingly, the Directors of Wace will
unanimously recommend that holders of Wace Preference Shares accept the
Preference Offer, although the decision of whether to accept the Preference
Offer will depend on the particular circumstances of individual shareholders.
The Subordinated Notes will rank behind all of AGT's senior debt in
right of repayment of principal and interest, and are intended to be listed on
the London Stock Exchange. The formal Preference Offer, together with the London
Stock Exchange listing particulars relating to the Subordinated Notes, will be
posted in London as soon as practicable and will be subject to any conditions
set forth at that time.
The Preference Offer will not be made, directly or indirectly, in or
into the United States or to any United States person. The Subordinated Notes
will not be registered under the securities laws of the United States or any
state thereof and may not be offered or sold in the United States absent an
applicable exemption from registration.
Applied Graphics Technologies, Inc. is a leading provider of outsourced
advanced digital media asset management and archiving services, through its
proprietary Digital Link(R) System, to magazine and newspaper publishers,
advertisers and their agencies, entertainment companies, catalogers and
retailers, as well as major corporations. From more than 30 locations across the
country, AGT supplies a complete range of digital and
<PAGE> 2
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
outsourcing on-site facilities management and complete turnkey operations.
Additionally, AGT provides a wide range of advertising and marketing related
creative services for customers primarily in retailing. These services include
assistance in creation of newspaper advertising campaigns, development of
in-store and collateral media and photographic services. 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. Finally, through its Devon Publishing Group, AGT is a publisher of
alternative greeting cards, calendars and fine art and other prints and wall
decor items.
This release may contain "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Such statements
are inherently subject to known and unknown risks, uncertainties and other
factors that may cause actual achievements to be materially different from those
anticipated in the forward-looking statements. Readers are referred to AGT's SEC
filings, including its quarterly reports on Form 10-Q and Annual Report on Form
10-K, for a discussion of such factors. The Company has no responsibility to
update forward-looking statements contained herein to reflect events or
circumstances occurring after the date of this release.
Additional information about Applied Graphics Technologies can be
obtained by visiting the AGT website: http//www.agt.com
